The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows.
“With permission, Mr Speaker, I would like to make a Statement on the G8. The Government decided to hold the G8 in Northern Ireland to demonstrate the strength of this part of the United Kingdom. We wanted to show the success of the peace process, the openness for business and investment and the potential for tourism and growth.
I want to thank my right honourable friend the Secretary of State for Northern Ireland and the First and Deputy First Ministers for all they did to help with the conference. I want to congratulate the Police Service of Northern Ireland and all those responsible on delivering a safe and successful G8 and to thank everyone in Northern Ireland for giving everyone such a warm welcome. Northern Ireland put on its best face, and the whole world could see what a great place it is.
We set a clear agenda for this summit: to boost jobs and growth with more open trade, fairer taxes and greater transparency—what I have called the three Ts. I also added a fourth T—combating terrorism. We reached important agreements including on support to the Libyan Government and ending ransom payments for kidnap by terrorists. Despite our fundamental differences, we also made good progress agreeing a way forward on working together to help the Syrian people achieve the change that they want. Let me take each of these points in turn.
We started with the issue that matters most to our people—jobs, growth, mending our economies. First, we agreed that each country needs to press on with sorting out its public finances. Dealing with our debts and securing growth are not alternatives. The former is an essential step in achieving the latter. In fact the communiqué that we agreed unanimously reflects all three parts of the plan that we have for growth in Britain: not just fiscal sustainability, but active monetary policy to unlock the finance that businesses and families need, and structural reforms to increase our competitiveness so that our young people can get into work and succeed in the global race.
The UK’s G8 also launched a bold new pro-business agenda to drive a dramatic increase in trade and to get to grips with the problems of tax evasion, aggressive tax avoidance and corporate secrecy. This was a distinctive British agenda, to shape the way the world economy works for the benefit of everyone. We believe in free trade, private enterprise and low taxes as the best route to growth, but that is only sustainable if ambitious trade deals are agreed, the taxes owed are paid and companies play by the rules. This agenda has now, I believe, been written into the DNA of G8 and G20 summits, I hope for many years to come.
On trade, we started the summit with the launch of negotiations on an EU-US trade deal. This could add, as has recently been said, as much as £100 billion to the EU economy, £80 billion to the US and as much as £85 billion for the rest of the world. We should be clear what these numbers mean: more jobs, more choice and lower prices in the shops—the biggest bilateral trade deal in history, launched at the G8.
On tax, the Lough Erne declaration that leaders signed yesterday sets out simple, clear commitments. Tax authorities across the world should automatically share information so that those who want to evade taxes will have nowhere to hide. Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily—for example, through central registries—so that people cannot escape taxes by using complicated and fake structures. In a world where business has moved from the offline and the national to the online and the international but the tax system has not caught up, we are commissioning the OECD to develop a new international tax tool that will expose discrepancies between where multinationals earn their profits and where they pay their taxes.
The declaration also makes clear that all this action has to help developing countries too, by sharing tax information and building their capability to collect taxes. Crucially for developing countries, we agreed that oil, gas and mining companies should report what they pay to Governments, and that Governments should publish what they receive, so that natural resources are a blessing, not a curse. Charities and other NGOs have rightly campaigned for years for action on these issues and for the first time they have been raised to the top of the agenda and brought together in one document.
The agreements on tax made at the summit are significant but it is also worth noting what has happened on this front since I put this issue to the top of the agenda. On 1 January there was no single international standard for automatic exchange of information. Now there is such a standard and more than 30 jurisdictions have already signed up, with more to follow. After years of delay, the European Union has agreed to progress the sharing of tax information between member states. The overseas territories and Crown dependencies have signed up to the multilateral convention on information exchange. They have agreed automatic exchange of information with the UK and action plans for beneficial ownership. Taken together, all the actions agreed with the overseas territories and Crown dependencies will provide more than £1 billion of revenue to the Exchequer, helping to keep taxes down for hard-working families here in the UK.
People around the world also wanted to know if the G8 would take action to tackle malnutrition and ensure that there is enough food for everyone. The pledges at our nutrition and hunger summit earlier this month will save 20 million children from stunting by 2020. But crucially at our G8 we also took action on some of the causes of these problems. This is why the work we did on land, extractive industries, tax and transparency is so important.
Turning to the fourth T—terrorism—we agreed a tough, patient and intelligent approach: confronting the terrorists, defeating the poisonous ideology that sustains them and tackling the weak and failing states in which they thrive. The G8 leaders reached a ground-breaking agreement on ransom payments for kidnap by terrorists. In the past three years alone, these ransom payments have given al-Qaeda and its allies tens of millions of dollars. These payments have to stop and this G8 agreed that they will.
We also discussed plans to begin direct talks with the Taliban. Britain has long supported a peace process in Afghanistan to work alongside our tough security response, so we welcome this step forward. We also discussed support to Libya. I believe that we should be proud of the role we played to rid Libya of Colonel Gaddafi, but we need to help that country secure its future. So we held a separate meeting with the Libyan Prime Minister, which included President Obama, and European nations have already offered to train 7,000 troops to help Prime Minister Zeidan disarm and integrate the militias and bring security to the whole country. More contributions will follow from others. Let me be clear that the Libyan Government have now asked for this and that they will pay for it.
Finally, let me turn to Syria. It is no secret that there are very different views around the G8 table. I was determined that we should use the opportunity of this summit to overcome some of these differences and agree a way forward to help the Syrian people achieve the change that they want. This did not happen during just one night in Lough Erne. The talks between Secretary Kerry and Foreign Minister Lavrov have been vital. In the weeks before the summit I flew to Sochi and Washington, and I met again with President Putin and President Obama in the hours before the summit began. These conversations were open, honest and frank, but we were all agreed on what must be the core principle of the international approach to this crisis. There is no military victory to be won and all our efforts must be focused on the ultimate goal of a political solution.
Together with our G8 partners we agreed almost $1.5 billion of new money for humanitarian support. This is an unprecedented commitment from Lough Erne for Syria and its neighbours. We agreed to back a Geneva II process that delivers a transitional governing body, crucially with full executive authority. So a core requirement for success that had been called into doubt in recent weeks has now been reasserted unanimously with the full authority of the G8.
We pledged to learn the lessons of Iraq by making sure that the key institutions of the state are maintained through the transition and there is no vacuum. This sends a clear message to those loyalists looking for an alternative to Assad. The G8 also unequivocally condemned any use of chemical weapons, and following an extensive debate, we reached for the first time a united position, including Russia, that the regime must immediately allow unrestricted access for UN inspectors to establish the full facts on the use of chemical weapons by regime forces or indeed by anyone else. All of these agreements are absolutely fundamental to saving lives and securing the political transition that we all want to see.
Let us be clear on what is happening in Syria and what we are trying to achieve. We are faced with a dramatically escalating humanitarian disaster with more than 90,000 dead and almost 6 million people having had to flee their homes. There is a radicalisation of terrorists and extremists who will pose a direct threat to the security of the region and the world. There is a growing risk to the peace and stability of Syria’s neighbours, and the long-standing international prohibition on chemical weapons is being breached by a dictator who is brutalising his people.
None of this constitutes an argument for plunging in recklessly. We will not do so, and we will not take any major actions without first coming to this House. But we cannot simply ignore this continuing slaughter. Of course it is right to point out that there are extremists among the opposition. There are, and I am clear: they pose a threat not just to Syria but to all of us. The G8 agreed they should be defeated and expelled from their havens in Syria.
I also understand those who fear that whatever we try to do could make things worse, not better. Of course we must think carefully before any course of action. But we must not accept what President Assad wants us to believe—that the only alternative to his brutal action against Syria is extremism and terrorism. There are millions of ordinary Syrians who want to take control of their own future, a future without Assad. That is why I made sure that the G8 agreed that the way through this crisis is to help Syrians to forge a new Government that is neither Sunni, Alawite nor Shia.
We are committed to using diplomacy to end this war with a political solution. This is not easy, but the essential first step must be to get agreement between the main international powers with influence on Syria. That is what we have done at the G8 in Lough Erne. We must now turn these commitments into action. I commend this Statement to the House”.
Lord Hill of Oareford
My Lords, first, I associate myself very strongly with the point that the noble Baroness made about holding the G8 in Northern Ireland in the first place. A long time ago, when I worked for one of my former bosses, John Major, he started this whole process in Northern Ireland, which the Labour Government then built on. It shows that if people are brave enough and stick at it, they can achieve great things. It was a tribute to the work of many people to have brought that about. It helped boost the economy, and it was a very powerful message all around the world of what can be achieved.
I agreed with the points that the noble Baroness made about the importance of the hunger summit, which happened the week before the G8 summit in Lough Erne. I was very glad that more funding was provided at the summit and that more ambitious goals were set down on what we might be able to do to tackle the problem of children suffering from malnutrition and, indeed, to prevent the deaths of young children. We believe that there may be 1.7 million children whose lives we may be able to save through that programme.
On our approach generally to international aid, we have kept that pledge. I think that that is right and that it lends us moral authority—which I think was the phrase that the noble Baroness used—and helps us deliver some of the other important policies that we are trying to take forward.
On trade deals, the beginning of a negotiation between the EU and the US on a trade deal was announced. It is only a beginning but if it comes in it will lead to many billions of pounds. The Prime Minister was clear earlier today on the benefits to the UK of being in the single market. I think that it is in the interest of all of us to try to make sure that this deal is concluded.
As for public registries of beneficial ownership, every country at the summit agreed to an action plan. Some have said that they will move straightaway to have these registries. So far as Britain is concerned, we have said that we will consult on the question of whether or not they should be public. We clearly need to keep pressing. I think that six of the G8 countries have already published an action plan on this at Lough Erne, and we have moved quite a long way on it.
The noble Baroness is absolutely right about the importance of information sharing applying to developing countries—I agree with her entirely on that. The whole point about this is that it is not just about the developed countries making sure that we all get the proper tax but that if we can deliver that across these countries, those developing countries which need to have their tax revenues paid would benefit as well.
On Syria, I was glad of the welcome that the noble Baroness gave to the increase in humanitarian aid generally and to the UK’s contribution specifically. We need a political solution, as she said. I am not able to give a date for when the Geneva II talks will start. It was discussed at Lough Erne but the decision taken there was to try to get agreement on the substance rather than on a specific date. However, it was clear that there was a sense of urgency, and the G8 called for it to happen as soon as possible.
As for the G8 summit moving us closer to a political settlement in Syria, I think that it is fair to say that before the G8 summit the Russians seemed to be backing away from a transitional authority with full executive powers, but they have now reaffirmed their support for one. We also now have the language, for the first time, on our approach to the use of chemical weapons. That is new and I think that it will help. As for the time and effort spent on lifting the arms embargo, we felt that it was right to do so. We think that it has helped to increase the diplomatic pressure on that.
As the noble Baroness knows, no decision has been taken to arm the rebels at all—the Government have been very clear about that. It is a hypothetical question. However, my right honourable friend the Foreign Secretary has made it clear that, were the Government to make that decision, Parliament would obviously have a say in it. On her final point about whether I would seek to make sure that the House is kept informed on all these developments, the answer is yes, of course, I will seek to do so in the normal way.
Lord Brittan of Spennithorne
Will my noble friend agree that the last time a serious attempt was made to reach a wide-ranging trade agreement between the United States and the European Union it foundered on the absolute refusal of the US regulatory agencies to agree to any degree of mutual recognition, let alone harmonisation, and that unless at the very highest level action is taken to deal with that blockage, this attempt will be no more successful than the last? Is it not therefore absolutely necessary that there should be a focus on this issue?
Lord Hill of Oareford
I am sure that that advice from my noble friend is extremely wise. I know how closely involved he has been over the years with many of these negotiations. It is clear that this issue was given a great deal of importance at the highest level, during the conversations between our Prime Minister and the President of the United States at the G8. Obviously we are at the beginning of the negotiations; I think the first meeting is due to start next month. However, I am sure that all those charged with the responsibility of trying to bring about this extremely important deal will know of the history. If they do not, they will have been reminded of it by my noble friend and will bear that in mind as they try to secure this important deal.
Lord Lea of Crondall
Does the Minister agree that the question of regime change now bandied around in our newspapers gives people a sense of déjà vu, when at the same time we are looking at a peace conference? The idea on the Arab street that the West can be involved in regime change will possibly only have the result that the dispute between Alawites and Shia and Sunni Muslims will not be left to them but will also become our dispute.
Lord Hill of Oareford
I understand the point the noble Lord makes. It was said at the G8 that if we can get the G8 and other countries working together to bring about a political situation by bringing their different pressures to bear—whether it is the Russians, the Americans, or whoever—that must be worth trying.
Lord Dholakia
My Lords, I thank the noble Lord for the Statement. This was one of the most successful G8 summits of recent times. The Minister was right to point out the three factors: trade, transparency and tax. Does he accept that they would considerably help not only developed but underdeveloped nations, and would make a real difference to the lives of ordinary people? There is a serious concern about our involvement in Syria. We certainly welcome the idea of and the arrangements for a peace conference, whenever it will take place. However, more than 93,000 people have been killed, and extremism has surfaced from both the Assad Government and the opposition. The Minister was slightly hesitant, but does he accept that Parliament will decide whether there is a need for further involvement in relation to the supply of arms, or any further action the Government takes?
Lord Hill of Oareford
On my noble friend’s first points about the importance of trade, tax and transparency for the developing world, he is of course entirely right. We are aiming for more trade and to break down the barriers. Coming out of the G8 we are very keen to make progress at the WTO conference this December. For instance, we will try to break down trade barriers in Africa, where they have a terribly detrimental effect on the ability of people to do business and also affect the tax revenues that flow from that. We aim to make that easier and more straightforward so that tax is paid. We also want to make the system more transparent so that money from industries such as the extractive industries will go into legitimate purposes to help those economies and societies, rather than into a small number of very deep pockets. I agree with him on that.
On Syria, I hope that I gave a clear answer to the noble Baroness, Lady Royall. Both my right honourable friend the Foreign Secretary and the Prime Minister have made clear that, were a decision taken by the Government to arm one side in Syria, which it has not been, that Parliament would certainly have its say.
Lord Wright of Richmond
My Lords, I have warned many times in the past 15 months, as have many others in both Houses, against the folly of military intervention in Syria and I have no need to repeat that warning this afternoon. However, if there is any substance behind the allegation in the Times today that the West is trying to engineer a coup in Damascus, I hope that the noble Lord’s right honourable friend the Foreign Secretary, distinguished historian as he is, needs no reminding of the disastrous results of some previous attempts by outsiders to change regimes in the Middle East. Not only would such attempts, if successful, almost certainly produce a Government in Damascus of much greater threat to British interests than the present regime, it would directly contradict the Government’s repeated view that any future regime is for the Syrian people to decide. Can the Leader of the House assure us that HMG are playing, and will play, no part in any such attempt at regime change—what the Statement describes as helping Syrians to “forge a new Government”? Finally, I ask the noble Lord for an assurance that if, as we all must hope, a peace conference can be arranged, HMG will not oppose the participation of Iran.
Lord Hill of Oareford
My Lords, the noble Lord, as he said, has been very clear and consistent on his position on this issue for 15 months and, I am sure, longer. I recognise that and I am sure that my right honourable friend the Foreign Secretary will be aware of that. On the noble Lord’s specific questions, I do not think it sensible for me to go any further than the Statement; I am obviously not involved in those negotiations. I know that those who are involved will have heard what he has said and I will make sure that his consistent warnings about this are relayed to them. Clearly, as we have already said, we are seeking a political solution that is acceptable to the Syrian people. That is what we are working for.
The Lord Bishop of Liverpool
My Lords, we on these Benches very much welcome the direction of travel on taxes, trade and transparency. Can the Minister tell us what steps Her Majesty’s Government will take to ensure that these three Ts figure strongly on the agenda of the G20 summit later this year?
Lord Hill of Oareford
That is an extremely good question. I can tell the right reverend Prelate that the hope, expectation and intention coming out of the G8 is very much that some of this detailed work on tackling tax evasion, aggressive tax avoidance and transparency will be taken forward by the G20 and the OECD. Behind the simple, 10-point declaration that summarised the headline points at the summit is a much longer, more detailed communiqué that sets out the much more detailed steps of the sort to which the right reverend Prelate refers.
Lord Davies of Stamford
Does the agreement at the G8 to ban ransom payments to terrorists, which is very welcome, include banning payments to pirates who capture individuals? The noble Lord has probably heard me say several times in the past three years that this problem is of at least equal dimension.
Lord Hill of Oareford
I will need to come back to the noble Lord on whether the agreement covers such payments. Its intention was to eliminate the scourge of ransom payments, but how they are defined in detail is something that I will have to follow up with him.
Lord King of Bridgwater
Does my noble friend recognise how much I echo what has been said, how much I welcome the fact that the conference has been held successfully in Enniskillen—having been all too close to the outrage and tragedy that took place there—and how I am reflecting on the irony of how the world has moved forward? That outrage was almost certainly committed with Libyan explosives, but the new Prime Minister of Libya was present at the G8. I hope very much that one of the outcomes of the G8 will be a better future for Libya. I echo what the noble Lord said. There must be political discussions about the future of Syria; they must be held by everybody without preconditions, which is one of the lessons of Northern Ireland for making progress; and obviously it would be enormously helpful if Iran were present as well.
Lord Hill of Oareford
I understand the second point made by my noble friend, which echoed that made by the noble Lord, Lord Wright. On the first point about Northern Ireland, the noble Lord knows better than most in the Chamber what the situation was and the extent of the work that had to be done. He was closely involved with that. It is a powerful symbol of what can be achieved if people are prepared to take those brave decisions.
Lord Morris of Aberavon
My Lords, perhaps I may explore the assurance in the Statement that Parliament will have its say on Syria. Do I take it that there will have to be specific parliamentary approval, as the convention has now grown?
Lord Hill of Oareford
Yesterday, at some length, and earlier today, the Prime Minister set out what that means: were the Government to decide that they wanted to arm the rebels—which they have not—it would be subject to a vote.
Lord Kilclooney
My Lords, coming from Northern Ireland, perhaps I may say how delighted I am at the success of the G8 conference in County Fermanagh. It has promoted Northern Ireland as a stable society. It has been good for our tourism. We should pass on from Northern Ireland our appreciation to the Prime Minister for selecting Northern Ireland as the part of the United Kingdom where the G8 conference would be held. Is the Leader of the House aware that this has been not only good publicity for Northern Ireland but also successful economically? In the past 10 days we have had another 1,500 new jobs announced in Northern Ireland. Just this morning, the Japanese Prime Minister, who remained in Northern Ireland following the conclusion of the G8, announced a further investment of 400 new jobs in County Antrim.
Turning to the question of transparency in our banks, we know that new standards will be introduced. Since international companies within the United Kingdom have been transferring their corporation tax payments to other countries to avoid tax, and British overseas territories have been fingered as possible places to avoid tax, can the Government guarantee that the five small sovereign states within Europe that use the euro—Monaco, San Marino, the Vatican, Lichtenstein and Andorra—will be subject to the same standards of transparency?
Lord Hill of Oareford
My Lords, I had not heard those latest figures on Northern Ireland, and I am delighted to hear them. They are further evidence of the benefits of holding the G8 there and the wisdom of doing so. I am very grateful for the remarks made by the noble Lord. On his more general point about tax avoidance and so on, this whole approach will clearly only work if it is applied on a level basis across all countries. The aim of much greater transparency is at the heart of this approach. An example is publishing information on where countries pay tax in order to work out where the profits are. Trying to make that approach across a broad front lies at the heart of what was agreed at the G8.
Lord Higgins
My Lords, this has been an usually successful and constructive conference. The proposals being made on taxation regarding transparency and so on should certainly have a pretty rapid and significant effect on tax evasion, but they will have only a relatively limited effect on aggressive tax avoidance. Consulting internationally is certainly welcome, as the Statement says in relation to the OECD. However, at the end of the day, it is a matter for taxation in this country. Multinationals which use these aggressive techniques in this country have said that doing so is within the law. This is true, but it means that our law needs to be changed, which is a very technical subject. The law needs to relate to profits made in this country, and in some way enact a tax on the profits of online transactions which originate in this country. I hope that we will not overlook that side when looking at the international aspect of the matter.
Lord Hill of Oareford
That point is well made. I hope that the drive towards greater transparency will flush out and illustrate some of the problems to which my noble friend refers, solutions to which can then be worked on in the way that he suggests.
Lord McConnell of Glenscorrodale
My Lords, all of us who took part in the debate last Thursday will be delighted that there has been some progress on tax and transparency at the G8 summit. I hope that the steps that were agreed will prove to be significant. I have questions about two of these steps in particular, the first being the agreement made with the UK dependencies and territories last weekend. If they do not fulfil the promises made at that meeting, what further steps will the UK Government take to ensure that they do so? Secondly, I welcome the statement in the communiqué that there will be capacity building in the developing world, to help those countries legislate for and collect taxes under this new system. What will the UK do to help countries build their capacity for tax revenue collection?
Lord Hill of Oareford
On the second point, concerning the specific detail of what we will do, I will follow that up with the noble Lord. There are some specific steps being taken. We are making available people who understand the detail of how the system works in order to help in precisely the way that the noble Lord says is necessary. We will do so because it is obviously right to help developing countries understand the complexities of the tax system and the kind of behaviour that goes on. It is not only Britain, but also other countries which will help to do that. If I can provide more detail, I will do so.
On the first point, about what do we will do if Crown dependencies or the overseas territories do not live up to their promises, my answer is, “Let us hold their feet to the fire and ensure that they do live up to their promises”. They made that commitment. It came out of the G8 very clearly that not only the United Kingdom but all G8 member countries will hold them and other jurisdictions to account on that, and will want to see progress made.
Lord Soley
I urge the Government not to raise too many expectations on the quick arrival of a Geneva conference. Listening to Mr Putin’s comments in Russia and at the summit, he has made it very clear that he intends not only to continue to arm the present regime but also to, in his words, draw up new contracts for arms with it. That, to me, conveys very clearly Russia’s intention to argue at a Geneva conference for a regime which is in control of as much territory as possible. I am afraid that means continued fighting and refugee problems for the Middle East, and little hope of a successful outcome. We need to face up to the fact that Mr Putin has again managed to take us back to that old system whereby we prop up dictators, whoever is the strong one in power.
Lord Hill of Oareford
Obviously, I hope that the noble Lord’s warnings will turn out to be wrong, and not like Cassandra’s. However, I understand why he makes the point. He is clearly wise to say that one should not set unrealistic timescales and all the rest of it in terms of Geneva II, which was one of the conclusions that the G8 reached. Notwithstanding his points, it is fair to say that progress was made at the summit in terms of Russia making commitments that it had not previously made. We all have to hope that, on the back of that, we will be able to make the progress that I know the noble Lord and the whole House would like to see.