Trade

Question for Short Debate: UK Exports

08th March 2017 – Contribution by Lord Waverley 

My Lords, this Question encourages the Government to share their thoughts on this important subject. There will be other opportunities as we prepare for completion of the Brexit negotiations, but we need to start a process now to prepare for the time when we leave the European Union. I thank all noble Lords speaking this evening. Sensing contributions of an international nature, I will restrict my remarks more to the situation as I see it within our country.

I declare that I am the founder of SupplyFinder.com, a powerful multipurpose network of active business opportunities and information across 195 countries in 25 sectors and 11 languages. It is a comprehensive website, three years in development.

The United Kingdom is embarking on an ambitious new journey, for which we must prepare and manage carefully. Addressing the export promotion needs of our devolved regions and England will lead to employment growth and prosperity. Although a measure of uncertainty has been removed, many challenges remain. It therefore cannot be business as usual; rather, we must tackle these difficulties with clarity of vision, determination and renewed vigour.

We will succeed in increasing exports if we place increased emphasis on tolerance, respect and the well-being of all our people, all pulling together. Our country thrives in times of great adversity. We keep calm and carry on, stoically British.

Now the task is more nuanced. We must be outward-looking and positive as a nation, dispensing with negativity and adopting a can-do attitude. Not only are we called upon to be resilient, we also must be entrepreneurial, seeking and capitalising on every opportunity. Let us embrace the vital contribution of women in society and business. Let us relish our extraordinary multicultural diversity. These are the strengths that form the bedrock of our 21st century society, the pillars helping to define and unite us as a nation. “UK first, in a spirit of partnership with existing and new friends”, should be our mantra.

An early question for Government is, “What do they consider to be their best role?”. Government must share the burden and understand where their strengths lie to succeed in increasing exports. Should the Government fulfil a B2B role, or might it be better to outsource these activities and focus on B2G and, of course, G2G—Government to Government? Their core mission should be to strengthen links between private sector and public sector, creating the right environment to allow for the private sector to succeed as equal partners.

Taxpayer money can be better channelled through partnerships with the private sector. It is essential, however, that the Government support business confidence, particularly if there is any short-term economic downturn. The French and German Governments proactively support their exporters, while our UK private sector is often left to fend for itself. The primary responsibility is to create the right environment for the private sector to thrive. Would the Government consider incentives, such as tax breaks and allowances to support British exporters?

Government must enhance the business capabilities of the Civil Service and consider an urgent and transparent root-and-branch reform to meet the challenges of the future. In addition, Government must ensure that export finance is available where there is traction from our exporters to popular and even sometimes risky markets.

What are realistic levels of export values and numbers of new exporters? Indeed, how are we to measure success? Understanding this would help devise policy. The Government’s recent Green Paper, Building Our Industrial Strategy, is a good starting point, a road map to reach a destination. Questions then arise: by whom, to where, and by when? Generally, there are insufficient data on which to gauge the efficiency of business support performance. Estimates of the current number of exporters vary widely. It needs to be decided whether manufacturing will regain its prominence, and if so, which aspects. This sector requires strategic thinking and clarity to address varying needs of airport expansion, energy generation and the future of the foundation industries that underpin manufacturing. Government should move more quickly and use this network to create access into new markets, helping with market intelligence and research, increasing awareness of business opportunities and enabling ease of access for SMEs. The Overseas Business Network initiative has so far delivered. The Prime Minister’s trade envoys are excellent. Both should be recognised and supported further, particularly into new markets.

It is essential that all stakeholders are around the table and playing an active role. Business needs a simple and, ideally, a single route to advice and support. Digital routes exist, but business prefers to speak to a person. This is where multipliers, approved chambers of commerce and the trade association movement come into play. Their B2B contributions are a great strength. I think I am right in saying, however, that there is no single central list of trade associations in the UK. That needs to be resolved. Some will rightly ask, “What of funding? What of resources?”. Solutions could be found. For example, part of the fees for each company registering with Companies House could be given to a nominated chamber and association. This would generate beneficial multipliers to improve services. Competition would dictate to which nominated multiplier these funds would go. Companies would attach themselves ideally to one chamber and one association. These B2B activities should then be marshalled to ensure maximum impact on opportunity.

Government should support more mini fast-in, fast-out missions as well as the big set pieces. They should insist that all applications for public funds, whether small business support grants or major infrastructure  proposals, be weighted by the contribution each makes to the nation’s exporting capability. They should develop a comprehensive package of trade missions over the next three years to introduce both new and experienced businesses to new markets and to generate new trade and project the positive GB message that we are an outward-looking nation reaping benefits from Brexit.

Sector trade also must be promoted by the creation of hubs manned principally by the private sector, centres of excellence, properly supported and funded to facilitate the needs of exporters. The UK has a comprehensive national and local network of chambers as well as an overseas network and is a trusted international brand that opens doors. These all need to be developed as vital resources. Figures suggest that in the past, one in five SMEs exported. Has that increased? Do the Government have a target level? Gone are the days when the world would come knocking. Business must get out into the field, understanding local culture and local rules.

The challenge is how to get them out there. Encouraging joint ventures or dependable partnerships would seem a useful way forward. There are plenty of initiatives in the offing, but we need to be innovative in our thinking, make things happen.

Yesterday I offered introductory remarks to the New Silk Road Forum. The Iranian ambassador gave a keynote speech. Opportunities abound for UK business interests, but we need to get a move on.

What might the UK reasonably expect to achieve in future trade agreements, and over what period of time? That is a general question which I will not develop this evening. I have focused on policy but time does not permit me to address FTAs, other than to wish the noble Baroness and the noble Lord, Lord Price, well.

I will say a very quick word about the events industry, an industry of paramount importance and one which requires support. It attracts 9 million visitors and, on average, 170 exhibitors for each show. Internationally, just 20 UK-based organisers create 1,049 events outside the UK. UK shows can be used to secure an international position for the UK. Challenges include the need to ease entry. Health and safety and data issues also require attention.

We are in a fast-moving world of differing geopolitical and geo-economic alliances. This is a call to action. We are on the starter blocks of a long journey, poised for the off. The prize: a successful global Britain, a critical link to an interconnected world, a vital hub for international commerce and increased exports. Let us make it happen.

Link to full contribution: http://bit.ly/2wpfwMg

Foreign Policy: Support for UK Businesses in Global Trade

14th November 2017 – Contribution by Lord Waverley

My Lords, does the noble Earl wish to concede that a combination of conflicting intradepartmental priorities and policies, leading sometimes to a lack of visible ministerial support, has a detrimental impact on industry’s ability to enter and further new markets? Given that government should not consider itself to be the sole arbiter of bilateral relations, should not a primary focus be to create an environment whereby the private sector thrives, best achieved in step with policy and industry?

Link to full contribution: http://bit.ly/2NkQDsh

 

Motion to Take Note: Trade and Customs Policy

5th December 2017– Contribution by Lord Waverley 

My Lords, parallel preparations in advance of final Brexit implementation are essential, even though the end product is yet to be determined. As a reluctant but optimistic Brexiteer, I have no difficulty with a paper entitled Preparing for our Future UK Trade Policy. The principle of free trade and the goal of enabling continuity, boosting global trade relationships, supporting developing countries in reducing poverty and a rules-based framework for trade remedies and trade disputes are objectives that allow the UK to hold its head high.

I have spoken on multiple occasions over the months on such matters and will not repeat what is already on public record. The covering note on the cross-border trade Bill, however, presents a Rubik’s cube of complex legal and technical issues within equally complex political constraints. It is that lack of clarity around political constraints that makes the technical analysis a testing exercise, such that businesses have no alternative but to prepare for the contingency scenario of no agreed customs arrangement.

It is hoped that this month will shed light on the probable Brexit end game. While a hard Brexit is still on the cards, given the continuing uncertainty, renewed focus on delivering the ideal scenario of frictionless trade, with an interim implementation period, would appear more sensible. Brexiteers should understand, and accept, that frictionless trade will be perceived by some as though we are still in—but surely this is a small price to pay to ensure overall readiness. I have also come to accept, albeit reluctantly, that addressing detail through secondary legislation is acceptable in the circumstances.

In essence, this is about an orderly withdrawal of the UK from the EU. Questions arise, however. Excise and VAT regimes must function effectively on exit day, so what is the Treasury’s preferred option? Is it a continued waiver from entry and exit summary declarations? Is it to remain a member of the Common Transit Convention, so that goods will not need to complete import and export declarations at each new border crossing? Is it to seek mutual recognition of authorised economic operators and press for bilateral implementation of a technology-based solution for roll-on roll-off ports? Will the Government be supporting the adoption of these simplified procedures, including presentation waivers, the use of the CTC and self-assessment? Or would the Treasury prefer an option of a virtual border, where the UK, in partnership with the EU, operates a regime for imports that will remain in the EU market even if they are part of a supply chain in the UK first?

Leaving the EU without a negotiated agreement will necessitate other EU countries having infrastructure in place for the two-way process of importing and exporting to work effectively. Is there any evidence  that such preparations are under way? To achieve frictionless trade, the Government must ensure that all departments and related agencies operating at the frontier are joined up. The main cross-channel port countries of Belgium, France and the Netherlands will need to alter their systems to accommodate UK imports and exports. Beyond budgetary issues, this will require co-operation and direction from the Commission. Preventing disruption will require both sides to be prepared for changes.

I spent a large part of yesterday evening scouring public-source EU documents. It is a given that, as of the withdrawal date, the United Kingdom will no longer be part of the customs and VAT territory of the Union. However, in one of those documents, in the subsection, “Modes of Transport”, in each of the sections pertaining to “Maritime”, “Air”, “Road and Rail”, “Postal Shipments” and “E-commerce”, the following words appear:

“These changes will be implemented when all the … IT systems will be available”.

Would the Minister care to comment on this prospect? What is being anticipated, by whom, and at what cost over what period? From what I understand from the excellent briefing this morning, the EU is not expected to have its systems ready until 2025—a point made by the noble Lord, Lord Whitty. So even if we were to enjoy a transition period of two years, it would take us to March 2021. What is the process that would be enacted during the period 2021 to 2025?

We are at a critical juncture in the Brexit journey today. The Irish frontier complexities loom over the negotiations. The question of no divergence on regulatory alignment remains the bogey. I have not been to the large logistics centre on the Chinese side of the Kazakh frontier, but it might be that relevant lessons could be learned given the long-haul shipments that eventually reach Europe.

I have previously raised the possibilities and benefits of an integrated digital economy platform in relation to cross-border challenges. Given that 60% of global B2B trade currently runs through the systems of the leading 12 technology companies, signing up 150 of their leading customers would be sufficient to ensure that the digital economic platform captures around 60% of global trade by 2030. I understand that the Global Coalition for Efficient Logistics—GCEL—stands ready to demonstrate the potential of its digital technology in respect of trade between Northern Ireland and the Republic, in order to enable trade to take place between the two in a manner satisfactory to all parties and without the need for a physical border. I am aware that principals will be in the UK Friday and Saturday, and I have little doubt that a meeting of interest to the Minister and her department could be arranged.

Very briefly, and as a concluding thought, I will flag the concerns of SMEs, many of which have never prepared documents for a customs exit or entry clearance—again, a point made by the noble Lord, Lord Whitty. It stands to reason that a lack of experience, staff and resources for dealing with significant changes, procedures and paperwork will become a challenge. Would the Minister consider placing this issue in her in-tray for consideration? What possible training exercise might be readily entered into?

The greater the divergence between EU and UK regulations and product standards, the more customs capacity the UK will need to develop. The Minister should recognise constraints at the physical border and consider moving checks inland. The UK currently has access to more than 20 EU systems used to track the movement of goods and vehicles. Although an FTA could grant the UK permission to continue to use at least some of these, no deal could require the UK to build and integrate new systems from scratch.

Finally, I have two quick observations. I listened very carefully to the noble Lords, Lord Whitty and Lord Kerr, as I have done to all noble Lords. Two thoughts emerged. Will the Government draw up a comprehensive list of FAQs—frequently asked questions —to address the issues as we move along this journey? That would be very helpful for all our good friends around the country to understand where and what the game is, what they must do, how they should do it, and so on.

Secondly, the noble Lord, Lord Kerr, referred to his Article 50. As no one can judge the political future environment, there may well be a need to consult the people. In anticipation of this, could we jettison the term “second referendum” and instead vote on the “final outcome”—a point raised at a joint meeting that the noble Lord and I attended?

Many other challenges remain. However, I will leave it there for the moment.

Link to full contribution: http://bit.ly/2P5CKyI