The UK will thrive outside the EU Customs Union, leading the world as a free-trading nation

The UK will thrive outside the EU Customs Union, leading the world as a free-trading nation

When the UK voted to leave the EU, the UK voted to re-join the rest of the world. The great Brexit prize will be regaining our ability to strike new free trade deals across the globe and seize the opportunity to lead the world as a free-trading nation, championing trade liberalisation and directly taking on those who advocate protectionism.

For the last forty years the UK has been blinkered by the EU with our attention disproportionately placed on the Single Market and trade with the EU. Although we can now turn our attention to the growing economies in the world, we should be clear that in leaving the EU we are not leaving Europe or turning our backs on our European neighbours and partners. Rather, the Prime Minister has been explicit that the Government is seeking a deep and comprehensive trade deal with the EU that covers both goods and services.

The Customs Union has again been dominating the headlines after the key Brexit Cabinet sub-committee rightly took a decision not to support a Customs Partnership, mirroring the EU’s requirements for imports and effectively preventing the UK from setting its own independent trade policy – which would simply throw away one of the biggest Brexit gains. This proposal should be removed as an option from the table all together.

By leaving the Customs Union, the UK will regain its ability to set its own independent trade policy. If we were to take the advice of some colleagues in both the Lords and Commons, we would find ourselves a vassal state shackled to the rules of the Customs Union, unable to set our own trade policy, while not only being absent from the table, but out of the room when decisions are taken affecting us: the very worst of both worlds.

Our trade with the EU is in deficit and declining. In 2006 it was 56% of our trade, today it is 43%. Meanwhile our trade with the rest of the world is in surplus and rising.

Of course we should not play down the importance of Europe as a trading market and partner, but we must orientate ourselves towards the thriving economies in the rest of the world such as those in South and East Asia and their growing demand for goods and services.

57% of Britain’s exports are now to outside of the EU, compared with only 46% in 2006. Furthermore, the IMF estimates that in the next ten to fifteen years 90% of global economic growth will originate from outside the EU.

International demands for British goods is growing and Aberdeen (which I represent in Parliament) is well placed to take advantage of this given that currently 90% of manufacturing in the city gets exported, mainly in oil and gas and environmental engineering.

Aberdeen is home to a truly global oil and gas industry. To quote the oil and gas UK blueprint for Government, it is “a global energy industry, anchored in the UK, powering the nation and exporting to the world”. This is demonstrated in current industry exports which account for 43% of the UK supply chain turnover in 2017, up from 41% in 2016. And Oil and Gas UK’s Vision 2030 has the ambitious aim of doubling the supply chain’s share of the global market from 3.7% to 7.4% by 2035.

Balmoral Group, based in my constituency of Aberdeen South, was established in 1980 and specialises in subsea buoyancy, renewable energy products and engineering solutions. They employ 500 people and they are highly dependent on the export markets they are focusing on of West Africa, South America and the Gulf of Mexico. They are clear that their only opportunity for growth is in the export market.

To ensure the industry’s global competitiveness and that it captures a large share of an ever-growing energy market, it is crucial that the right fiscal and regulatory regime is in place to incentivise investment. To date this Conservative Government has created one of the most competitive fiscal regimes in the world by providing an unprecedented level of support for the North Sea sector with tax breaks worth £2.3 billion, the creation of the Oil and Gas Authority and significant investment in the Aberdeen City Region Deal.

Thanks to the UK Government investment in the city deal, the Oil and Gas Technology Centre was created, which is working with industry to develop the solutions, technology and innovation to maximise the full potential of the UK North Sea. From asset integrity to small pools, from drilling to decommissioning, the technology developed in Aberdeen is truly exportable and the opportunities for the Granite City are endless.

We knew that the job was not yet done and a top ask of the new Scottish Conservative MPs last year was for the Chancellor to introduced Transferable Tax History (TTH). I am delighted that Scottish Conservatives engaging positively and constructively have exerted influence at the heart of government to deliver this for Scotland. This policy change announced at the Autumn Budget can help unlock upwards of £40 billion of new investment by allowing the transfer of the tax history from the seller to the buyer when North Sea assets are sold on.

TTH can bring new investment by enabling more deals to be done on late life assets, prolonging the life of mature fields by many more years. This highly competitive fiscal regime will ensure the UK is a global leader in mature basin management.

The oil and gas industry is one of the true global industrial success stories the UK has and with its truly global reputation, it is a shining example of the role Britain can play on the world stage outside of the EU.

The North East of Scotland is also home to a thriving food and drink industry and is known for its whisky exports. Again, Scottish Conservative MPs delivered for this industry in the Autumn Budget, with duty on spirits being frozen again, making a bottle of whisky £1.15 cheaper than it would otherwise have been since the duty rise ended in 2014.

The freeze achieved in the Budget supports the global competitiveness of this iconic UK export. Overall the spirits industry generates £5billion of exports and employs 50,000 people.

With the opportunity to forge our own new bilateral free trade agreements we can take Scotch whisky to the growing markets of the world such as India. With the support of this Government, Scotch whisky will thrive after Brexit.

Although the story of whisky is well known to all of us, perhaps a less told story is that of other domestic exports from the region. For example, in the fishing industry companies like MacDuff Shellfish, Denholm Seafoods, Lunar Freezing and ISFT Ltd are exporting to countries such as Nigeria, China, Vietnam, Uruguay and Ukraine. And companies such as Saltire Seed and Alan Twatt are exporting seed potatoes to Thailand, Egypt, Israel, Saudi Arabia and Brazil.

Aberdeen has a worldwide reputation from oil and gas to food and drink, and from our exceptional world class universities to our renowned tourism offering.  As part of the United Kingdom, Aberdeen’s ambition to compete globally with places such as Houston and Dubai can be supported and realised through the strength of the Foreign and Commonwealth Office and the Department for International Trade, which has been working to support Aberdeen-based companies to export across the world.

There are huge opportunities for Aberdeen and the wider North East of Scotland to use our competitive advantage to seize the benefits of Brexit. We must set our sights on the future; a new global future.

It would not be in our interest or the EU’s interests to see unnecessary restrictions on trade. I am confident that the Prime Minister will deliver a new bespoke partnership, which will support our mutual prosperity.

The UK is the world’s fifth largest economy, the fifth largest exporter and the second greatest soft power. Our worldwide presence is reinforced by our global brands, creative industries and the reputation of our universities.

Britain is truly global and we must be ambitious to maximise the golden and historic opportunity of Brexit which is being able to design a new trade policy and sign new bilateral trade deals with the rest of the world.