UK Convergence Programme

Debate between Lord Bates and Lord Lea of Crondall

Tuesday 9th April 2019 Lords Chamber

[Lord Bates]

Noble Lords have asked some very specific questions. I will follow the injunction of the noble Lord, Lord Davies, and seek to address them as best I can. If my noble friend Lady McIntosh and the noble Lord, Lord Vaux, would allow me the courtesy of writing to them in more detail on their specific points, I will certainly do so. I accept what the noble Lord, Lord Davies, said: we can all agree that we are not in normal times. My noble friend Lord Gadhia made an insightful point when he talked about the difference between what is happening in the political realm—which is not normal—and in the economic realm, which is really remarkable given the headwinds and uncertainty which the economy is facing at present. That confirms the great strength of our entrepreneurial businesses and enterprises and the incredible work that the people in them are doing. This gives us real hope for the future.

I was invited to address the Brexit issue head on; a convergence debate about the European Union seems a pretty good place to do that but I do not want to spend too much time on this. From the Government’s point of view, it is clear: if we had had our way, the withdrawal agreement would have been agreed by Parliament in December. We would now be into an implementation period where lots of the issues about free movement, to which the noble Lord, Lord Lea, referred, would have been addressed. We would also be working our way through into a deep and meaningful—

[Lord Lea of Crondall]

The Minister makes a very interesting point. He is confirming that everything is to play for in the discussion in the coming months about the future relationship. By that I mean that nothing is ruled in and nothing is ruled out on all these matters concerning freedom of movement, et cetera. A lot of people are getting concerned that the Government may have lost the plot.

[Lord Bates]

The accusation was made that the Government were somehow not addressing the issue of Brexit. Responding on behalf of the Government—which I am entitled to do—we believe we have negotiated a good withdrawal agreement. We have a good and fair financial settlement and a political framework which holds out the real possibility of a strong, deep relationship with our European friends and neighbours that can enable our world-class businesses and entrepreneurs to continue to work.

The noble Baroness, Lady Kramer, made a point about business investment. She asked whether the falls in business investment were explainable as purely related to Brexit or whether there was something more structural in the economy. She almost pre-empted my response—perhaps because we have had many of these debates in the past—which is that any decline in business investment in the OBR forecast is of course concerning to the Government: business investment is critical to addressing the types of productivity concerns that were raised earlier. Without investment, we cannot hope to address those concerns, and I take on board all her points, but the forecast period seems to confirm that while we have had two years of a relatively small drop in business investment, that is against the background of businesses currently sitting on historically high cash reserves. Therefore, the OBR forecasts that that will pick up to a stronger growth of plus 2.3% in 2020 and continue to grow at this stronger pace in 2021 and onwards. That seems to suggest that business investment is linked to the political issue of the hour and the uncertainty that stems therefrom.

Trade Bill

Debate between Lord Bates and Lord Lea of Crondall

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Lord Bates]

My Lords, I am conscious of the time, but I also want to ensure that noble Lords have an opportunity to reflect on the serious issues raised by the noble Lord, Lord Lea. We may deal with them briefly this evening but we did not deal briefly with them when they came up in Committee. There was quite some debate on them on 4 February, and for those noble Lords who are interested, they can read it in glorious technicolour between columns 1360 and 1370 in the Official Report of those proceedings. Perhaps if the noble Lord, Lord Lea, will permit me to summarise what the key arguments were at that point, I will try to answer two of the points that he raised.

EFTA membership would not be acceptable because it would mean accepting the free movement of people between its four existing members. To gain access to the 29 existing free trade agreements negotiated by EFTA, the UK would have to negotiate its way into each and every one of them with the relevant third countries. There is no guarantee that that would be successful: EFTA’s trade agreements were not negotiated with the size and type of Britain’s economy in mind. Were the UK to join EFTA, it would constitute 71% of the enlarged area.

If we rejoined the European Economic Area to stay in the single market, we would not have control over our borders. It would mean having to accept all four freedoms of the single market, including free movement of people across the 30 EEA states. On laws, it would mean having to implement new EU legislation covering the majority of the sectors of our economy. In contrast, we are making an up-front sovereign choice to commit to ongoing harmonisation with EU rules on goods, covering only those necessary to provide frictionless trade in the context of our agreement.

The noble Lord, Lord Lea, said that if we crash out, we need to keep the right to rejoin EFTA. If we leave the European Union without a deal, we fall out of the EEA and EFTA. We would be able to apply to rejoin, but this is contrary to government policy for the reasons that I have explained. He asked what the impact on the EEA Agreement would be if we extended Article 50. If we were to extend Article 50, the UK would, of course, stay within the EEA under the EU pillar until we left the EU. With regard to citizens’ rights agreements made with the EEA and EFTA states, these would enter into force only when we leave the EU or at the end of an implementation period.

I hope that, with that brief summary, the noble Lord—whose contributions I always enjoy and listen to attentively—will not feel that I have not responded to him, but in the context of the wider consideration of this issue in the debate, the Government’s position remains as it was in Committee. I therefore ask him to consider withdrawing his amendment at this stage.

[Lord Lea of Crondall]

My Lords, I thank the Minister for that reply. In fact, he did not answer all the questions on 4 February. I could draw attention to some of them, but I will not. This could have been an opportunity today. Free movement of persons is, of course, an issue of which we have experience within the European Union. We would be cutting off our nose to spite our face on areas of the economy, such as the whole entertainment, theatre and ballet industry, as the noble Baroness, Lady Bull, referred to on one occasion. There are many, many others, so these sweeping statements about control of our borders are really over the top and not a sensible way to address this issue.

I am not going to say more at this stage. Suffice it to say that the initiative is now with the House of Commons. I have some confidence that in the next few days and weeks this will become, as my noble friend Lord Monks said, a strong policy in the Commons. I rest on the fact that it is still the policy of the House of Lords, as has been said by my noble friends. On that basis on this occasion, I will not seek to test the opinion of the House.

Yemen: Humanitarian Situation

Debate between Lord Bates and Lord Lea of Crondall

Monday 14th January 2019 Lords Chamber

[Lord Bates]

Stockholm is a process, not an event, so it needs to be ongoing. The situation in Hodeidah remains fragile, but we believe there is still a commitment from all parties to keep it open. Yemen is in this predicament because it relies so heavily on imports of food and fuel to serve its population, through the Red Sea ports. The latest figures we have for December show that 81% of food and 89% of fuel managed to get through. That is a reason for cautious hope, but it remains fragile, and the consequences of this not holding are well stated.

[Lord Lea of Crondall (Lab)]

My Lords, how far does the noble Lord think it is possible to reconcile deadlock in the UN and building on the mission’s developing role, such as keeping the Sanaa-Hodeidah road open and so on?

High Street Banks

Debate between Lord Bates and Lord Lea of Crondall

Wednesday 19th December 2018 Lords Chamber

[Lord Lea of Crondall]

To ask Her Majesty's Government what powers they have to require retail banks to maintain a presence on the high street.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, decisions on branch closures are a commercial matter and are taken by the management team of each bank without intervention from government. However, the Government recognise that branch closures can be disappointing for customers, and believe that the impact on communities must be understood, considered and mitigated wherever possible.

[Lord Lea of Crondall (Lab)]

My Lords, I thank the Minister for that reply. Karen Doyle runs a small bakery on the main street of Sowerby Bridge in West Yorkshire, a town that had six banks a decade ago, but the last one closed this July. She told BBC News:

“Bank closures have just ripped the heart out of the town. What really annoys me is that as taxpayers we bailed the banks out when they were in trouble and now they’ve left places like Sowerby Bridge behind”.


Lloyds Bank springs to mind, does it not? Does the Minister agree with the sentiments expressed so cogently by Karen Doyle? She could have added that it is a half-truth that everyone now happily relies on telephone banking. Given that two-thirds of bank branches have already closed, has the time not come for the high priests of the Treasury, instead of washing their hands of this exemplar of creative destruction, to start planning for a bank for regional regeneration? Otherwise, perhaps let it be set up—

[Lord Lea of Crondall]

If people interrupt, this will take longer.

Otherwise, perhaps let it be set up as an offering of seasonal good will by the European Commission.

[Lord Bates]

I thank the noble Lord for his question. As for the situation in Sowerby Bridge, he will be pleased to know that there is now a much tougher access to banking standard, which was set up by UK Finance following a review by Professor Griggs, and requires impact assessments to be undertaken. He will further be able to reassure the resident of Sowerby Bridge that she has access to the Post Office network—some 11,500 outlets—and that as a result of the banking framework agreement now in place, 99% of personal banking services, and 95% of the small business banking services to which she referred, can now be transacted through the Post Office in Sowerby Bridge. I hope that that will bring some reassurance, and even festive cheer, to the noble Lord and to the bakery concerned.

International Development: Co-operation with the EU

Debate between Lord Bates and Lord Lea of Crondall

Tuesday 11th December 2018 Lords Chamber

[Lord Bates]

One of the things that we can be incredibly proud of relating to the poorest countries in the world is the work done to give tariff-free, quota-free access to UK markets and to the EU for about 100 of the poorest countries in the world. We are committed to replicating that. In fact, we have already done so through the cross-border trade Act, which has already passed through your Lordships’ House.

[Lord Lea of Crondall (Lab)]

My Lords, would the noble Lord agree that if the EU did not exist, this sort of Question would be a very good reason for inventing it? I give the examples of Burundi and Gabon, which each have only about one person competent to deal with a whole number of areas. Would it not be ridiculous if each European country came and told them that the criteria for auditing and testing were to be done 27 different ways? It is vital that this kind of co-ordination continues, preferably by the EU with British participation.

[Lord Bates]

Actually, for the vast majority of interventions of the type the noble Lord mentions we are talking about not EU but UN systems where we seek to have greater harmony. A lot of the things we seek to do with the sustainable development goals are a UN commitment. Our climate change ambitions are driven by a UN framework. There are lots of things that we work together on, but they tend to be more supranational, rather than in large bodies such as the European Union.

Brexit: Bank of England Report

Debate between Lord Bates and Lord Lea of Crondall

Thursday 29th November 2018 Lords Chamber

[Lord Bates]

We do indeed need to look at a range of figures. The most reliable measure is what business is doing. Businesses are hiring people, which is why we have record levels of employment; businesses are exporting, which is why we have record levels of exports; and businesses from overseas are investing in Britain, which is why we have the largest stock of FDI in Europe. That is the true evidence that we need to look at.

[Lord Lea of Crondall (Lab)]

My Lords, is it not surprising that someone should say that by using the measure of GDP, which is consistent with the OECD and every other major nation’s measure—one could discuss reconciling income, output and expenditure at some other point—the Governor of the Bank of England is inventing some sort of false crisis? Is it not the case that the charge concerning Project Fear has been replaced not by evidence and forecasting for the future but by decisions by industry, which are now being announced? In Britain, FDI decisions—not forecasts—are down 80%.

[Lord Bates]

The noble Lord has great expertise in economic analysis. He will recognise, therefore, that what we are discussing today is a scenario: it is a tool that is used to assess and stress-test risk. What is being put forward here is a worst-case scenario. I am not a pessimist; I am an optimist and a believer in the best possible outcome. I believe that that is the Prime Minister’s deal, which I hope will be supported.

National Debt

Debate between Lord Bates and Lord Lea of Crondall

Wednesday 14th March 2018 Lords Chamber

[Lord Bates]

There are two things that we can do. One we have done already: the action that we took on payday loans, placing a cap on the appalling rates of interest that were being charged, was the right thing to do. Extending that to other areas of financial services is also right. But ultimately, the best thing that we can do for people who are struggling with debt is to provide work and opportunities so that they can repay that debt and provide a living and a hope for the future of their families.

[Lord Lea of Crondall (Lab)]

My Lords, is the Minister aware—

Paradise Papers

Debate between Lord Bates and Lord Lea of Crondall

Monday 6th November 2017 Lords Chamber

[Lord Bates]

Each of these things will be checked by HMRC, but the point is that evasion of tax and attempting to evade tax is against the law and will be pursued with all vigour by HMRC. Avoidance continues to be part of the international financial system and we recognise and value it.

[Lord Lea of Crondall (Lab)]

My Lords—

Sterling: Euro Exchange Rate

Debate between Lord Bates and Lord Lea of Crondall

Monday 9th October 2017 Lords Chamber

[Lord Bates]

My noble friend is absolutely right that we are out of the eurozone as far as that is concerned. The strength of the UK can be recognised not only in how people respond to our market but in how they respond in terms of foreign direct investment. That is a much more concrete and long-term form of investment. The UK continues to be the second-largest recipient of foreign direct investment in the EU and second in the world only to the United States. The fact that companies such as Nissan, Toyota, Apple and Bloomberg are making major long-term investments in the UK should encourage us to do the same.

[Lord Lea of Crondall (Lab)]

My Lords, in saying that we do not have an exchange rate policy but simply an inflation policy, the Minister has repeated the Written Answer that he gave to a Question that I tabled. In the hypothetical situation of the pound falling further, is it not ever more obvious that it is a totally false binary to say that we have a policy on inflation but not one on the exchange rate, when the one feeds into the other in a very material way?

[Lord Bates]

I acknowledge the noble Lord’s great professional experience in economics, but I am saying something slightly different. I am not saying that we do not pay attention to that and do not watch it at all; I am saying that the way in which it has been configured, through successive Governments, is such that this is a matter for the Monetary Policy Committee of the Bank of England to respond to. Where inflation rises above 3%—its target is 2%—it has to respond. Where it sees matters which are causing concern, it can choose to cut interest rates—as it did after the referendum, to historically low levels of 0.25%. We are not saying that we do not have any policy; we are saying that we have a core set of policies which the Government are responsible for and we are acting on them.

Brexit: United Kingdom-Africa Trade and Development

Debate between Lord Bates and Lord Lea of Crondall

Tuesday 25th April 2017 Lords Chamber

[Lord Bates]

That conversation happened when Liam Fox, the Secretary of State for International Trade, was in South Africa talking about how we could enhance trade co-operation between our two countries. It is important that we do that. We also need to see Africa as a tremendous opportunity—I know that the noble Lord shares my view on this. Africa will be a market of some $30 trillion by 2050 and will have a middle class the size of Europe. It is in our enlightened self-interest to build those strong links and maintain free trade.

[Lord Lea of Crondall (Lab)]

Does the noble Lord accept that the elephant in the room in this debate is a country called China? China is growing very fast in Africa and says quite explicitly that it thinks it very important that the main Chinese relationship will be with the EU. Instead of saying that everything in the garden will be lovely, would not the Minister find it more useful to think how the constructive relationship with EU countries and the EU as such will continue?

[Lord Bates]

I totally agree but refer to the point I made before that the problem in the crisis we face at the moment, particularly in sub-Saharan Africa, is a shortage of investment rather than too much. All the investments made by other countries and private investors are of course a matter between that particular country and the investor making those decisions. We do not want to get in the middle of that. We want to encourage as much investment as possible in that area so that growth can happen.

Immigration: Harmondsworth

Debate between Lord Bates and Lord Lea of Crondall

Thursday 3rd March 2016 Lords Chamber

[Lord Bates]

That is something that is under active review at this point in the light of Stephen Shaw’s report. He identified that there had been some improvement in a number of areas since 2013, particularly in the physical infrastructure of the site, but nowhere near enough. There are very strict criteria set out for performance in the contract, and they are being reviewed by the Home Office. We will of course make public what actions will be taken when a decision has been reached.

[Lord Lea of Crondall (Lab)]

My Lords—

[Lord Greaves (LD)]

No, we have just had a Labour question.

Yesterday I visited some houses in a Home Office scheme in a street in West Drayton, run by an adjoining hotel, Heathrow Lodge, which provides a few days’ initial short-term accommodation for asylum-seeker arrivals before they are dispersed. There are very basic bedrooms, with communal bathrooms and no kitchens. Will the Minister look personally into the numerous problems that I found there? I will send him a briefing, but they included people who seemed to have been effectively abandoned there for up to three months instead of three days; the quality of food provided; a lack of necessary Home Office communication and documents; ridiculous rules; a lack of facilities for a one year-old child who had been there for some time, and much more.

[Lord Bates]

I am very happy to look at those issues, just as we looked at the issues raised by cases in Cardiff and Middlesbrough recently. If the noble Lord supplies me with information, I am very happy to look at it more closely.

[Lord Lea of Crondall]

My Lords, can the Minister throw a little more light on the remarkable statistic referred to by the noble Lord, Lord Roberts of Llandudno, that someone has been in there for five years? How can that be?

[Lord Bates]

It is certainly the case that 92% have been there for less than four months, and the time is reducing. Of course, those who have been there for longer than four months—in fact, for longer than 28 days—are often people who are working very hard to avoid their removal. They are perfectly entitled to do so, but they are trying to frustrate the system. We have concerns about public safety. That is the reason why they are there and have not been granted bail.

EU: Migration

Debate between Lord Bates and Lord Lea of Crondall

Wednesday 19th November 2014 Lords Chamber

[Lord Lea of Crondall]

To ask Her Majesty’s Government whether they have made any proposal to other European Union member states, either severally or collectively, which would limit (1) the right of United Kingdom citizens to live and work in other European Union member states, or (2) the parallel right of citizens of other European Union member states to live and work in the United Kingdom.

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, the Government have regularly engaged with other member states on the issue of free movement, the Home Secretary has consistently pressed for action on abuse and the European Council has recognised that this issue needs to be tackled. The Government have also started a debate on reforming the transitional controls for new member states and will engage constructively with other member states in discussion on how best to achieve change in this area.

[Lord Lea of Crondall (Lab)]

I thank the Minister for his reply, which means no. The reason it is no is that it has obviously dawned on the Government, belatedly, that this would require reciprocation by all the rest of the 28 member states.

I have two supplementaries. First, does the Minister agree that there is a broad balance at the moment, not by design but by the facts on the ground, between the number of Brits living over there, in the EU, and the number of Europeans coming here? Roughly 2.2 million gain a living there and there are a few more here. Secondly, is the Minister aware that it is not exceptional to have this arrangement in Britain? Does he agree that, for example, there are far more people from the rest of the EU living in Germany—not least from Greece and Romania—than are living here in Britain?

[Lord Bates]

First, my initial Answer was yes not no. It was that we have been engaging with Europe. The European Commission has endorsed this approach. The noble Lord referred to Germany. The German Government are passing legislation through the Bundestag to restrict the benefits of those who come to Germany when they are not genuinely seeking work. It was tested in the European Court of Justice. These are exactly the types of reforms and reviews which we have been pushing, from our side, and which are getting greater support across the other member states of the European Union.

EU Council

Debate between Lord Bates and Lord Lea of Crondall

Monday 27th October 2014 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, the big peanuts in this—

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

The noble Lord was not here for the beginning of the Statement.

Social Mobility: Public Schools

Debate between Lord Bates and Lord Lea of Crondall

Tuesday 17th December 2013 Lords Chamber

[Lord Lea of Crondall]

To ask Her Majesty’s Government what assessment they have made of the degree to which those educated at public school disproportionately occupy senior positions in both public and private sectors in the United Kingdom; and whether they have plans to reduce any imbalance.

[Lord Bates (Con)]

My Lords, improving social mobility is the principal goal of this Government’s social policy. The Social Mobility and Child Poverty Commission was established to monitor the progress of government employers, the professions and universities in improving social mobility. Current evidence shows that, while improvements are being made in some areas, there is still much work to be done.

[Lord Lea of Crondall (Lab)]

My Lords, I thank the Minister for that reply, which I think means no. I have two supplementary questions. First, would he not agree with the recent and widely reported observation by Sir John Major to the South Norfolk Conservative Association on 8 November:

“In every sphere of British influence the upper echelons of power in 2013 are held overwhelmingly by the privately educated or the affluent middle class. To me from my background I find that truly shocking”?

Secondly, would he accept that to give tax relief to public schools as charities is also truly shocking? Charities are supposed to be about assistance from the rich to the poor, not from the poor to the rich.

[Lord Bates]

My Lords, I thank the noble Lord for his question. He quotes Sir John Major; let me offer him a quote from Alan Milburn in November. In responding to criticism about why the previous Government had not done more to advance social mobility under their 13 years in office, he said that it is,

“wrong … to argue this is the consequence of the actions of any one government. Deep-rooted … and flatlining mobility have been decades in the making”.

That is why this Government have introduced the pupil premium, which is targeted at disadvantaged pupils; free childcare; and an increasing number of apprenticeships. As for the noble Lord’s point about charity status, that is for the Charity Commission. Of course, it has to demonstrate that there is a public benefit to that status, and I know that many independent schools take that very seriously and forge many partnerships with schools in the state sector as well.

Finance Bill

Debate between Lord Bates and Lord Lea of Crondall

Monday 26th July 2010 Lords Chamber

[Lord Bates]

I am quoting from the same rating agencies that rate government debt and sovereign debt around the world. That is what results in the prices of those debts being traded on the international money markets. The noble Lord, Lord Myners, knows better than anyone about the global flows of international finance. The rating levels are crucial to this, as we see when we look at the situation in Ireland. To stretch the small business analogy to its absolute limits, you can say that international confidence in the Government’s resolution to get to grips with the deficit is analogous to what many companies will have—

[Lord Lea of Crondall]

My Lords—

[Lord Bates]

I will just finish this point, if I may. It is analogous to what many companies will find in dealing with their share price. The share price reflects the market’s belief in the Government’s resolution and its confidence in the soundness of the finances. That has a huge impact on the Government’s ability to—

--- Later in debate ---

[Lord Lea of Crondall]

I am grateful to the noble Lord for giving way. I do not think he has answered the noble Lord, Lord Skidelsky, or my noble friend Lord Myners. Would it be too much of a caricature to say that if we have to believe in voodoo economics, which is what the markets add up to, the logic of the noble Lord, Lord Skidelsky, and my noble friend Lord Myners is of no matter whatever? Do we just have to worship the voodoo economics of the markets?

[Lord Bates]

I accept these points. All I am saying is that, by arguing the other way, the noble Lord effectively says that there is not the slightest correlation between the ratings of global rating agencies, the level of debt in the economy and the price that we pay for that debt. I find that a more extraordinary position to argue from. I agree that these are contentious matters. What I have tried to set out through my contribution to the debate is that it is a multi-layered and complex subject but, essentially, we need to control costs; introduce simplicity to the system as a mechanism of doing that; increase sales by driving up enterprise; and repair the balance sheet so that the international lenders who are providing the debt have the confidence to continue doing so. I believe that the Government have done that and they have my full support.