Sir Keir Starmer should stop “obsessing” over the European Union and focus on a trade deal with Donald Trump, a Conservative minister has said.

Shadow business secretary Andrew Griffith claimed that business confidence is at “an all-time low” and a trade deal with the US would be a “game-changer”.

Responding in the Commons, Business Secretary Jonathan Reynolds said the UK’s trading relationships should be considered in a “holistic” way.

Labour have talked growth but they have delivered decline. The one game-changer now would be a US trade deal

This came as the Government sought to reassure MPs it would not lower animal welfare standards in future free trade deals, following concerns about previous agreements signed under the Conservatives.

Dr Danny Chambers, Liberal Democrat MP for Winchester, said farmers were concerned about the potential import of products from battery hens or meat linked to higher levels of antibiotics.

During business and trade questions on Thursday, Mr Griffith said: “Business confidence is at an all-time low, bar the pandemic.

“Hiring is collapsing and companies are fleeing. Labour have talked growth but they have delivered decline. The one game-changer now would be a US trade deal.

“Would the Secretary of State urge the Prime Minister to stop obsessing about going backwards into the EU and agree with me, at this Christmas time, that the best gift for British business this Christmas would be for the Prime Minister to get on a plane to Washington and talk trade with President Trump?”

Mr Reynolds replied: “I’m afraid I think the shadow secretary of state’s analysis is too simplistic. The US is a major trade partner and always will be, but he will know, so is the European Union.”

He also noted a future trade deal with China, adding: “The future for the UK is being positioned to get the maximum benefit from all of those key markets.

“The kind of agreement (Mr Griffith) is putting forward would obviously have major ramifications for British agriculture in particular – he knows the issues that are associated with that.

“So we cannot consider one of those trade negotiations without considering the impact on all of those key trading relationships. I would ask him to consider that in a more holistic and complete way.”

It is the reality that we will not compromise on animal welfare standards as we take forward our programme of free trade agreements

Earlier in the session, Dr Chambers, a former vet, asked business minister Douglas Alexander to “outline what steps he’s taking to ensure that British farmers will not have to compete with products produced to lower animal welfare standards, for example battery hens or the indiscriminate use of antibiotics, which is also a public health issue, in future trade deals”.

Mr Alexander replied: “It is the reality that we will not compromise on animal welfare standards as we take forward our programme of free trade agreements (FTA).

“While we might well have approached the negotiations that he refers to under the previous government in a different manner, reopening them would certainly create uncertainty which we genuinely believe would hurt UK business.

“We are not seeing Australian or New Zealand beef, lamb, flood the UK market and we will continue to monitor trade flows in relation to both of those FTAs.

“But on the other hand he makes a very fair and important point about the need to maintain welfare standards.”

MPs were also told that Saudi Arabia joining a multinational defence initiative would not affect the UK’s ability to impose future bans on arms sales.

This came in response to Richard Foord, Liberal Democrat MP for Honiton and Sidmouth, saying: “The Italian press has been reporting that the Global Combat Air Programme (Gcap) consortium involving the UK, Italy and Japan might be extended to add Saudi Arabia.

“Can the minister confirm this press reporting, and can the Government say how this would affect any future suspension of arms export licences to Saudi Arabia, as the UK government did in 2019?”

Business minister Gareth Thomas replied: “We are looking at working with other partners in terms of the Gcap programme, and I was grateful to have the opportunity to be in Italy last month to discuss the further potential of Gcap and indeed other work that we can do with the Italians in this space, but it won’t affect the issue that he is specifically concerned about.”