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Lord Trimble
That this House takes note of the Government’s priorities to be pursued at the next meeting of the G8 in Northern Ireland on 17 and 18 June 2013.
Lord Trimble
My Lords, I begin by thanking the Prime Minister for selecting Fermanagh as the location for the G8 summit. He had scores, if not hundreds, of possible locations throughout the United Kingdom from which to choose, but I am sure that it was simply the beauty and tranquillity of the surroundings, together with the high quality of communication and security available, that led to the choice. I can recommend that noble Lords go and see just how nice it is. I must also thank the nearly 4,000 policemen from other parts of the United Kingdom who are rendering support to the police in Northern Ireland over the coming days. We hope that they have a pleasant and peaceful time, but I am confident that they can cope if anybody tries to disturb the peace.
The Prime Minister set out the Government’s priorities for the G8 in a speech at Davos in January, and revisited the topic on Monday. I will refer to the former, in which he began by recalling,
“we are in the midst of a long struggle against murderous terrorists and the poisonous ideology that supports them”.
We cannot avoid this struggle, for the ideology that drives terrorism is one that hates our society and the freedoms and opportunities that it provides. That hatred is all the greater because most people in the countries and cultures from which the terrorists come desire the same freedoms and opportunities that we enjoy. David Cameron rightly pointed out that our response must be intelligent and patient, and while military action may be necessary, it must be combined with a political response. My own experience is that good intelligence is absolutely essential, but it is unlikely to be obtained on the scale necessary until we have won the ideological war and convinced the communities from which terrorists come that their ideology is wrong and that in a mature democracy such as ours the only valid option is the use of exclusively peaceful and democratic means.
Turning to the question of how to compete in today’s global economic race, this Government have done much to tackle the problems created by our predecessors: the debt, the bloated welfare system, the underperforming education system. But as David Cameron says,
“competing in the global race is not just about what we do at home, it is about the wider economy we’ll operate in, the rules that shape it, the fairness and the openness”,
it needs. So what we need to see from the G8 is a drive to,
“more free trade … fairer tax systems … more transparency on how governments and … companies operate”.
To turn to tax and transparency, on 21 May a US Senate committee heard a report entitled Offshore Profit Shifting and the US Tax Code—Part 2. The report focused on Apple and how it used,
“a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the United States and into Ireland, where Apple has negotiated a special corporate tax rate of less than two percent”.
It mentioned the movement of substantial funds to offshore entities in Ireland, while claiming that they were not tax residents of any jurisdiction. The report also mentioned companies such as Apple Operations International and Apple Sales International, which together had received hundreds of millions of dollars, the former paying no corporate income tax to any national Government for five years, and the latter, due in part to its alleged status as a non-tax resident, paying taxes on only a tiny fraction of its income.
The Irish Government immediately issued a denial that a special rate of corporation tax had been negotiated with Apple. On 26 May, the Dublin-based Sunday Business Post reported:
“This newspaper has learnt that Apple was one of about six multinationals that reached an agreement with Charles Haughey’s coalition in 1990 ... The deal did not relate to the corporation tax rate. Instead it centred on the tax base on which profits were calculated.”
The following Sunday, the paper added:
“What was negotiated was a deal that allowed Apple and the other multinationals to reduce their taxable corporate profits. This had the effect of reducing the tax Apple paid on profits to 2% or less for a number of years ... This was the ‘double Irish’ system under which income earned by one Irish Company was transferred to another Company—typically via a royalty payment under which the second company was paid for intellectual property—with the second company being incorporated here”—
in Ireland—
“but tax resident elsewhere”.
Under US law, the second company, despite being controlled from the US, was not regarded as tax resident in the US, and so not liable for US corporation tax. The paper thinks that this double Irish arrangement now applies to nine multinationals. It also says that the Irish are under pressure to end this, and I hope that the Minister in replying can tell us more on that point.
Much of Apple’s UK profits are spirited away in a similar manner and, of course, this is done by other major companies. There has been much comment and anger about this, not least in this House last week, but tax avoidance is lawful and a natural instinct that government use to shape popular choices. Directors considering their duty to their company may even think that it is obligatory. I think that the sensible response is to clarify what is lawful and what unlawful—and maybe, indeed, to extend what is unlawful. This will also need action at international level. At least the senatorial report might result in legislation to negate the double Irish device. My noble friend Lord Newby, replying to last Thursday’s debate, outlined some of the current lines of action and said,
“the Prime Minister will take a lead and will push this very hard at the G8 later this month”.—[Official Report, 6/6/13; col.1312.]
Corruption and money-laundering are similar threats to global and national economic health. This is not just a third world problem. At a reception in this House a few weeks ago to launch his book entitled Fragile Empire, Ben Judah estimated that roughly one-third of public expenditure in Russia is lost through corruption. That is an enormous figure. Global Financial Integrity, in a report published in February, Russia: Illicit Financial Flows, said that the Russian economy had lost hundreds of millions of dollars in illicit financial outflows. These outflows represent the proceeds of crime, corruption and tax evasion. The report estimated the size of Russia’s underground economy, including drug smuggling, arms and human trafficking, at no less than 46% of GDP—another astonishing figure. In the past, much of this was laundered through Cyprus, but I understand that now a lot of it is laundered through the UK and its dependencies. This is the preferred route, because money is considered safer here.
I choose Russia as an example, although it is not the only one, partly because of its importance and proximity to us, but also because there are important matters on which we are seeking Russia’s diplomatic support. It would be helpful, and perhaps easier to obtain that, if we were doing something which the Russians would regard as very welcome.
On tax transparency, which would help to inhibit laundering, the Prime Minister has written to the leaders of the Crown dependencies and overseas territories. Most of these have agreed to join in an automatic exchange of information scheme based on the US Foreign Account Tax Compliance Act, and 17 EU members have called for a new global standard based on that Act. Equally important is developing accurate registries of who really owns and controls companies, and being clear about the beneficial ownership of companies. This seems to be developing rapidly; there are reports in the press that indicate that some people are reluctant to join in this scheme. I hope that the Minister can bring us up to date on this, and touch on what revisions the United Kingdom is seeking to the EU’s third money-laundering directive.
I turn to two issues where Russia is in a position to make a positive contribution, one of which is Syria. It is often said of Syria that there are no good options left, but it is not unusual for us to have to sift out the worst from the not so bad. Leaving the Sunni majority in Syria to be crushed by Lebanese Hezbollah, Iranian Revolutionary Guards and Shia supporters from Iraq, all of whom are active within Syria in significant numbers as we speak, must be pretty close to the worst option available.
On Iran, it looks as though the regime there will continue to accumulate 20% enriched uranium, which it has in significant quantities. That can be taken to weapons grade in three to four months at the outside, but it does not look as if the regime will try to do this until it suits it to do so. Therefore, the international community needs to ensure that it is in a position to detect such a dash and to do it in sufficient time for action to be taken by the Security Council, so as to avoid the possibility of others taking their own initiatives. Unfortunately, looking back over other cases where countries went nuclear, it is depressing to see how often the international community was taken by surprise.
Let me turn to more cheerful matters. On trade, it is hoped that the G8 summit will see the launch of negotiations on a free trade area between Europe and the United States. The prize here is enormous, but estimates vary. It is said that a US/EU free trade area would add $60 billion or in some cases $80 billion to US GDP, and $50 billion to $100 billion to EU GDP, including at least $10 billion to the United Kingdom economy, with further worldwide gains in excess of $80 billion. The figures are estimates, but they give an indication of the extent of the prize that is available.
The US Government have indicated that they want to achieve an agreement quickly. But before they committed themselves to it, they asked for, and I believe received, an undertaking from the European Commission that on a certain key issue the Commission would follow the science. I pretty much hope that this lead will be followed by the member states on whose behalf the Commission will be negotiating and that the absurd quasi-superstitious fear of genetically modified crops will not be allowed to deprive us of this tremendous opportunity.
In addition, the EU is in or about to commence talks with Singapore, Canada and Japan, and the World Trade Organisation is working on a deal to sweep away trade bureaucracy at a ministerial conference in December at Bali. It is a pity that, in the midst of all these opportunities, our trade and recovery is, and unfortunately will be, held back by the weakness of our largest market, which is likely to persist until those involved come to the painful, but inevitable, conclusion that the euro was a mistake.
None the less, there are some reasons for optimism. We have some economic successes. The business editor of the Times, Ian King, pointed out last week that this year more cars will roll off Britain’s production line than in any year since 1972, and that four out of five of these cars will be exported—a phenomenon not seen since 1976. Since 2010, while public sector employment has fallen by some 420,000, 1.3 million private sector jobs have been created. Some purchasing managers’ indices—PMIs—have been published recently, in which a figure over 50 indicates growth and a figure under 50 indicates contraction. This week, the Financial Times gave a very interesting regional breakdown of the latest figures. Yorkshire and Humber lead the field with 57.6, a 26-month high for the region. Wales is second on 56.7, which is a remarkable 39-month high for Wales. London comes third on 56.4, a 14-month high. All other regions in the UK show growth, except for Northern Ireland, which on a figure of 49.6 is very close but not quite into the positive field. However, for Northern Ireland, that is an 18-month high. We therefore have a remarkable picture of very significant growth shown by these PMI figures. Of course, they are only possible forerunners of actual growth, which still has to come.
There are still other problems: lending to SMEs continues to shrink; productivity, to quote Mr King, remains lousy; we are still running, proportionately, a bigger deficit than Greece; and exports are rather disappointing. But these weaknesses underline how right the Government are to prioritise tax and trade. We do not expect next week’s meeting to solve all problems, but we hope that there will be progress on what are indubitably the priorities for the country and that this progress will contribute to the continuing recovery of the economy. I beg to move.
Lord McConnell of Glenscorrodale
I thank the noble Lord, Lord Trimble, for securing and opening this debate on the important events that will take place in Northern Ireland next week. I wish Northern Ireland well in hosting the summit, and I praise the Prime Minister for what I think was a brave decision to take the summit to that location. I wish not only the Prime Minister but the First Minister and Deputy First Minister well in maximising the benefits and outcomes of the 2013 G8 summit. I hope that it helps to entrench peace in Northern Ireland and that it is a success which signals that real change has taken place.
The summit at Gleneagles in 2005 was undoubtedly one of the highlights of my time as First Minister of Scotland. Many of us will remember the incredible events in advance of that summit: the 200,000-plus people who in Edinburgh the weekend previously called for making poverty history; the concerts that took place in all eight capitals, creating a global movement for change, perhaps for the first time ever; the work by UNICEF and others to involve young people in the G8 and its discussions in a way that had not happened before; the horrific violence that took place in Edinburgh in the two days before the summit; and the attempts to climb the fence in the fields of Gleneagles as the summit got under way.
However, inside that fence, the discussions involved, for the first time, leaders from Africa and around the world—not just the G8 leaders but others, too—who came together to try to solve one of the great problems and challenges of our age. The next morning saw the horrific bombings in London and Tony Blair’s departure from Gleneagles to come back here to take charge. However, in Gleneagles there was a resolve to finish the summit and make the decisions that were required, including the commitment to $50 billion of new money in aid, the hope of a new agreement on trade, perhaps not yet realised, and action on debt, education and health, all of which contributed to a great pride in Scotland that ultimately the summit had been a success, despite the bombers and those who tried to disrupt it.
The challenges of 2013 are perhaps new. The threats may be slightly different but, again, leadership is required. In my view, the agenda that has been set out to advance trade, to ensure tax compliance and to promote greater transparency, particularly in tax affairs, is the right one for our time. However, on trade, although it is vital that the EU-Japan discussions and the EU-US discussions get under way because they affect us all, it is also vital that we do not forget that agenda of fair trade and ensure that global trade agreements open access to markets fairly for all.
On tax, I want to talk briefly about Caroline Muchanga, who lives in Mazabuka in Zambia. She has two daughters and one son. On a good day, from the small market stall that she has in her village she earns $4, which is not always enough to feed her children or to pay the school fees for her daughters. One of the products that Caroline sells on her stall is White Spoon sugar, made by Associated British Foods. As estimated by ActionAid, ABF makes about $123 million in profits in Zambia alone every year, yet Caroline Muchanga pays more in cash in tax in Zambia than ABF. This is immoral. ABF is not alone, and it is perhaps wrong to single out one company, because there are companies and individuals doing this all over the world and not just in sub-Saharan Africa. However, that lost tax to countries such as Zambia is estimated to be about three times the total of international aid from the developed world to the developing world. That loss of revenue cripples economies, it affects public services and it costs lives. Therefore, when the G8 meets next week in Northern Ireland, it must act on these issues.
First, as the noble Lord, Lord Trimble, already said, the global sign-up to financial information sharing is a vital part of the agenda for this summit. The UK can take a lead in this by insisting both that all our European Union partners sign up to this financial information sharing, and that the UK dependencies and territories play their part, too. I would be interested to know what the Minister can tell us about the discussions with the dependencies and territories that will take place over these next few days.
Secondly, and I think absolutely crucially, a legal register of beneficial ownership is long, long overdue. To make progress on this agenda it is absolutely critical to understand who owns companies and corporations, understand who gets the profits, and understand who is moving them from the countries where they are made to the countries where they are held for tax purposes. I understand that some members of the G8—perhaps including Canada, as was reported in the Canadian press recently—may be hesitant about a legal register of beneficial ownership. The members of the G8 need to show global leadership on this agenda. They must be brave, be strong and ensure that such a register is in place. It must apply not only in the G8 countries but right across the world, so that those countries that are currently losing out on all that revenue have a chance to identify and chase it, and ensure that their economies can benefit more successfully in the future.
Thirdly, it is crucial that the UK’s leadership of the G8 next week does not deal with these issues in the context of Europe or of the strong economies of the world. The summit must also take action really to secure the opportunity for the weakest economies in the world, the poorest countries of the world, to make the most of any changes that are put in place. This includes capacity building, of the sort that Britain has supported over the years in Rwanda and elsewhere, in order to build successful revenue authorities that can create decent tax systems and consistently collect taxation revenues. That sort of action to build capacity in the developing world must go hand in hand with a new global regime for greater transparency, including registers of beneficial ownership.
It seems to me that this agenda, rightly, does not copy or try to replicate what happened at Gleneagles in 2005. Some of the promises made then have not been fulfilled. We should be disappointed by that, and we should continue to press those responsible to meet the commitments that they made back then. This agenda moves that a step forward. It talks about changing the rules, rather than just giving more. It is about making sure the rules are fairer, rather than just allocating more and more money from the developed world to the developing world.
Next week’s agenda could be a real turning point in a new global relationship. I wish the Government well and hope they will be successful. If they are, I hope that Northern Ireland will take as much pride in the 2013 summit as Scotland always will in the 2005 summit.
Baroness Falkner of Margravine
My Lords, I, too, thank the noble Lord, Lord Trimble, for securing this extremely timely debate ahead of next week’s G8 meeting in Northern Ireland. I am going to concentrate on just two of the three Ts that the Prime Minister identified as his priorities for the meeting: tax and transparency. On tax, it has long been argued that bilateral arrangements between countries were never going to deliver. Multinationals simply move to a different jurisdiction, cloak their activities in opacity and pay their teams of lawyers and accountants to devise ever more ingenious methods legally to avoid tax—legally in law at least, if not in spirit.
It is with great enthusiasm that I see the United Kingdom rising to the challenge of tackling tax and transparency in this forum. While these eight countries may not represent the collective might of the world’s main economic centres today—I must say that the presence of Italy seems a little anachronistic—the G8 is a good place to start. Any progress here will surely lay the foundations for a wider debate among the G20 countries, to be hosted by Russia.
The subject of the tax and transparency of large corporations generates public opprobrium like no other. A poll in Prospect magazine recently found that the public hugely disapproved of large corporate tax avoidance—some 88%—while their disapproval of wealthy individuals who cheated to avoid tax was significantly lower at something like 38%. Not paying VAT to the plumber or to the person who came to do the odd job, but paying cash, resulted in only about 6% or 7% of people disagreeing. That may not be entirely rational, but the lesson that I would draw if I were a large multinational is that the large corporations are in the firing line, not small individuals, as the public see them.
It is a hugely ambitious agenda for the Government to take on, and the challenge of breaking down corporate secrecy by seeking to require companies to disclose their beneficial ownership, which is asking who owns and controls them, is to be applauded. By setting up centralised registers with a clear line of sight, which is the minimum available to the law enforcement agencies—I would like public access as well, but I recognise that that may be too much to ask for at this point—the poorest Governments who have the greatest need will at least have the tool with which to begin to look for their stolen assets.
This would not be comfortable for the rich developed countries, nor for their associated tax havens. In the former category, we have the United States where much responsibility for corporate oversight is at state level so the Government may be less willing to act against the state of Delaware, for example, which according to the Economist has more companies numerically than its population. Small countries are the best known tax havens and unfortunately many are UK Crown dependencies or overseas territories. In this regard, the Commonwealth—I am aware that the noble Lord, Lord Howell of Guildford, will speak right after me, so I shall be careful what I say and mute my criticism as I know well to do when he is speaking—has been rather feeble at taking action as a forum that might have been well suited to this task. Among its members are some of the poorest countries of the world, where assets have been plundered and corruption is rife. The ability of these countries is heavily circumscribed by the lack of capacity—having sharp civil servants and revenue officials, schooled in the latest techniques of outright corruption and capable of spotting corporate tax evasion.
At the other extreme, among its members are the offshore banking centres—the relatively rich Caribbean islands where many of these companies are registered. We have only today heard the news that Bermuda, among the richest islands and a strong financial services centre, has announced that it will not sign up to the multilateral convention on mutual tax assistance. This is particularly frustrating as all three Crown dependencies—Jersey, Guernsey and the Isle of Man—have come on board along with the Cayman Islands. Perhaps the Commonwealth could embed a programme of secondment of experts from the rich developed world. Perhaps even the architects of these opaque tax structures might go and work with those poor countries’ tax authorities to try to build up capacity to retrieve those billions owed. It may be a sobering experience for the practitioners in the City of London to see for themselves what the effects of their work reaps in the lives of the millions who are deprived of the benefits of their natural resources, for example.
Turning to extractive industries, US entry along with France and Germany to the extractive industry transparency directive is extremely positive. We cannot continue with a system where secret deals are struck by companies and Governments whereby huge amounts of profits disappear into the ether. It is evident that when we require companies to say what they have paid and Governments to disclose what they have received, it is harder to steal. The United Kingdom is right to press this case more vigorously despite the fight back in the US from the big oil companies. We have also seen the public dismay caused by corporate tax avoidance with the likes of companies such as Google and Starbucks. People often say that when a company provides essential services it is difficult to vote with your feet, as people have been able to do with Starbucks—sufficiently so as to make it volunteer to pay £20 million in tax. But volunteering is surely not good enough. People say that we cannot take similar action against Google because using a search engine is no longer an optional extra in our lives. However, we know that its profits are made from selling advertising and it should not be beyond the wit of the British public to reject the products of those Google advertisers until the company sees that it might need to come into line as its profits go south.
More importantly, those companies argue that it is for the United Kingdom legislatures and the Executive to come up with laws that prevent them from their propensity to avoid. To some extent, I have sympathy with that argument. When we get report after report from the Public Accounts Committee, as we have this morning, it is not entirely clear to me why the Executive—our Government, HMRC and the Treasury—cannot come back to Parliament with some proposals at least to attempt to get to grips with the problem of new and more innovative structures being developed by the financial services sector on a regular basis.
I will use my last minute or so to talk about Syria, which is also on the agenda. For those, like me, who believe that the civil war in Syria will be brought to an end only when the parties are prepared to come to the negotiating table, it is axiomatic that that will inevitably be brought about by success or failure on the battlefield. For the western world to stand aside from supplying arms when all around them are doing so—and to the most unfriendly groups in terms of our interests—it seems that as a country we have become entirely isolationist. That is something completely out of character with our history, our international standing and our permanent membership of the United Nations Security Council.
Moreover, we may eventually be forced to do so under our obligations in humanitarian law. So I say with some regret that I wish we would not go down the route on which we believe we have to ask Parliament to approve every step in our moves to deal with the Syrian imbroglio. I do not understand why an Executive—a Government—are appointed if they feel they are so weak in tackling what is clearly in our interests: ethically, morally and in humanitarian terms.
Lord Howell of Guildford
My Lords, we should all be grateful to my noble friend Lord Trimble for initiating this debate and for his excellent opening speech. I also welcome siting this G8 conference in Fermanagh, which is one of the most beautiful areas of our United Kingdom. I got to know it well during my privileged time as a Minister in Northern Ireland for two and a half years. As my noble friend Lady Falkner has reminded us, the Prime Minister’s priorities for this G8 are the three Ts—trade, tax compliance and transparency. All are excellent issues which we should pursue with vigour.
I shall concentrate mainly on trade, although on the tax compliance issue I merely observe that obviously the efforts are completely commendable. However, in dealing with the hyper-connected world of unbelievable complexity in which we now live, it is difficult to see how Governments will ever catch up completely on a multinational scale with all the devices for avoiding and minimising tax liabilities. I leave your Lordships with this thought: we should be a little uneasy about the idea that the answer is more and more power to the tax-gathering authorities, on almost Bourbon levels. It will not solve the problems, which are undoubtedly there. The complexity is very great.
This leads to my main point which I want to share with your Lordships. In this transformed world, the character of trade has changed almost beyond recognition. Modern trade now follows a totally different path from anything that the world has ever seen. In today’s heavily interconnected world, it is no longer a question of products manufactured in one country being sold to another. The advent of the modern supply chain means that most manufacturers use components from a variety of different parts of the network and from different countries.
In these novel conditions, markets are simply no longer definable in terms of tariffs, quotas and other protections. On Europe, for instance, we hear the current mantra that the single market must be preserved, but the nature and meaning of the phrase “single market” has been completely transformed. The common trading platform of the world wide web is building up a new kind of supranational single market which is highly competitive and very transparent; it is criss-crossed by intricate supply chains and knows no regional boundaries whatever. The often asserted “fact” that the European Union is the world’s largest single market is in fact no longer correct. Cybermarkets on the world wide web are much larger. Pacific rim markets, including the vast market of China’s new middle class, are just as large, with the growing consumer markets of India, Brazil, Mexico, Turkey, Thailand, Vietnam, east and west Africa and a score of other places all coming on extremely fast behind.
Not only have old classifications such as “manufactured goods” ceased to have any statistical meaning but the trade in services—which 30 years ago was hardly worth mentioning—has taken centre stage with its knowledge-intensive products. The driving forces of international business have shifted into a world which is only dimly understood even now. It certainly was not at all understood all those years ago. In particular, the old idea that the path to free trade lay through negotiating down various tariffs and quotas has lost much of its meaning. It is the non-tariff barriers which are woven into countless procedures, customs and attitudes that now stand in the way. Their existence and persistence depends not on tariffs but on deep cultural factors and processes. The assault on them has to begin not with numbers or even with detailed negotiating facts but with the deployment of soft power in all possible forms.
That all, in turn, depends on the power to communicate and persuade and to open up our economies—for which, incidentally, the modern Commonwealth network, with its common working language, its vast and intimate professional links and its dazzling cross-cultural cross-pollination, is of course ideal. When listening to the Canadian Prime Minister just a short while ago I was a little sorry that, in an otherwise splendid speech, he did not mention that aspect. However, I agree totally with my noble friend Lady Falkner in her remarks that the Commonwealth, as a network, ought to be an ideal vehicle for the kind of proposals that she put forward on improving transparency and tax compliance.
We have to recognise, in the background to all the changes I am describing, that we are dealing with a world which is totally transformed, with 2.5 billion people on the internet at all times. Mr Eric Schmidt of Google estimates that there are now more mobile telephone subscribers on this planet than there are human beings. Every morning, 300 million Chinese go shopping online. We are doubling the data we draw out of the system for trade and other activities every nine months. I will share one further blinding statistic with your Lordships. Under the present system we generate in two days more data than were generated between the dawn of civilisation and 2003. We are, in short, in a completely transformed atmosphere in which trade is operating in totally different ways. That is one point that I hope will be understood by the G8 dignitaries when they gather at Enniskillen and in Fermanagh.
My second point is that there has been a lot of talk about the G8 being the top table, but it is not. There are many top tables today. The rioters last Sunday in the City of London were completely deluded when they talked about this being the power centre—the centre of wealth and riches and so on. Not even the G20 is the top table today. There is a new alphabet soup of organisations, alliances and networks springing up all over the planet, and they are beginning to exert as much power and influence as the old G8 and the other institutions of the 20th century, such as NATO, the UN, the IMF and the European Union, all of which are struggling to adjust. New sets of initials are swirling round in this alphabet soup which we have to adjust to: OIC, SCO, AU, GCC, AL, UNASUR, SAARC, ANMC, PIF and Caricom. I will not take time to spell out what all those stand for. I can see the noble Lord, Lord Triesman, shaking his head. Those are just a few. At the end of the list I put the largest and densest network of all, the Commonwealth network, which unites 2.25 billion people in a common system, as I have already described.
Procedures, attitudes, organisations and institutions have only dimly begun to reflect what is happening, and most of the media, with some brilliant and insightful exceptions, have hardly done so at all. A network world—for that is what it has really become—operates quite differently from one of hierarchies and blocs. Relationships emerge of a quite different quality; priorities are reshuffled; new elements, previously ignored, come to signify. Suddenly, in a digitalised network system, everyone has to be kept in the loop, small nations and large. More than that, the networks become part of the legitimising process. Agreement for international action at the United Nations has to be supported by agreement across the networks. All have to be consulted, won over and brought along, because all are now instantly, and in most cases continuously, connected.
I will end by saying that I hope that at Fermanagh our colleagues and leaders engage with these new issues, because they are entirely new, and do so with a suitable degree of humility, fully realising that in today’s world they are not the top table; they are only players in a far larger and newer scheme of things. They are not the bosses; they are the partners. They have to grasp the opportunity to understand that status, otherwise they could well find that they are not players at all but merely spectators.
The Earl of Listowel
My Lords, I, too, am most grateful to the noble Lord, Lord Trimble, for securing this important and timely debate. I will concentrate on the opportunities that the G8 summit offers for increased transparency through taxation and other means. Our chairmanship of the G8 is an opportunity to look at land rights, particularly for smallholders. I have been grateful for briefing meetings from the IF campaign, which has consistently raised these issues. I begin by praising the Government for the example they have set to the leaders of the developed world in their commitment to funding international development aid amounting to 0.7% of annual national income. Their example at a time of global recession must be a powerful factor in sustaining efforts which have proved so successful in saving the lives of children in the developing world.
The importance of strengthening transparency was brought home to me by visits to a sub-Saharan state made with other parliamentarians and funded by UNICEF, Save the Children and Tearfund. Our first two visits were made during the civil war of that nation. The country was blessed, or cursed, with plentiful supplies of diamonds and oil. We saw a nation where an elite of 100 families benefited from much of the vast mineral wealth while the multitude lived in squalor. The charity Transparency International drew attention in particular to the way that the Government of that country failed to share details of the deals they made with oil companies for extraction payments. British Petroleum decided to take a principled position and to make public information about payments, at some cost to its own business. My noble friend Lord Browne of Madingley was chief executive of BP at the time.
The wealth of the country went towards the healthcare of the 100 families, the education of their children in the United States and the United Kingdom, arms for the civil war, and other such areas. Meanwhile, in a large internally displaced people’s camp in the capital of that country, families had no water source and had to pay for the privilege of using tankers. This camp had been in existence for several years and simply been ignored by the authorities.
We saw homes built among giant dumps of rubbish and children playing among the refuse. We spoke to AIDS patients with no prospect of treatment. We heard of people being arbitrarily displaced from one area of the capital to make way for new, profitable developments. We also met the Minister for Health, a Mr De Almeida, a member of the 100 families, who had initiated the first national immunisation programme for children—no mean feat, given the continuing war and the lack of electricity and apparatus to chill the vaccines. So there were members of the Government who cared for the people.
We learnt that this nation was just one of many developing nations in which oil and diamond wealth allowed elites not to consult the people or even bother with their interests because they had no need of the taxes that their people might provide—no need for your taxes, no need for your votes.
I hope that I may encourage the Minister and his colleagues to push hard on the matter of tax reform and to improve transparency. Robust international agreement on these matters would reduce the power of political elites to drain the wealth of the nation for themselves, strengthen the arms of those politicians who wish to act in the interests of the people and do much to address poverty and hunger in the developing world.
We also met a women’s co-operative operating in the capital. The women had joined together to purchase food at better prices for themselves and their families. Through the work of the IF campaign, we have learnt of the importance of smallholders in the developing world in feeding the people, and I understand that most of those smallholders will be women.
I hope that the Government will also be looking for international agreements to strengthen the land rights of smallholders, thereby addressing the continuing scourge of hunger and malnutrition. In our briefings, we heard from Ricardo, a young man from a remote region of Tanzania. He was raised, as best she could, by his grandmother. He experienced malnutrition and there were no hospitals or services nearby to help to remedy the undernourishment. He suffered from kwashiorkor and other diseases related to malnourishment. Starved children suffer impairments that hinder their learning and, later, limit their capacity to work. We really need to do more to prevent hunger, and international treaties on land rights would be a good step in this direction.
I look forward to the Minister’s response. I ask him in particular how the Government will use their presidency of the G8 to push for greater transparency in land acquisitions, to ensure that corrupt deals are stopped and that people have the information that they need to hold Governments and companies to account. I also ask him whether the Government will be supporting greater transparency from Governments in developing nations so that citizens in those countries can hold their Governments to account for the money that they spend. I apologise for not giving him notice of those questions, and if he would write to me and put a copy in the Library, that would be very helpful.
Lord Bates
My Lords, it is a privilege to follow the noble Earl, Lord Listowel. He and I, along with my noble friend Lord McColl, took part in a wonderful debate last Tuesday, initiated by the noble Lord, Lord Empey, on overseas aid. We were on the same side in expressing our pride and delight at what was being done and at how this Government, in very difficult times, were making the care of the poorest in our world an absolute priority. We can take pride in that.
We have already seen the number of under-fives dying from preventable diseases fall quite dramatically over the past 15 years, from an average of 12 million per year to just over 6 million now. Last weekend, the Nutrition for Growth summit, which came out of the Olympic hunger summit and which the Prime Minister has followed along with his responsibilities on the UN high-level panel on finding successors to the millennium development goals, agreed yet more funds that can be directed to that task. That funding should ensure that a further 1.7 million children under five will be saved as a result of these initiatives by 2020. That is profound. I cannot think of anything else that could come out of the summit that could possibly match it. I take pride in our Government’s role. I was struck by Bill Gates’s declaration when he said that the leadership in this area by the Government and the Prime Minister,
“will be a source of British influence around the globe for years to come”.
That is something we can take immense pride in.
I pay tribute to my noble friend Lord Trimble for securing this debate. I was delighted with his introduction and his invitation to visit County Fermanagh. With a following wind, I might reach County Fermanagh on 9 September having walked from London to Dublin—with a little help from the Isle of Man Steam Packet Company between Heysham and Douglas in the Isle of Man and then on to Dublin—to raise funds for Save the Children in connection with this initiative. It is what goes down in government circles as an aspiration. One need only look at my physique to realise that perhaps it is a triumph of hope over experience. None the less, I have always been an optimist; in fact my blood group is B-positive. I look forward to seeing County Fermanagh for many reasons this year.
I want to follow on from my noble friend Lord Howell’s fascinating speech on the global scene to make some structural points about the G8 and to seek some comments from the Minister, who I know is academically and politically well informed in these areas. Any gathering that seeks to achieve anything needs all those present to be capable of acting on what comes out of it. I want to test that a little further. Does the G8 as presently configured meet the global challenge? The group originated in 1975 at Rambouillet when it was convened by President Giscard d’Estaing to bring together the world’s most powerful industrial nations and market economies. It really followed the collapse of the Bretton Woods agreement, which had modified international exchange rates until then and a successor body was needed to bring the industrialised nations together to iron out global economic problems.
When it was initially convened, it was the G5, and then Canada was added the next year. Following the break-up of the Soviet Union, Russia became a member. Then the G8 was extended to the G9, with the EU being given observer status. I want to test whether we need to look at this again. What was right in 1975 does not necessarily reflect the world in 2013. Of the current top 10 economies in the world, China, Brazil and India are not present at the top table, although I accept my noble friend Lord Howell’s point that in a network world such terms are not entirely accurate. Is it right that the EU should have an additional voice at the G8 when it already has four very powerful voices in Germany, France, the UK and Italy, and yet the powerhouse of Asia has only one representative at the table, Japan?
Should the G8 fit more closely with the permanent members of the Security Council? Again, they were relevant in 1946, but with the absence of Brazil, Germany, Japan and India, the composition is limited when agreements are reached that require political and sometimes military action. In short, it seems entirely right that the most powerful political and economic countries in the world should have a special relationship. The helpful briefing document prepared for this debate contains the original 1975 Rambouillet summit declaration, which says:
“In these three days we held a searching and productive exchange … on the world economic situation, on economic problems common to our countries, on their human, social and political implications, and on plans for resolving them … The growth and stability of our economies will help the entire industrial world and developing countries to prosper”.
That makes a clear link between economic growth, the major economic powers and responsibility to the poorest in our world.
It was also refreshing to read the remarks made by my right honourable friend the Prime Minister on 21 November 2012, when he set out what he wanted for the G8. He said that he wanted to,
“go back to those first principles … No mile long motorcades. And no armies of officials telling each other what each of their leaders thinks—or should think. Instead we will build on the approach taken by President Obama at Camp David this year: one table and one conversation”.
That is a very noble thing, which improves the chances of success. Those chances would be improved still further if the G8 included around the table those countries that are absent simply because at the point of formation they were not the economic powers that they now are.
In fact, there is a strong case that the permanent 10 members of the UN Security Council and the economic members of the G10 should be the same. If you ranked countries by economic power, we would have the US, China, Japan, Germany, France, UK, Brazil, Russia, Italy and India. If those countries were connected and represented around the table, the chances of solving some of our intractable international problems would be greatly increased.
Lord Hunt of Chesterton
My Lords, we should be grateful to the noble Lord, Lord Trimble, for this debate about the G8 in Northern Ireland. Of course, the G8 is more than about just trade. As the noble Lord, Lord McConnell, reminded us, it is about people, culture and science. Ireland’s unparalleled contribution to culture, with its great scientists and poets, is familiar to us all. A connection between trade and culture comes to mind. When Oscar Wilde went to New York in the 1880s, he was asked as he went through customs whether he had anything to declare. He replied that he had only his genius to declare.
Of course, I approve of the enthusiasm expressed by the noble Lord, Lord Trimble, for trade and the contribution of the European Commission in those negotiations, which has a dominant role in determining non-tariff barriers, mentioned by the noble Lord, Lord Howell. Without the role of the EC, we would not be in this position of influencing and participating in these extremely important global determinants of trade.
I will not repeat the remarks of the noble Lord, Lord Bates, about a more realistic approach in the international world of negotiation, which I was delighted to hear. I will say only that the extraordinary issue of how the international framework of discussions should be changed cannot be solved by a collection of Prime Ministers sitting around the table. Surely it should proceed by initiating research programmes of many think tanks and universities around the world. The first step would be to put it on the agenda. If we could all agree that there should be an international research programme on that, involving all the countries the noble Lord mentioned, that would be a way forward. We cannot just have a snap decision, obviously. So are the Government thinking about this?
Secondly, as the noble Lord, Lord Howell, mentioned, we live in a highly networked world. At the meeting in Brussels on Tuesday on global systems, organised by the European Commission, a colleague working on energy from University College put up a slide of Buckminster Fuller’s 1939 vision of a global electrical power network. As he commented, in fact we are now having a transfer of electricity from the UK, Europe, Russia to China; before long it will be India. While we are having these extraordinary technical collaborations, which are growing consistently, our political masters are blowing hot and cold about how we should collaborate.
It was rather the same in the Cold War when, for instance, all weather forecasts were exchanged. The only person who did not play cricket about weather was Saddam Hussein, who turned off the weather when he arrived in Kuwait. This was considered a very bad show. It had never happened before. The point is that there is a technical world and a political world. Fortunately, the technical world carries on, but of course we need to connect the two.
The other important point about the 2006 UK G8 meeting, which the noble Lord, Lord McConnell, emphasised, was that despite the terrorist bombing in London—which I heard from my office in UCL; it was very frightening for many people in London—important commitments were made to reducing third-world debt, increasing aid and tackling climate change. One of the important events of that G8 meeting was that the UK Government, with backing from many other Governments, supported a parallel meeting of global legislators that began a sustained programme of introducing new laws and regulations in countries to deal with climate change. That is an absolutely necessary underpinning of international agreements.
That work was extremely controversial when it began. For example, only in 2006, many countries regarded deforestation as a neo-colonial word to stop people cutting down trees. It just shows how concepts have developed and collaboration has increased. Now this kind of approach is very much supported by the World Bank, the FCO, and UN climate agencies. In fact, progressively the G8 has undertaken many of its projects in conjunction with other bodies. It is no longer regarded as just an exclusive body. In Italy in 2007, for example, I attended a remarkable meeting of G8 and UNESCO. It was a meeting on innovation and education which involved innovation from countries all over the world, such as pioneering development of inexpensive medicine in India. This progressive outreach of G8 is something we should continue. Again, this is why, as the noble Lord, Lord Howell said, the notion that G8 is just an in-group of a few leaders is not how it is working out.
I also want to make the sideways comment that Canadian legislators have taken a very strong lead in this idea of legislators working together on climate. I am afraid they have to regret the policies of their Government rather forcefully.
In 2012, the G8 under the United States chairmanship focused on the Arab spring and the contribution of science and technology with natural disasters. Its focus on the former has not been very successful, one might say, but its work on the latter was a continuation and a building on the work of the United Nations report in 2012 bringing together UN agencies and other parts of the United Nations systems in explaining the impacts connecting natural disasters and climate change as well world population. Again, the G8 helped to underpin a very broad United Nations-wide initiative.
This year, as we learn from the House of Lords Library paper, to which the noble Lord, Lord Bates, has also referred, the Government have organised some specialised conferences to deal with specialised issues. Some of them have only involved G8 countries—for example the G8 science meeting—but others have had a broad membership of civil society groups in the G8 and other countries. I hope that theme will continue. There were two separate meetings on nutrition and innovation. However, these two themes need to be connected. For example, there are remarkable improvements in India with people now using social media to learn about the best use of agricultural aids as well as acquire data about weather and climate. This is having remarkable effects. To start with, there was some resistance to the use of social media. The idea of giving people mobile phones in place of seed was, as it were, an issue to be discussed. Now we realise that these two things have to go together.
Despite the remark of the noble Lord, Lord Howell, about too much data, there is not enough data in African countries. African farmers are not collecting and measuring their rain. You must collect your rain if you want to know how your crops will develop during the season—knowing whether you have less or more rain. Many other areas of data are collected by many different agencies in African countries which are simply not exchanged. Some noble Lords will have heard me banging on about this before, but I still find it hard to get that sharp focus on the simple question of data exchange being accepted as an important issue by aid agencies and even DfID. They are very keen on global computer models, and so am I, but I am also keen on people measuring rain.
Finally, this G8 meeting, like others, raises issues and starts initiatives. I hope that the UK will set an example which other countries have not followed very much: reporting on the G8 meeting during the following year, so that we know what has happened. For example, we have our Library document, which covers initiatives this year, but it is difficult to find out how it connects to initiatives in previous years. That would be very helpful.
Lord Brooke of Sutton Mandeville
My Lords, it is a particular pleasure to follow the noble Lord, Lord Hunt of Chesterton, if only because it enables me to thank him publicly, after a long interval, for once telling me that a description of mine of the siege of Prague which I had incorporated into a debate on the arms trade was the only time he had ever laughed out loud while reading Hansard on a train. But his content today was much more noteworthy.
It is difficult to imagine any subject more germane for debate in this week than that which my noble friend Lord Trimble has selected, nurtured and so cogently introduced. It is a most felicitous overture that it should be an Ulsterman, one who has played so large a part in the Province’s history, who is doing it. The 198th anniversary of Waterloo may not be an ideal day for the G8 beginning its business, but at least it was another Ulsterman, in the person of Lord Castlereagh, who did the successful fixing at the Congress of Vienna a year later, and Derry’s/Londonderry’s year as City of Culture is a happy index to underline the happiness of the Prime Minister’s chosen and highly apposite location, through we must hope that 2013 will be an exception to the general Irish rule of thumb that in July Lough Erne is in County Fermanagh while, for the rest of the year, County Fermanagh is in Lough Erne.
For myself, I think that the Prime Minister is to be warmly congratulated on the priorities and preliminaries over which he has presided. From the letter he wrote to his international colleagues in the first week of the new year to the selection of Professor Paul Collier to advise the Government on the preparations and policies for the G8 summit, from the speech the Prime Minister delivered to the World Economic Forum in Davos on 24 January to his subsequent letter to the leaders of the UK Crown dependencies on 20 May about continuing to work in partnership with the UK on internal tax matters, he does not, at least to me, appear to have put a foot wrong. As the noble Lord, Lord Hunt, has just said, the days prior to the full G8 conference are full of events that play to the conference’s themes.
Moreover, the Prime Minister has sought to keep the agenda simple and taut, with its emphasis on trade, on tax and on transparency. The critical issues contained in the letter of 20 May to which I have just alluded—tax, information exchange and beneficial ownership—were at the heart of the agenda. That does not mean that we should necessarily be too optimistic about securing all we seek. The Minister responding to this debate confessed earlier this week that the Government were not sure about the definition of a lobbyist, and some of the briefing we have received from that quarter for this debate has had a peremptoriness about it which some might think was a little unrealistic.
In Northern Ireland, in what we have called our peace process, we had to learn to be patient, but we never forgot what our long-term goal was, and applied patience and policies to achieve it. There is evidence from the overall plan that this has not been neglected here either. Of course the G8 are important, but so, likewise in these matters, are the G20 and their handling should be all of a piece, even if the diplomacy is complicated.
In its briefing for today, the House of Lords Library drew heavily on Professor Collier’s article in Prospect in March this year. However, the briefing uses only part of it, and I strongly commend the entirety of the article to anyone who has not yet read it. Professor Collier has been an Oxford Professor of Economics since 1993, a fellow of St Antony’s since 1986 and he has been director of the Centre for the Study of African Economies since 1991. The latter shows up in particular in the rigour and comprehensiveness of his analysis of the hazards and complexity of the solutions that these problems will require. Happily it is, of course, to his college’s St Antony that we pray when we have lost something and cannot find it. Not for nothing did the head of taxation at OECD aptly refer to the existing arrangements as “double non-taxation”. In the context of the subsequent transfer to the G20 meeting, it is a notable vindication of the Government’s employment of Professor Collier that he was also invited by the Russian Government, current hosts of the G20, to address the major conference on tackling corruption in government and business that they convened in April.
I want to speak only about international tax as that has constituted a serial thread in this Chamber over the past six months. It is a matter of some relief to me that of the UK Crown dependencies, one of those which has, to the best of my knowledge, never been a tax haven is St Helena, where a forebear of mine was a distinguished and gallant governor between 1787 and 1801 and where his nephew, whom he brought out as his secretary, remained until 1834. Thus, a family connection with the island was created that lasted not only through Napoleon’s stay, but in all for almost half a century. However, those British territories which are tax havens have understood our intertwined role and, in the case of Jersey, have given leadership in these tax considerations which the World Bank has adjudged a model.
The fact that Jersey also became the world’s largest exporter of bananas is an index of the sub-plots of this drama. It is 54 years since I was last in Uganda, where it was borne in on me that there are 250 different species of banana. It is 43 years since I was last in Jamaica, another island where bananas are not unknown. At the Negril end of the island there was then a waste—for the benefit of the Hansard writer, I am spelling that word with an “e” rather than an “i”—that was eloquently described on the map as the Great Morass. These are deep waters, Watson, as Sherlock Holmes used to say.
However, to be encouraging, and not least in the context of the G20, there are signs of light. America has made for transparency in reporting a legal requirement for US-listed resource extraction through the Cardin-Lugar amendment to the Dodd-Frank Act 2010. The European Parliament is considering an equivalent of Cardin-Lugar. At a European Council meeting in Brussels on 22 May this year, beyond the general conclusion on fighting tax evasion, it was agreed that rapid progress was needed, and I quote,
“to improve the EU’s agreements with Switzerland, Liechtenstein, Monaco, Andorra and San Marino”,
in line with measures equivalent to those in the EU. Canada is following the United States in clarifying and tightening the application of its equivalent to the US Foreign Corrupt Practices Act, even if Canada has also opposed the introduction of mandatory disclosure standards; for instance, in relation to 330 minerals extraction projects in Africa.
Professor Collier has also earned our gratitude by trumping the African defence of questionable deals done—the defence being that it takes two to tango—by enlarging the duo to a threesome, as in, I think I recall from my youth, the dance “the dashing white sergeant” with a cast of a briber, a bribee and a facilitator. The latter word is one that my noble friend Lord Trimble may remember from the vocabulary of the peace process.
Facilitators can live a long way from Africa, including in this city. A recent experimental study conducted by Griffith University in Australia, which sent more than 7,000 e-mails to law firms around the world, requesting that shell companies be set up, contained a sprinkling of references in random e-mails that included incriminating information indicative of corruption, and offers of a premium on normal fees to maintain secrecy. Regrettably, replies to this random selection demonstrated a fall in the number of law firms demanding identity documents, which are internationally required to allow company owners to be traced. Law firms in G8 countries were not immune from this diplomatic—or undiplomatic—omission.
Professor Collier adduced practical and effective responses to these contingencies, but it remains the case that only 1,000 of the 280,000 annual reports of transactions that give grounds for suspicion in the UK are investigated. On the other hand, the fact that the US now recognises that present practices are adversely affecting US tax revenues is a powerful stimulus to remedial action. It is, however, a combined and united push that is required.
In closing, I go back to where I began, with the moral from our peace process in Northern Ireland. The most important imperative is agreement on the goal and unremitting attention to anything that will advance that cause. The Prime Minister, at his level, and Professor Collier at his, have done an outstanding job in setting out an agenda that addresses these matters. If we can match even a fraction of the results of the Congress of Vienna, we shall have done well.
Baroness Jenkin of Kennington
My Lords, I, too, thank the noble Lord, Lord Trimble, for initiating this very timely debate. As we all know, the priorities for the G8 are to push for practical action to achieve fairer taxes, greater transparency and freer trade. These are essential actions in shaping the rules that characterise a fair and open global economy, ensuring that both developed and developing countries benefit. Like others in the debate, I congratulate the Prime Minister and his team on their hard work and commitment in driving the G8 agenda.
G8 summits have sometimes been seen as places where western nations have pointed the finger at developing countries, but this meeting is also about the G8 countries getting their own house in order. To make a difference to developing countries, it is vital to reach agreement on things such as tax transparency and trade. This will allow developing nations to know, when developed nations go into their country, what they are paying for the contracts, what those Governments are receiving, and what the real benefits are for the people of those nations.
As we have discussed, fairer taxation will be a key priority at the talks. It is important that we get political support for ensuring that global tax rules are fit for the 21st century. As the recent hoo-hah has shown, it cannot be acceptable for companies to create shadow shell companies offshore, effectively meaning that neither the developed nor the developing countries get the benefit from tax revenue that should come from profits.
If these companies are not paying tax on their profits, developed and developing nations cannot provide the public services and support that are needed. We do not underestimate the complexities and challenges, but it must be a key part of what we are doing at the G8 to say to companies, “You have to be transparent about who owns you, where you are owned and what tax you are paying”. As my noble friend Lord Brooke pointed out, research suggests that Jersey is now the world’s largest exporter of bananas. We know that that is not true and needs to be sorted out.
Greater transparency of taxation must also be accompanied by greater transparency of other financial flows. The UK, through DfID, has led the way in becoming the world’s most transparent aid donor. Through its role in the international aid transparency initiative, DfID is ensuring that UK taxpayers, and citizens in developing countries, will be able to track funds right through the aid chain to the point of delivery, ensuring that countries can better manage the aid that they receive, plan effectively, co-ordinate better and, most importantly, make sure that the money gets to where it is supposed to go.
Three of the other seven G8 countries—the US, Canada and Germany—are now also publishing their aid transactions, through the initiative. We hope that the remaining G8 countries will also prioritise the information needs of developing countries, and fulfil these transparency commitments.
Accompanying progress in aid, the UK and French Governments have made a joint agreement in the run-up to the G8 which will mean that both Governments will apply for formal candidacy of the extractives industry transparency initiative, which was set up to help tackle corruption, to improve the way revenues from oil, gas and minerals, are managed, and to make sure that people across the world share in the economic benefits of the natural resources in their country. I am proud that our Government are playing a key role in ensuring that people benefit fairly from the natural resources of the country in which they live. As the noble Earl, Lord Listowel, pointed out, mineral wealth in developing countries should be a blessing, and not, as so often in the past, a curse.
Finally, on transparency, last week the UK Government took a further step in enhancing transparency through the launch of the Lough Erne G8 Accountability Report. The G8 has never before produced such a comprehensive accountability report, showing it being open about where it has delivered against its commitments, and where it needs to do more. The results rate progress as good in six sectors: economic development; health; water and sanitation; food security; governance; and peace and security. It is satisfactory in three others: aid and aid effectiveness; education; and environment and energy. This report demonstrates that the G8 has made progress on its commitments but that there is more to do. It is well worth a read.
Greater transparency and a fairer tax system will go a long way to creating a fair and open global economy, but nothing can match the power of freer trade in improving people’s lives. The EU and the US together make up about a third of all global trade. As the noble Lord, Lord Trimble, said in his opening speech, a deal between these two regions could add—and we could discuss the figures—a huge amount to the EU economy alone. Trade between developing countries and within Africa is growing, and we should encourage that work further. This means continuing to support the multilateral system, and working through the WTO to agree a deal to sweep away trade bureaucracy. That alone could be worth huge amounts of money—$70 billion—to the global economy, and help trade to flow freely across the world.
I, too, highlight the work and achievements that have already happened as part of this year’s G8 agenda. On Saturday, as the noble Lord, Lord Bates, remarked, the Prime Minister held a high level meeting entitled, Nutrition for Growth: Beating Hunger through Business and Science. Undernutrition is a chronic lack of nutrients that can result in death, stunted physical development, and a lower resistance to illnesses in later life. It is the biggest underlying cause of death in those aged under five in the world and is responsible for 8,000 child deaths each day. It stunts the growth of children, reducing their potential, undermining their adult earnings by up to 10%, and in some countries reducing the size of the economy by 11% as a result.
The Global Nutrition for Growth Compact was endorsed by a total of 90 stakeholders, including 24 Governments and 28 business and science organizations. It secured new funding of up to £2.7 billion to tackle undernutrition up to 2020. This money will lead ultimately to enhancing the lives of those most in need: improving the nutrition of 500 million pregnant women and young children; reducing the number of children under five who are stunted, by an additional 20 million; and saving lives of at least 1.7 million children by preventing stunting, increasing breastfeeding, and better treatment of severe and acute malnutrition. As the noble Lord, Lord Bates, said, if nothing else comes out of this summit, that is a huge achievement.
This year’s G8 agenda is ambitious, but it is an agenda that has the potential to shape the rules leading to a genuinely fair and open global economy. Healthy, educated populations in poor countries will lead to poverty reduction and ultimately to trade with us here in the UK. We must ensure that all G8 countries work together over the next few days for the benefit of both developed and developing countries around the world.
Lord Lexden
My Lords, reference has been made by my noble friend Lord Trimble and others in this debate to the splendid place in which the summit is to take place. Perhaps a few further comments may be appropriate, since it is a source of such pride to those of us who are closely connected to the affairs of Northern Ireland, on which I shall focus.
Those attending the forthcoming summit will find themselves in one of the most beautiful parts of our country. The celebrated traveller and expert on agriculture, Arthur Young, was captivated when he visited it in the 1770s. He recorded,
“the promontories of thick wood, which shoot into Loch Earne, under a shade of a great ridge of mountains, have the finest effect imaginable … the whole unites to form one of the most glorious scenes I ever beheld”.
His enthusiasm greatly pleased his host, Sir James Caldwell, who, when they parted, sent him on his way with,
“colours flying, and his band of music playing … on board his six-oared barge for Inniskilling”.
A century later, the anonymous author of a tourist guide to Ireland, published in 1886, described the Fermanagh lakes as the “Windermere of Ireland”, with a pen dipped in purple ink, and went on to lavish praise on Lough Erne. He said:
“Studded with islets, which dip their luxuriant foliage in its waters, it adds the beauties of a sylvan stream to the placid sternness of a majestic lake”.
Now we look forward to the impressions of my noble friend Lord Bates, who is to visit Lough Erne later in the year; I am confident that they will be just as favourable as those in the 18th and 19th centuries. Of course, he must bear in mind always the splendid quotation given to us by my noble friend Lord Brooke.
Let us hope that the leaders of the worlds’ greatest economies appreciate the great good fortune of holding their summit in a place of such outstanding beauty. It has been said many times in the run-up to the summit that such a gathering in Fermanagh would have been inconceivable even a few short years ago. It is a measure of the great progress that Ulster has made towards political stability and success that the summit is taking place in a county that has historically had its share of bitterness and strife, arising from the fairly even balance of unionists and republicans in its population. It is also a measure of the personal commitment of my right honourable friend the Prime Minister to Northern Ireland’s union with Great Britain that he felt so strongly that the meeting should be held in this part of our country. The Prime Minister is a man of generous liberal instincts; he has pledged himself to work for a Northern Ireland in which all sections of the community are fully involved in shaping what he has described as a,
“shared future, not a shared out future”.
He is a unionist by deep conviction.
The prospect of a shared future for the people of Northern Ireland, which the Prime Minister is so determined to advance, would not exist but for the far-sighted work of so many people over recent decades. My noble friend Lord Trimble is conspicuous among them; without him, there would almost certainly have been no Belfast agreement 15 years ago, providing the cornerstone of the new dispensation in Ulster. Without his insistence on proper standards of conduct by members of the Northern Ireland Executive when he was First Minister, devolved government might never have been eventually restored on a firm basis.
It is well known that Northern Ireland faces formidable economic problems, which this House discusses from time to time, as indeed it should, avoiding the grave error made in Westminster after the creation of Northern Ireland in 1920, when the Stormont Parliament was left entirely to its own devices. The sources of Ulster’s economic problems are readily identified: the public sector is unduly large and the private sector unduly small. It is the central aim of this coalition Government in Northern Ireland to rebalance the economy, and in this they have the enthusiastic support of the Northern Ireland Executive. There are now some encouraging signs of progress. Yesterday’s fall in unemployment continues a trend for the fourth consecutive month, the first time that that has happened in six years. The Province’s unemployment rate is now in line with that elsewhere in our country.
Many believed that the devolution of corporation tax to the Northern Ireland Assembly would form a major element of the necessary economic rebalancing. A very low rate of corporation tax could enable Northern Ireland to compete more successfully for inward investment with the Republic of Ireland, where the rate stands at just 12.5%. The Northern Ireland Executive and the Treasury concluded their discussions on the matter last year but the announcement of the Government’s decision has been postponed until 2014.
Other means of stimulating the private sector are needed and the G8 summit could make a valuable contribution. My right honourable friend Theresa Villiers, the Secretary of State for Northern Ireland, has made that clear just today. She said:
“The Government has been working closely with ministers from the Executive to ensure that Northern Ireland gets the maximum benefit from the Summit. One recent study suggested that Northern Ireland could benefit from a £40 million boost to the economy in the short term, while two thirds of businesses believe the Summit will be positive or very positive. I know that a number of local businesses have been able to secure contracts as a result of the Summit”.
It is important, she went on to say, that,
“we do everything possible to ensure the Summit has a lasting legacy. So Invest NI is working with both the public and private sectors to highlight key inward investment and export opportunities. The Executive is planning an autumn investment conference. In addition the Northern Ireland Tourist Board and Tourism Ireland are intensifying efforts to promote the region in key overseas markets and to promote more tourism here. Fermanagh has huge tourism potential and we want to capitalise on it”.
I applaud the Government’s determination to ensure that the summit brings lasting benefits to the wonderful part of our country where it is to be held.
Lord McColl of Dulwich
My Lords, I too would like to thank my noble friend Lord Trimble for introducing this debate. I would like again to draw attention to the devastating effect that undernutrition has on millions of children throughout the world, as my noble friend Lady Jenkin has just emphasised.
The World Health Organisation estimates that half of those suffering from undernutrition are afflicted with diseases or parasites caused by a lack of safe water and a lack of sanitation. Efforts to increase access to these services must be a vital part of efforts to improve nutrition.
Apart from the direct disease link, access to water and sanitation services also affect women’s education and empowerment, which also impacts on their and their children’s nutrition. I was pleased that the UK commitment at the Nutrition for Growth summit this weekend recognised these links. I hope that this will lead to more effective integrated and cross-sector efforts to tackle disease and poverty.
When I visited Kathmandu recently, with the charity WaterAid, I was able to see at first hand these very problems of lack of sanitation and clean water. I also took part in my first demonstration. We marched through the streets of Kathmandu carrying placards with slogans addressing the need for toilets. It was my first venture into this kind of activity—it is never too late to learn.
Last week DfID published the Lough Erne accountability report, which reviews the G8’s delivery against its commitments and is a valuable tool for holding leaders to account on their promises. As it reports on the G8 as a whole, however, it hides individual members’ performance, and those that are doing less well are sheltered from true accountability. On water and sanitation, the report indicates that the G8 has made good progress both on maintaining political momentum and on increasing funding for the sector. It highlights the importance of the Sanitation and Water for All partnership as a way of improving aid for water and sanitation and shows that the G8 countries have increased their aid to water and sanitation projects, including a 16% rise in 2011. Crucially, it fails to show how and where this money is being spent.
G8 members have a rather mixed record on this front. They should direct aid to basic water and sanitation systems and to the countries and populations who are most in need. The majority, however, spend their money on large infrastructure projects. WaterAid’s report entitled Addressing the Shortfall states that less than 3% of French and United States water and sanitation aid goes towards creating basic systems. Germany does a little better, at 17%. As for Japan, only 38% goes towards basic systems but it is by far the biggest donor to water and sanitation aid. The UK is the notable exception, with 81% of its water and sanitation aid going to basic systems.
Moreover, aid for water and sanitation is focused on the wrong countries and seems to be associated with political allies and strategic relationships. WaterAid’s report, Addressing the Shortfall, shows that 20% of United States aid goes to Iraq, 12% of Germany’s aid goes to Turkey and 10% of France’s aid goes to Egypt. The countries in most need of water and sanitation include Côte d’Ivoire, Mozambique and Niger, but they are not among the top recipients of water and sanitation aid from any G8 country.
More than ever, aid must be focused on where it is most needed—the poorest and most marginalised. The United Nations high-level panel report rightly calls for the eradication of poverty by 2030 and for everyone everywhere to have access to water and sanitation. Can the Minister assure us that the Prime Minister will use his leadership of the G8 to continue to push the message that aid money should, first and foremost, go to those who most desperately need it?
The Lord Bishop of Bath and Wells
My Lords, I am most grateful for the opportunity to participate in this debate and to speak in the gap, not least because, due to my impending retirement and relinquishment of my See, this is the last opportunity that I will have to address your Lordships’ House. I express my thanks to the House for its unfailing courtesy and generosity to me during my brief years of service here.
I, too, thank the noble Lord, Lord Trimble, for his introduction to this debate. Fermanagh is very special to me. It was the home of my late and much loved father-in-law.
The Prime Minister indicated on 6 June that the G8 summit would be an important opportunity for him to discuss Syria with the other world leaders. While most of the attention at the G8 will rightly focus on the priorities set out by the Prime Minister and largely debated here today, it is nevertheless customary for the first day of the G8 to be spent on pressing international issues.
There is probably no more pressing concern than the crisis in Syria, which the Foreign Secretary has described as representing,
“the worst crisis affecting world affairs at the moment”,
and the biggest humanitarian crisis today. Few would disagree, and it is clear that for the G8 to meet without due attention to this matter would be unacceptable.
I welcome the remarks made by Justine Greening in the other place in respect of the United Kingdom Government’s commitment to both the short and long-term need for humanitarian aid. Further, with the United Nations appeal for £3.2 billion to deal with the humanitarian emergency, the G8 provides us with an opportunity for encouragement of greater participation in respect of that need. It is clear that we cannot stand by and do nothing.
I declare an interest as the chair of Conciliation Resources. There are competing narratives on Syria, not least in the provision of arms, and there is a real difference of opinion in this House, as evidenced elsewhere. However, the absence of a political settlement in Syria places particular strains on the resilience of neighbouring countries, particularly Lebanon. Every effort needs to be made by the G8 leaders to contain the conflict, and key to this is meeting the humanitarian needs of Syria’s refugees, which are already pushing to breaking point the current UN refugee protection system.
The G8 provides a rare opportunity to offer hope in an otherwise bleak landscape. It provides an opportunity for G8 members to resolve the differences that have emerged since the announcement on 7 May of a joint effort by the US Secretary of State, John Kerry, and the Russian Foreign Minister, Sergey Lavrov, to convene a peace conference to advance a political solution. I hope that the Minister can give this House some assurance that at the G8 the United Kingdom Government will give a real impetus to pursue this rigorously. As the former NATO Secretary-General Jaap Scheffer said, all parties, including the Assad regime and Iran, should be among those present on this occasion.
The G8 summit provides an opportunity to move beyond the paralysis and defeatism that has all too often marred international debates about Syria. I believe that the brutality and bitterness of the Syrian conflict, which mirrors all too many such conflicts in recent times, place before us a deep series of questions. What does it mean to be a human being? How do we value and place significance on every human life? I very much hope that the G8 will get behind the peace initiative. I hope too that we might at some point have a debate in this House on the issue and nature of the significance of human dignity and what it means to be human. Meanwhile, we express the hope that the leaders of the G8 will, as we implore them to, resist the bellicose rhetoric with its threat of regional spillover, and ratchet down the violence to bring an end to this ghastly conflict, with all its dehumanising realities.
Lord Triesman
My Lords, I join everyone in thanking the noble Lord, Lord Trimble, for initiating this debate and for his very powerful introduction. On behalf of these Benches I thank the right reverend Prelate the Bishop of Bath and Wells for his very considerable contributions while a Member of this House. We wish him well.
It is always sensible for a Government hosting a G8 to set out its priorities and achieve focus. The work leading up to a G8 summit needs focus, and the sequence of conferences feeding into the summit are a critical part of achieving a coherent outcome. As the noble Lord, Lord Brooke said, the Prime Minister trailed his programme in detail, especially, I though, at Davos. He has planned the whole process for a long time. It will be a key moment to judge his effectiveness, because in this case I am convinced that he will be judged by real outcomes.
Recent G8 summits have been choreographed as relaxed fireside chats among the leaders of the world, or at least among those who purport to be its leaders. Of course, these are the optics of such a meeting, but the tests are always of the substance. What should we look for in the final communiqué? What will success look like? The first objective is to create a major boost to growth through trade, which I think is a point also made by the noble Baroness, Lady Jenkin. From 2008, following the sharpest decline in world trade since the great depression, the people of this country, as elsewhere, have been looking for a credible plan for growth. They will look to the G8 in its general review of whether that is possible.
In my view, the reality is that the Government are desperate for some good news from the G8. The United Kingdom has flat-lined. It looks much more like the long period of stagnation which the Japanese economy experienced than an economy on the move. David Cameron will want the G8 to point in a direction that he appears to be unable to achieve with his own Chancellor. So trade improvement is mission critical to this summit.
The combined IMF report and the latest Institute for Fiscal Studies report showed that the next two general elections will be played out to the accompaniment of the harsh tunes of austerity. There is no optimism here about debt reduction or other missed targets: they are all going to be missed. The limited data that the noble Lord, Lord Trimble, mentioned on inventory growth has to be placed in context, as I am sure he would do himself. It is about stocks rather than about finished manufacture and growth. The IFS states:
“We should expect not just 2015 but also 2020 to be an austerity election. Spending reductions are set to be a long-term feature of the UK's public finances, rather than a short and sharp experience”.
What on the horizon could lift that gloom? The best bets are on the potential free trade agreements between the EU and G8 partners. The EU/United States negotiations are due to start; if successful, the Government believe that this might add £100 billion to the EU GDP and more than £80 billion to the United States GDP—all stimulating world trade. If all the free trade agreements succeed, the boost to the world economy could be—these are big figures, I know—more than £1,000 billion. Noble Lords will have anticipated the point that I want to make. These are EU negotiations; what an extraordinary moment for the Government to embark on what may be a populist and gadarine policy that could sever the United Kingdom from the EU. That is now a palpable risk. No wonder that some eminent Conservatives look with dismay at the Eurosceptic brigade among them. What a time for those who want to liberalise and reform the global economy, as we do, to pander to the protectionism and nationalism of some of our vocal xenophobes.
I make one further point on the trade priority. Some fireside corner of this G8 must assess the consequences of the collapsed Doha round. The G8 continues to take far greater value from trade out of Africa than we put in. That point was made by a number of noble Lords. The mispricing and underpricing of African commodities is a motor for African poverty, disease and conflict. The inflated prices that the advanced world extracts for sophisticated, not always useful products; our unwillingness to transfer knowledge and capacity; and the willingness of some people to renege on the G8 promises at Gleneagles are all millstones on Africa. My noble friend Lord McConnell was right to remind us of the significance of what was said at Gleneagles, and the noble Earl, Lord Listowel, reminded us of the 0.7% as well, which is very important. There was progress at the hunger summit of 8 June, but if we fail Africa by not recognising its interests in world trade, that would be at best myopic and at worst a betrayal.
Tax evasion and avoidance is, rightly, the second major priority. While the warm-up discussions have revealed some big differences of opinion about where tax liabilities are generated and tax can be collected, these are key issues, and I applaud the Prime Minister’s intent on this. Whether individuals or Google-style companies are involved in evasion or avoidance, these matters need to be addressed. The noble Lord, Lord Trimble, was right to remind of us of the nine multi-nationals in such a position. That is not a critique of fair tax planning, but it is a call for opposition to what may be the Canadian and Russian objections that could scupper the process.
David Cameron should come back to Parliament to report that he has secured five practical steps. First, we need a clear reform of country-by-country reporting where multinationals publish all the key information required to assess their tax liability—revenues, profits and taxes in each country in which they operate. Secondly, disclosure of tax avoidance schemes and systems should be extended to all global transactions. Thirdly, we should seek greater transparency in tax havens, disclosing information on who is hidden behind front companies and trusts. The G8 should launch a convention on tax transparency. Canada is not entitled to block such arrangements. Fourthly, the G8 global assessment of the impact of controlled foreign company rules with attention to developing countries would be helpful. I note that the Government are reluctant to get into this area but it is a global package that would strengthen their own G8 priority. Fifthly, we should seek reform of the corporate tax system to prevent profit shifting and the use of opaque havens. The current system lags far behind global economic developments and the wiles of specialists. I heard what the noble Lord, Lord Howell, said about the perhaps unconquerable barrier of complexity. Tax cannot be put into the “too difficult” box, although I thought what the noble Lord said was intriguing and I intend to read and study it with great care.
Will the Minister respond positively to those five suggestions, designed to bolster the G8 priorities of the Government? The points made about the impacts on transparency are also a priority. We support the focus on land and extractive transparency, and progress would unquestionably be a blow to corruption. I join in commending the African Union’s land policy initiative and commend Kofi Annan’s reports on the imbalances of trade which are impacting on Africa. I am tempted to recommend an initiative on transparency and anti-corruption in international football, but I might be straying a touch too far today.
In general, this is the right time to push for anti-corruption agendas. Many will advise the Prime Minister not to push too hard in case some of those to whom he speaks recoil. Russia’s interests in Cyprus have been mentioned by the noble Lord, Lord Trimble; the noble Baroness, Lady Falkner, has mentioned some of these matters and a quite remarkable set of statistics from Delaware. A commitment to transparent public registries would transform matters. It would never be easy again for international criminals to work the way that they do and have the freedom that they have had. We should not settle for a lesser or cosmetic solution. I hope that the Minister will assure the House that the Prime Minister will put on all appropriate pressure, including on the United Kingdom’s overseas territories.
I started by commending focus and I finish with a word of caution about too narrow an agenda. The G8 provides opportunities to share thinking and it would be a waste if environmental degradation, nuclear proliferation and the death spiral of Syria—as the right reverend Prelate the Bishop of Bath and Wells just reminded us—were not covered properly. The G8 needs to prepare for the tough issues. On all these priorities my greatest anxiety and, in my view, the gravest test for the Prime Minister, lies in split-personality thinking in the United Kingdom Government.
We say that we want co-operation on fundamental propositions from nations with whom we appear to want no real or deep relationship. We tell them that they are consistently wrong about a wide spectrum of things. We raise three melodramatic cheers for every veto we exercise, whether it is a real one or just theatrical. We do not seem to understand that partners become less inclined to work with us each time that we do that. We need to consider that if we want partners, let us behave like partners. This will be the test of the contention of the noble Lord, Lord Brooke, about whether the Prime Minister has put a foot wrong. The dance is not yet over. I wish the Government well and I put these matters in plain terms precisely because I wish them well. There is nowhere better than Northern Ireland to face and resolve the toughest issues.
Lord Wallace of Saltaire
My Lords, I wish to add my regret that, sadly, the right reverend Prelate the Bishop of Bath and Wells is about to retire. Over the past week, I have been thinking about the first Bishop of Bath and Wells whom I was aware of, who stood on the right of the Queen, I think it was, as she was crowned. In some ways I regret—though in others I am glad—that the current right reverend Prelate has not been able to assert that privilege during his time as a Bishop. We shall miss him, but the Bishops keep the House of Lords young, as they say.
Before moving to other topics in this debate, I want to answer the noble Lord, Lord Triesman, on the coalition Government’s attitude to international and European co-operation. I say this as a Liberal Democrat, but what I have heard from the Prime Minister and Foreign Secretary in recent weeks has been outstandingly clear: our national interests rest in international co-operation and in remaining a full and committed member of the European Union. I have heard no such clear statement from any member of the shadow Cabinet.
If we are to have responsible opposition, we also need a clear indication from the Labour Party of its commitment to staying in the European Union and its position on a referendum. We need clear cross-party support in the national interest. I see that the noble Lord is unhappy with my criticism, but I look forward to hearing a clear statement from the Labour Party on those issues. I am happy with the coalition position on European reform and with the way in which we are moving forward with the balance of competences exercise and I reject the idea that we are being blown about by the right-wing press and UKIP.
This has been a good debate in terms of the G8’s broad agenda, particularly about going to Fermanagh. To hear the noble Lord, Lord Trimble, refer to Fermanagh as “tranquil” is an indication of just how far Northern Ireland has moved. Enniskillen was anything but tranquil 20 years ago. Fermanagh and Tyrone were bandit country during the Irish emergency. It is therefore tremendous that the Prime Minister was determined to bring the G8 to Northern Ireland this year to showcase Northern Ireland to the international media, to foreign Governments and as a place to invest.
I note to myself that it is now time for Yorkshire to start lobbying for the G8 summit to be held there when it comes around in eight years’ time, for not dissimilar reasons. Meanwhile, the Tour de France will have to do for next year. I am already discovering that it is impossible to get a hotel anywhere on the route of the Tour de France for next year, so Yorkshire is already beginning to do quite well in that regard.
Let me turn to the substance of what the G8 leaders will discuss when they meet next week and address the question of whether the G8 is the right body to meet. The noble Lords, Lord Bates and Lord Howell, and the noble Baroness, Lady Falkner, raised questions about whether we should now be going with some other body. It is of course always easier to carry on with what you have than to carry on with something new. However, I would stress that in many ways this is the best group we have because it is the only group we have to focus attention on strategic global issues, whether they are economic, political, developmental or environmental.
As the noble Lord, Lord Bates, remarked, the G8 had its origins as the G4 in 1975, when three major European Governments were trying to bring a then rather distracted American Government back to discussing how we managed the global economy. It was then expanded to become the G7 with Italy, Canada and Japan—and with the EU playing a role, because the EU as a collective body has competence in matters of trade, which has always been very important for the G7 and G8. Russia was added in the mid-1990s when, as a post-communist country, it was becoming a much more open society and moving towards a rather more open market economy. This is a group, after all, which is committed to free institutions, open markets and open societies. That is one reason why, as I was saying at the Dispatch Box yesterday, we have some concerns about the direction in which Russia is going. These eight countries are responsible for 50% of global output and 66% of global trade, so in many ways they are still the reliable top table at which one has to discuss many of these matters, in a rather messy response to the need for some form of global governance among major sovereign states.
There is of course the G20 now, the larger grouping which includes the Chinese, the Indians, the Indonesians, the Brazilians and others. The G20 will be meeting in St Petersburg in September, under Russian chairmanship, and many of the issues to be discussed among the G8 will be pursued further there. We all have to recognise that in different ways China, India, Indonesia and Brazil are still reluctant to take on and share the full responsibilities of global leadership and that much of the agenda for global co-operation and future global regulation thus remains to be negotiated between European countries, the European Union and the United States, then to be accepted by others.
The G8 has of course grown more institutionalised. It has grown larger and its agenda has grown amazingly wide. The numbers of officials attending have mushroomed and our Prime Minister is attempting to bring back direct conversation, intimacy, informality and a focus on getting things done. The noble Lord, Lord Hunt of Chesterton, queried the outcome and the follow-through. One of the British initiatives this time is to have an accountability report to look back at former G8 pledges and see what has been done. We have produced a report with checks on what we think has been achieved, or moderately half-achieved, and what has been left undone. It is not that bad a record, actually. Of course, as in all negotiations between Governments, there are some things on which you simply cannot manage to make progress, but we have made a lot of progress, particularly on global development.
Lord Wallace of Saltaire
I do not know whether it is yet in the Library. It was published two days ago. I will do my best, looking hopefully at the Box, to put it in the Library as soon as we can. I must say that I have been briefed by a number of officials who are working incredibly hard for the G8 exercise. I am very grateful that one of them has been able to spare a bit of time out of her 14-hour day to come here and assist me in this and I wish to add my compliment on her remarkably clear handwriting.
The G8 is an informal directing group and the discussions within the G8 then feed out to others. On the final lunch the secretaries-general of the IMF and the OECD will be there and the tax transparency agenda will be carried on quite largely through the OECD. The land ownership agenda, which was mentioned by the noble Earl, Lord Listowel, will be carried out partly through the Food and Agriculture Organisation. Discussions are part of a very intricate network in which we work as we can with others. There are a number of associated conferences now. We have had a Foreign Ministers’ G8 with very active engagement from the Russians on issues such as Syria and elsewhere. We do not always agree but we are actively discussing these issues. There is also the Science and Innovation conference mentioned by the noble Lord, Lord Hunt. The Nutrition for Growth compact has been signed by 24 Governments from the developed and developing worlds, 22 business groups, four science organisations and a number of major international non-governmental organisations.
Sessions at the G8 will cover the global economy, including trade, and the very important bilateral negotiations which have been taking place between the EU and Japan and which will be taking place between the EU and the United States. There will be a session on international political issues and foreign policy, a session on countering international and cross-border terrorism, a session particularly devoted to tax and transparency, and a final lunch at which the delegates will be joined not only by the secretaries-general I have mentioned but also by a number of other senior figures from Africa and South America.
The Prime Minister has focused on the three Ts—trade, tax and transparency. I have already spoken about trade. We very much hope that we will be able to get back to a global trade agenda with the World Trade Organisation. However, some of the leading members of G20 have not been particularly co-operative on a global trade agenda which is why we are having to pursue regional trade negotiations. If we are able to achieve a trade agreement between the United States and the European Union to follow those with Japan, Korea and Canada, we will have made a major contribution to global economic growth. This is about the rules which shape global trade and the fairness and openness which characterise them.
We have also discussed tax. Britain has a particular responsibility here because of the number of overseas territories and Crown dependencies which have become offshore financial centres. The Prime Minister has been in contact with all of our overseas territories and Crown dependencies. They have now all agreed on a number of measures. Bermuda is still discussing the question of a multilateral convention on mutual assistance on tax matters but we hope to resolve that issue with Bermuda before we have sorted out the complete agenda for the G8.
I was asked about the fourth money-laundering directive. This is an EU measure and proposals are currently being negotiated by member states and the European Parliament. They would require that companies obtain information on their beneficial ownership, hold this information and make the information available to competent authorities. The European agenda, the global agenda and the G8 agenda overlap and complement each other. In all of this one has to recognise that tax sovereignty and global markets do not go easily together. That is why we have to pursue these international negotiations on tax transparency in order to regain a degree of our tax sovereignty. The Government have been relatively successful over the past three years at regaining tax from multinational companies. I am told that HMRC has collected more than £23 billion in extra tax since 2010 through challenging large businesses’ tax arrangements and tackling transfer pricing issues, and we continue to hope that we will raise a good deal more through tax transparency.
As noble Lords know, transparency is about not only tax but beneficial ownership. The noble Earl, Lord Listowel, asked particularly about transparency over land tenure. The problem with land tenure in developing countries is that often records do not exist, so in terms of technical assistance, as part of bilateral or multilateral aid programmes, helping these countries to establish clear records of land tenure is a necessary part of what we do to establish who owns what, where foreign companies are buying in and how far we protect local farmers on their own. There is very careful work on greater transparency with less developed countries, starting with proper land records.
On 22 May the Prime Minister announced that Her Majesty’s Government intend to sign up to the Extractive Industries Transparency Initiative, which was set up to tackle corruption, to improve the way in which the revenues from oil, gas and minerals are managed and to ensure that people across the world share in the economic benefits of natural resources in their country. A lack of transparency there, as with land transactions, is very much part of the obstacles that we have to overcome in ensuring that free trade and open markets benefit everyone, including the poor and weak countries, which are often open to these sorts of extractive industries in particular.
The lunch on Tuesday will focus particularly on Africa, looking at the millennium development goals and, as we have already mentioned, talking about the larger issue of nutrition. I am disappointed that we are not paying more attention to population on this occasion. The noble Lord, Lord Hunt of Chesterton, is disappointed that we are not spending more time on climate change, although there will be preparations for a major conference in 2015 under different tutelage—the UN Committee on Climate Change—which will be a main focus.
With regard to our political discussions, I was asked particularly about Syria. At Prime Minister’s Questions yesterday, the Prime Minister said:
“We should use the G8 to try to bring pressure on all sides to bring about what we all want … which is a peace conference, a peace process, and the move towards a transitional Government in Syria”.—[Official Report, Commons, 12/6/13; col. 331.]
This has been a worthwhile debate. I was nervous that the agenda of the G8 was so wide that I would be unable to cope with many of the questions that would come in. I sat here trying to imagine the noble Lord, Lord Hunt, talking to his Soviet colleagues during the Cold War about eastern and western approaches to weather forecasting and whether there was a Marxist approach to it as well as a capitalist one.
We have looked back to the previous UK-sponsored G8 in 2005. Gleneagles was a great success and helped to push the G8 on to the development agenda to a much greater extent than before. It is still managing to push that forward. This Government, as the Nutrition for Growth compact shows, are still attempting to use the combined efforts of the developed democracies, non-governmental organisations and international organisations as such to promote a more open global market and a more equitable global society.
We look forward to a successful G8 summit next week. This is of course only one in a long series of heavy intergovernmental negotiations, but Her Majesty’s Government are using this opportunity to press forward what I hope all noble Lords will agree is a very worthwhile and constructive global agenda.
Lord Hunt of Chesterton
Will the Minister respond on the issue of water? This is the United Nations International Year of Water Co-operation and the water issue has not really had the emphasis it should have had, as was mentioned by the noble Lord, Lord McColl.
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Alderdice, has sponsored one or two conferences on water in the Middle East in the past year with the support of the Foreign Office. We are all well aware of the many complexities of water. Those of us following the argument between Ethiopia and Egypt over the dam on the Blue Nile will know that water wars are not necessarily too far away. There are a great many complications and the Government understand that not only clean water but also cross-border water supplies are very important matters for us to deal with. It is not neglected simply because it is not a major item on this year’s G8 agenda.
Lord Trimble
My Lords, it is now my pleasant duty to thank all noble Lords who have taken part in this debate. It has been a very interesting debate to listen to. It has been very interesting to see how various contributions complemented each other while some brought in completely new topics and new thinking. I have very much enjoyed listening to it as I am sure all noble Lords here have. I am tempted almost to comment on each contribution but I will eschew that temptation for two reasons. First, I can see that the noble Baroness, Lady Wheatcroft, is in her position ready to go on her debate and I do not wish to detain her. Secondly, my noble friend Lord Wallace of Saltaire has been so comprehensive in his reply to the debate that he has done that job for me. He has also given us a very good insight into what will happen in the next few days in Fermanagh. Finally, I want to add my thanks to the right reverend Prelate the Bishop of Bath and Wells for his contribution to this House. I am sure all of us here are glad that we have had the opportunity to hear his last contribution in the House.