That this House has considered UK export performance.
Back in January, the Prime Minister laid out his five priorities, high among which was to grow the UK economy, creating better-paid jobs and opportunity right across our country. To do that, he brought the Government’s business expertise and world-class trade negotiators together under one roof at the new Department for Business and Trade, beefing up our teams, refocusing our energies and better targeting our resources to support businesses and drive growth. Indeed, growth is the key to unlocking everything we want for our country. It is at the very heart of everything that this Government are doing, and there is no better way of achieving it than by exporting.
Naysayers may try to claim otherwise, but we are already in a strong position. Last year, the UK was the world’s fifth largest exporter, up from sixth the previous year. The value of the goods and services sold by our businesses overseas hit £849 billion in the 12 months to July, an increase of nearly 16% in current prices over the 12 months, and our trade deficit almost halved from September last year to this June. We also sell more services overseas than any other economy on the planet bar the USA, and those exports hit an all-time high in 2022.
Let us not forget that all these successes have come at a time of unique global challenges, from Putin’s illegal war in Ukraine to the covid recovery. UK businesses have responded with incredible resilience in the face of persistent global trade shocks.
The Minister mentioned the UK’s performance in services. We are the third largest country in the world for artificial intelligence, behind only the US and China. Does he agree that investing in our services and exporting them will become only more important as we move towards the AI revolution?
I could not agree more. That is why in our trade deals we have such a laser focus on developing services. We need to play to our strengths. Our goods are world class, but it is in services, which account for more than 70% of our economy, where we see huge potential growth. As I travel around the world, I see great enthusiasm and recognition of incredible quality in our service sector that we have not yet fully exploited. That will be a key area of focus for the Government.
The past few years have been not only testament to British businesses’ resilience and adaptability, but proof of the strong demand for UK goods and services around the world. As the UK’s International Trade Minister, I have seen that appetite at first hand. Last month, I was in Vietnam. I saw how our service exporters are already providing valuable services to Vietnam’s growing economy, from the British Council expanding education opportunities for Vietnamese students to UK architects and engineers transforming Ho Chi Minh City’s skyline. I saw how, over the coming years, there will be even more opportunities for UK businesses to trade with a nation that is set to become the world’s 20th biggest economy by 2050.
I noticed in the paper last week that very statement that the Minister made about a young, vibrant economy full of young people who wish to excel. I know that he always tries to respond positively to questions that I and others ask in the Chamber, so let me ask him this: can Northern Ireland be part of the exports success story? We want to be.
Absolutely. I can assure the hon. Gentleman that we are focused very much on supporting and enabling Northern Ireland exporters to be successful—as, indeed, they have been. No matter where we go in the world, there is huge enthusiasm for UK goods and services, and Northern Ireland has some outstanding products that the world wants to consume. That is why we are focusing not just on the EU but on the rest of the world, where there is an insatiable appetite for UK goods and services. We want to make sure that we deliver those and get benefits from trade deals for every nation and region of the UK.
The month before I visited Vietnam, I was in India, where I announced a package of partnerships on electric mobility and construction, positioning our businesses to sell into those fast-growing sectors. Everywhere I have visited, from Oman to Indonesia, I have heard the same story: “We want to buy British.”
My message to the House is that we are working flat out to help businesses grab these opportunities—and, best of all, we are succeeding. We are not scared of challenging ourselves to do more and to move faster. That is why we have set ourselves a target of reaching £1 trillion of exports by 2030, around five years earlier than previously expected. That is an ambitious target, but one that I feel is achievable with Government and business working together.
Trade deals are at the heart of our approach, and our programme of negotiations is one of the largest in the world. We are negotiating trade deals tailored to the modern UK economy and the opportunities of individual markets. Of course, each deal is different, but all of them remove barriers to trade so that we can create the right conditions for decades of future growth, security and innovation, to help the UK thrive in a changing world. We have already secured trade deals with 73 countries as well as the EU, turbocharging key areas such as services, food, drink, automotive and life sciences, creating new opportunities in forward-leaning areas such as data and digital—as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) mentioned—and enabling our businesses to sell into the economies of the future.
On modernising trade deals for the future, the Minister will be aware of the real difficulties our food, farming and fishing businesses face getting their products into the EU. Why will Ministers not contemplate negotiating a veterinary agreement to sort those trade barriers out?
The hon. Gentleman will be aware, first, that we are securing deals around the world. The EU, as I have repeatedly said, is important but we are also seeking deals around the world. The EU will continue to be important and of course the trade and co-operation agreement is an important part of that relationship, but we are continuing to have conversations both at EU level and one on one with individual countries to see how we can remove market access barriers, and I will come on to that in a moment.
We are also signing memorandums of understanding with US states, including Indiana, North Carolina, South Carolina, Oklahoma and Utah, with more to come. We are building closer transatlantic partnerships that will benefit our businesses over the long run, but of course brokering agreements and engaging in talks are just one aspect of our work. We know that many British businesses want to sell overseas but are hindered by obstacles in their trading partner’s rulebook. At the Department for Business and Trade, we have a set of teams focusing on overcoming those barriers. From lifting bans on British bacon to South Korea, to raising ownership caps on solar projects in the Philippines, we are removing the barriers holding British exporters back.
That is why the Department is leading a cross-Government effort to tackle a hitlist of about 100 obstacles standing in our businesses’ way in every part of the globe. Some of those barriers might seem small, some much larger, but each and every change will remove inhibitors to business to help our businesses to prosper, generate new jobs and pay higher wages. Indeed in the year to March, we have resolved 178 trade barriers preventing businesses from selling their goods and services in over 70 countries, and removing just 46 barriers could boost UK exports by £6.5 billion over the next five years. In the Secretary of State’s first 200 days in post, we resolved the equivalent of £11 million in barriers every day.
This debate takes place 12 months on from the last Prime Minister’s kamikaze Budget, which was cheered by so many Members on the Conservative Benches. It made the cost of living crisis much worse, biting into the pockets of every family in Britain, and made tough conditions to do business even tougher. That Budget was not a one-off; we have now had 13 years of economic failure, five Prime Ministers, seven Chancellors, each one worse than the last, with the business environment getting harder, barriers to trade going up, increasing red tape and the driving up of costs, and cuts in business support making it tougher for Britain’s exporters. Indeed, the former exports Minister, the hon. Member for Finchley and Golders Green (Mike Freer), said just last summer that Ministers were not doing enough to help firms to send goods overseas.
In 2012, the Conservative party pledged to reach £1 trillion-worth of exports by 2020. It has not happened yet, and it does not look like it is going to happen in the next five years either. Indeed the Office for Budget Responsibility thinks it will not happen until 2035, 15 years late.
As my right hon. and learned Friend the Leader of the Opposition has repeatedly underlined, growing our economy is crucial to ending one of the bleakest periods in our country’s recent economic history and to delivering again the hope of a decent job and better prospects for all those wanting to work and their families. Exports are fundamental to that mission. Jobs linked to exports pay on average higher than average wages in the UK. So I welcome this debate, even if the analysis the Minister set out bears little resemblance to the frustrations countless business leaders have shared with us on this side of the House about the record of recent Ministers on exports.
The OBR, the Bank of England and the National Institute of Economic and Social Research have all predicted that exports will drop this year. I hope they are wrong because, when exports decline, jobs, investment and wages all decline too. If— Labour is determined to deliver this—we want the highest sustained growth in the G7, accelerating growth in our exports is fundamental. However, in the 13 years since 2010, British export performance has been outperformed by every member of the G7 apart from Japan. Figures from the House of Commons Library and from the United Nations—specifically, the United Nations Conference on Trade and Development—show that Canada saw a 10% growth in its exports of goods and services from 2012 to 2021, the last decade-worth of figures that are available, while the US saw growth in its exports over that period of almost 14%, Italy almost 16%, France over 16% and Germany almost 23%—but Britain, just 6%. Over the same decade, the EU as a whole saw growth in its exports of goods and services of almost 30%. Perhaps the Minister winding up this debate will tell the House why he thinks other countries of similar wealth and status have been doing better at exporting their goods and services than us. One of last year’s Prime Ministers, Boris Johnson, thought poor export figures were down to a lack of ambition from businesses themselves; I hope the Minister does not share that view.
I am interested to hear what the shadow Minister has to say about the Brexit situation and renegotiating with the EU, because in the Financial Times at the weekend, we see that “Keir Starmer pledges to seek major rewrite of Brexit deal”, when in 2020, The Guardian’s headline was, “Labour will not seek major changes to UK’s relationship with the EU”. Which is it? Why is the Leader of the Opposition proposing to extend further uncertainty on British businesses, who are busy getting on with exporting around the world?
I am not sure whether that was one of the questions that the Whips gave out to the hon. Gentleman, but I have made it clear that we will not rejoin the single market or the customs union, but we will seek to use the 2025 review to push for better terms of trade. We will seek to negotiate a veterinary agreement with the EU to help in particular hard-pressed food, farming and fishing businesses. We will accelerate efforts to secure mutual recognition agreements to make it easier for our professionals to work in EU markets.
Specifically on Europe, many businesses are concerned by Ministers’ plans to unilaterally extend a Windsor framework requirement for food and drink to be labelled “not for EU” this time next year when goods are sold across England, Scotland and Wales. They are particularly concerned because many say that they were not consulted. This measure will apply to a large share of food products in shops, including meat, dairy, pet food, fish and fruit and veg. Given that businesses are warning that this could increase costs, as they will not be able to supply identical products for sale in both EU markets and the UK, it would be good to know which businesses and business groups were consulted, and what their views were.
The biggest challenge and opportunity that Britain faces is climate change. British businesses could be at the heart of the race to net zero. Indeed, the global transition to green technologies is projected to create new industries worth £1 trillion by the end of this decade alone. However, when the Secretary of State called net zero targets “arbitrary” and “unilateral economic disarmament” only last year and could not deliver even one new offshore wind farm in last week’s energy auction, we are not exactly in the best place to take the climate science innovation of British businesses, universities and other innovators and export them to the rest of the world. We on the Opposition Benches would create a nationwide network of climate export hubs to support every region in the country to secure new skilled jobs and opportunities from green trade. In particular, we need to make sure of help for trade and exporters in every region of the UK. Only 1.4% of exporters are from the north-east and less than 5% are from the midlands.
It is a pleasure to follow the shadow Minister. I can assure him that I am quite capable of highlighting Labour’s flip-flops and U-turns by myself, but I thank him for the insinuation, and for the suggestion that I might be up to writing questions for the Whips one day.
I start by thanking both Ministers on the Government Front Bench for their engagement with Newcastle-under-Lyme businesses in the past year. The Minister for International Trade, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), who opened the debate, came to visit, I think, six constituencies in Staffordshire on a whirlwind tour earlier this summer. He visited Langley Alloys in my constituency, which has 70% of its turnover overseas, in countries ranging from Brazil to New Zealand—a country with which we have signed a genuinely revolutionary trade deal in recent months. The Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) welcomed a number of impressive businesses from Newcastle-under-Lyme down here to Westminster for a business roundtable either towards the end of last year or early this year, and I thank him for his engagement on that.
The way that the Department for Business and Trade is working to support individual firms in areas across the country, including areas in need of levelling up such as Newcastle-under-Lyme, is testament to how this new Department is working across the entire country to support exports, and I welcome that. Exports are now back to pre-covid levels, and the Department’s export strategy is working. It looks like we are target in the race to £1 trillion by 2030. It is a challenging target, but the rates we have seen in recent years suggest we will be able to reach it.
In dealing with the European Union, this Government under the Prime Minister’s leadership have been smoothing over a number of the residual issues from the EU. I think we can all concede that, due to a little bit of bad faith on both sides, the process of getting the deal with the EU was not as smooth as we would have liked. However, with the Windsor framework we are seeing an improvement in trade with Northern Ireland. The Horizon deal only two weeks ago was hugely welcomed by the scientific community with what it implies for our scientific and artificial intelligence industries, which I mentioned earlier, and our services in the future.
It is always a pleasure to follow the hon. Member for Newcastle-under-Lyme (Aaron Bell). I am not sure that I can be quite as animated as he was during his speech, but I will do my best.
The issue was clearly laid out by the shadow Minister, the hon. Member for Harrow West (Gareth Thomas), with the stats on exports. The Government are incredibly positive about how wonderful exports are, but the reality is, when we are compared to G7 partners, the stats tell a very sorry tale.
Of course, we are the only country in the world dealing with the hangover from covid—no, wait, that is not right. We are the only country in the world dealing with the impact of the war in Ukraine—no, that is not right, either. We are the only country in the world dealing with demographic challenges—no, that is not right, either. The thing is, we are the only country in the world dealing with removing ourselves from our largest trading partner. That is the differential. That is why we are not seeing the growth in trade.
The Minister talked about the fact that there are agreements in place with 73 countries. Fabulous. We left the EU, which has agreements in place with 72 countries. So with all that work and all the running around that Government Ministers have been doing, we currently have one more country with which we have a trade agreement in place than the EU. It almost seems as if the immense amount of uncertainty that everybody—individuals and businesses—has been put through was not really worth it after all.
We could go back to 2016 and make different decisions about how to make Brexit work—six different leaders of Labour and Conservative colours have spoken about it—and how to make the best future for the economy, the wellbeing of people throughout these isles. What the Government should have done was ask, “What do we export the most? What is our trading relationship with the EU?” We exported a lot of services to the EU before Brexit. So, if it had been me taking decisions on this, I would have done everything I could to try to protect those services. I would also have done everything I could to protect those communities that would be decimated by the loss of something, such as fish processing—and whisky, which the Minister mentioned a moment ago. The Government should have been focusing on those things. Instead, they put forward that their No. 1 priority in negotiating Brexit was to end freedom of movement. They have had to suffer the economic losses that go along with that. So they have sacrificed the beneficial position we were in before Brexit, affecting a number of businesses and individuals as a result, not just because of the decision not to prioritise services but for the loss of freedom of movement. That has meant that our farmers, for example, are struggling to find people to work on their farms. It is the same issue in food processing and across some of our most rural communities, which are being decimated as a result of how much harder it is for people to come and live and work in the United Kingdom.
I am slightly confused about the hon. Lady’s policies and those of her party. I think she said that oil and gas production was coming down. Is it not her party’s policy to prevent any new exploration of oil and gas in Scottish fields? Is her own policy in disagreement with that of her party? I am very confused on that matter.
The party’s policy is that every new oil and gas licence should go through a rigorous environmental assessment. As much as the Conservatives try to paint it as something else, that is the party’s policy. The vast majority of my constituents who contact me would like no new licences to be granted. Far more constituents contacted me to tell me that Cambo was a disaster and should not go ahead. I have a large university in my constituency, and a huge number of people from all around the world, who are massively concerned about the impacts of climate change. I urge the Minister to come and spend some time in my constituency, to see the passion on the ground for a just transition.
My constituents really like having jobs. Most people do. It is great to be able to take a salary home. My constituents, in the main, are not terribly fussed if the job that pays them lots of money is in oil and gas or in the renewables sector. When I talk to people, they tell me that they would like a good job. Those people in the oil and gas industry ask for their tickets to be transferable so that they can go to offshore wind just as easily as they can go to oil and gas platforms. The UK Government have failed to capitalise on that. They failed to invest in CCUS. In fact, back in 2015 the then Chancellor pulled the plug on CCUS without even telling the industry. He stood at that Dispatch Box during the Budget and did that.
The UK Government have failed to prioritise improving our food exports. If they were serious about supporting our farmers, they would do everything they could to ensure them access to the labour that they need to pick the fruit, butcher the pork and export all that wonderful produce. If the UK Government were serious about supporting people and businesses in Scotland, they would have come forward far quicker with the decision on Horizon. They would have prioritised ensuring that our world-leading scientists across these islands, and particularly in my constituency, continue to have access to those research grants. They would have ensured that they could continue to work closely with European counterparts to develop the really cool tech of the future and to develop drugs for Alzheimer’s and heart disease in my constituency. All those things would have been prioritised by the UK Government if they cared about supporting individuals and businesses. They would have taken these things seriously, and they would have prioritised those industries rather than simply prioritising the removal of freedom of movement.
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In July, we took a huge step forward in enhancing our presence in the Indo-Pacific when the Secretary of State signed the agreement on our accession to the comprehensive and progressive agreement for trans-Pacific partnership. That is a vast free trade area spanning from Asia to the Americas and now, with our accession, Europe. The deal will give businesses right across the UK access to a market of half a billion people—the 21st century’s middle class, with money in their pockets ready to spend on our goods and services. This is our biggest trade deal since Brexit and we are the only European member of this free trade family.
As the House will be aware, we also recently ratified our first from-scratch trade deals with Australia and New Zealand, sweeping away the majority of tariffs on goods and services with those nations and creating even closer and warmer economic partnerships. The Secretary of State recently returned from India, where she met her counterpart, Minister Goyal, and advanced our free trade agreement negotiations, which are now in their final stages. Beyond that, we are working towards deals with a host of growing economies, including members of the Gulf Co-operation Council, Israel and Mexico—one of the world’s largest consumer markets, with its population projected to reach nearly 150 million by 2035.
We are using our trade policy to maintain our position as the world’s second largest services exporter. Having worked in that field prior to politics, I have seen at first hand our huge expertise in the sector, and I know that it is vital that we reinforce our reputation and make it easier for our service providers to sell around the world. That is why we should all be excited about our talks for a new, updated trade deal with Switzerland, for example. There is a huge prize on offer for both UK and Swiss companies in everything from finance and legal to accountancy and architecture. The current trade deal is almost 50 years old and really only covers goods. The modern British economy is over 70% services, which is why we are so active in upgrading and enhancing our trade deals to suit it.
We also recognise that, although many businesses, particularly smaller ones, want to export, many do not feel confident to do so. My Department has therefore developed a new export strategy that includes measures to help businesses to sell overseas. They include better targeted and transformed export support services and cross-Government co-operation to get more businesses selling overseas. We have a network of on-the-ground experts around the globe who are helping UK companies to understand every market’s unique opportunities and how to access them, while domestically thousands of small businesses are turning to our export support service, the first port of call for firms that want to begin their exporting journey. Since 2022, our trade advisers have handled 9,600 market inquiries. We are well aware that on-the-ground support is vital to encouraging businesses to export internationally, which is why we have a presence in over 100 international markets. Therefore, we are offering significant support to help exporters, including through trade advisers and the export academy, and we provide a wealth of information online as well. Over 400 export champions across the UK volunteer their time to share their experience and expertise, inspiring new and aspiring exporters to follow their lead. In addition, UK Export Finance, our award-winning export credit agency, is helping to support companies with export contracts around the world.
The achievements I have listed this afternoon did not happen by accident: they have only happened by creating the right environment for UK exports to flourish, and through an unrelenting focus on free and fair trade and promoting free markets. We will continue on this road, forging new deals, overcoming obstacles and creating opportunities so that UK businesses and the communities they serve can thrive.
Hidden deep in the last White Paper on trade was the admission that, while the share of global goods exports has dropped for most G7 countries, the UK share appeared to have declined faster than most. What was striking about that admission is that Ministers offered no explanation for it, and the situation does not appear to have got any better. Figures compiled in the UK by our own Office for National Statistics reveal that, since just before the general election, UK goods exports to some of our biggest markets have dropped significantly: to Germany, our second biggest market, exports of goods have dropped by 7.5%; to France, our nearest neighbour—our fifth most important market—our goods exports are down over 6% since the election; goods exports to Spain have seen a 9% drop; and to Sweden a 5% drop. There certainly does not seem to have been any attempt across Government to understand why others are doing better than us at exporting.
International Monetary Fund data suggests that, since the last election, every other member of the G7, in sales to key export markets near to us, is performing better. British exports of goods and services to Germany are down by 17% since May 2019. To France, they are down by 14% since May 2019. American, Canadian and Italian exports to France and Germany are all up by over 20%. Even Japan is doing better than we are at selling goods and services to France and Germany since the general election.
But it is trade with India that perhaps most tellingly lays bare the steady relative decline in Britain’s trading performance. Despite better figures on services, our exports of goods to India actually declined over the last decade. This is a country where Britain has a long and deep history. There are many barriers to trade, but it is extraordinary that other countries have been able to increase their exports of goods while Britain has not.
These figures make it all the more surprising that Ministers cut support to help businesses get to trade shows, find new markets and win their first export contracts. The Government cut support in recent years to trade bodies wanting to run their own trade missions, and they cut direct support, too. The trade show access programme—the key support for businesses new to exporting—had its funding cut so much that only 10% of the number of businesses that were helped by the programme under the last Labour Government appear to be getting help from this Secretary of State’s trade show access programme.
At the last general election, exporters and the wider British public were promised by the Conservatives that 80% of all trade would be conducted under the free trade agreements that Ministers would have signed by now, and that a trade deal with the US, our biggest market for goods and services, was going to happen by the end of last year. Neither has happened. We were promised a deal with India last year by Diwali. Will there be one by Diwali this year? Indeed, most of the deals that have been signed by Ministers were roll-over deals—cut-and-paste jobs. Ministers have routinely exaggerated the benefits of the trade deals they have negotiated for exporters.
While the deals that Britain has signed with Japan, Australia and New Zealand are welcome, particularly for geopolitical reasons, the quality of the negotiating effort by Ministers has hardly been inspirational. The deal with Japan, according to the impact assessment, appears set to benefit its exporters four times more than British exporters. The former Environment Secretary, the right hon. Member for Camborne and Redruth (George Eustice), admitted that he thought that Britain, when negotiating the trade deal with Australia,
“gave away far too much for far too little in return”.—[Official Report, 14 November 2022; Vol. 722, c. 424.]
While any increased opportunities for trade are welcome, at just 0.07%, 0.08% and 0.02%, the new trade deals with Japan, Australia and New Zealand will not lead to huge boosts to Britain’s economic growth or to great surges in exports. Even the CPTPP will only boost exports enough to see a 0.08% increase in our GDP.
Talking to businesses and their representatives, there is widespread frustration with the trade deal that the Conservatives negotiated with the European Union. The Institute of Directors underlined that almost 50% of its members found the UK’s trading relationship with the EU challenging. The British Chambers of Commerce, Make UK and the Federation of Small Businesses all highlight the real difficulties that their businesses are still having in getting their goods and services into European markets. Without changes, the trading arrangement with Europe will continue to compound the challenges our exporters face and risk cementing further the Government’s record of low growth and higher taxes. Ministers have been too slow to recognise the problems in the trade and co-operation agreement, and far too slow in trying to address them. The failure to sort the rules of origin issue for our car manufacturers, which the previous debate addressed, is just the most pressing example.
We on the Opposition Benches are determined to improve conditions for trade with Europe to make Brexit work. We will not rejoin the single market or the customs union, but we will use the 2025 review of the trade and co-operation agreement to push for better terms of trade.
There is remarkable talent in every part of our country, yet wages here no longer keep pace with the hopes and dreams of the British people. The Government are delivering one of the worst rates of economic growth of any country in the G7. Their own Ministers believe they are failing British exporters. It does not have to be this way. Our ambition on the Opposition Benches is for a dynamic trading Britain, where businesses are not held back by Government negotiating failure or a lack of support at key moments. There are exceptional businesses in this country, and they deserve better than what Ministers are offering. Instead of pushing up trade barriers and pushing away investment, and instead of cutting support to businesses to export, we on the Opposition Benches will back British exporters. We will have the back of British exporters.
I was with the Science, Innovation and Technology Committee in America last week. We visited Boston and Washington DC to speak about artificial intelligence in the light of our current inquiry into the future governance of AI. When we were in DC, I met UK Research and Innovation, which has an office there. It is clear that it is doing a huge amount of work to prepare the ground for investments by Britain in America, and conversely investments by American firms in Britain—building links in the technologies of the future. Of course, the USA remains this country’s single biggest destination for exports, with £168 billion of exports in 2022, the majority of which is in services.
I will touch a little more on what we heard last week. The Americans are very impressed with where we are on artificial intelligence and think that our proposed model of regulating by the use of AI—we are working through this from the White Paper—rather than, like the EU, trying to regulate the concept of AI, is the right way to go. We heard repeatedly from lawmakers, the Administration and businesses that they welcome the summit that the Prime Minister will host at Bletchley Park in November.
That brings me to the Minister’s point about how important digital agreements are for the future. We have signed a digital agreement with Singapore and included significant digital chapters in the deals that we have done with Australia, New Zealand and Japan.
The free trade agreements that we have been proposing are possible only because of Brexit. As the Minister said, we have signed 73 of them—a number of them are roll-over agreements, but a number of them are new—and of course we have signed the deal with the EU. These free trade deals offer British businesses, including those in my constituency of Newcastle-under-Lyme, new opportunities. I know that the Department is working with businesses to help them both to understand the mechanics of the free trade agreements and to realise the opportunities of them. Although the numbers may start small, free trade agreements are additive, because each year more firms get into exporting, so their true benefits come in the long term. For example, we project more than £3 billion for the Australia and New Zealand deals by 2035. Of course, by signing up to the CPTPP, we have even more opportunities for businesses.
Although this is an export debate, we should highlight that trade deals are good for UK consumers too. By joining the CPTPP, we will see lower prices on imports of things such as fruit juices from Chile and Peru in South America, and chocolate from Mexico. Trade deals therefore work for British consumers as well as British exporters. The Government are delivering for businesses, resolving the issues we have seen with the EU and opening new markets.
However, as I suggested in my intervention on the shadow Minister earlier, I fear that Labour wants to return the country to all the uncertainty that we had from 2016 to 2019. It is pretty clear from reading the previous remarks of the Leader of the Opposition that Labour’s ambition is to unpick and ultimately reverse Brexit, as well as to sign up for hundreds of thousands of additional migrants from the EU, as we saw last week. I quoted those two headlines, with the FT saying, “Starmer pledges to seek major rewrite of Brexit deal”. I think that is the last thing that businesses and politics need. We have come to a period of stability after the turmoil following the referendum in 2016; we do not need to go back to those times. Of course, he said in 2020 that Labour would not seek major changes to the UK’s relationship with the EU.
That, I am afraid, is yet another flip-flop from the Leader of the Opposition, but given that he campaigned to remain and stood up at Labour conference calling for a second referendum with an option to remain, I do not think we should be surprised. How can anybody trust what he says? I have no sympathy politically with the people on the Labour left, but he has reneged on all the commitments he made to them when running for the Labour leadership. He stitched them up like he wants to stitch up the British people, and that gives him no credibility and no integrity when it comes to negotiating for Britain.
There have been many returnees to the shadow Cabinet in recent weeks—they refused to serve under the right hon. Member for Islington North (Jeremy Corbyn) because of the tolerance of antisemitism in the party at the time, but the Leader of the Opposition served willingly. He even said:
“I’m not going to rank Jeremy Corbyn. He’s a colleague and a friend and he’s led us through some really difficult times in the Labour party.”
But the shadow Chancellor, the shadow Home Secretary, the shadow Health Secretary and the new shadow Work and Pensions Secretary refused to serve under the former leader. They did the right thing, but I am afraid that the Leader of the Opposition did the expedient thing. He has tried to pull the wool over people’s eyes about that. He is trying to do that again on Brexit and for British businesses. We must not let him get away with it.
In the automotive debate, we heard comments about the rules of origin. I first raised the rules of origin in relation to the automotive industry in this House five or six years ago, and the problem has not been solved. That level of uncertainty has been hanging over the automotive industry since then, and there is no clear answer. The clock is ticking; there is a very short period of time before this kicks in, and decisions need to be made. At that point, I spoke about diagonal cumulation. We need to ensure that there is certainty or we will continue to see those large manufacturing companies with bases all over the world choosing to invest in improving their factories in European countries rather than those in the United Kingdom. It has been decimating for our manufacturing.
I was glad that the hon. Member for Newcastle-under-Lyme mentioned the numbers—£3 billion—in relation to the Australia and New Zealand trade deals. The Office for Budget Responsibility estimates that we will lose £100 billion as a result of Brexit—£3 billion does not touch the sides of that number and the 4% drop in GDP that we see as a result. Whenever trade deals like these are signed, we might see an improvement in exports. In fact, after the Japan trade deal was signed, we saw a reduction in exports to Japan, so the jury is out on whether they work. However, regardless of whether there is an increase in exports, throwing beef and lamb farmers under the bus is not the way to go.
According to the OBR, there is likely to be a 15% reduction in trade intensity. The OBR has those figures as a result of the Government’s economic plans, the deals signed and the proposals in place. Our food processors and producers, who are producing the best food in the world—as a Scottish MP, hon. Members would expect me to say that—are being massively undercut because the Government have the wrong priorities when signing trade deals. We have already seen beef exports go down by 22% since the deal was signed. The price of producing lamb in Australia has reduced again, which will undercut our farmers and make us less likely to become a nation self-sufficient in food production, because it will cost us more to rear the lamb. That is a problem. The Government have prioritised the wrong things.
The Government have missed the opportunity of renewables, and not just in terms of capitalising economically on climate change and the move towards a just transition. In fact, they have missed the opportunity to invest in amazing innovations in renewable technologies and to export them around the world. During the oil and gas boom, Aberdeen in north-east Scotland became known for exports. My constituency was top for the number of patents per head of population. There is an amazing amount of research and development as a result of the oil and gas industry. We are seeing declining amounts of oil and gas and an increase in the number of countries looking to capitalise on and use renewable technologies. Because we are not seeing investment in things such as carbon capture, utilisation and storage, we are not able to stay ahead of the curve and use that tech to assist other countries around the world in the way that we were able to do with oil and gas.
A number of Members have mentioned making Brexit work. It is not possible to make Brexit work. We cannot make Brexit work, because Brexit does not work. Various Conservative leaders have stood there saying, “Make Brexit work.” The Labour party has stood there saying “Make Brexit work.” It cannot work. It is not the positive economic future that we want. The Scottish National party will continue to stand for being in the single market. We will continue to support being members of that single market and, yes, having freedom of movement. Freedom of movement is great for economic benefit. In nine out of the last 10 years—and eight years running—Scotland has had the highest levels of foreign direct investment of any area, country or region in the United Kingdom other than London. That is because the Scottish Government are doing everything they can to ensure that we continue to trade and export, and continue to have a great relationship with as many countries in the world as we possibly can.
The UK Government do not even have a published trade strategy document that pulls everything together. If they had an internal trade strategy document, it would be great if they would publish it, so that we can all see their strategy. Conservative Members say that there are missed opportunities in international trade because they are not prioritising work on selling renewables around the world. Clearly, something is missing. It would be great to see that strategy so that we can provide the appropriate scrutiny. If they continue to hide it, no one can scrutinise it. We do not know what they are trying to do because they are not willing to tell us and share the strategy with us, if they have one.
The only way to ensure that trade with the EU continues to go up and to bring back freedom of movement is for Scotland to free itself from Westminster and take its own decisions on immigration and trade, ensuring we have as close a relationship with the EU as possible, not by making Brexit work but by being back as a member of the EU and the single market. That will protect our economy and our freedom of movement, and ensure our scientists have the best possible access to collaboration. That will ensure our farmers have a level of protection they do not currently have in being able to export food without whatever is going to happen with the Windsor framework, which could be disastrous for our farmers. The United Kingdom Internal Market Act 2020 continues to go over the top of what the Scottish Government would like for our future, our farmers and our food producers. I recommend that everybody looks very closely at the SNP’s next manifesto, in which we will lay out those policies even more clearly than I have this evening.