Liam Fox: “I can agree as many trade agreements as I like. But if British business doesn’t want to export, then that doesn’t do us any good."
Liam Fox is one of the leading Leave campaigners in the Cabinet – but don’t call him one of the ‘three Brexiteers’. As the Trade Bill is introduced and exit day fast approaches, the International Trade Secretary talks to Sebastian Whale about preparing for life outside of the EU
At first, Liam Fox seems a little tense. It is Monday, mid-afternoon, and the big political story is the meeting of the Brexit subcommittee to discuss the vexed issue of the divorce bill from the European Union. Reports originally suggested ministers had convened for the crunch talks earlier in the morning. I begin to wonder whether the International Trade Secretary’s representations have fallen on death ears.
Alas, the committee takes place after our interview, and a consensus is reached to up Britain’s offer to just under £40bn on the condition the EU agrees to move to trade talks in December. I prod optimistically for a hint of what Fox was to push for, assuming that, when it comes to EU-related payments, he believes less is more. With short shrift, he replies: “I think you can guess you’re not going to get an answer to that one.”
We are sat in Fox’s office at the Department for International Trade, which peers over Downing Street on one side and Whitehall the other. A prime viewing position for keeping track of movements, Fox jokes, by now in a more relaxed mode.
Littered across the high-ceilinged room are pointers to Britain’s 18th and 19th Century history. Fox sits underneath a vast replica of Queen Victoria’s Royal Coat of Arms, with a grandfather clock used for the original Board of Trade (which the Government revised earlier this year) in the opposite corner. With some relish, Fox singles out a painting of the John Wood paddle steamer, a ship that ferried people and goods during the 1830s, just one of his selections from the Government Art Collection.
Another possible explanation for Fox’s initial disposition is Michel Barnier. That morning, the EU’s chief Brexit negotiator said the European Parliament could vote against a trade deal with Britain, if it tried to slash taxes and regulations. There must be “common ground” between the UK and the EU, he continued, to have an “ambitious” future partnership. Fox seems unmoved.
“We know that if we want to sell cars into the United States, or industrial products into Japan, then we have to conform to their standards or we won’t get into the market. It’s no different from any other deal anywhere else. That’s not to say British companies can’t produce different goods for different markets. But if they want to sell into the EU market, clearly, they’ll have to conform to those particular standards,” he says.
“One of the reasons that we’re leaving is to get control of our own money, and that will include setting our own tax priorities for the UK. We’re not leaving the EU to be held in aspic.”
But would Fox, like some of his Eurosceptic colleagues, like to see the UK become the Singapore of the west post-Brexit; deregulated and pursuing an expansionary fiscal policy?
“I want the UK to become as flexible and as competitive as it’s possible to be. But we are Britain, we’re not anywhere else, we have our peculiar demographics, we have the built-in cost of things like our pension system and our public services. So, there’s a limit to what you can do in terms of taxation because of the restrictions on spending that we have,” he says. Sighing, he adds: “It’s amazing how everybody wants us to be like somebody else, I just want us to be like Britain.”
Fox, a former GP and civilian army medical officer, became Secretary of State at the Department for International Trade at its inception in 2016. But don’t call him one of the three Cabinet Brexiteers: “I keep reading this and I think, why three, because I remember campaigning alongside Chris Grayling and Andrea Leadsom and Penny Mordaunt and previously Priti Patel. I’m sure that three Brexiteers is a more attractive phrase to use for the media, but it doesn’t describe the Cabinet dynamic.”
Regardless, it’s two other Brexit-backing ministers who have garnered media attention in recent weeks. Environment Secretary Michael Gove and Foreign Secretary Boris Johnson’s letter to Theresa May, which was leaked to the Mail on Sunday, set out the pair’s vision for Brexit. The missive also reportedly called for David Davis to be side-lined from negotiations by an unelected ‘Brexit Tsar’. This, according to the Mail on Sunday, has prompted the Brexit Secretary to consider standing down.
“I don’t believe that for a minute. I really don’t,” Fox interjects. “I think that there’s – I understand that the press have their pages to fill. And I also understand that when people don’t know things they make them up. But it doesn’t really take us much further forward.”
As for his Cabinet colleagues, Fox continues: “We’ve got serious discussions to have about what’s the content of our negotiations and what are the parameters we’re willing to operate within. I think we’d all be very wise to do that behind closed doors.”
But surely the circumstances of the letter and its leaking is not a good look for a government seeking to present a unified front on Brexit? “That’s the problem isn’t it, things leaking out. We all write memos and letters and set out our positions. I’ve not been in the unfortunate position of having anything I’ve written to the Prime Minister leaked, so,” he says, deadpan.
Punctuated at various times throughout our time together are swipes towards the UK media. Of course, this is not unusual for Fox, who has lamented the Brexit coverage of the UK press at regular intervals, singling out for questioning repeatedly the BBC and Financial Times. But it goes some way to explain our slightly stilted early exchanges.
“The media are not party to our internal discussions. And so, a lot of stuff gets made up. But you know, that’s what we get,” he says. His “greater frustration”, he continues, is the “lack of explanation” given by the press on the UK’s position on trade. Regardless of the referendum result, Britain would need to export more, he argues.
“On the positive side, with a modest push we’ve seen that big increase in one year, which suggests to me there’s a lot of slack in our exporting capabilities still. Getting out to our businesses and saying, ‘here are the changes we’re making, here are the good things that are happening, here are the things you can take advantage of’, is what I would like to see, rather than personality-based stories,” he says.
It’s one of Fox’s bête noires, the state of Britain’s exports. In September last year, it was behind his controversial comments branding British business “too lazy and too fat”, in his calls for the UK to view exporting as a duty. Though his language has cooled, he is still banging the drum. “I can agree as many trade agreements as I like, but if British business doesn’t want to export, then that doesn’t do us any good,” he says.
“Our Rolls Royce’s and our BAE Systems are as good as any other big company in the world. A difference tends to lie at the medium part of the SMEs, where our companies are not quite as willing to export as before. We’ve been trying to find ways to help them,” he says. How so? Incremental solutions have included easing the ability for firms to gain access to UK export finance, reducing waiting time from weeks to days. “That’s not going to get a front-page splash on the tabloids,” he begins. “But for real businesses it makes a real difference. We have already seen a lot of export activity generated from that.”
A lot of the department’s work has been spent finding out what infrastructure is needed globally to support UK business. This includes reviewing how the government can assuage concerns for British firms, who may harbour unease about trading in a particular nation. “If political risk is one of them, what can we do to alleviate that, or help share it or mitigate the risk for them. That’s really what we’ve had to do across a whole range of sectors.”
The UK also plans to set up a network of nine trade commissioners around the world to boost trade after Brexit. “We need to ensure that people who are selling Britain understand the markets they’re selling into, and they understand what Britain’s able to sell,” says Fox. “It’s a matter of understanding what our strengths are and how we could monetise those strengths by selling some of them overseas.”
And as the foundations are laid abroad, the government began the domestic push earlier this month. With all eyes on the Withdrawal Bill, the Trade Bill’s first reading went without much fanfare. The legislation will write the EU’s existing free trade agreements with non-EU countries into UK statute books. “This will give us the ability where those agreements have at least reached the point of signature, to replicate them in UK law. In other words, we can ensure that we’ve got the same market access in both directions,” Fox explains. “I’ve seen some people calling it a cut and paste, which shows how little they’ve read the complexities of it.”
The bill would also allow the UK to continue to bid for government contracts around the world, and establish a new way to resolve international trade disputes through the trade remedies body.
“What the Trade Bill doesn’t do, is to deal with future free trade agreements. We haven’t set out in legislation how we will do that. We want to put it in stages, so that we have got stability and continuity first of all, and then we will want to set out major consultation mechanism for new free trade agreements,” he says.
The government will seek to gain approval from business, parliament and the devolved nations at the start of trade talks, rather than at their culmination, to avoid a deal being rejected late on.
“Clearly, at the end the government has to have a balanced view over the whole country and the whole economy. But I think we’re going to have to be willing to consult more widely than governments have done in the past,” he says.
“What we don’t want to do is to do what happened with TTIP, for example – invest a great deal of time and effort in a negotiation only to find it is not acceptable to either public opinion or parliament. So, we will want to get that consensus at the beginning of the process, not the end.”
But, as with the passage of the EU (Withdrawal) Bill, the government is facing push back against the use of so-called Henry VIII powers in the legislation. In a letter to the Guardian, Fox insisted that the powers in the bill would only allow for amendment of secondary legislation covering existing trade agreements, as opposed to new ones, as claimed by campaigners.
An opportunity to get the ball rolling on trade comes in the form of the Commonwealth Heads of Government meeting, which takes place in London next year. The UK has already set up trade working groups with Commonwealth countries including Australia and India. Fox says the summit will not be about getting a trade agreement with the wider group of nations, “which is what I keep reading”, he adds with frustration, “because the Commonwealth is very disparate. What it will do is enable us to talk about intra-Commonwealth trade and how we might encourage that.”
But isn’t the event also about demonstrating the UK’s post-Brexit offer? “I don’t think the Commonwealth look to the EU as necessarily a positive. When I was in Africa last week, one of the leaders said there, ‘welcome home’, meaning back to the Commonwealth and away from the orientation towards Europe,” Fox claims.
The trade deal of most immediate concern to the government is with the European Union. Fox has been sanguine before about the prospect of walking away empty handed, and signs point towards the European Commission pushing for an off the shelf option being offered to Britain. As for protectionist signals from Brussels, Fox says: “The more I’m at a distance from Europe the more absurd it looks, that you would actually want to diminish the prosperity of your own people to make a political point, and when the Commission would say ‘we have to do this to make sure no other country would dare to leave’, it sounds a lot more like the language of a gang than a club.”
Interview over and now at his vast desk, Fox flicks through his calendar for 2018, dotted with numerous trips to far-flung lands and barely a day spare until the end of March. For a man who is, cruelly, accused of not having much to do (Britain cannot sign trade deals until formally out of the EU), he seems keen to convey that his schedule is packed. With Brexit fast approaching and the Trade Bill working its way through Parliament, he’s certainly got his work cut out.
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.