Brexit: Domestic and International Trade Debate
My Lords, I, too, thank my noble friend Lord Leigh for initiating this important and timely debate and for his excellent opening remarks. It was also a pleasure to listen to my noble friend Lord Gadhia’s excellent maiden speech. A Hindu and a Ugandan like me, my noble friend has extensive experience in international trade. I am sure that that experience will be a great asset in your Lordships’ House and I look forward to many more contributions from him.
The truth is that, irrespective of how the nation voted on 23 June, we have needed a new approach to our trade policy for some time. Britain’s economy has been skewed for a long time. Our current account deficit is unsustainable, we export far too little, our productivity is too low, we are overly reliant on both the City and consumer spending, our manufacturing base is too small and our house prices are too high. Irrespective of Brexit, these problems have been in place for some time.
We have become complacent, both in government and in the private sector. We have some firms that do a tremendous amount of work to export, but nowhere near enough. Too many businesses avoid the risks. When I was in business in the 1970s and 1980s, exporting was seen as a great point of pride for companies. Now it is just seen as a risk. We have to change that mindset.
Part of that work falls to government. Our Government should be more proactive. The Department for International Trade—previously UKTI—works on the basis that companies will come to it. This is fine if you already export, or if you are a FTSE 100 global company with vast resources, but it does not help SMEs. Indeed, it is the wrong way round. The department should be identifying opportunities—a road project in Tanzania, for example—putting them straight up on their website and emailing the link to every infrastructure company in the UK. A bit of proactivity could get us a long way.
Before I move away from government, I will make two additional comments. The first is that the previous Prime Minister committed to making our diplomatic service more business orientated: to appoint business leaders to high commissioner and ambassador posts and to increase the commercial knowledge of those from a diplomatic background. Could the Minister give me an outline of what progress has been made in this area?
The final thing I will mention in relation to government—in this case, I have definitely saved the best for last—is UK Export Finance. For those who are not aware, UK Export Finance is the UK’s export credit agency and directly supports the export of British goods and services. Its work is invaluable. I highly recommend that any company thinking about exporting should look at its work. This is a vital service and one that we must do a lot more to promote.
In the time I have remaining, I would like to talk about Africa, which my noble friend Lady Finn covered very well, and the opportunities available on that continent. I was very fortunate to be given my dream job earlier this year, acting as the Prime Minister’s trade envoy to Rwanda and Uganda. Africa is home to a number of the fastest-growing economies in the world—exactly the type of markets we need British firms to be focusing on. Huge chunks of Africa are now prime markets for British firms. Yes, there are risks, but the rewards are also fantastic. With a developing middle class, 52 huge cities with populations of more than 1 million and some of the most innovative banking systems that I have seen, this is a continent that has come on leaps and bounds.
For too long Britain has seen Africa through the Band Aid lens and has missed its real potential. We have to change our mindset on Africa and on exporting. This is why we should focus more on trade and not aid. We should not have the situation, as we do in many African countries, of having dozens of DfID staff but no trade representatives—it is lunacy. Similarly, we cannot have an entire continent, especially one with the economic potential of Africa, constantly overlooked when it comes to visits by our Cabinet Ministers. These are little things, but they add up to our current exporting difficulties.
Our business leaders and the Government need to seize the opportunity that Brexit has offered to reset our path, to be more proactive in identifying and advertising opportunities, and to be less risk-averse and lazy. We have barely gone a day since the referendum without talk of free trade deals and of hard and soft Brexit, but this is a red herring. If we are not encouraging and supporting firms to export in the first place, additional tariffs are hardly a significant factor. I hope that we will see a new approach from this Government.
The full debate can be read through the following link: