EU-UK Trade and Cooperation Agreement

Baroness Wheatcroft Excerpts

Friday 8th January 2021 Lords Chamber

[Baroness Wheatcroft (CB) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Alderdice, as I agree with everything he said. The Minister said that any deal was a compromise but, while the UK Government laud their success in the negotiations and the Prime Minister declared that we have succeeded in

“having our cake and eating it”,

that is not the case. The EU interpretation of the deal is naturally very different. It points out that

“the Trade and Cooperation Agreement does not cover any decisions relating to equivalences for”,

among other things,

“the UK data protection regime, or the assessment of the UK’s sanitary and phytosanitary regime for the purpose of listing it as a third country allowed to export food products to the EU. Indeed, these are unilateral decisions of the EU and are not subject to negotiation.”

The impacts of that are already being felt. While there has been government triumphalism over the issue of fishing, our shellfish industry faces decimation. Much of its produce was exported to the EU, but now there are huge new obstacles, both bureaucratic and financial. Could the Minister comment on that?

This agreement is better than nothing, but it is dividing the country. There is now a border in the North Sea. The Government consistently try to deny this, but there is now an effective border between Great Britain and Northern Ireland. We have seen how this has affected Sainsbury’s. The Kennel Club, no less, is also deeply concerned about the new obstacles facing those in Northern Ireland who wish to compete in dog shows in Great Britain. The horseracing industry in Ireland is very concerned about how it will face bureaucratic challenges and more expense. These charges can make life prohibitive. This is a tiny example of the deleterious impact of this deal. Far from having our cake and eating it, we will be going increasingly hungry.

Spending Review 2020

Baroness Wheatcroft Excerpts

Thursday 3rd December 2020 Grand Committee

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, the spending review laid great stress on the need to preserve jobs. The Chancellor accepted that retail, hospitality and leisure have been some of the hardest-hit sectors during the pandemic, yet the review confirms that the Government are persisting in doing away with tax-free tourist shopping. The Office for Budget Responsibility says that the Government’s costings on this move are based on a “highly uncertain estimate” of how international tourists will react to the change. However, industry forecasts say that it will cost at least 40,000 jobs as tourists head to centres such as Milan and Paris to spend their money.

I must declare my interest as chairman of the Association of Leading Visitor Attractions. Our members —museums, art galleries, gardens and so on—across the country are desperate to see this measure, which will destroy jobs and reduce government revenues overall, reversed. Will the Minister re-examine this perverse decision?

Secondly, the spending review announced the laudable aims of fostering more building of social housing and the creation of a national infrastructure bank—something that we have long needed. In a report on a consultation also published last week, the Government said that the bank will be able to provide advice to local authorities on local projects. The consultation on future lending, carried out by the part of the Treasury known as the Public Works Loan Board, states that the PWLB will no longer lend to local authorities to invest in commercial property simply for yield, but the Treasury lent billions to local authorities to do just that. Those deals are now going badly wrong, as many predicted they would, so can the Minister tell the House whether he will support those local authorities which now face financial catastrophe as a result of loans fuelled by Treasury lending?

Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020

Baroness Wheatcroft Excerpts

Thursday 19th November 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, I thank the Minister for presenting these regulations in such a straightforward manner. In principle, I welcome them. A six-month delay in imposing new and costly obligations on business at this time is clearly a sensible step. I hope that it will help delay Kent turning from the garden of England into the toilet of England, as some fear it will be, as lorries queue up outside the ports. Does the Minister expect those delays to be imminent on the other side of the channel because these agreements are not reciprocal but are being waived only by the UK? We cannot expect the EU to reciprocate.

It seems utterly mad to propose imposing new burdens on our businesses at this stage. It is welcome that HMRC is prepared to spell out that these regulations will be costly and troublesome to business when they come into practice. Already our country has lost a fortune because of Covid. The automobile industry alone reckons that Covid has cost it £27.5 billion so far in lost sales and production. There is no doubt that Brexit will add to those costs when we finally come to the end of the transition period.

Therefore, rather than waiving these regulations for six months, will the Minister consider extending the transition period across the board? That would be a sensible move for the UK and the EU. It might allow time to rethink the way in which businesses are classified. I understand the need for traders to have a registration and identification number but, despite the imminence of our final departure from the EU, many still have not secured one.

Perhaps they struggle with the requirement first to classify their operations in line with the Government’s official classifications. There are numerous, different and, in some cases, somewhat obscure categories. Manufacturing of consumer electronics is a sensibly broad and easy to understand category but do we really need businesses to shoehorn themselves into such narrow classifications as “producing oleaginous fruits” or “manufacturing of knitted or crocheted hosiery”? Those categories seem unnecessarily narrow. Will the Minister undertake to consider simplifying classifications to help those applying for EORIs?

Public Procurement (Amendment etc.) (EU Exit) Regulations 2020

Baroness Wheatcroft Excerpts

Monday 16th November 2020 Grand Committee

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, as others have done, I thank the Minister for introducing these essential regulations—clearly, we have to fill the gap that we are creating somehow.

It was good news on 7 October when the World Trade Organization agreed to the UK’s accession to the government procurement agreement when we can legislate effectively to join that agreement. The agreement covers contracts worth £1.3 trillion, so it is clearly important that we should have access to those contracts on a level playing field basis.

The noble Baroness, Lady McIntosh of Pickering, asked whether our Government are encouraging our businesses to apply for the appropriate contracts as they come up under the GPA. I would be glad to hear from the Minister exactly what the Government do on that front. Clearly, it is important that we export to the biggest possible market.

But I am concerned about that level playing field basis—and the noble Lord, Lord, Lord Hain, mentioned his concerns about this. Last year, the Prime Minister said that he would like to “fundamentally change” the public procurement rules to “back British business”. A Green Paper is expected shortly. Perhaps the Minister could tell us exactly when we might see it. Could he also tell us whether it is right to be concerned, as the noble Lord, Lord Hain, is, that we may well jeopardise our access to GPA contracts if, as the Green Paper will suggest, we move very strongly towards favouring British business?

Others have referred to the dubious nature of some of the contracts that have already been issued for PPE. I understand that the Government had to move quickly, but I do not understand why, as the Good Law Project has exposed, there had to be special procurement channels set up for “VIPs”. The Cabinet Office was directly feeding its contacts into the procurement process. Speed is one thing, but handing contracts to favoured friends is very different. Could the Minister tell us whether “VIP” channels exist in other procurement areas, not just PPE?

[The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)]

I call the noble Lord, Lord Bhatia. Are you there, Lord Bhatia? We will move on to the noble Lord, Lord Wallace of Saltaire.

Future of Financial Services

Baroness Wheatcroft Excerpts

Wednesday 11th November 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl)]

My Lords, I declare my interests as listed in the register. The Treasury papers say that it will give audit equivalence to the EEA states and approve as adequate their competent authorities. It is important that investors should be able to have confidence in audits provided by EEA auditors for overseas operations of UK businesses. However, does this also mean that EEA auditors will be able to continue practising in the UK after the end of the transition period, while UK auditors will be excluded from EEA markets? If this is the case, can the Minister say what the cost will be of this lack of reciprocity?

[Lord Agnew of Oulton (Con)]

I am not able to give specific answers to the noble Baroness, Lady Wheatcroft, on those subjects at the moment. They will, no doubt, be included in the ongoing negotiations. If we receive clarity on that in the next few weeks, I will happily write to her.

EU Exit: End of Transition Period

Baroness Wheatcroft Excerpts

Thursday 24th September 2020 Lords Chamber

[Lord True (Con)]

My Lords, as my noble friend knows, there are continuing discussions in relation to Northern Ireland, but we are taking all available steps to support trade readiness in Northern Ireland, including establishing a new and unprecedented trader support service. That is backed by funding of up to £200 million and will provide end-to-end support for businesses engaged in new processes. The importance of the state of Northern Ireland within our union and customs territory is undoubted.

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, transport and trade depend on GPS. Yesterday, I asked the Minister what preparations were being made for our continuing involvement in Galileo, given that the country has now abandoned its hare-brained scheme to try to create its own system. His response was that

“the EU’s offer on Galileo did not meet the UK’s defence and industrial requirements.”—[Official Report, 23/9/20; GC 554.]

Therefore, can he tell us what will meet those requirements and whether it will be in place at the end of the transition period?

[Lord True (Con)]

My Lords, I can only repeat the answer that I gave yesterday, which the noble Baroness very kindly read out. The Government believe that the infrastructure and IT systems that are put in place will meet the needs of this nation.

EU: Future Relationship

Baroness Wheatcroft Excerpts

Wednesday 23rd September 2020 Grand Committee

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, when he was electioneering back in December last year, the Prime Minister promised that:

“We have an oven ready deal, put it in the microwave as soon as we get back after the election on Friday 12th December and get it done.”


I know that rash promises are sometimes made before elections—indeed, they are sometimes made after elections; the “world-beating” test and trace system comes to mind—but today, we are discussing the UK’s approach to negotiations with the EU. Can the Minister say what the Government’s approach to that oven-ready deal has been? Did it ever exist? The withdrawal agreement was a framework, though not a perfect one, that is now being torn up, but the oven-ready deal that electioneering led people to expect is not in sight. The Government’s preparations for leaving the EU are about as close to oven-ready as the turkey that has just been hatched.

Others, most notably the noble Lord, Lord Judd, reminded us that the EU is about far more than trade. I accept that we have left the EU; now what we need is a good deal. Trade deals are never easy to negotiate but it is clear that a deal with the EU is what we need most. In 2018, 49% of our trade was with the EU. It is potentially great news that we have concluded a trade deal with Japan, but Japan accounts for just 2% of our trade and we do not yet know the details of that deal. There are questions over quite what we have given up, particularly on state aid. I find it incomprehensible that a Conservative Government should be prepared to risk our future relationship with our major trading partner over the issue of state aid. I would be grateful if the Minister could tell the House what state aid the Government are so desperate to provide that they are prepared to sacrifice such a crucial relationship.

As the noble Lord, Lord Berkeley, pointed out earlier, we learned this week that if we leave without a deal there could be 7,000 trucks piling up outside Dover, causing chaos and delaying deliveries by up to two days. It seems now that there is even to be a border around Kent. Michael Gove said this afternoon in the Commons that there would be a “Kent permit” for all lorries that needed to enter the county and without such a permit they would not be allowed in. Last week we learned that Logistics UK—formerly the Freight Transport Association—was told that the Government’s smart freight system, designed to reduce the risk of cargo delays, would still be in “testing mode” in January. Well, at least it has been traced.

It turns out that life outside the EU is harder to organise than this Government appear to have imagined. Their gung-ho talk is just that—delivery is the problem. Being a member of the EU brought numerous benefits beyond the smoothly flowing travel of goods and people. Take GPS, now such a crucial part of modern life. The Galileo system, of which we were beneficiaries through our EU membership, worked efficiently but the Government did not want any part of Galileo. We would go it alone. Earlier this year, this gung-ho Government spent £900 million on buying 45% of OneWeb, a bankrupt US tech company, which had attempted to build a constellation of 650 satellites. This was to be the basis for our very own GPS system. Just months later, that project is being abandoned.

Tobias Ellwood, the chairman of the House of Commons Defence Committee, dismissed the scheme as a “vanity project”. It takes vanity on a monstrous scale to blow what adds up to more than £1 billion on feeding it. However, it is not merely the waste of public money that is appalling, it is the risks that a lack of such a system causes. According to Mr Ellwood, if we do not have the back-up of Galileo we are going to have problems. We will be extremely vulnerable from a security point of view. In the continuing negotiations with the EU, will access to Galileo be included?

This afternoon, the president of the CBI, the noble Lord, Lord Bilimoria, spoke eloquently of the need for business to have a deal. He explained that Covid had wrought havoc on our companies. It has eaten into their cash resources, if they had any, and into their material stockpiles. Companies have struggled to get through the last six months, but this week brought the news that restrictions could last another six months. An avalanche of redundancies looms. Is this the time to embark on what even the noble Baroness, Lady Noakes, accepts will be an uncomfortable process?

This afternoon Michael Gove told the Commons that there might be a few bumps in the road. I was delighted to see the noble Lord, Lord Rooker, back in fighting form and even more pleased to have listened to what he had to say. If only our Prime Minister would read that speech in Brussels next month. Extending the transition period is the sensible thing to do, but this gung-ho Government do not do sensible. Michael Gove stated this afternoon that 24% of businesses believe that they are ready for 31 December, and acknowledged that flows across the critical short strait crossings could be reduced by 60% to 80%. Nevertheless, an extension of the transition period will not be contemplated. In a pre-Covid era, it would be mad to press on in such circumstances. As the country struggles to cope with Covid, it is simply incomprehensible.

Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020

Baroness Wheatcroft Excerpts

Wednesday 2nd September 2020 Grand Committee

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, I refer to my role as a director of a financial services company, as listed in the register.

We all know the importance of financial services to our economy: it is the highest exporting sector that we have. However, as this legislation indicates, we risk jeopardising its success. There is no denying the need for this legislation, but we are already into September: if a comprehensive deal is not agreed soon with the EU—and the omens do not look good—then the financial services industry risks being badly damaged.

I listened to the noble Viscount, Lord Trenchard, talk about how much we could innovate and so on if we were free of EU regulations. But innovation in financial services is rarely a benefit; in fact, I am hard-pressed to think of an innovation since the invention of the hole-in-the-wall that has actually been beneficial.

Equivalence in regulation is imperative for trade with the EU to continue, and recognition of that equivalence has to be in place for transactions to continue. The Minister sounded confident that that will be the case within the required timescale. Can he explain why he is so confident that equivalence will be granted in the EU?

The political declaration sounded optimistic about the prospects for equivalence, with the implicit intention that cross-border service provision would continue. But can we now be assured that this is a view shared by both parties? The direction that the negotiations have been taking appears to be diverging somewhat drastically, and certainly progress is not being made.

More specifically, do the UK regulators have the capacity required to make the decisions on equivalence that they will be asked to make? Has a decision been taken on the level of charges that they can implement and whether this will be sufficient to cover the extra costs involved?

Finally, I point out that one of the major assets of the UK financial services sector will not be impacted at all by any success on the equivalence front: the supply of talented Europeans who have played such an important part in making a success of the financial services industry in the UK. They have already been leaving in large numbers, and it is highly unlikely that they will return once freedom of movement has been turned off. The UK has been a star in the global financial services market; we are now deliberately risking dimming that star.

EU: Non-financial Services

Baroness Wheatcroft Excerpts

Wednesday 2nd September 2020 Lords Chamber

[Lord True (Con)]

My Lords, the Government are committed to protecting IP to a very high level and are proposing a chapter in the free trade agreement based on precedence to reflect this. Both the EU and the United Kingdom are IP-intensive economies and we need to make progress. My noble friend is right in relation to rights of representation that flow from the single market, and I assure her that these issues are currently very much in the mind of the Government.

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, what revenue does the Treasury receive from non-financial services and, in the event of no deal, how does it propose to replace that revenue?

[Lord True (Con)]

My Lords, I do not have in my brief the precise figure that the noble Baroness has asked for, so, as I promised earlier in relation to another question, I will write to her with that. The Government’s overall objective is to sustain, develop and increase the viability of our magnificent non-financial services and creative services.

Finance Bill

Baroness Wheatcroft Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, the Chancellor has responded to the Covid crisis with unprecedented cash handouts. Some are clearly well judged, the furlough scheme most obviously. Others, however, look off target. When the head of HMRC, Jim Harra, questions the wisdom of measures, it would surely be wise to pay attention, yet the Government took the rare step of issuing a statement to HMRC, insisting that it should go ahead with implementing two measures of highly dubious worth.

The first is a bonus scheme to reward employers for doing what they were probably going to do all along: taking back some staff who have been on furlough. The second is a £10 bribe to eat out. Do people really seem likely to respond by going out to eat because of a £10 bribe when they were frightened to go into restaurants beforehand? I doubt it.

I also question the wisdom of the changes to stamp duty, as have others: £3.8 billion is a large amount to spend to encourage people to move house when our major problem is the shortage of housing. It seems slightly weird to bribe people to buy second homes or to swap their second homes when too many people in this country do not have a home of their own. I thought we were going to use this opportunity to build infrastructure and invest in our capital, but that is not happening with the changes to stamp duty.

Others have remarked on the mixed messages coming from government on distancing and whether people should be going to the office, and I echo that. It is not helpful when the Prime Minister and the Chief Medical Officer are giving completely opposite advice to the public.

How much more confused will the public be when, in just a few months, Britain finally severs its relationship with the EU, and business has to cope with an onslaught of new form-filling and costs? Even the Trade Secretary has raised doubts about the preparedness of the UK’s ports to cope with the new regime that will dawn at the beginning of next year. We may need a job creation scheme, but 500 new members of the Border Force is a very unhelpful way of creating new jobs. Who is going to pay for these new jobs when the economy takes yet another hit? Brexit is an unnecessary onslaught on top of Covid. Can the Minister tell me that he really believes that it is the right time for such a drastic move?