Trade Bill

Baroness Neville-Rolfe Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, in moving Amendment 1 I shall also speak to Amendments 4 and 5. The purpose of these amendments is to provide a legal basis for the Government to bring forward a statutory instrument to ratify the Luxembourg Rail Protocol. Noble Lords will probably remember that I spoke about and explained the purpose of this protocol in Committee. Very briefly, I remind the House that the Luxembourg Rail Protocol is a protocol to the Cape Town convention to reduce the risk for creditors, which in turn will reduce the cost of financing for new and current rolling stock.

An Oxera study published this week showed, I think, a saving to the rail sector of about £130 million per year. However, it is particularly important for the British rolling stock manufacturing community looking to develop new markets outside the UK, which I believe is one of the purposes of the Trade Bill. This rail protocol follows an older protocol on aircraft leasing and financing, which I think most people believe has been very successful in financing aircraft.

In Committee, the Minister replied that the Government support the ratification of the protocol. I am very grateful for the support of the noble Lord, Lord Grimstone, and the noble Viscount, Lord Younger, on this. Since they felt it was more appropriate to get the necessary legal basis through the private international law Bill, I agreed that I would not move my amendment. We had discussions with Ministers on the private international law Bill. I am once again grateful to Alex Chalk MP, the Justice Minister, and to the noble and learned Lord, Lord Stewart, for their help in drafting the new amendment to the PIL Bill when it came back to your Lordships’ House for ping-pong. I am grateful to the Ministers for their discussion.

During the debate the noble and learned Lord, Lord Stewart of Dirleton, agreed how important the rail protocol is to the industry but suggested that the application of the protocol was narrower than I might have thought, saying:

“The Government consider this to be an important issue and are thinking about how best to implement the protocol in the United Kingdom. As we discussed last week, we consider that the power in this Bill”—


that is, the PIL Bill—

“is too narrow to fully implement the protocol, although the provisions in applicable law would be within its scope.”—[Official Report, 19/11/20; col. 1574.]

That is very good but all it did was allow half the protocol to be implemented, which noble Lords will probably agree is not a good situation.

The Government appear to support the ratification of this protocol and to consider it important for the rail industry. However, I feel that I have been sent round the houses, from the Trade Bill to the PIL Bill, and now the Ministers have discovered that it will allow only half the protocol to be ratified. I was grateful for further discussions with the noble Lord, Lord Grimstone, by email recently, in which he suggested that

“the Trade Bill should not be expanded beyond essential readiness for trading as an independent country outside the EU.”

I would argue that this protocol would allow the rail sector to do just that. I think it would be very useful if it could be included.

The Minister again suggests that the Trade Bill is not an appropriate vehicle for matters relating to finance and transport, which should be considered elsewhere. If it were a matter of motor manufacture or printing-press manufacture, surely those would be trade issues as well. For motor manufacture, is the Department of Transport involved or is it a trade matter? That question must be resolved. Government lawyers from probably three different departments are dancing around a pinhead. This merry-go-round must stop because it is wasting a lot of government time, as well as Parliament’s.

I have been sent around the houses: transport, trade and justice, and now we are back in trade. I am very pleased to be back in trade this afternoon. Ministers say that they support the protocol to help achieve better trade in railway equipment, so in order to stop this merry-go-round, will the Minister urgently arrange a meeting with myself, the Department of Transport, the Department for International Trade and the Ministry of Justice if necessary? Will he then bring forward an amendment at Third Reading, which I assume and hope would be agreed across government, to enable the Luxembourg Rail Protocol to be ratified? Surely the Government can get their lawyers to agree.

If the Minister could commit to arranging such a meeting with me to resolve these issues and bringing forward an amendment at Third Reading, I would be very content. If not—and I hope it does not go that way—I am minded to seek the opinion of the House, if only to demonstrate the strength of internecine warfare in this Government on an issue that they all support but cannot work out how to deal with. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise primarily to support the noble Lord, Lord Berkeley, as I did in Committee, in his efforts to get the Luxembourg Rail Protocol to the Cape Town Convention implemented in the UK. As we have heard, some steps have been taken, thanks to the good offices of the Minister and of Alex Chalk in the other place, but sadly they have not quite done the trick. I refer to my business interests in the register, including the UK-ASEAN Business Council, and a new role as chair of Crown Agents, which curiously, I find, did a great deal of work on rail and rolling stock during its long history.

I see two advantages to the protocol that was signed by the UK as long ago as 26 February 2016—obviously a very different world then. First, it will reduce the risk to creditors, which in turn will reduce the cost of financing new and current rolling stock—everything from engines to equipment and parts, data and manuals. Whether these are for a new line that is being built or for existing lines, by lowering creditor risk the protocol will assist in lowering the cost of new, more efficient, locomotives and wagons for freight and passenger transport. As the noble Lord, Lord Berkeley, has just said, an Oxera study to be published this week suggests a saving to the rail sector of about £130 million a year. This is quite significant when rail funding is under pressure, and particularly desirable as part of a move to net zero as we seek to combat climate change.

Secondly, it would help British rolling stock manufacturers seeking to develop new markets outside of the UK. There is an urgent need, for example in Africa, for more railway equipment both for urban transport—light rail, metro and trams—and for intercity rolling stock. The markets are there for British exporters, but the Governments and their operating agencies do not have the resources. I am talking about countries such as Namibia, Egypt, Ethiopia, Kenya, Uganda, Zambia and South Africa. The lack of resources has been a major constraint, and in a number of cases, operators have bought Chinese rolling stock instead, even when it is less suitable, because it comes with Chinese state-backed financing.