Welcome to this final panel on today’s session on trade strategy. Thank you to all of our witnesses for joining us and for your time. Sir Sherard Cowper-Coles, thank you very much indeed for joining us remotely; we are very grateful for that. Lord Sedwill, perhaps I could start with you. The Prime Minister is off to Washington shortly. He has a threat of tariffs to manage when he gets there. If the President of the United States imposes tariffs, should the UK retaliate? If so, how?

It depends on the nature of the tariffs, as well as the extent and the degree to which they are conditional. We should be ready to retaliate. What we saw in the first Trump Administration—as you will recall, I was National Security Adviser throughout nearly the whole of that Administration—was non-tariff measures as well as tariffs, for example punitive tariffs on steel, which were notionally aimed at China but in fact swept up all other producers of steel as well, including the UK. We have to be ready to retaliate, but in the end we are not going to outmatch the Americans if we get into a tariff war, particularly on our own. We should aim to secure a free trade agreement. Trump has said he wants to do that. One would hope that today’s announcement on defence would create the right climate for a more productive conversation than that threat might suggest.

Let us take the scenario of an across-the-board 20% or 21% tariff, which was the last Tweet that we read. What is the UK response to that? Is it the strategic tariffs that perhaps we imposed in the past? How would we calibrate our response?

We would have to see whether Trump said, “Okay, this is across the board, but I am now going to negotiate with individual countries to release that”. The Prime Minister and Government might decide not to retaliate, but we need to have some capabilities in order to retaliate if necessary. It will not have much effect on the Americans, so we should be thinking about non-tariff measures and other measures that would have more of an effect, and that would get President Trump’s attention, should he be unwilling to then quickly get into a negotiation with the UK about releasing the tariffs and about advancing towards a free trade agreement. For the UK it has to be stiletto rather than bludgeon, because we simply do not have a big enough bludgeon.

Mr Magnus, what would you counsel the Prime Minister to do if we got hit with across-the-board tariffs from the United States?

I am not sure I have very much to add to what Mark said. We are pretty small beer as far as the United States is concerned. I agree that we should be prepared to match or to counter. Obviously, it would help us a lot if we were to do this as part of a bigger group, rather than on our own, where Americans or the Administration would regard us as pretty much toothless. It depends. We are not completely powerless in terms of the structure of what we sell to the United States. There are some areas, particularly financial services and others, where we may be able to counter a threat, but I am not really optimistic that it would be terribly effective. We have a long and sometimes enviable reputation of being a free trader, not that we have not been forced on very, very rare occasions to adopt tariffs, but these are in exceptional circumstances. Whether this would count as an exceptional circumstance or whether the President of the United States would use the threat of tariffs to try to leverage something from the United Kingdom remains to be seen, obviously.

Sir Sherard Cowper-Coles, what would your advice to the Prime Minister be if we were hit with across-the-board tariffs for America?

I agree very much with what Lord Sedwill and George Magnus said. I would add only that we have, of course, a not-so-secret weapon in the form of our new ambassador in Washington, who was trade commissioner and who worked with me when I was ambassador in Saudi Arabia to get Saudi Arabia into the World Trade Organisation. This goes well beyond tariffs, as Mark Sedwill has suggested. We need the whole range of weapons in our diplomatic armoury. We are dealing with a rather volatile personality who is susceptible to flattery and to incentives of all kinds. It needs to be done with a great deal of agility and subtlety. Mark’s analogy of the stiletto rather than the bludgeon might appeal to His Britannic Majesty’s ambassador in Washington.

Lord Sedwill, this is perhaps the sharp end of a big debate about UK trade strategy. The way that this is sometimes characterised is that, even if we do not have to choose between Europe and the United States, we have to somehow square this triangle between Europe, the United States and China. What are the worries that we need to have at the front of our minds about the risks of economic coercion when we are trying to figure out some of the answers to these debates?

There are two big risks I would identify. The first is—as you suggest, Mr Chairman—that the three big players here are the US, China and the EU. If they get into a protectionist battle, a tariff war or a whole load of non-tariff measures taken against each other, they will be so preoccupied with each other that the UK, Japan, Australia and other countries that are essentially independent operators will just have to navigate their way around it, because they will be so preoccupied with each other that they will not have any bandwidth really to focus on us. That is the first big risk we just have to recognise. It is not a risk of coercion; it is a risk of just being ignored while they are preoccupied with each other. The point on coercion is a really interesting one. This came up in the G7 panel I chaired back in 2021 when we looked at economic security and economic resilience in the round, not just in trade. What we have seen, in particular with Chinese coercion of countries and the use of economic measures to coerce countries, is essentially playing them off against each other, picking them off one by one. We saw this with Australia and Canada, with the detention of senior Australian or Canadian executives in China and the attempt to secure concessions from those countries in return. Frankly, apart from a bit of rhetorical support, it felt pretty lonely to be in Canberra or Ottawa in dealing with China at that time. One point we made in our report to the G7 was about standing together. We can all seek economic advantage on a national sovereign basis, but if we are going to deal with a much bigger player, China in that case, on issues such as economic coercion or human rights, we have to do it in concert with allies. At the time, the United States was clearly an ally, at least on that, but we may have to think similarly if we face economic coercion from the United States, as George Magnus suggested. Being able to deal with others and respond with others is going to be a great deal more powerful than responding on our own.

The United States is interesting. Perhaps that is not the appropriate word, but it is certainly a blank sheet of paper. We do not really know how this game, if you pardon the expression, is going to play out. We have much more experience in watching and analysing coercion from China, as you have just heard. Of course, China has a lot of form in trying to use coercion to influence trade practices and, ultimately, political argument. The first one I remember is Norway over the Nobel Peace Prize, but also, as we have heard, it has involved Australia, Canada, most recently Lithuania, but also South Korea, Japan, Philippines and probably a couple of others I have missed. The interesting thing about these episodes is that they have caused quite a lot of disruption to particular products, because they have never really been imposed by China through across-the-board tariffs, as it were. It has always been on very, very specific products, which Beijing has always thought would be harmful to the exporter but strategically immune from China’s point of view. Nothing has ever really been banned that was of great significance to the industrial policy of China. In the end, actually, all the countries affected ended up increasing their exports to China once the restrictions were lifted or if they found alternative ways of trying to compensate for the loss of sales to the People’s Republic.

If we take China in particular, what are the vectors of coercion that we should be most worried about? Can we guard against that coercion with the Sedwill strategy of standing with allies? Is that enough or do we need to be doing more?

What do you mean by the vectors?

What are the main lines of coercion that we should worry about when it comes to China?

Unless we really hacked Beijing off and did something very offensive, or said something or did something that Beijing found very unpleasant, I do not think that we would necessarily be in the firing line for specific export restrictions that did not apply to others. There are other, more subtle ways in which China tries to influence trading patterns and, ultimately, political argument and narrative. Some of this actually comes through the roles of state enterprises. Now, curiously or not curiously, for the last 50 years the role of state enterprises in China has been pretty constant. It has been about a quarter of the total output of the economy. A quarter of $18 trillion is a lot of power and a lot of financial muscle. The other way, which is quite sensitive—maybe you do not want to get into too much detail—is influencing operations through business consulting firms, through business lobbies and through well‑placed members of the establishment. Lots of countries do this kind of thing; we probably do it as well, for all I know, but China is obviously an adversary and we have to be really careful about that more subtle influence. It is not really coercion in the blunt sense of the word, but the effect, of course, is the same.

Lord Sedwill, what are the key risks?

I identified one, which is essentially the detention of British executives or foreign executives. We did not face that ourselves, but the Australians and Canadians did. It has become harder for many businesses to convince expatriate staff to serve within the People’s Republic itself. Sir Sherard will have a better view of that, because he has a much more comprehensive view of the overall perspective of British business operating in China. In particular, it is market access. China does not need to use tariffs in order to be able to impose pressure, because so much of our economic dialogue with China, certainly in my time, was about market access, not about the formal measures of trade barriers such as tariffs or formal regulations on non-tariff barriers. Simply, it was the guidance from the party and from the Government about market access. Of course, for a trading nation it is such a crucial part of our economic plan.

Sir Sherard Cowper-Coles, what is your view about the key risks when it comes to economic coercion?

They are less in the case of the United Kingdom than they are in the case of other countries, given the fact that we run a goods deficit with China. At the moment, under the new Government, we have a pretty good overall political relationship with China. At the China-Britain Business Council we polled our members on this and about half our members make less than 10% of their profits from China. The flipside of economic coercion is also economic opportunity. China is not afraid, as other countries are, to use its power to incentivise countries. As a huge exporter of services, we saw this during the Chancellor’s very successful visit to China in January. We see big opportunities as well for British business. It is not just the threat of coercion. There are two sectors where we might be exposed, and those are the luxury goods and automotive sectors. If relations were to turn down very badly then particular companies in those sectors might feel the heat, but there is no sign of China doing that. One small example during the Chancellor’s visit—

We were doing so well. We have some slight interference on your line, Sherard.

Oh, I am sorry. I would just like to say that during the Chancellor’s visit—

We are going to come back to you, Sherard, just because the line is not quite strong enough.

We touched on luxury goods and automotives, but I wanted to come to all of you to ask what critical products and supply chains are most exposed to the current economic security threats.

The question is really about which of our industries or sectors would be most at risk if there should be some sort of military or diplomatic spat, basically.

Various geopolitical factors, yes.

Energy is not a particularly big issue between us and China. I do not think we sell China any energy, and I do not think we buy much from it either. You immediately think about aerospace. You think about technology. You maybe think about pharmaceuticals. These are things that we are pretty good at in one way or another. Except in circumstances where we should find ourselves in outright conflict with maybe others vis-à-vis China, I do not worry too much, really, about restrictions by Beijing on the United Kingdom in these areas. We might find ourselves in a difficult position if relations between the United States and China were to get to a point, partly through the America first investment memo that was recently sent by the President, partly because it is speculated, “Will there be a deal? Won’t there be a deal? Will he up the ante to impose lots of export restrictions on Chinese tech before opening up to the possibility of an agreement?” These kinds of things could put us in a difficult position or an awkward position—not just us, but our trade partners as well, because the United States might expect similar action from, quote, its allies. Yes, there would potentially be some problems there. As Sherard said, we do not have a trade surplus with China. We want to sell it a lot more financial services, which are, generally speaking, not as contentious as particular goods. A big issue—maybe you will come on to this; Sherard knows much more about this than I will ever know—is that, as far as I can make out, a lot of British firms do not worry, but they fret about the fact that they do not really know where the red lines are. I know the audit is in process. I do not really know when it is coming out and what it is going to provide for. We could do our own firms a big favour by basically being quite specific about what you are allowed to do and what we do not think you should be allowed to do, or only with restrictions, and so on. That would clarify things, but there is no question that there are vulnerabilities.

The key vulnerability, which, by the way, is not a particular UK one, arises from monopolies. That is not only true of monopolies that sit in China. There is a monopoly on the most advanced semiconductors based in Taiwan, a country that of course is vulnerable, but is allied. There are others—we came across this during the pandemic—including many that we did not really understand. We started mapping that through a project called Project Defend in government, about looking at supply chains and where the monopolies lie if you work back up the supply chain, because they often are not apparent. In the case of China, the key monopoly is in critical raw materials, so platinum group metals, rare earth elements and so on. China, not because it has done anything nefarious, as is sometimes suggested, but simply because it has invested in the refining and production capacity, has, depending which one you look at, something between a 70% and 90% monopoly in the refining and production of those critical raw materials. Those are essentially the petroleum of the 21st century economy and we are all completely dependent upon that. Of course, China is also highly dependent on those too and on the refined products that are used returning, so there is a mutual dependence here, but, if you wanted to identify a particular area where there is a monopoly that is absolutely critical to the 21st century economy, it is that. When I spoke to the G7 leaders and tried to bring this alive for them, I said, “You need to think of this as the potential 1970s OPEC crisis of the 21st century, if there were a geopolitical crisis that then caused a disruption to that supply in the way that happened in the 1970s with oil”. That is the scale of it.

Do you have concerns around tech monopolies as well, where supply chains are less visible?

Well, of course. In a sense, this is the hardware of tech. Critical raw materials and semiconductors are the hardware of tech. For the software of tech, the monopoly sits in California. It is a different kind. An oligopoly sits in California, really, with the “Magnificent 7” American tech companies. There are monopolies throughout the modern economy. Globalisation has led to specialisation and the growth of huge firms. If you are thinking about economic resilience, the answer is not to create a different monopoly and a different dependence, even one that is onshore. It is not a very efficient thing to do. The answer is to create diversification in the market, because you get the direct benefit of alternative sources of supply and you constrain the behaviour of the original monopoly if countries can build up those alternatives.

Do you think we now know what those supply chains are that we need to worry about?

We certainly did a pretty good mapping exercise. This was several years ago now, as I have been out of government for a while. My understanding is that that has been kept fresh, so I would expect that Government would have a pretty good idea of what the critical supply chains are and where the critical vulnerabilities are for this country.

Just to add to what Lord Sedwill and George Magnus have said, we at the CBBC believe several UK sectors rely on China for rare earth mining and processing: electric vehicle motors, wind turbines, advanced battery technologies, and defence and aerospace. I agree with what George said about pharmaceuticals and chemicals, and also technology and semiconductors. Our figures also suggest that we are less vulnerable than the US on solar panels; we are less vulnerable than the EU on electric vehicles, solar panels and industrial equipment; and our vulnerability in terms of rare earths and battery materials is similar to that of other nations. Given the present climate, and, indeed, given the potential tensions with the United States, we are not actually as exposed as we might be at the moment.

That is very helpful.

Can I just add two very quick things? On the subject of supply chains, this is a little bit of a moving feast now, because of the influence of tariffs from Trump 1.0 and all the other restrictions on investment screening and so on and so forth, which we do, the Americans do, and everybody else does. Supply chains are obviously moving around a bit in terms of being recalibrated. The Chinese share of US imports and the American share of Chinese imports have both dropped over the last five or six years. We have seen a significant increase in trade volumes emanating from Mexico, Thailand, India, Vietnam and even countries such as Cambodia. We need to keep an eye on how these supply chain metrics are shifting as a consequence of the policies that are being introduced to restrict trade. The other thing is not really a physical good, so it does not really qualify as a supply chain phenomenon in the same way, but data is something that a lot of people really worry about now, so data transmission, data collection, data storage and privacy. I am sure the Committee is very, very familiar with all of these things. When we talk about electric vehicles, cellular modules and the internet of things, these things should actually command a lot of our attention nowadays.

I just want to reinforce some of the points that have been made, quite specifically around the automotive industry, as it makes the transition from internal combustion engines, which is a huge employer in the UK and a huge export for the UK. As EVs become more dominant—of course, it is mandated that we move towards electric vehicles by either 2030 or 2035—Chinese monopolies could grow and grow. We are already seeing some form of control, particularly around critical minerals, where the Chinese will limit exports of those minerals, they will ban the export of those minerals, and, in the case of lithium, they are now increasingly beginning to ban the export of technology and investment outside of China. They are really trying to maintain that monopoly. That is an existential threat to the UK automotive industry, because we will not be able to make the transition in time. We are very much playing from a position of weakness compared to a decade or so of constant investment by the Chinese. We have a lot of catching up to do.

Yes. Let us move on to what we do about it.

As Lord Sedwill said, there has been a lot of work done in the UK to identify critical minerals and which ones are truly critical, in terms of both availability and demand. They have done some very sophisticated work to identify the targets. Lithium is one of those. In answer to that question, we have to develop an entire new industry that will compete on a level playing field with China. That is difficult. In the UK, as we heard from the steel industry earlier, there are all sorts of requirements on lowering your carbon footprint, about sustainability and ESG credentials. None of that is a requirement in China. All the chemicals that go into electric vehicles today are not compliant. They are not low carbon. In fact, we are almost blind to the level of carbon footprint that goes into an electric vehicle. That will change in 2027 with the introduction of battery passports. That is the first step. That is identifying what the carbon footprint is, how much recycled chemicals have been used in the production of a battery, and other ESG credentials, particularly around sustainability, but it is not here today. For new industries trying to emerge and maintain that market share in the automotive industry, that is just one example of an industry that uses batteries. You can equally include the aerospace industry or the defence industry. Many industries are increasingly using batteries, but to maintain that market share requires an entire new emerging industry in the UK and Europe. That requires a lot of private investment. In response to the question of what the UK is doing about it today, we are trying to encourage those industries. The automotive transformation fund, together with Innovate UK, provides investment to help the UK automotive industry make that transition to electric vehicles. It does provide early-stage funding. We have seen the national wealth fund take following positions in equity, as well as government-backed debt for those industries. We are also seeing some headwinds, which the more cynical among us might think have been induced by the Chinese to some extent. We have been seeing very low lithium prices in our industry, prices that are almost a record low. That is because of practices that are being employed in China. That is preventing private money from investing in these emerging industries. That is a big problem.

Lord Sedwill, when you are prosecuting a trade strategy, how do you install in your trade strategy things that might protect you against these vulnerabilities? If you are worried about monopolies, presumably you want a trade strategy that helps you diversify your trade.

That is exactly right, but the truth is that we do not have the critical mass to do that on an entirely national basis, given the dominance of China in this particular area, Taiwan in semiconductors, and other countries in other areas. We simply do not have the critical mass to affect the overall shape of the global market. That is why we looked at doing this through the G7. That means developing alternative sources of supply of those critical raw materials, which means building refineries in other places than China and securing the supply of the raw materials from the mining sector, cobalt from the DRC, or wherever it might be. To go to the point that we have just heard, it is about protecting those industries while they are developing, because they are vulnerable to dumping, predatory pricing, et cetera. It is investment. It is tariff and non-tariff measures. It is ensuring that there is a level playing field on environmental and labour standards. These processes are dirty and dangerous, and we operate to different standards from our competitors. As a shorthand, to go back to the OPEC analogy, it is everything we did after the OPEC crises of the 1970s, but before the crisis breaks, if you want to take that example. To go to the very sharp end, though, it is also about incentivising British tech companies, assuming they get access to these raw materials, to grow in this country and to list here, rather than on the NASDAQ. We do not have time to go into all of those measures, but it is about getting the incentives right to achieve that as well. It is not just a trade strategy; it has to essentially be an economic resilience strategy that trade is part of.

Where is the locus for this in Government then, from your experience as Cabinet Secretary? Where would you put the centre of gravity for co‑ordinating this?

In my time the locus was counterintuitively, despite the title, the National Security Council, because national security was very broadly defined by the coalition Government. In a series of strategic defence security reviews, national security capability reviews and the integrated review, we defined national security as essentially encompassing security, prosperity and influence. That was the shorthand for it throughout that decade, so we brought the economic and security Departments together at the NSC and thrashed these issues out. How were we going to have a coherent relationship with China that balanced our security concerns with our economic requirements? It does not matter where it is; it just has to be somewhere that balances those things off.

Does that mean it is a mistake for the Secretary of State for Business and Trade not to be on the National Security Council any more?

The Trade Secretary or the Business Secretary were on the National Security Council in my time.

They are not now.

If the NSC is going to be narrowly focused on security and defence, then in a sense it is fine not to have the economic Departments represented, but there needs to be some other body that brings the security and defence community, the economic community and Government together, because that is where the rubbing point often lies. It does not matter whether it is the Cabinet, some other committee or a mission board. It can be the NSC or it can be something else, but they have to be around the table, having the same conversation, so there is a coherent government policy.

The situation we have today is that the economic security sub‑committee of the National Security Council has been abolished because, we are told, the National Security Council itself co‑ordinates economic security, but the Secretary of State for Business and Trade is curiously missing from the standing membership. It just feels like that might be a decision that needs revisiting.

Yes. I would hope the Secretary of State for Business and Trade is allowed at least to attend. My view is that that is a heavyweight Department. National security encompasses economic security. If you want to attack this country without going to war, you attack our economic security. We know the Russians and others are thinking about that. In my view, DBT should be around that table and should be thinking about security just as it thinks about prosperity.

Lord Sedwill, a lot of this is about where the UK goes, taking a medium to long-term aspect rather than a short-term one. Your point about monopolies is very well taken. If we are looking to mitigate, manage or even contest those sorts of risks, and we want to push UK ideas, policy, security and economy, are we better off inside one of those big three groups—the obvious one being the European Union—or are we better off as a second-order power floating and playing as best we can, and managing and mitigating those risks outside?

Well, it is clear we are not going to be in one of those three groups anytime in the foreseeable future.

In the medium to long term?

Well, I still think even in the medium to long term.

Mr Maynard is an optimist.

We have no choice but to navigate, and other countries do that successfully. Japan has always been in exactly that position, and it has a similar economic structure to us. We can align. If you are smart in diplomacy you align as best you can with your natural allies, but you do not become completely dependent upon that alignment and you allow yourself some choices. We have to do that now. There is an argument about whether we would be better inside the EU and doing it that way, but that argument is not a practical question for the foreseeable future.

Okay, but just to answer that one on the long term—and I take your point about medium and short—in order to have the UK’s strength maximised, where are we better off? I am interested to hear your thoughts.

In the long term, I would like to see a north Atlantic free trade agreement. In the long term I would like to see an economic NATO. That is not going to happen under Donald Trump, but a different American Administration that is thinking strategically about China and the risks of divide and rule among the Western community might think about a north Atlantic or a G7-plus free trade and economic arrangement. The UK should be a part of that.

It is just accepting the inevitable for the foreseeable future, should we say, that we are not going to be a member of any of the three groups, particularly not China, but also not the EU. As Lord Sedwill was speaking, I was thinking about this and also about some of the evidence I was listening to earlier this afternoon. The thing about a small, open economy such as ours where trade is quite important is that, if we want to rely more on trade and we want to win more business, our exports have to grow much more quickly than they have been. We know that we are on the bottom end of a hockey stick, really. We were 10% of global exports about 40 years ago; we are now about 2.5% or 3%. If we want to change that, there are basically only two ways we can do that. We can take advantage of booming or growing world export markets. One of the things that I would dissent from in what I heard this afternoon is that we are actually now at the peak of where world trade growth has been. We are going to see increasing amounts of trade conflict in years to come. It is going to be really difficult. Where we have basically fallen short historically as a nation is in growing market share, which is the other way that you can succeed in international trade. That made me think about something you said about doing more stuff at home, because where we have really been not very good is scaling up new ideas and technology ideas that we have. We are pretty good in pharmaceuticals, and probably in some advanced forms of energy technology as well, but we have not really been that good at scaling up our new firms, our better firms, and basically going out to take market share from others in third markets. That is another way of saying import substitution, or maybe not really import substitution, but doing more from a domestic point of view to increase our external presence. From memory, the Department for Business and Trade has written quite a lot about this in the past.

I hate to say this as an ardent remainer, but we are seeing some benefits. For example, the British education sector, not just higher education, is benefiting from the tensions in US‑China relations. There are now about 200,000 Chinese students at British universities, and they are contributing pretty substantial sums to UK GDP. Similarly, often through Hong Kong—with which incidentally Britain does more trade than we now do with Japan—if one regards that as part of greater China, we are seeing pretty significant sums of Chinese capital coming into the UK for investment in the UK, either directly or through our stock markets. Chinese individuals are looking for homes for their capital. They look around the world. They do not particularly want to put it in the EU. They do not want to put it in America. It comes to Britain. There is an upside to all of this. What the Government are doing with planned visits to China by Ed Miliband, by the Secretary of State for Business and Trade, and so on, to exploit those in an agile way, as Lord Sedwill said at the beginning, is exactly right and in our national interest.

We have covered off a little bit of what I was going to interrogate. I am just going to ask for a brief comment from Sean, and then I am going to slightly change the direction and ask Lord Sedwill something as well. We have talked a lot about national security and economic security, particularly around batteries and lithium. I just wondered, Sean, if you wanted to comment on what the Government could be doing around stable supply chains. I know you have touched on that a little bit. I would then like to ask you, Lord Sedwill, about whether we need to slightly diversify what we are looking at when we are talking about critical minerals. I know, for example, that Warwick Manufacturing Group is currently looking at a project at the UK Battery Industrialisation Centre about, for want of a better word, solid state batteries, alternatives and different materials. I have a company in my patch called PI-KEM that helps with the research and the tools around developing different forms of batteries. I just wondered, when we are looking at maybe putting all our eggs in one basket—in this instance lithium—whether you had any thoughts on that.

I will start by saying that almost every constructive battery technology uses lithium, so there is a strong case for it. One of the things we could do is level the playing field. We talked about CBAM. There is currently no intention for CBAM to be extended to battery raw materials. It should be. At the moment, the rules of origin that control the local content of material going into batteries do not identify the raw materials; they start at the cathode active material level. They could do, and that would really help. That would prevent imports coming into China. This is a hugely growing market, going up from 120,000 tonnes today to 700,000 tonnes by 2030. The opportunity is absolutely huge. We will be low carbon. We will be sustainable. We know we can compete on a very sound footing. It is important that we promote and support private equity or private finance. At the moment these industries are very risk averse, because it is an emerging technology. They are questioning whether people can compete with the Chinese on the footing that we are on at the moment. Anything that would change that balance is imperative, and without it we will fail.

I have three things to go to your point, and, if I can still draw on that OPEC parallel, they are three things that were done after the OPEC crisis of the 1970s. First, build up inventories and reserves of the current critical raw materials that we need and where monopolies exist, in order to give us a buffer. Secondly, find and invest in alternative sources of supply of the existing raw materials. Thirdly, exactly as you say, develop alternative technologies. That is exactly what happened after the OPEC crisis. Solar power and all the other energy sources were really developed because very high oil prices and very high energy prices made them potentially economically productive. It could be solid state or other kinds of tech, but reserves, finding alternative sources of supply and finding alternative technologies are my three things.

That is a wonderful wrap-up. That is lucid, optimistic, and nice and clear. Thank you so much to everybody for your evidence and for your time this afternoon. That has given the Committee an awful lot to think about. Thank you very much indeed. That concludes this panel, and that concludes this session.