Liam Fox – 2019 Speech on India Day

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, on 16 July 2019.

1. Introduction

Thank you – and in particular my thanks to the Indian business leaders and of course Piyush Goyal, [Minister of Railways of India] who have flown a long way to attend today – and to the City of London co-hosting this event.

Just two months ago, India was the home of the greatest democratic exercise in the history of mankind: a truly extraordinary beacon to the world of India’s freedom, democratic values and independence.

And I would like to offer my sincere congratulations to Piyush Goyal, [Minister of Railways of India] and the Indian Government for their fresh mandate and, in particular to welcome the programme of economic reform and development. There is a clear momentum emerging.

I also welcome the announcements in India’s Budget last week of plans for further liberalisation of foreign direct investment and financial markets.

This is a moment of great opportunity for both UK and Indian companies, and we must seize it together.

2. The strength of UK-India relations

India is due to become the world’s third largest economy by the end of the next decade and is currently the fastest growing G20 economy.

As two modern, diverse democracies, the UK and India are natural partners, working together to help drive this transformation: promoting our people’s prosperity, improving global security and tackling our common challenges.

The total number of people employed by British companies in India currently stands at 788,000 – 50,000 of which were jobs created within the last 2 years.

But there are also 800 Indian companies employing nearly 105,000 people in the UK.

And Indian inward investment to the UK has brought more than just capital. It has also brought skills, exports, good corporate citizenship, and entrepreneurialism.

UK subsidiaries of Indian parent firms represent some of the UK’s largest tech companies such as Tata Consultancy Services, Infosys and exporters, such as JLR.

And the latest figures show UK-India overall bilateral trade increased by 14% last year to £20.5 billion. And since 2010, the UK and India are among the top five investors in each other’s economies.

3. The strength of UK financial services

So we have a remarkable record on which to build.

And as we look to the future, I believe the United Kingdom has complementary strengths to propel India’s economic growth and transition towards a more services orientated economy: not just as a partner of choice, but the partner of choice.

We meet today at the historic centre of the world’s greatest and most international financial hub: the City of London.

And please don’t be fooled by the historic grandeur of our venue. Behind it lies a very modern, innovative and unique ecosystem: with a deep and liquid global capital pool, pioneering regulatory framework, and world-class advisory, legal and related professional services.

London alone hosts over 250 foreign banks, more than New York, Paris or Frankfurt.

The UK is the world’s largest centre for cross-border banking.

We account for fully 37% of global foreign exchange trading, well ahead of other international centres. Twice as many dollars are traded in the UK as in the US, and twice as many euros are traded in the UK as in the Eurozone.

London continues to be a major global centre for the issuance and trading of bonds, with around 39% of global secondary market turnover in 2017.

And of course, as we have just heard, the United Kingdom is the home of the FinTech revolution, making sweeping changes, delivering more control, access and increased competition.

It has been estimated that we have more software developers here in London than Berlin, Dublin and Stockholm all combined.

And we have a unique chance to build on these strengths in partnership with India. This includes access to the Adhaar personal biometric ID card platform: the greatest in the world, giving UK FinTech firms the opportunity to globalise their product and bring credit to people who have not had access before.

The UK also ranks number 1 in Europe and first among non-Muslim-majority nations for Islamic finance.

And in Green Finance the UK is uniquely well placed to provide the complex solutions required to assist the transition to a low-carbon economy and boost clean growth investment.

4. The City’s offer to India

So we already have a strong record on which to build with India in particular.

UK financial markets have helped support the development of whole new product classes, helping Indian firms prosper, grow and go global.

For example, the internationalisation of the rupee will be a crucial issue in ensuring the Indian economy plays its full role in international trade in the years to come.

And I was delighted to learn in last week’s Budget that India is considering issuing sovereign bonds abroad. And as I said this morning when I opened the exchange, I hope you will consider issuing on the London Stock Exchange.

There are over 400 sovereign bonds listed on the exchange, and we are able to offer a low cost, efficient listing process, with access to one of the deepest financial markets in the world.

The London Stock Exchange is already the world’s largest rupee denominated Masala bond centre: most recently, it hosted an issue by the state of Kerala. It sells more than half of all the rupee denominated bonds issued to overseas buyers globally.

That’s more than Singapore, more than New York, more than Hong Kong, and more than Frankfurt, all put together.

I think this demonstrates the scale of what the UK can do for India’s economic transformation: and the potential of what we can achieve together in the future.

5. DIT/HMG’s offer to India

Now, the Department for International Trade is here to take these links further: with the sector expertise, financial support and networks in both countries to unleash the vast potential in the strong ties between India and the United Kingdom.

That is why we have a network of advisers in locations across India, helping to reduce barriers to market access, helping connect UK and Indian firms and sharing advice on local regulations, business practices and consumer tastes.

That is why last year we appointed Crispin Simon who is with us here today, as Her Majesty’s first ever Trade Commissioner for South Asia, based in Mumbai, and why UK Export Finance, our world-leading export credit agency, can now provide up to £4 billion for British companies doing business in India –available in Rupee’s, so that Indian firms can ‘buy British, pay Indian’.

It is also why the UK Government has its Ease of Doing Business in India programme, centred on the sharing of UK practical expertise with Indian Central and State Governments, removing barriers to economic growth and supporting India’s meteoric rise up the World Bank’s Ease of Doing Business rankings.

6. Conclusion

All these efforts stem from a simple premise: the strength of the India-UK relationship and the complementarity of our economies’ strengths, opportunities and potential for the future. But what are these strengths?

As I have mentioned: Britain’s position as a world-leading finance hub.

India’s ambitious growth and reform plans – and aspirations to develop its financial infrastructure and tap into global sources of capital.

The UK’s government vision to build a Global Britain – with stronger links with the world beyond Europe after we leave the European Union.

And together, these realities are an unrivalled opportunity for our mutual prosperity.

Tagore once spoke of a world where ‘mind is without fear and the head is held high’.

And I am confident that with India and the United Kingdom, we can move forward in partnership together, doing just that. Thank you.

Liam Fox – 2019 Speech on Exporting and Trade

Below is the text of the speech made by Liam Fox, the Secretary of State for International Development, in London on 26 June 2019.

1. Introduction

Perhaps I could start with a question. Of these Government Departments, which has the biggest budget?

Justice, Defence, the Home Office, International Trade. Answers on a postcard. Well, last year Defence came out top, with £28.4 billion. The Home Office was second at £10.8 billion. Third was Justice at £6.3 billion. The Department for International Trade was way down the list. But what might surprise you is the size of the gap between International Trade and the other Departments. In fact, DIT’s budget was less than a tenth of the Ministry of Justice’s, at around £400 million.

Now, this is in no way to suggest other Departments are over funded or that justice, the police or the defence of the realm are not vital spending priorities. I could hardly say otherwise as the former Defence Secretary!

2. DIT in context

But I wanted to put my remarks here in context because there is an untold story here, which I’m going to set out today.

I am proud to lead a department which has a direct impact on our prosperity.

In 2017/18 alone, we helped UK businesses export goods and services worth around £30.5 billion, against our total exports of around £645 billion.

And based on analysis by the Institute for Economic Affairs, DIT estimate that this could potentially generate around £10 billion for the Exchequer.

Over 2016/17 and 2017/2018 we supported more than 3,500 inward investment projects, creating and safeguarding over 190,000 jobs.

So my point is that we have some amazing ‘bang for your buck’ given the resources and for the taxpayer’s investment.

Yet for all this success there is an implicit warning. Global Britain cannot be built on a shoestring.

As the UK leaves the EU, it is vital that Government aggressively promotes and finances international trade and investment, and champions free trade: promoting the private sector companies that are the wellspring of our national prosperity.

Economies in South Asia, East Asia and Africa are becoming more and more prosperous, driving demand in precisely those sectors in which the UK excels.

Ensuring Britain succeeds in this new era means having the right tools to ensure we can unlock the global economy, which will in turn support the UK economy.

And to sell Britain abroad we need to understand two things. First, the markets we are selling into and the opportunities that they have to offer. And second, our overseas network also has to understand what Britain has to sell in goods and services, constantly updated by our sector teams here in the UK.

If the United Kingdom is under-armed – if we fail to rise to the opportunities and challenges of a rapidly changing global economy – there are plenty of competitor countries who may be better resourced or equipped. We must ensure that Britain is not left behind in the global trade race.

3. The case for DIT

Now, according to the International Trade Centre, the UK has an untapped potential of £124 billion in the export of goods alone. That’s companies that could be exporting because their peers do but are not choosing to do so.

And fulfilling this potential means being serious about the scale of the challenge posed.

As we prepare for life after Brexit, we must embrace the opportunity to connect into the markets of the future.

The global economy is changing, as you all know, at a staggering pace. The population is projected to increase to 9.8 billion by 2050, and will become better educated, wealthier and more urbanised.

It is predicted that the share of global GDP of the seven largest emerging economies – including China, India and Turkey – could increase from around 35% to nearly 50% of global GDP by 2050, which would mean that they overtake the G7.

Last year Africa had five of the world’s fastest-growing economies.

Africa’s GDP has been predicted to double between 2015 and 2030. And the African Development Bank has estimated that by 2060 there could be 1.1 billion middle class Africans: quite a big consumer market.

This is a golden opportunity for high value UK goods and services to find new consumers and business markets.

And we are working at the moment to deliver the Prime Minister’s ambition for the UK to be the largest G7 investor in Africa by 2022.

Yet, notwithstanding that, the Department for International Development has more staff in Kenya than the Department for International Trade has in the whole of the continent from Egypt to South Africa.

This is not to say that our international development efforts are too large, or that they are in competition with our international trade and investment promotion efforts.

However, if we want to have greater influence, if we want to sell more goods and services abroad, if we want to encourage more British businesses to invest and operate overseas, and overseas firms to locate and invest in the UK, then we must invest in the capabilities required.

And this means striking a new balance between our spending priorities – not just focusing on how we divide our national income, but how we grow that income too.

Within whatever spending envelope comes out of the next Spending Review, we must ensure that we prioritise those areas that will generate economic growth and wealth creation for our country in the future.

4. Free & fair trade

Over the past three years, I have spent a great deal of time talking about the benefits of free trade. Open, free and fair trade, rooted in a sound and relevant international rules-based trading system has repeatedly shown itself to be of huge benefit to both individuals and states; producers and consumers; and in both developed & developing countries alike.

And I say consumers because, all too often, we focus on producers without setting out the benefits of free trade to household incomes: keeping prices down and ensuring competition and diversity of supply.

In fact, I sat through an International Trade Ministers’ meeting where I had my watch out to see how long it would take anyone to say the ‘c’ word: 52 minutes before anyone mentioned consumers.

As the world’s emerging and developing economies have liberalised trade practices, prosperity has spread, bringing industry, jobs and wealth where once there was only deprivation.

According to the World Bank, the three decades between 1981 and 2011 witnessed the single greatest decrease in material deprivation in human history. Or, as Francis Fukuyama put it in his recent book “Identity”, the percentage of children dying before their fifth birthday declined from 22% in 1960 to less than 5% by 2016.

A billion people taken out of abject poverty in one generation. That is why it is morally unthinkable to reject free and open trade.

Now, as with many freedoms, free and open trade can seem like an inherent fact of life. But the reality is that these freedoms and the benefits that they bestow have been hard-won. They must be continually defended from the siren-call of protectionism, which would tip the global balance in favour of the rich against the poor, the strong against the weak, and the developed against the developing.

And it is worth reminding ourselves of the positive narrative around free trade and the improvement of the human condition, because in the world around us, there is a rising chorus of protectionism which threatens to drown out the case for a free and open global trading system.

New barriers, which were touched upon in the last session, many of them invisible, are emerging around the global economy, creating new impediments to the open commerce that is the lifeblood of global prosperity.

What is worse, many of these impediments are being introduced by G7 and G20 countries – the very nations who have prospered most from the open, liberal trading system of recent decades.

Research by the OECD has shown that protectionist instincts have grown since the financial crisis of 2008. By 2010 G7 and G20 countries were estimated to be operating some 300 non-tariff barriers to trade: 300. By 2015 this had mushroomed to over 1200 non-tariff barriers to trade. Now protectionism can be seductive but is a dangerous affair. I have described it as the class A drug of the trading world – it can make you feel good at first, but it can prove disastrous in the long term.

It is economically destructive, preventing us from reallocating global resources effectively. It is also socially regressive because those on lower incomes spend a higher proportion of their money on goods than services so tariffs and barriers will hurt the poor more. And we will all pay the price if those denied the opportunity of global prosperity turn their backs on the partnerships and cooperation that underpin global security.

We all have to ensure that those who have most benefited from open and free trade do not pull up the drawbridge behind them and deny the same benefits to others. Why? Because I have never believed that trade is an end in itself, but a means to an end. Trade is a means to an end. Trade is a way in which we spread prosperity more widely. That prosperity underpins social cohesion, that social cohesion in turns underpins political stability and that political stability is the building block of our collective security. If you interrupt that continuum of trade and investment, do not be surprised if you get unwanted consequences, politically, economically or in terms of security.

5. DIT’s role in ensuring a thriving economy

Now the Department for International Trade has been key in ensuring we are in a better position to achieve our aims.

We have been working as never before to help businesses take full advantage of global opportunities, ensuring the UK remains a leading destination for international investment, assisting outward direct investment for UK companies into overseas markets, and negotiating market access for UK exporters.

Last year we launched a new Export Strategy: to encourage, inform, connect and finance businesses of all sizes with the goal of increasing our exports from 30% to 35% of our GDP moving us to the top of the G7.

We have convened the Board of Trade for the first time in 150 years to champion trade and investment promotion across whole of the United Kingdom.

We have created an overseas network of Her Majesty’s Trade Commissioners selected for their expertise in particular markets, building our regional trade plans and securing market access across the globe.

We have our world-leading export credit agency UK Export Finance, celebrating its 100th birthday this year, with a £50 billion capacity , available in 65 international currencies, to ensure that no UK export fails for lack of finance or insurance: and at no net cost to the taxpayer. 77% of the businesses that UKEF supported in 2017/18 were small and medium-sized enterprises: a step change from the situation previously in terms of that business relationship.

And, recognising that it takes more than one business to deliver an export contract, I was very proud to announce earlier this month that UKEF has extended eligibility for its support to companies in exporters’ supply chains: not just end stage exporters themselves.

And this will enable these firms, from car parts suppliers to food packagers – who play a crucial role in supply chains but do not directly sell goods or services themselves overseas – to access the support they need to thrive, including in vital areas such as cashflow.

We have also launched the UK’s first ever public consultations on new trade agreements – with the United States, Australia and New Zealand, as well potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP: easier said in the morning than after a drink in the evening!

6. DIT’s global competitors

And there is pressing reason for these efforts. It is no secret that countries across the world are ramping up their trade and investment promotion efforts.

President Macron’s ‘Choose France’ initiative is openly seeking to attract businesses who may be looking to relocate from the UK.

And the Dutch Government has hired more personnel to optimise support for British companies to move from the UK.

And yet despite this, the United Kingdom continues to be the top destination in Europe for attracting foreign direct investment: reaching a record high on the latest figures to the end of 2018.

For the first time in more than four decades, Britain has the opportunity to reach out to the wider world as an independent trading nation, and a global champion of free, fair, rules based international trade.

And, in the shape of the Department for International Trade, the UK has an ideal – and indeed unique tool – to realise that opportunity to drive growth in a post-Brexit economy.

And unlike many of our strategic partners such as Australia, or Canada, the United States or the European Union, the United Kingdom is unique – and I wonder how many people understand this – unique in carrying responsibility for export promotion, trade finance, trade remedies, exporting licensing and international negotiations in a single government department.

It is one of the most important and farsighted legacies of Theresa May’s time as Prime Minister of this country.

And DIT unites all the UK’s trade capabilities, bringing together the government’s international economic levers to give us a truly competitive ‘Trade Advantage’.

It puts trade front and centre of the national agenda, a focal point to create the conditions for UK businesses to be competitive on the world stage.

And as the only department with a network both in the UK and overseas, DIT is uniquely positioned to engage directly with business, with the high levels of expertise and global reach that those businesses need to exploit new opportunities.

7. Aligning trade and development policy

Now, it is not just about structures. As you will know it is also about priorities.

It means ensuring that trade is at the forefront of the foreign policy agenda, as well as our development agenda, so that we can use the new policy freedoms which will be realised after we leave the European Union to better align our international policy goals.

This means recognising the key role of trade in boosting global prosperity and security, and giving developing nations a chance – a real chance – to trade their way out of poverty on a sustainable basis.

The Government is working hard to ensure development and global prosperity are at the heart of UK trade and investment policy, enhancing market access for poorer countries and ensuring that they can take advantage of this access through trade-related assistance that we give.

We are committed to bringing trade and development policy closer together, investing to build a safer, healthier, more prosperous world and helping countries in the developing world leave aid dependency to become our trading partners of the future.

This includes our £1.2 billion cross-Whitehall Prosperity Fund , to promote economic reform and development in countries eligible for ODA.

And this will help tackle poverty and unlock new opportunities for UK businesses in strategically important markets such as India, China, Brazil, Mexico and South-East Asia.

8. Global Economic headwinds

And I believe the need for all this this is now stronger than ever. It will be no secret to those of you in this room this morning that significant headwinds are growing across the global economy.

Last month, the OECD forecast of world GDP growth in 2019 and 2020 were revised down to 3.2% and 3.4% respectively.

At the same time, global trade growth forecasts have been revised down significantly: by 1.6 percentage points to 2.1% for 2019 – the weakest rate since the height of the financial crisis.

And for the first time in decades, the system of free, fair, rules based multilateral trade which underpins our prosperity, has itself come into question.

The World Bank has identified that mounting protectionism and a broad-based increase in global tariffs could translate into a possible annual decline in global trade of 9%, or over US $2.6 trillion relative to the baseline in 2020.

Of course, the strength of the UK economy has so far bucked the trend. The employment rate is at a record high, while the unemployment rate is at a 45-year low. Wages are growing faster than inflation.

British exports stand at a record high of £645.8 billion – a year-on-year increase of 4% at a time when global trade growth has been slowing.

And, as I have already pointed out, latest figures from UNCTAD found that the UK has once again been confirmed as the number one destination for FDI in Europe – hitting a record high of almost £1.5 trillion in stock – more than Germany and France combined.

Nevertheless, for all its successes, we must acknowledge those headwinds in the global economic outlook in which we operate, and the risks which we therefore face.

We need to take the measures in cooperation with our international economic partners to ensure those risks are mitigated, standing up for our belief in free trade and the free trading system.

Otherwise there can be no guarantee that our economy will not be affected by adverse trends.

9. Conclusion

So we must be ready for whatever the future holds.

The UK can only meet its global ambitions and drive prosperity at home – during a time of fierce international competition and global economic challenges – if it puts trade at the top of our agenda.

That is why, at this critical juncture in our national history, it is essential we are appropriately equipped so the UK can boost its competitiveness, forge new and enhanced trade relationships around the world, and thus achieve our full economic potential.

We have a once in a lifetime opportunity to realise our country’s potential as an outward looking, Global Britain.

A country that promotes prosperity worldwide by helping developing countries to trade their way out of poverty.

A country that champions free, fair, rules based trade, abiding by and shaping world-class standards and the international rules-based trading system.

But we cannot do this on a shoestring and we must be willing to prioritise our spending to where it will lead to greater wealth creation and growth, providing us with the future funding of public services such as health, education and defence.

Failure to take the scale of the challenge seriously will mean we may lose out on the potential of a new golden era of British trade.

The opportunity is out there for the taking. And we must embrace it: with confidence, with optimism, and above all, with courage. Thank you.

Liam Fox – 2019 Article on Trade

Below is the text of the article written by Liam Fox, the Secretary of State for International Trade, as part of Sunday Times SME Export Track 100 on 28 May 2019.

I am absolutely delighted to see the huge range of ambitious businesses listed in this year’s SME Export Track 100. I firmly believe that small, dynamic companies such as these are the future of the UK economy, and of our export growth, so this is a great opportunity to celebrate their international success.

Exporting not only increases the profitability of businesses, it has a positive impact on its local economy, encouraging growth and creating jobs. This year’s cohort of companies employs 8,900 people and has created 3,000 jobs in the past two years – that’s 3,000 families with more secure, stable income thanks to exporting.

The SME Export Track 100 showcase the best of British innovation and entrepreneurship. I am especially pleased to see some familiar companies, such as such as Rarewaves (No 100), which has sold rare vinyl records, video games, books and CDs to buyers in more than 170 countries.

This company worked with the Department for International Trade (DIT) to build its overseas ecommerce strategy, and has benefited from specialist advice on launching in China and other complex markets.

Another is Joe & Seph’s (No 36), the popcorn maker. Co-founder Adam Sopher, 34, recently joined our Export Champion community, a network of inspirational business leaders who have expanded their companies through exporting, and are on hand to share practical advice to help turn exporting ambitions into reality.

There is a market out there for every business, no matter its size or sector, but it is crucial that companies are given the support and confidence they need to grow, in order to unlock their economic potential.

The DIT is committed to ensuring that more businesses seize global opportunities, which is why we launched our Export Strategy last summer. This was developed in collaboration with businesses to address the barriers they face to exporting. As we look to ramp up exports to 35% of GDP, it sets out how we will give UK companies the tools they need to enter international markets, offering not just encouragement, but finance, vital connections, and valuable advice on how to expand on the world stage.

Our website, , has a tool to help companies identify and apply to sell through a wide range of international marketplaces. Users can also find information on financial support from our award-winning credit agency UK Export Finance (UKEF), plus live export opportunities from across the world.

In 2017-18, UKEF provided £2.5bn to help 191 British companies sell to 75 markets worldwide. Three-quarters of these were small and medium-sized enterprises. According to the IMF, 90% of global economic growth in the next 10 to 15 years will come from outside Europe, so it is no surprise that 45 businesses on the SME Export Track 100 are targeting future expansion in Asia, while 15 are looking at Latin America.

Take Nosy Crow (No 89), for example. Under founder Kate Wilson, the children’s book publisher is pursuing Latin American opportunities for its Portuguese and Spanish editions. Cleaning products company Mirius (No 67) recently secured a trio of new contracts its bio-security products to export to the Middle East, Taiwan and Brazil — assisted by a DIT grant that helped it secure the necessary accreditation.

Many emerging economies have a growing middle class, which is creating even greater global demand for British products. Analysis by Standard Chartered predicts that seven of the world’s top ten economies in 2030 will be made up of markets currently “emerging” — one of the reasons we have appointed nine trade commissioners to promote British trade and prosperity across the world.

There is no better time for companies to take advantage of the international demand for our products and services. OECD figures show that between 2016 and 2018, UK exports grew faster than those in Germany, France and Italy. UK businesses are already building a truly global Britain through their innovation, ambition and hard work, contributing to our growing economic performance and ensuring we remain the trading partner of choice for so many around the world.

The UK’s position in the global marketplace will be made stronger with the contribution of the SME Export Track 100, which hail from right across the nation.

No matter where you are in Britain, there is much to be proud of, and I look forward to seeing greater success for our world-beating companies.

Liam Fox – 2019 Speech to CityWeek

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, on 20 May 2019.

1. Introduction – the prophets of doom were wrong

If there is one sector in our economy that represents a combination of old-fashioned British grit and determination alongside global innovation and leadership, it must surely be financial services. Time and again doom-mongers have predicted the demise of the City. And time and again they have been proved wrong.

From the Big Bang deregulation of financial markets in 1986, when some predicted London would struggle to continue to compete as a global financial centre. To cries that the end was nigh for the City of London when the United Kingdom decided against joining the Euro – a decision that I believe has stood the test of time. To the 2008 financial crisis, which brought the sector to the brink. All wrong. But the City of London has not just survived the onslaught, it has positively thrived in the face of some formidable threats.

And as we prepare to leave the European Union, once again the death-knell has been sounded on the future of the UK’s financial sector. Now I understand people’s concerns – we are in the middle of a fundamental change of direction, and the unwillingness of Parliament I have to say to give certainty exacerbates the situation. But I am convinced that when the dust settles the City of London will do what it always does, which is to emerge fitter, stronger and more dynamic than ever.

2. The strength of UK financial services

Since the referendum in 2016, the United Kingdom has maintained – and even strengthened – its position as a global financial centre: I would argue as the leading financial centre. Just today, Deloitte’s Crane Survey shows that construction of new offices in London has hit its highest level since the referendum.

Office space under construction between October 2018 and March 2019 amounted to 13.2 million square feet: the equivalent of more than 22 Shards, up 12% compared to the previous survey, while volume of new office construction activity was 3.5 million square feet: some 38% higher than the previous survey. Office space under construction between October 2018 and March 2019 amounted to 13.2 million square feet: the equivalent of more than 22 Shards worth of office space – and a 12% increase compared to the previous survey.

It’s a far cry from the doom and gloom predicted when the UK voted to leave the European Union in 2016, and reinforces the City’s global pre-eminence as an investment destination. And this follows on from recent OECD figures which show the total value of foreign investment stock into the UK increased by a further 5% to £1.46 trillion in 2018, making the UK now home to more foreign investment than Germany, Spain and Poland all put together.

And the financial sector stands at the heart of that success. Our deep and liquid global capital pool, a pioneering regulatory framework, and world-class advisory, legal and related professional services have helped us run one of the greatest trade surpluses in our history: at around £43 billion a year. Some 4.2% of the UK’s working population, nearly 1.4 million people, are employed in finance and insurance. And, with two-thirds of these employed outside London, it’s important to remember that the City’s influence is not confined to the square mile; it stretches right the way across the UK with new jobs and opportunities being created all the time. The depth of our professional infrastructure runs from London to Edinburgh, to Bristol to Belfast. Goldman Sachs, for example, is opening a new office in Milton Keynes, creating up to 250 jobs. The new UK challenger bank OakNorth investment is bolstering its ranks, taking on new staff in Manchester, the Midlands and the South West to keep up with demand for its demand for business loans.

KPMG has announced plans to create up to 400 jobs over the next three years in Glasgow. This is truly a sector which benefits every part of the United Kingdom.

And it is of fundamental importance to the overall strength of our economy. According to the industry body TheCityUK, our banking sector is the largest in Europe. London alone hosts over 250 foreign banks, more than New York, or Paris or Frankfurt combined. It is our largest tax payer, contributing around 11% of total UK tax receipts – or £72 billion on the latest figures – paying for the schools, hospitals, security and the other public services on which we all rely. Those who threaten its viability or stoke up resentment against the sector should remember how much it pays the bills. It is the ability to innovate, to adapt and to change that keeps us on top. The UK was the first Western centre to embrace Islamic finance: the first to offer a Sharia-compliant bond, for example – and remains its leading western centre.

We also host the second largest offshore centre for Chinese renminbi clearing. Twice as many dollars are traded in the UK as in the US, and twice as many euros are traded in the UK as in the Eurozone.

The UK has more than 40% of the global market in Fixed Income, Currencies and Commodity trading. We have the second largest centre for debt financing globally after the United States. And we are – by far – the largest capital market in Europe, accounting for 20% of the bond and loan market, and 33% of all Initial Public Offerings and private equity activity in Europe. And of course the United Kingdom is the home of the FinTech revolution, making sweeping changes, delivering more control, access and increased competition.

It has been estimated that we have more software developers than Berlin, Dublin and Stockholm all combined. And of course we have Level 39, Europe’s largest fintech accelerator. And last year the UK attracted more venture capital investment than anywhere else in Europe, with £6.3 billion. And these advantages are showcased in our Fin Tech sector, with around 1,600 firms contributing approximately £7 billion to our economy and supporting over 75,000 jobs. Furthermore, the UK is now the number one investment destination in the world for mergers and acquisitions, ahead of the US, ahead of Germany and ahead of China, according to a report by EY. And these are just some of the achievements, I could go on and for a little bit of encouragement I might! But the point I want to make really is this: that this Government believes in the City and is behind you every step of the way in your success.

Our financial services are of huge value to this country’s overall prosperity and I am convinced that you will remain at the heart of the global financial system whatever the outcome of the Brexit process.

3. Facing the challenges ahead

Of course, there’s no room for complacency and we must face up to the fact that there will be significant challenges as well as opportunities ahead, not least because a number of new players will become apparent. I recognise that, for many firms in this room, the period since the Referendum has been one of uncertainty. So please be assured that we firmly believe the best approach is to leave the EU with a deal and we are continuing to work hard, including with parties across Parliament, to find a way forward. But whatever the outcome, I want you to know that this Government will remain your champion. We will never jeopardise the City’s success. We recognise your difficulties, we recognise your importance, and we want to work with you to give certainty and stability wherever possible as we move towards our new deep and special partnership with the European Union. But it is also worth stressing, and I think it does not happen enough, that there is a world beyond Europe and there will be a time beyond Brexit.

Britain stands on the brink of a new era in our trading history, continuing our close cooperation with our partners in European Union who still represent 44% of our exports, while reaching out as an independent trading nation for the first time in 40 years to friends old and new in the wider world. While our established partners such as the EU will continue to be of great importance, the locus of economic power is shifting rapidly, with an estimated 90% of global economic growth projected to occur outside the European Union over the next five years. That is where the markets are going to be, and that is where we need to be.

The world is becoming increasingly well educated, wealthier, and more urbanised. And it is predicted that the share of global GDP of the seven largest emerging economies – including China, India and Turkey – could increase from around 35% to nearly 50% of global GDP by 2050, which would mean that they overtake the current G7. It is a seismic shift in global economic power. When I try to explain it to people, I point out them that by 2030, China will have more than 220 cities with a population of more than 1 million people. The whole of continental Europe will have 35. It is worth understanding the scale of the change. This historic shift in global economic and demographic power will reshape the opportunities of international trade in the years to come.

The mission of my Department is to build a future for the UK’s international trade in this emerging environment: to open new markets, build new export and investment opportunities, investment into the United Kingdom and investment out from the United Kingdom, and, perhaps most importantly, champion the cause of free trade and trade liberalisation, especially in services in an era where protectionism is increasingly lifting its ugly head. In 2017-18 alone, my Department supported a total of 332 financial and related professional services projects, securing or safeguarding over 15,000 jobs in this country.

We have launched four public consultations, to seek new Free Trade Agreements when we leave the European Union, with the United States, with Australia to New Zealand, as well as the potential to seek accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP – which is always easier to say now than it is later in the day. Our new Export Strategy will help the UK climb the ranks of the 21st century’s great trading nations by encouraging, informing, connecting and facilitating finance for firms to realise their full exporting potential, and that is particularly true for SMEs where we need to find new exporters.

In addition to this, we continue to work with key economic partners around the world. For example, I was recently delighted to address Qatar Day, which highlighted the mutual opportunities for business across asset management, cyber security, capital markets, sustainable finance and FinTech, for UK and Qatari companies. Qatar incidentally has over £35 billion of investment in the UK, much of which is here in London. And FinTech is at the heart of our global technology and innovation strategy and our growth agenda. That’s why we are continuing to roll out our FinTech Bridges – links between Governments, regulators and private sectors – in priority global markets, from Singapore to China, from Hong Kong to Australia, where we launched our FinTech Bridge Pilot Programme last month. And these Bridges will promote regulatory cooperation to reduce barriers to entry in one another’s markets. We are also working to leverage the UK’s unique expertise and capacities to assist development in emerging economies. For example, in January my team visited Latin America to discuss how the UK’s insurance and risk modelling knowhow might help these emerging economies adapt and mitigate against the effects of climate change.

And both the UK Government and industry are developing an international road map for greening the financial system.

And my Department will be key to helping leverage UK expertise to combat climate change through Green Finance, in which the UK is – yet again – a world leader. The Government is also working with the London Stock Exchange and the wider capital markets community to target local currency bond issuances.
Just last Friday, the Indian state of Kerala issued the first sub-sovereign level bond for developing infrastructure in the UK, following in the steps of countries like Indonesia who did the same last year, showcasing once again the contribution the City is making to finance infrastructure worldwide and contributing to our international development agenda, a fact that is not nearly widely enough understood.

4. Conclusion

I know there are many people who are concerned that Brexit means Britain turning in on itself and becoming more introspective. Nothing could be further from the truth.

As we leave the European Union we will become more open to the world, not less, and more open to the great opportunities that lie beyond European shores. The financial sector and its related professional services will be at the centre of these new opportunities. Never before have prospects globally been so great. Yes of course there are challenges, as there always have been.

But I can assure you that the British Government stands ready to help you seize these opportunities, to make our financial sector’s future even brighter than the past has been.

… accelerating financial inclusion by giving people better tools to save, to manage, to borrow and invest their money … supporting the financial products, technical expertise and experience needed to grow developing economies, which will be in all our interests… … and building a more stable, secure and prosperous future, both for the United Kingdom and our partners around the world.

We have a great opportunity to shape the world around us. In fact, we always have a binary choice: to shape the world around us, or be shaped by the world around us. We must have the confidence and courage to do that shaping. The City has led the charge before. It will do so again. Thank you.

Liam Fox – 2019 Speech to the Institute of Government

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, on 15 May 2019.

Good morning everyone.

When people talk about, or write about, the Department for International Trade, they tend to do so in rather vague terms about what they call ‘trade deals’.

While trade policy is an important part of what we do, it accounts for less than 20% of our total staff.

As an international economic department we are responsible for helping sell UK goods and services to the rest of the world, negotiating market access for UK exporters, assisting outward direct investment for UK companies into overseas markets and for foreign direct investment into the UK.

So I am very grateful to the Institute for Government for providing this opportunity to set out how DIT came into existence, its current role and its future ambitions.

And I am proud to lead a department which has a direct and measurable impact on our prosperity.

In 2017/18 alone, we helped UK businesses export goods and services worth around £30.5 billion.

Using analysis by the Institute for Economic Affairs, it is estimated that this could potentially generate around £10 billion for the Exchequer.

Despite a challenging global economic climate, British exports now stand at a record high of £640 billion – that’s a year-on-year increase of 3%.

Since the Referendum alone, UK exporters have sold around £1.7 trillion of goods and services to the rest of the world.

What’s more, our efforts to keep the UK in the global spotlight as an attractive place to do business has helped stock levels of foreign direct investment hit another record-high of £1.34 trillion.

This has helped generate around 1,500 new jobs across the country each week.

Between 2016 and 2018 we supported more than 3,500 inward investment projects, creating and safeguarding over 170,000 jobs.

And the UK is the number one destination for foreign direct investment in Europe and third in the world last year behind only China and the United States.

It actually seems remarkable to me that three years ago DIT did not even exist.

When I was asked to set up the new department by the Prime Minister in 2016 we had nothing.

No desks, no phones, no IT, no office and no staff.

In fact, on day one I was 25% of the department!

Today we are a department of nearly 4,000 people, led by an excellent Permanent Secretary in Antonia Romeo and equally excellent Chief Trade Negotiation Adviser, Crawford Falconer.

The UK stands ready to implement an independent and visionary trade policy for the first time in more than 40 years.

It is truly a pivotal moment for the country, and I am delighted to say that we are starting from a position of strength.

I wanted this morning to take a step back, as Bronwen says.

How did we get to this point? Where did we start from? And what lessons does it have for the future?

When I became Defence Secretary in 2010 we were faced with reshaping a dysfunctional Ministry of Defence in real time – with £39 billion inherited departmental overspend, a 7% budget cut to be implemented to help reduce the government deficit, two military conflicts in Afghanistan and Libya, a strategic defence review that had not been conducted for 12 years and the loss of around 37% of our civil servants as a consequence of the above.


And this experience was crucial when it came to creating a new department.

While we needed to develop our policies, our strategy and direction, as well as building the very infrastructure from which everything else flows – and all in a very short space of time – we were free from the limitations of someone else’s structures and constraints.

We knew we had to be clear about our purpose from the outset.

We had to find a way to incorporate existing organisations like UK Export Finance, our export credit agency.

So we organised ourselves around three very distinct pillars: trade policy, including trade agreements; investment promotion; and export promotion.

And everyone in the department belongs to one of these. And each of the pillars is owned by a dedicated Minister, and a dedicated Civil Service Director General.

We also had to create an organisational plan to implement these three pillars, build HR and finance capabilities, find office space, and – crucially – find the very best people available to fill them.

Setting up a Departmental Board, including recruiting a team of Non-Executive Board Members led by the excellent Simon Walker, was crucial as it acts as the central coordinating structure of the entire department.

And the Board, which I chair, meets around 10 times a year.

We just held our 27th board on Monday.

It plays a fundamental role in challenging and scrutinising the department’s business, while simultaneously setting our strategic direction and supporting my Ministerial team and senior Civil Servants in delivering our long-term goals.

We publish our agenda to our staff worldwide before the Board sits so they can comment and feed into it, and we inform them of our discussions and decisions afterwards both by email and by video.

But even with this in place, it was clear that we had a problem: the UK had not operated its own independent trade policy for more than 40 years and there were very few civil servants or Government Ministers with direct experience in this highly technical field, and no collective Whitehall memory on which to draw.

All of this could seem daunting, but I actually think that the uniqueness and genuinely ground-breaking nature of the challenges fuelled the excitement and expectation of what lay in store for the department.

But pulling together this team in such a short space of time required a great deal of cooperation across Government.

Now some might think that with more than 430,000 employees scattered across the country and internationally the Civil Service is unwieldy.

Actually, nothing could be further from the truth.

At its best, few organisations are as dynamic and quick to react as the Civil Service.

So when the call went out for help in staffing DIT, other Government departments did all they could to release the people with the right skills.

And our team worked frantically over the summer so we could hit the ground running when Parliament returned from the summer break in 2016.

There is not a day goes by when I am not impressed by the dedication, drive and professionalism of those who have helped create DIT, and delivered world-class advice and delivered out objectives as the structures bedded in.


However, while we had some very experienced people from the outset, they did not necessarily come with the policy expertise that we required.

That’s why we made it an early priority to reach out to the people who already had the expertise that we needed, holding consultations with trade experts around the world.

We were able to draw on the skills and expertise from strategic partners such as Canada, Australia and New Zealand who advised us, for example, on establishing our own trade remedies function.

And there was a great deal to learn, with policy details like procurement, intellectual property, tariffs or rules of origin requiring a whole new level of understanding, or a different perspective in the context of an independent UK trade policy.

That’s why we unveiled the International Trade Profession last year.

This is the newest Civil Service profession and is designed to recruit and train a new generation of international trading talent.

More than 2,500 civil servants have joined so far and are being equipped with the skills they need to make our country the great trading nation that we can be.

Another challenge was the need for DIT to become a credible, data-driven, intelligence-led and more efficient organisation.

This meant developing our analytical, statistical and data science capabilities, and rolling out a new range of surveys and data collections to inform the development of trade and investment policy.

We laid the groundwork to build solid relationships with the ONS and HMRC to deliver the necessary trade statistics, and we pushed forward with the OECD and WTO cutting-edge initiatives developing new measurements of digital trade and Trade in Value Added.

I remember when we started commenting on the lack of data that seemed to be there and I remember saying that if I made decisions when I was still practising medicine on the basis of the same level of information I would probably have found myself up in front of the General Medical Council.

But we have built that capability and are continuing to build it today.

We made sure businesses were involved in helping shape the department from the outset by opening a channel of communication to understand what mattered to them, while at the same time opening the eyes of many companies to the potential of what was coming down the track.

And we expanded our World Trade Organisation mission in Geneva as a very early priority in fact within days, to lay the foundations for when we take up our seat as independent member.


So having got the right people in the right places, we needed to set a clear direction for the department.

So in my first major speech as Secretary of State I made the case in Manchester for free trade and an open and liberal trading environment and warned about the dangers of protectionism.

I said there that “free trade has, and will continue to, transform the world for the better, and the UK has a golden opportunity to forge a new role for ourselves and importantly for the rest of the world.”

I believe this passionately and setting out this intellectual creed from the start was essential in shaping DIT’s culture and its direction.

But in a department the size of DIT, with a presence in 108 countries, political direction by my excellent team of Ministers and myself can only go so far on a day-to-day basis.

So we wanted to create a set of values that went to the very heart of everything we do.

We called it the DIT Spirit.

Central to this is our “vision to create a UK that trades its way to prosperity, to stability and to security”.

Our values of being Expert, Enterprising, Engaged and Inclusive guide how we deliver our vision and what we expect of one another.

These values are in turn underpinned a raft of behaviours that we expect all staff to model.

By setting out our values so early and clearly, we have been able to build a culture of trust and purpose which, in less than three years, is I think established, coherent and cohesive.

This is reflected in our People Survey results, which have shown consistent improvement in the level of employee engagement across the department.

If, of course, there’s a downside, it’s when the Treasury tell me we’ve got a very high application to job ratio and therefore there’s no free-market case to see our salaries go up!

Senior leadership team

Now the efforts of our early senior leadership team to build capacity at pace were quite remarkable.

A single Departmental Plan needed to be built, publicly outlining our core strategic objectives, and how we were going to achieve them.

Trade and investment sector teams, spread across several organisations, had to be brought together: from UKTI, UK Export Finance, the Trade Directorate team at the Department for Business, Innovation and Skills, and overseas teams from the FCO.

Other teams such as the Trade Policy Group needed to be scaled up very quickly. And teams that didn’t even exist, including our corporate functions such as the Ministerial Strategy Directorate, Private Offices, Finance, HR and Communications functions all needed to be built.


Everyone involved in DIT has been in some way involved in something ground-breaking.

As the Institute for Government has said, the UK is unique in carrying responsibility for export promotion, export finance, trade remedies and international negotiations in a single department.

We also carry export licensing on top of that.

This sets us apart from so many of our strategic partners such as Australia, or Canada, the EU, or the United States.

Indeed, across the non-EU G20 countries only China and Indonesia have a separate trade department. Which puts us in a strong position.

We are an international economic department of state, which has brought together skillsets in trade promotion, trade policy, foreign direct investment, outward direct investment and export promotion in one place.

We also convened The Board of Trade for the first time in 150 years to champion exports, inward investment and outward direct investment, but most importantly to ensure that their benefits are spread across all parts of the United Kingdom.

We will be meeting tomorrow in Belfast and I’ve been fortunate enough to have senior individuals from across the political parties with experience, Patricia Hewitt, for example, former Secretary of State at DTI, is one of our members, Brian Willson also has joined us.

We have also established a network of Her Majesty’s Trade Commissioners who are responsible for our nine global regions.

They were selected from the very best talent, across both the public and private sector, for their expertise in specific markets from China to the US and everywhere in between.

Their job, alongside our Trade Policy Group and our partners across the world, is to secure the best market access, trade and international relationships that the UK will need as demand from growing markets in Asia and growing technology change over the next decade and more.

And our trade commissioners set priorities for wide geographical areas and promote the department’s work overseas, but they are responsible for their own regional trade plans, setting out our ambitions in those regions for exports, outward direct investment and foreign direct investment back to the UK.

Now, there were those, and probably still are those, who believe that such a level of autonomy given by a Secretary of State to our Trade Commissioners was, to use the words of Yes Minister, “a very brave decision, Minister”.

But I think our trust has been shown to be very well placed.

And I’ve always said there’s no point in having the most intelligent and most intuitive staff if you don’t allow them to use their intelligence and their intuition to be able to serve the organisation better.

As a department we’ve have continued to run the Exporting is GREAT campaign to raise awareness among UK businesses about how exporting can help firms to grow.

We have launched the online platform which has, among other things, a live directory of exporting opportunities.

For the first time anywhere, a Government – this Government – is putting business directly in touch with potential customers overseas.

Some 149,300 exporting opportunities have been advertised since the service’s launch to UK businesses.

And we are continuing to support the excellent work of UK Export Finance, the world’s first credit agency which this year celebrates its 100th birthday.

Its ground-breaking and innovative work remains as relevant today as it did when it was first created, with some £50 billion worth of financing available in 65 international currencies.

Last year we launched the new Export Strategy to make Britain a 21st century exporting superpower.

Through this we are informing, connecting and financing businesses of all sizes in a bid to increase our exports from 30% to 35% of our GDP moving us towards the top of the G7.

One thing that struck me, however, is that not everyone understands the value of what we sell.

So, this morning’s check you’re awake quiz: if I were to ask you to rank the following sectors in order of their estimated export contribution to the UK economy, with the greatest at the top, what would you say?

So you have insurance and pensions, whisky, defence, and education. Where do you rank them from one to four?

Well, it may surprise you to learn that based on the latest figures education would come top with £19.9 billion.

Based on the latest ONS figures, the total export of insurance and pension services from was just behind at £18.8 billion.

The defence sector comes in at £5.9 billion in the same period.

And whisky exports, according to the ONS, were £5 billion last year.

Now, drawing comparisons is always a minefield and I want to make clear that while these are official figures, I’m not strictly comparing like with like.

But I think it gives us an idea of the huge diversity and strength of the UK’s exports – and not always in sectors that the public might readily think of as being exports for the UK.

We’ve also secured a deal with the WTO to remain within its Government Procurement Agreement, providing access to the £1.3 trillion a year’s worth of procurement opportunities in the global public tender market in a no deal scenario.

We have agreed a no deal tariff policy across Whitehall to minimise costs to business, mitigate price impacts on consumers, and support UK producers against unfair trade practices. In the event of a no deal exit, 87% of total imports to the UK by value will be eligible for tariff-free access.

We have also set up a Trade Remedies Investigations Directorate to ensure the UK can continue to provide support to domestic industries to counter unfair subsidies or dumping. And we have worked to ensure we have bilateral agreements in place to ensure continuity of trade with key markets currently covered by existing EU trade arrangements worth £71 billion, whether that is in the event of no deal, or probably more importantly after the proposed implementation period. I could go on, but I think you get the picture.


What we have achieved in three years is working for Britain and I would just like to say that I’m enormously proud and grateful to my team.

We are helping businesses access new markets, with new tools and new technologies to improve the living standards of people around the world, who are benefiting from greater choice at lower prices.

This in turn helps drive global prosperity, contributes to global stability and security, and underpins the Government’s agenda for a Global Britain.

We’re on the cusp of striking out with our own trade policy for the first time in more than four decades. When we do so we will have the freedom to shape a better future, not just for ourselves and our own people, but for the wider world too.

As I’ve often said, we don’t see trade as an end in itself; we see trade as a means to an end.

It is a way by which we can spread prosperity.

Spreading prosperity helps underpin social cohesion; social cohesion underpins political stability; and political stability is the building block of our collective security.

And it’s a continuum that cannot be interrupted without unwanted consequences. All we require is the courage to seize the opportunities that are out there and my department stands ready to help the country do just that.

Thank you.

Liam Fox – 2019 Speech at Global Trade Review Conference

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, at the Global Trade Review Conference held on 8 May 2019.


I’d like to start with an exercise. Who here has an iPhone with them?

Take it out, turn it over and tell me what it says on the back. The writing’s minute so you’re going to need pretty good eyesight, but I can assure you that I’m not here to give you an eye test.

It reads: “Designed by Apple in California. Assembled in China.”

iPhones are just one example of the complex and integrated supply chains across the global economy, where design and build can take place across a range of countries, with each step along the way adding value to the final product.

If you measure trade merely in gross terms as a single transaction based on the final price you are missing the point. If you do not understand the complexity and importance of global value chains you will fail to set the appropriate policy frameworks. It is part of the challenge we face in a rapidly changing world of trade.

For example, we are in the middle of a revolution in e-commerce, and the digital economy is now a major part of global trade.

This has changed the game for everyone, from the largest corporations, to the thousands of small companies who have never before been able to trade internationally.

Services are now a larger part of the world economy than ever before. And regulation has not kept pace. The WTO estimates that while services comprise around two-thirds of global GDP and almost half of employment – and nearly half of world trade on a value-added basis – the barriers to trade in services are around as large as those in goods half a century ago.

For the UK, as a services-orientated economy – and the world’s second largest services exporter – this clearly needs to change if we are to realise our potential as a truly Global Britain.

If we are make the most of the opportunities for future global prosperity in front of us, it’s essential that we draw up a new set of rules governing key areas such as e-commerce and cross-border data flows, and tackle head-on the obstacles to digital trade such as data localisation. We need to redouble our efforts to promote an open, efficient and transparent trading environment.

The dangers of protectionism

Somewhat alarmingly, we appear to be moving in precisely the wrong direction.

For the first time in decades, the system of free, fair, rules-based international trade which underpins our global prosperity is under attack.

Ever since the financial crisis of 2008, G20 countries have been taking steps which limit market access.

Tariff and non-tariff barriers have been thrown up as countries try to defend or support domestic industries. Economists rarely agree on anything, but there is a near-universal conclusion that protectionism of this nature only ever leads to a dead-weight loss.

The consensus is clear: open and competitive markets are the most efficient vehicle for delivering the prosperity we all want.

Tariffs are a nice euphemism, but in truth are simply a tax on imports – an impediment to that prosperity, with far-reaching consequences. Tariffs are taxes. You can’t like tariffs but hate taxes.

Tariffs mean people at home pay more for the things they use every day, and the businesses that we rely on to drive our economy will pay more to manufacture products with components from overseas.

Tariffs hold back growth, hitting the poorest among us hardest.

And what is worse, broad-based protectionism provokes retaliation driving up costs further.

Drawing on data from more than 150 countries, the IMF recently concluded that tariff increases had an overall negative impact, reducing productivity, income and welfare.

This has led to higher unemployment, higher inequality, and, incidentally, negligible effects on the trade balance. These barriers have the potential to dampen export orders and reduce manufacturing output, causing lost growth and kindling inflation.

Protectionism in history

Throughout history, attempts to protect domestic industries through tariff barriers – such as the Long Depression of the 1870s and the Great Depression of the 1930s – failed and failed miserably.

In contrast, the reversal of these policies after the Second World War had the opposite effect.

People talk about the moon landings or the climbing of Everest as the pinnacle of human achievement, but when you look at the broader benefit both pale in significance compared to the liberalisation of trade.

For the impact this can have goes way beyond any story that GDP data can tell; it’s about something far, far more precious than that.

A study by the IMF found that a change in the real income of the bottom 20% of the population in developing countries was strongly linked with a change in trade openness.

In the past 25 years, trade has helped lift one billion of our fellow human beings out of abject poverty by creating jobs and raising incomes.

As Francis Fukuyama put it in his latest book “Identity”, the percentage of children dying before their fifth birthday declined from 22% in 1960 to less than 5% by 2016.

This unprecedented transformation in living standards has been made possible by the General Agreement on Tariffs and Trade, the World Trade Organisation, and our acceptance of a global rules based system driving one of the greatest of mankind’s achievements to date.

Of course there are those who do not share this interpretation of events, who cannot channel their inner Adam Smith and who argue for intervention and protection.

The infant industries fallacy

It is certainly the case that some countries have historically developed their industries while simultaneously having high tariff barriers.

Some have argued that this is the way forward for industries which require protection from more established competitors.

However, this is not the case. As the OECD has laid out, there is a clear link between Global Value Chain integration and economic transformation for developing economies.

The boom in international trade since the Berlin Wall fell – growing at 8% a year – has seen developing economies as some of its biggest beneficiaries.

Whereas in the past some nations may have used tariffs to protect infant industries in a world where production and value chains were principally within that country, this model no longer works.

As we have seen with my iPhone example earlier, we now live in a world where complex global value chains that cut across national boundaries are an ever more important part of how we do business.

The use of imported intermediate goods and services has become dramatically more important for global exports.

It is estimated that such trade has doubled, with the value added of imports as a share of exports rising from 10% in 1990 to around 20% in 2015.

Imposing tariffs and non-tariff barriers in this globalised world threatens to fragment these supply chains, often damaging the very industries they seek to protect.

Trade statistics

A failure to understand the complexity of these global supply chains is also causing other problems.

All too often, we hear about how a reduction of our trade deficit is an improvement and an increase a worsening. This is only half the story.

The way the statistics are currently calculated does not capture the value added by each stage of the production process, nor the role of subsidiaries abroad.

This has led several economists to argue that some notional trade balances – most notably between China and the United States – are very misleading.

So, returning for the last time to the iPhone example: US import data will show an iPhone purchased in the US as an import at the retail cost, which is recorded as a trade deficit for the US, and a trade surplus for China.

This does not reflect the fact that only a fraction of its value is added in China. Most of its value was added in California.

And of course, Apple is a US company meaning much of the profit will ultimately end up there.

The deficiencies in measurement tend to make the trade deficit of industrialised economies like the UK and the US – which excel at things like design and software coding, activities that not reflected in most trade metrics – appear larger than they are.

Hal Varian, Google’s chief economist, has argued that the value of software in worldwide smartphone sales alone cuts the US trade deficit in half.

WTO reform

But a free and open system also has to be a fair one. Free trade does not have to mean a ‘free for all’. Despite its many successes, the international trading system is clearly not perfect and we must do everything we can to ensure that rules are applied fairly, universally and transparently.

We cannot tolerate illegal dumping or subsidy or the inability to determine whether a business is in the state or private sector.

In any dispute, our first port of call has to be the World Trade Organisation – the home of the rules-based international trading system that underpins our prosperity. For all its faults, it represents the best hope of retaining a global consensus on how we operate our trading system.

The United Kingdom will soon take its seat around the table as an independent member for the first time in over 40 years. It is an opportunity for us to help shape the global debate.

Working alongside our allies, we are making the case to update the WTO rulebook to tackle underlying trade tensions, which include industrial subsidies, state-owned enterprises and forced technology transfer.

We must encourage trust and transparency in the WTO by updating the dispute settlement system and improving members’ compliance with notification requirements.

And we need to ensure that the system of special and differential treatment for developing countries is fit for purpose.

Levelling the playing field involves carefully considering poorer countries’ individual needs, and ensuring that every country from the poorest developing nation to the world’s richest economies reap the benefits of a liberal but rules based system.


Britain is a great and historic trading nation, but we have never seen this trade simply as an end in itself. Trade is a means by which we are able to spread prosperity.

That prosperity underpins social cohesion and that social cohesion, in turn, underpins political stability, which is the building block of our collective security.

It is a win-win system.

But this system cannot be taken for granted and those of us who genuinely believe in free trade and competition have a duty to recommit ourselves to the multilateral system with the WTO at its centre.

Yes let us recognise its faults and weaknesses but let us act collectively to make it work for all members – large and small, rich and poor, for today and for tomorrow. As we prepare to leave the EU, the United Kingdom has a Department of state for International Trade, dedicated to helping businesses like the ones in this room export, driving inward and outward investment, negotiating market access and trade agreements, and championing the concept and benefits of free trade.

It is why we have a network of Her Majesty’s Trade Commissioners, with the experience and autonomy to drive our trading performance in specific markets, from China to North America to Africa. You will hear from some of them later.

However, this is not a mission Government can ever fulfil alone.

Businesses – like the ones represented here today – have a crucial role to play.

We want everyone who understands the vast opportunities that free trade represents, and the prosperity it brings, to help make this case.

To be a voice, promoting the benefits of the global multilateral trading system – and making that case throughout the UK and internationally.

We want you to make the case for international trade in practical terms – how it benefits your businesses, your communities and makes a real difference to people’s lives.

It is this case that will win the battle against the siren voices of protectionism. We should not be by-standers in our future. We should set a firm course to shape the coming era. For Britain and the world.

And we must success for the price of failure would be too high.

Thank you.

Liam Fox – 2010 Speech on General Fonseka

Below is the text of the speech made by Liam Fox, the then Shadow Secretary of State for Defence, on 17 February 2010.

After years of war, there is much talk in this country about peace. This is a welcome change. But peace is not simply the absence of war.

A genuine peace requires other, positive attributes. It requires freedom from fear-the fear of hunger, the fear of sickness, the fear of persecution.

It requires freedom of expression including a free press and broadcast media. It requires freedom to dissent within the law. And it is a law that must be applied without regard to race, gender or religion, accepting fundamental human rights. It is a law that must apply equally to the governed and the governing.

Sri Lanka is a fortunate country. It has seen decades of violence and terror under the LTTE brought to an end. It has a constitution and a judicial system that should be the foundations of a peaceful, tolerant and progressive society.

This is a country with huge natural wealth and economic potential. Yet too many Sri Lankans have been denied access to this potential. I have visited camps where children from the war zone have never been to school. I saw other children brutalised by a life as child soldiers, totally unaware of the existence of a different lifestyle that so many others take for granted. For those returning home from the camps there must be a new start with access to quality social infrastructure-good housing, education and healthcare. All Sri Lankans, of whatever ethnic group, must share equally in the future of this country or the country will never reach its full potential.

Of course, such infrastructure requires money. That is why I have brought plans with me for the creation of a new fund which can help provide basic social infrastructure for the reconstruction that this country will need if the end of the violence is to develop into a sustainable peace. I am extremely grateful for the support I have received across the political spectrum and from religious leaders. We will be signing a memorandum of understanding for the workings and next steps in establishing this fund and will set out details in the near future. I hope this initiative we will give the people of Sri Lanka, and particularly the Tamil people in the North and East, the tools they need to ensure that opportunity and prosperity are the inheritance of all the people of this island.

There is however a political problem which needs to be addressed if the outside world is to have confidence that Sri Lanka is a stable place in which to invest. The President won a huge victory and deserves congratulations. But the situation surrounding General Fonseka threatens to damage Sri Lanka’s international reputation . At a crucial time for this country’s future it cannot afford to have the prosecution of such a senior military officer portrayed as an act of revenge. It is not for any outside nation or body to determine who should or should not be tried in this country but how such trials are conducted will play a huge role in how this country is perceived abroad. The law not only has to be applied fairly but has to be seen to be applied fairly. It is my strong view that the General should be tried in a civil court where the charges against him can be tested with all the rigour that the law can muster and where transparency will enable both the domestic population and the international community to have confidence in the judicial process.

Liam Fox – 2010 Speech on Defence Spending

Below is the text of the speech made by Liam Fox, the then Shadow Secretary of State for Defence, on 3 February 2010.

I would like to thank the Secretary of State for his statement and for prior sight of it, although we do seem to have been the last to see the Green Paper since every journalist I have met this week has been telling me about its contents.

I think the Secretary of State deserves genuine praise for his attempts to find a cross party consensus. When the history of this dreadful government is written, his will be one of the more honourable mentions. I would also like to thank my Honourable Friend the Member for Mid-Sussex for the effort he has put into producing a balanced and open-minded Green Paper and I know that his experience in the MoD was appreciated in the process.

This Green Paper indicates that the MoD is coming out of denial but the Prime Minister is not. We are used to the Prime Minister briefing against his perceived enemies in the corridors of Westminster but not normally undermining a Secretary of State on the front page of The Times. How far away from the number 10 briefing this week is paragraph 9 on page 9 of the Green Paper which says ‘we cannot proceed with all the programmes we currently aspire to. We will need to make tough decisions.

Of course this week we have seen the truth of the Prime Minister’s approach to defence. The former Defence Secretary, the Right Honourable Member for Ashfield, said that there was ‘quite a strong feeling that the defence review was not fully funded.’

The former Chief of the Defence Staff, Lord Walker, told us that the defence chiefs threatened to resign as a result of the savage cuts which the then Chancellor tried to apply to defence in the middle of two wars.

And today the former permanent secretary Sir Kevin Tebbit talked about having to operate a ‘permanent crisis budget.’

The Defence Secretary introduced defence cut backs in December but the Prime Minister has talked about Defence increases this week.

In his statement the Secretary of State said ‘there has been a great deal of interest and speculation about whether any major capabilities will be confirmed in the Green Paper’.

But we all know why: it is because No 10 have been briefing all week that any project that has job implications for the Prime Minister’s constituency will be spared. That is taking a core strategy way too far.

There are some things on which we are clearly agreed.

We know from bitter historical experience the difficulty of predicting future conflict- either its nature or its location. We cannot base our future security on the assumption that future wars will be like the current ones. That is why we must maintain generic capability, able to adapt to any changing threats.

There is no doubt that in Afghanistan we have been too slow to give the army, in particular, the agility and flexibility it needs to maximise its effectiveness.

But we must also remember that we are a maritime nation dependent on the sea lanes for 92% of our trade. A time when the threat of disruption is increasing is no time for Britain to become sea blind.

We also agree that France and the United States are likely to be our main strategic partners. For us there are two tests: do they invest in defence? And do they fight? Sadly too few European allies pass both these tests.

The Secretary of State talked about a 10% increase in the defence budget in real terms. He also talks about the higher level of defence inflation. Can he tell us how much of the increase in the defence budget has gone into pay, pensions and allowances? And what proportion of that increase has been made available for equipment and other programmes over the period he outlined?

Can he confirm that the department’s budget for next year will be 36.89 billion pounds as previously set out? He says ‘not a penny will be cut for next year’s budget.’ What cuts does the Government envisage after that?

Unlike the Opposition and the House of Commons, he has access to all the costs of the contracts and penalty clauses for the major programmes. Why will the Government not give honest answers about the implications of the cost overruns in the years ahead?

We know that there has been serial mismanagement at the MoD, with the equipment programme somewhere between 6 and 35 billion pounds above what can be afforded. How will it be reconciled?

After twelve years on indecision, we finally get a Green Paper weeks before an election. And despite all the good words in this Green Paper today, the future defence budget will have to be conducted against the backdrop of Government debt of 799 billion pounds. That is the equivalent of borrowing 1.1 million pounds every day since the birth of Christ.

That our nation’s security should be compromised by Labour’s historic economic incompetence is truly a national tragedy.

Liam Fox – 2019 Speech on Wales

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, on 9 March 2019.

As Wales Week in London draws to a close, there is no better time for us all to reflect on Wales’ position in the global marketplace – and there is much to be proud of.

The amazing scope of Welsh innovation and entrepreneurship was showcased in last year’s Board of Trade Awards hosted in Swansea. They ranged from a marine lighting firm in Swansea, furniture makers in Wrexham, revolutionary construction material manufacturers based in Pontypridd – and a brewery in Newport. These companies have contributed to Wales’ impressive economic performance. LSN Diffusion – an Ammanford-based powder coating company – exports nearly 90% of its products to countries including India and the U.S for example.

Goods exports from Wales continue to grow – rising by 3% to £16.9bn in the year to Q3 2018 – and that’s before taking into account our world-class services offering to global investors. Wales attracted 57 FDI projects in 2017/18, creating more than 3,100 new jobs.

Wales is building a strong reputation for innovation around the world – offering foreign companies access to top class talent, and a growing range of opportunities in areas like semiconductors, cyber security, neuroscience, wound healing, and of course the financial and insurance sectors, which in 2017 employed 29,500 people in Wales, contributing over £2.8bn to the UK economy.

The UK Government is working hard to continue that success by supporting Welsh firms to enter and expand into growing markets around the world.

In November 2018, we announced a £250m Energy Investment Portfolio in Wales, which will deliver further growth in innovative sectors, create jobs, and drive prosperity.

We also have dedicated online support –, giving overseas businesses help and advice to invest in the UK and access our high potential investment opportunities – and, which acts as a first port of call to get Welsh firms started on their exporting journey. The platform also offers information and support ranging from country guides and export opportunities to specialist advice on accessing particular markets.

And UK Export Finance – the UK’s export credit agency – has dedicated finance managers in Wales and has provided nearly £7.5m of support for Welsh exporters in 2017-18, resulting in over £64m worth of overseas sales.

The truth is that if you’re a Welsh business, or thinking of investing in Wales, there has never been a better time, in terms of support, opportunity and ease of doing business.

The UK – with Wales at its heart – stands at the beginning of an exciting period in its trading history, with the opportunity to reach out to the wider world as an independent trading nation. It is estimated that in the next 5 years, around 90% of global economic growth will come from non-EU nations.

Cardiff-based company Sure Chill is one of the Welsh companies leading the way, with life-changing medical refrigerators that have protected 20 million vaccinations in over 50 countries including Kenya, Mali, Nepal, Nigeria and Pakistan.

As we prepare to leave the EU, this is the moment to look to the future – to a world beyond Europe, and a time beyond Brexit. The UK is a great trading nation – and the UK Government will continue to work with firms in Wales to deliver the investment, exports and new opportunities that our people, businesses and communities need.

Liam Fox – 2019 Speech at Security and Policing Exhibition

Below is the text of the speech made by Liam Fox, the Secretary of State for International Trade, on 5 March 2019.

I would like to welcome the many international delegations who are joining us at today’s Security and Policing Show – more than 40, I believe – as well as Mark Goldsack, my Department’s new Director of our Defence and Security Organisation.

And thank you to the Home Office’s Joint Resilience and Security Centre, and ADS for organising such a successful event yet again this year.

The UK’s security industry is one of the strongest and most innovative in the world. It is one of our most diverse sectors in terms of both capabilities and application.

You are experts in a wide-range of areas, including scanning, trace detection and anti-theft systems. We are one of the top three nations for cyber-security solutions globally. And we are renowned the world over for our expertise in securing public spaces, building on our experiences at London 2012 and elsewhere – thanks for your efforts.

Your innovation, design, heritage and expertise are second to none.

I sometimes get asked: “What does Britain actually make now?” I’ve no doubt many of you have heard the same thing. I have to point out that we export a huge variety of commodities. In the year to December 2018, we sold £33.3 billion-worth of cars, £24.7 billion of medicinal and pharmaceutical products, and £24.7 billion of mechanical power generator products-from aircraft engines to gas turbines, and from steam generators to nuclear reactors. So much for Britain not producing anything any more; we are actually experiencing a renaissance in manufacturing in this country.

At the Department for International Trade, we also get the little brother of that: “What does Britain actually export?” Again, I tell them that we have an excellent economic success story to tell. Between 2010 and 2018, exports have grown by 40.8%, around 5% per year on average, driven by an increase in services exports of 55.2%.

Exports of goods and services in the year to December 2018 were worth almost £630 billion.

In addition to our world-class goods exports, we are also the world’s second largest services exporter. In the year to September 2018, we sold some £82.4 billion-worth of business services, almost £61 billion of financial services and nearly £38 billion of travel services. Here, across the sectors, the UK has huge comparative advantage. Services account for almost half of all our exports-42.4% going to the EU and 57.6% to non-EU countries.

This sector is a great example of why such questions fail to understand our national success.

The statistics are clear. The United Kingdom is the world’s second-largest defence exporter; the third-largest aerospace exporter and a producer of 40% of the world’s small satellites.

At the Department of International Trade we have been doing our part to further strengthen that success, providing support to UK companies to help them get started and expand their footprint in global markets.

This year alone, the department has supported over 140 export wins.

For example, we have recently helped a Lincolnshire based security systems innovator, Concept Smoke Screen, to secure a £17.5 million contract to export anti-theft fogging systems to Brazil’s banking sector.

Or there is Herefordshire based Silent Sentinel, who have recently sold £2.5 million of surveillance equipment into Poland.

In terms of cyber we have exporters such as Garrison, developers of one of the world’s most secure commercial internet browsing technologies, who have recently secured major deals in Germany and the United States. It is success stories like these that underpin hundreds of thousands of high-skilled manufacturing jobs, allowing people to support their families right across the country.

This sector plays a vital role in the UK’s prosperity: totalling some £4.8 billion of our exports – and it continues to grow.

But it also plays a wider role: creating the products and services which promote global stability in a very direct way, by sharing the means of security and policing with our friends and allies, and, in the final analysis, saving lives.

I am sure you don’t need me to tell you that we are at a pivotal time in British history. As we prepare to leave the European Union, Brexit is predictably consuming much of the Government’s attention – and a lot of our political bandwidth.

In terms of my department’s own responsibilities, our main priority is making sure that we transition the trade agreements the EU has with third countries, and that our trade regime works operationally on day one, in any scenario.

For the Government as a whole the priority is, of course, securing an agreement that the EU and the House of Commons can both agree to.

While I cannot tell you exactly what the outcome of those discussions will be, I can tell you that it is the Government’s firm intention for you to have continued access to European markets and supply chains, and to provide certainty for businesses and individuals as we move towards our future deep and special partnership with the EU.

But I would also like to highlight the fact that there is a world beyond Europe and there will be a time beyond Brexit.

While people often think of International Trade as a ‘Brexit department’, about 90% of our staff work on trade and investment promotion.

Around 130 of those are in the Defence and Security Organisation, our largest sector team by a wide margin, alongside a separate team for civil aerospace.

We recently launched our first ever space exports campaign. And we are making renewed efforts to focus on our cyber security sector, which is driving much of the growth in our exports.

Last April we launched a specific Cyber Security Export Strategy, based on the benefits of trade prosperity and our own national security, and I am glad to see so many representatives from companies in that area here this evening.

Some of you may also have been involved in the work we have been doing to develop a revised Security Exports Strategy, which we hope to publish soon.

It will set out our ambitions to support the industry, working in partnership with other departments, the Government’s innovation programmes and trade associations to provide greater levels of support to ensure that the UK’s exports in this important sector continue to grow.

This work, in turn, forms part of our wider Export Strategy that was published in August 2018. It is informed by extensive engagement with businesses and business organisations across all parts of the UK.

One of the things we identified in that Strategy was that the Government needed to concentrate our support on where we could make the most difference… … ensuring no viable export fails for lack of finance or insurance – through our world-class export credit agency UK Export Finance… … connecting businesses with local markets and addressing barriers to trade… … informing business about overseas markets, giving them the knowledge they need about local business cultures, regulations, or consumer needs – including the development of as a one-stop advisory shop…

… and encouraging firms to export through targeted support and in setting up a network of Export Champions – businesses who have successfully exported, and have the credibility to mentor others to do the same.

No-one is better-placed than the Government to talk to other Governments – something that is important to many of you here.

Many of you count foreign Governments as key customers. Even more of you count the British Government as a key customer.

Many of you operate in heavily-regulated areas, where Government-to-Government conversations can make a real difference; helping to connect businesses, opening markets and unlocking opportunities overseas.

And I am delighted to be able to add to that support this evening. Just before speaking to you, I signed an agreement with Sir Kevin Tebbitt, the Chairman of RISC.

This document formalises the efforts we have made with RISC and the many trade bodies that they represent over the last year to strengthen our mutual support for the sector, and we will be setting out our plans for this in more detail in the forthcoming Security Export Strategy.

The Security sector is one of the most adaptable and responsive industries in our country: rising again and again to the challenges posed to our safety and security.

And it needs to be, given the ever-evolving nature of the security challenges we face: whether it be cyber security solutions to protect our data, innovative ways to manage crowded places, or in preventing disruption at large transport hubs.

But I am confident that it is this very adaptability and responsiveness which will underpin your future success and continue to drive our international exports.

The mission of my department – to build a future for the UK’s international trade that supports our prosperity, secures our stability and guarantees our security – is a vital one and it is complemented by the efforts of everyone in this room.

Britain stands on the brink of a new era in our trading history, continuing our close cooperation with our partners in European Union while reaching out to friends old and new in the wider world, from which 90% of global growth is expected to originate in the next five years.

Our mission is to open new markets, build new trade and investment opportunities and to use these to underpin the Government’s agenda for a truly Global Britain.

It is a vital mission: and it is one I very much look forward to advancing in partnership with this sector in the year to come. Thank you.