Conservative leader Kemi Badenoch closed her party’s conference in Birmingham today (7 October). Beyond the much-anticipated inheritance tax announcements, we have the business and trade policy announcements below.
Away from party conferences, there are mixed reports on whether the UK is set to impose tariffs on Chinese electric vehicles (EVs), with business and trade secretary Jonathan Reynolds expected to rule the measure out unequivocally but other senior figures suggesting otherwise.
MPs weigh in on that issue, as well as how UK businesses can stay competitive at home and abroad at a Conservative Party Conference panel, co-hosted by the Spectator and the Chartered Institute of Export & International Trade.
Kemi’s keynote
Closing the Conservative Party Conference earlier today, leader of the opposition Kemi Badenoch said her party would deliver a “stronger economy” and a “stronger country”.
She said growing the economy would be the “central organising principle” of a Conservative government, and that “economic security and national security go hand in hand”.
Badenoch, previously a strong supporter of Brexit, said very little on the UK’s EU relationship, other than to criticise prime minister Andy Burnham for “reopening the Brexit debate”, which would create uncertainty for businesses. “Rerun[ning] those arguments” was “a terrible idea” she added.
Among the business measures outlined, Badenoch said the Conservatives would deliver a third runway at Heathrow. She also claimed banking reforms would release £450bn in capital to “every corner of our country” and the party would scrap business rates for “most of the high street”.
The former trade secretary highlighted high UK energy costs as a key inhibitor of growth, and said reliance on imports is contributing to this, as well as pollution.
“Importing oil and glass from countries that drill it in a dirtier fashion” isn’t a solution, Badenoch told the audience. She said the Conservatives would drill in the North Sea and build nuclear, creating “cheap, clean, abundant energy.”
She said that the Conservative have a “fully-funded plan” to get UK defence spending to 3% of GDP – in line with Nato targets – claiming to be the only party that does, and reiterated the party’s plan for a drone defence measure, similar to Israel’s Iron Dome system – Britannia Shield.
UK tariffs on Chinese EVs
Will the UK impose tariffs on Chinese EVs, as Brussels has been calling on ministers to do?
That’s been an ongoing point of discussion among ministers and industry leaders, both at the Conservative Party Conference and beyond.
Following exclusive FT reporting suggesting that EU negotiators had urged UK counterparts to align with Brussels on the issue for ‘Made in Europe’ concessions, Reynolds said that the idea is “under review”.
That came just before an EU plan to cap imports of Chinese hybrid cars to protect European manufacturers, reported by Bloomberg today.
According to further reports from the publication, Reynolds ordered officials to create a package of potential tariffs that could be applied to Chinese car imports.
While conceding publicly that Chinese EV tariffs are “on the table”, the trade secretary also said he won’t be drawn into making decision at the behest of other trading partners.
“Our core interests are slightly different to the EU as a whole as we are an export-led industry,” Reynolds told an audience during the Labour Party’s conference last week.
“We have markets all around the world and, frankly, if you end up imposing tariff barriers against countries – and then lose your market access because of reciprocal arrangements – you’re not gaining.”
Politico’s Morning Trade UK newsletter reports suggests one of the UK’s senior ‘reset’ negotiators is on a different page, though, as European relations minister Hamish Falconer said he was “surprised” by the UK-China tariff reports.
“That’s not the kind of conversation that I’m having with my European counterparts.”
He added that on the EU’s Industrial Accelerator Act (IAA), the UK would be seeking a “straightforward” and “unfussy” deal whereby UK goods were considered EU-origin.
Speaking at a panel at the Conservative Party’s conference, co-hosted by the Chartered Institute and the Spectator, shadow exchequer secretary John Cooper said that while Chinese EVs had seemingly begun flooding the UK market “overnight”, tariffs are a “blunt tool” and not the answer.
Spectator panel
This panel – named ‘Competing in a Changing World: How Can UK Businesses Stay Ahead?’ – saw panellists discuss how businesses can compete both on international and domestic stages.
On trade, panellists highlighted challenges at both the national and international level, as well as how business attitudes need to shift in order to accelerate trade-led growth.
Cooper also spoke about the need for collaboration with trade partners to build resilience, singling out Canada as presenting critical mineral opportunities and noting Sweden’s mineral scheme.
Bolaji Sofoluwe MBE, group managing director at ETK, said that the UK is “sleeping” on good trade opportunities across African nations, especially as the US and China are already heavily invested in projects on the continent.
Reflected on challenges facing many trading businesses, Bolaji said that non-tariff barriers should be given more consideration when it comes to trade supports. Offering the example of recent US data controls, she said many businesses are not sufficiently informed about challenges stemming from non-tariff barriers.
Chartered Institute director general Marco Forgione said that many of the organisation’s members had struggled with uncertainty in the currently geopolitical and trade climate, but also emphasised the opportunities stemming from UK trade deals with the US, India and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
He added the UK private sector could be taking a bigger role in offering trade support to businesses, giving Business Sweden as an example of effective business-government partnerships.
Meanwhile, NatWest’s head of sales channel management Nicholas Clark, said that “when we talk trade we need to talk innovation”, and encouraged businesses to invest in automation, growth and skills.
Elsewhere in trade
The FT reports that oil tanker captains in the Gulf are paying rates of around $100,000 per month to transit the Strait of Hormuz
Norway’s state oil company is pressuring the UK government to approve two controversial North Sea oil field sites, issuing threats to pull investment, the BBC reports
Yesterday in trade
Shadow chancellor Andrew Griffith promised tax cuts if the Conservative Party returned to power at the next election
Ministers Chris McDonald and Lord Anas Sawar started trade tours in Asia
Yemen’s military said it had recaptured a key port on the Strait of Hormuz from Houthi rebels
