UK-African Investment Summit

Earl of Effingham Excerpts

Thursday 18th April 2024 Lords Chamber

[Lord Benyon (Con)]

I have to say that has not been my experience when I have been travelling in Africa. Last week I was in Angola, where I saw a £440 million UKEF investment unlocking an extraordinary corridor of prosperity from the port of Lobito into the DRC and Zambia. It is that kind of investment that we want, and we can continue to do that with or without an African investment summit. Still, we want to have that summit and we will announce a date shortly.

[The Earl of Effingham (Con)]

My Lords, Africa currently represents 2.8% of global GDP but a material 19% of the world’s population. Only 2.1% of imports to Africa originate from the UK. In addition to the summit, what will the Government do to focus on promoting UK exports to the region in line with its expected GDP growth?

[Lord Benyon (Con)]

I thank my noble friend. There is the world’s largest free-trade area initiative, the African Continental Free Trade Area, with 54 signatures. There is abundant potential for renewable energy and resources critical to the economies and energies of the future. For example, the DRC has almost 70% of global cobalt resources, and will benefit from the investment that we have made in the Lobito corridor. My noble friend is right that it has to be a focus for government support to get businesses to trade. I am delighted to see a 6% increase in trade from the UK to Africa of £46 billion. That has been reflected in recent years and will continue in future years. This is an absolute priority for the UK Government. There are huge advantages, not least through our Commonwealth connections, and we want to build on those.

Latin America

Earl of Effingham Excerpts

Thursday 7th December 2023 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I thank my noble friend Lady Hooper for bringing forward this important debate. Although noble Lords will not find it on my entry in the register of interests, I am proud to say that my wife is Peruvian and I have been a regular visitor to the country for the past 27 years. I want to take this opportunity to highlight its economic developments, our relationship with Peru and the possibilities that we can seize upon, which will benefit both the UK and Peru.

When I first arrived at Jorge Chávez Airport in Lima on a warm, sunny day in December 1996, nothing could quite have prepared me for what was about to happen. I walked out of the relatively controlled arrivals area into a cacophony of hundreds of gentlemen shouting “Taxi!” at the top of their voices. The road from the airport to the residential area of Lima was lined with cars that would have been most unlikely to pass their MoT in the UK. It was also clear that, unfortunately, this was a country where poverty and economic hardship were borne by a number of the population.

Fast-forward 27 years and the Lima that I first encountered back then has been completely transformed. There is now a well-maintained three-lane highway from the airport, lined with shopping centres and restaurants. The old cars have, for the most part, been replaced by shiny new vehicles, and less of the population appears to be experiencing difficulty. Once-makeshift towns are now areas bustling with communities, shops, restaurants and roads. There are new residential developments all over the city, and future buildings appear like mushrooms at every visit. There is a burgeoning middle class, growing from around 15% in 2006 to 34% in 2019, made possible by access to capital in the form of mortgages and loans. Consumer spending has risen as more and more people are lifted out of poverty and the country’s middle class expands. To be clear, poverty levels are still too high: there was a steady decline from 57% in 2004 down to 20% pre pandemic but that had risen back to 28% in 2022, and those in the middle class have dropped from 43% down to 20% as a result of the recent global economic turbulence. However, we should remain optimistic that this can trend back to pre-pandemic levels.

Peru’s economic success has been driven by mining, agriculture, natural resources and tourism. The statistics tell the story. The country has the world’s largest reserve of silver, at 98,000 metric tonnes, as well as significant reserves of gold, lead and zinc. Peru provides half of the world’s supply of the superfood quinoa. Breathtaking experiences such as Machu Picchu, Cusco—the capital of the Inca empire—and untouched rainforest complete with pink dolphins, jaguars and river otters are all part of the scenery. The country boasts more than 4,000 species of butterfly and 2,100 species of fish, both respectively the largest species numbers of their kind in the world.

It is no surprise that, of all Spain’s colonial conquests on that continent, it was in Lima that it decided to install its viceroy. Peru was the jewel in the crown as far as it was concerned. It is also worth flagging that Peru has three distinct regions—the coast, the jungle and the mountains—each with its own unique climate, gastronomy, culture and trade opportunity. Peru has 28 of the world’s 32 climate zones, and it is this rich and deep diversity which, in my mind, makes Peru one of the key Latin American countries that we should continue to develop ever-stronger links with.

As recently as October of this year, we celebrated the 200th anniversary of our bilateral relationship. The UK is one of the leading investors in Peru. Our very own Hay Literary Festival, which promotes culture and social responsibility, takes place every year in Arequipa, the birthplace of Peru’s most famous Nobel Prize-winning writer, Mario Vargas Llosa. The previous Foreign Minister was one of over 270 Peruvian Chevening scholars who have been welcomed in the UK over the years.

The reintroduction of direct London to Lima flights will commence this month; the removal of short-term visa requirements just over a year ago for Peruvians visiting the UK will open up further partnership opportunities on business, tourism and trade; and, following accession to the CPTPP, UK business visitors will also enjoy an extended length of stay in Peru.

From a trade perspective, UK exports were £373 million in 2023, and the UK is now the most important European market for Peru. Peruvian exports of liquefied natural gas to the UK hit over £1 billion between November 2021 and March 2022, versus just over £80 million over the three-year period prior to that.

There are many reasons we can be confident that our relationship will continue to grow and that bilateral trade and investment will increase, but there are a number of areas which merit further consideration.

Notwithstanding the CPTPP agreement, what are the Government doing additionally to help UK SMEs diversify their supply chains and look to Peru, and indeed Latin America, as a partner? The Peruvian economy is well known to the likes of Anglo American and Rio Tinto, but what about our smaller companies, which could undoubtedly benefit from engaging in trade with their Peruvian and Latin American counterparts, but for which the continent is simply not on the radar? For example, in the fertiliser sector, small and medium-sized Peruvian farms are importing high-tech machinery to improve quality and production capacity. British-made machinery could surely compete in that space.

Many nutritionists say that, if they had to save one country in the world after a disaster, it would be Peru, due to the abundance of its superfoods such as quinoa, which is now a staple in many parts of the globe. When paired with exercise, these superfoods should promote physical and mental well-being. Given the ever-increasing importance of this post pandemic, I ask the Minister: what are the Government doing to increase trade in these types of superfoods from Latin America and encourage consumption as part of a nationwide health and well-being strategy?

In summary, there are many ways in which the UK and Peru can enjoy a mutually beneficial relationship across a variety of industries, trade and knowledge sharing. Accession to the CPTPP will be a great enhancement, but there are still many other opportunities for us to pursue.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Earl of Effingham Excerpts

2nd reading
Tuesday 21st November 2023 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I congratulate the noble Lord, Lord Cameron of Chipping Norton, on his excellent maiden speech.

I am speaking at Second Reading because I support this Bill and the sensible changes that it makes to our domestic laws, which will enable us to take full advantage of this agreement. I am particularly keen to talk about the benefits to our SMEs, both exporters and importers, how it will enhance our trading relationship with Peru, and the multiple ancillary benefits to the wider UK community. I refer the House to my entry in the register of interests.

Prior to having the honour and privilege of joining your Lordships’ House, I spent over 20 years advising and winning business from around a third of the companies in the FTSE 100. I greatly enjoyed my trips to Derby to see Rolls-Royce and Farnborough to see BAE, two of our leading UK exporters. For the past few years, my attention has migrated to SMEs. This focus has made me realise that while our large, listed businesses of course make amazing contributions to the economy and employment, SMEs are the lifeblood of our nation. I speak daily to these firms and am constantly dazzled by their entrepreneurial spirit, their determination, their grit and their ability to innovate and adapt on what can often be a very bumpy ride. It is these enterprises which we hope will grow to be the future Rolls-Royces and BAEs. We should do everything that we can to support them. The Bill and the agreement behind it aim to achieve that.

The Minister—my noble friend Lord Johnson of Lainston—enjoys statistics, so please allow me to share some. UK exports are now at the highest level that we have seen in our history, £882 billion year on year as of September 2023. The Government’s strategy is to achieve £1 trillion of exports by 2030, so we are comfortably on track to exceed that target. In 2023, 84% of the businesses directly supported by our excellent UK Export Finance—some 529 companies—were SMEs. This is the highest annual figure on record and represents a steady uptrend in UK Export Finance’s support for SMEs since 2019.

These numbers are significant and to be proud of, but I will give you what I believe is the most important statistic of them all. If you were to go to Companies House today, you would find around 5.4 million firms registered. Of those, only 8.8% export at all. Through the Bill and agreement, we have an opportunity to increase that number significantly. We are starting from a low base, so it is much easier to incrementally grow that 8.8% to, let us say, 20% and higher in the longer term. This will deliver major benefits to the UK economy and workforce.

CPTPP membership will give us access to 15% of global GDP and to some of the world’s most material markets in the Americas and Asia-Pacific. I can see only upside to helping our great UK companies export, and the Bill and agreement will play an important part in that. The Institute of Directors’ feedback on the Bill was:

“Anything that makes it easier for British businesses to export is good news”.


I should also flag the benefits to our importers. Only a few weeks ago, I was speaking to a business owner who is investigating how to import chemicals from one of the CPTPP countries to manufacture his product in the UK. He needs to diversify his supplier base and the Bill will help give him greater access to the global supply chain.

Finally, due to my involvement with Peru, allow me to give you some examples of how both the UK and Peru will benefit from this agreement. Tariffs of 11% will be eliminated on UK exports of beef and tariffs of mostly 6% will be eliminated on UK exports of poultry. At the same time, we in the UK can take advantage of cheaper import prices for Peru’s incredible and diverse array of fresh fruit and juices, which I personally enjoy, as well as chemical and manufacturing inputs to name but a few. UK business visitors will enjoy an extended length of stay in Peru and we will enjoy greater transparency for British investors in Peruvian companies and their directors.

Our exports to Peru were £370 million in 2022, which represented a 46% increase year on year. There is no reason why we cannot continue to grow strongly. I hope, as part of the CPTPP, we will expand and continue to work together in sectors such as mining, energy, finance and tourism.

I truly believe that we have an opportunity here to help our FTSE and AIM companies, our SMEs, our exporters and our importers to create large amounts of new UK jobs over time and collaborate with our partners in the CPTPP, so that everyone benefits.