Richard Holden: Three opportunities that open for us in an Australian trade deal

20 Jul

Maddisons Coffee Shop, Front Street, Consett

On Saturday, I did my sixth “Lockdown Litterpick”, around the beautiful Bollihope Common. A group of us bagged up five bin bags full of cans, bottles, pizza boxes and the general detritus that had been dumped in one the most beautiful spots in my constituency.

While chatting to my Association Chairman as the rubbish was collected, one of the volunteers revealed that she had emigrated from Canada to marry a Brit almost 40 years ago. Later that afternoon, I spoke with an old friend who had worked with me when I was a Special Adviser, before getting married and returning ‘down under’ to work for the Australian Government.

And later that afternoon still, on my way to my constituency office, I listened with interest to Times Radio as one of their correspondents gave an update on the New Zealand election – where the newly-elected National Party leader, Judith Collins, seems to be clipping the wings of Jacinda Ardern in an election that had until a couple of weeks ago looked as though it was shaping up to be a Labour landslide.

I mention these things because they to remind us that the ties that bind the United Kingdom with Canada, Australia and especially New Zealand are incredibly strong. Yes, they’re linguistic and historic, but they’re also based on families and friendships, and shared mature democratic systems of government underpinned by the rule of law.

As has been seen in recent years in both Australia and the United Kingdom, our Parliaments are more powerful than their premiers and the people aren’t afraid of switching out either if they’re not getting what they want. While Britain has spent the last few decades concerned over and trying to reform the nature of our relationship with the EU (which in 1980 made up 30 per cent of global GDP, but has shrunk to just under 15 per cent today) our CANZUK allies have been reaching out into the world.

I am very aware of how much with the grain some of these thoughts are in traditional conservative circles. But it’s increasingly clear to me that the opportunities presented by closer bonds with our Commonwealth allies are not some nostalgic pipe dream, but instead absolutely central to our future global ambitions, as well as the fillip our post-Coronavirus economy will need.

Our trade deal with Australia looks a though it might be one of the most comprehensive of the ones currently on the table, and there are three aspects of it that I’d like to flag.

First, Australia currently has a 20 per cent tariff on imports of luxury cars. Like the UK, the country is also right-hand drive. With our Range Rovers, Aston Martins and other top marques, surely this must be top target for negotiations.

Second, we’re much more understanding of Australians who want to come and work in the UK than the other way around. As we end our open borders with the EU and look at our Australian-style points-based immigration system, more mutual measures with our cousins in this regard must be a basis of future agreements.

Finally, Canada, Australia and New Zealand are all very developed service sector economies, but even our biggest companies are dwarfed by those of our American cousins. By opening our services sectors up to each other, we’ll drive competition, lower prices, increase productivity and, crucially, enable the formation of global firms with the diversity and reach across the globe.

That’s not to mention the new security integrations between our counties as the power structures of the globe tip towards the Pacific more generally and in which Canada, New Zealand and Australia all have a massive stake. We should be looking to leverage our foreign, defence and international assistance policies more generally on these security and international arrangements, as well as looking to build closer ties with an old ally of manufacturing in the North East of England – Japan.

China’s recent actions towards Hong Kong, the Pacific island nations, the South China Sea and, domestically, to its ethnic minority populations should give us all pause for thought. At the forefront of the minds of our allies across Asia and the Pacific is Chinese outward expansionism, control and internal repression

For Britain, out into the world is our call now. The tectonic plates of geo-politics have shifted to the Pacific; away from Europe to the wider globe. The world, not just the continent, is where Britain is at home. Now we’ve got to make the most of the opportunities on our global doorstep – and that starts with building our relationships with our old allies facing a new world on the Pacific rim.

Alan Mak: A new tech scrappage scheme will boost productivity

2 Jul

Alan Mak is MP for Havant and Founder of the APPG on the Fourth Industrial Revolution.

In the aftermath of the 2008 financial crash, governments around the world including those of Japan, Germany and the US responded to calls to help struggling car manufacturers by introducing popular scrappage schemes. After new car registrations declined by 30 per cent in the UK in the first quarter of 2009, the schemes saw demand bounce back, while dirty, polluting old cars were consigned to the scrapheap.

Now there is media speculation about a new car scrappage scheme – drivers will be given up to £6,000 to swap their petrol or diesel cars for electric ones – designed to provide a shot in the arm for the UK electric car manufacturing sector in the wake of Coronavirus.

Yet focus should also be given to how the Government could launch a similar scheme to help factories and businesses investing in the latest technology. We must use this period of recovery to press the fast-forward button on helping our businesses to improve their performance by adopting new technologies quickly, accelerating processes that would have otherwise taken many years into a much shorter period.

Just as the Government ushered a brand-new fleet of cars onto our roads a decade ago, a new scrappage scheme should be introduced for old and obsolete IT, tech and machinery. By particularly focusing on the adoption of robotics, it would achieve the dual ambitions of boosting productivity, and giving our businesses the cutting edge in international markets post-Brexit.

More British firms need to follow in the footsteps of innovators such as Ocado, who have created one of the most advanced automated warehouses in the world. Ocado’s newest fulfilment centre uses automation to pick 200 items per hour of labour time using its hive system – far outstripping traditional supermarket competitors.

As the Fourth Industrial Revolution accelerates, for British manufacturers and suppliers to keep up with international competitors, they must upgrade the machinery and software that is powering the workplace.

Yet automation and the adoption of new technology is an area where the UK needs to improve if we are to boost the nation’s productivity and economic growth after Coronavirus. Research published by the International Federation of Robotics shows that the UK has a robot density of 71 units per 10,000 employees – below the world average of 74 units – ranking us 22nd globally. Europe’s most automated country, Germany, has more than 300 units per 10,000 employees.

Whilst the critics will always fear job losses from automation, as we recover from Coronavirus, we can create high-wage employment through robotics. I’ve visited factories, such as Harwin’s manufacturing site near my own constituency of Havant, that have successful re-trained factory workers as high-skilled robot operators. We must rebut trade union leaders and others holding back change and hindering the adoption of new technology.

Just as a car scrappage scheme was brought in to safeguard the car manufacturing industry and protect demand in its vast supply chain, a tech scrappage scheme also has the potential to boost the fast-growing UK tech and robotics sector. Businesses that could benefit include Tharsus, the Blyth-based robotics company that supplies Ocado’s automated warehouse, which is now one of Europe’s fastest growing technology firms.

While individual businesses know the products that are right for them, a tech scrappage scheme can and should promote world class British engineering and high-end manufacturing by creating more demand.

Every UK business could benefit from upgrading technology and IT, but key to the success of the car scrappage scheme was incentivising people into the new car market by making them more affordable. To be eligible, the car had to be at least ten years old and many of those taking part in the scheme would never before have bought a new car. The same must be implemented for a tech scrappage scheme. The Government needs to target the least productive SMEs that have never before invested substantially into the latest robotics, software, automation or information technology.

Research published last year based on a survey of 2000 business owners showed that 46 per cent of small business owners believe technology is more important to their business than people. Just as we incentivised car owners into the market, a new scrappage scheme will give SMEs the confidence to make the tech upgrades their businesses need.

There would be environmental gains too. Just as polluting cars were taken off the road through scrappage, businesses would have the opportunity to replace diesel-fuelled machinery with cleaner and more energy efficient alternatives.

As our country bounces back from Coronavirus, and the focus shifts from health emergency to economic recovery, the Government must continue to focus on not only supporting businesses in the short term but arming our businesses to be ready for the long term impact of the Fourth Industrial Revolution.

Our economic recovery must be both green and digital – a scrappage scheme for IT, tech and machinery achieves both goals.

This is the third in a three-part series on how to boost our economy after Coronavirus.