Foreign Policy

Lord Bilimoria Excerpts

Wednesday 3rd May 2023 Grand Committee

[Lord Bilimoria (CB)]

My Lords, I am fortunate to travel around the world a great deal and to listen to what others think about the United Kingdom. Last month, I chaired a geopolitical conference here in London, with 100 YPO—Young Presidents’ Organization —chief executives and chairs from around the world. There was a session on Brexit, and I asked them what they thought of it. Some 99% felt that the UK had made a big mistake in leaving the European Union. Whether we like it or not, that is what the world thinks of what we did seven years ago in voting to do that. As the noble Baroness, Lady Tyler, said, we have had three Prime Ministers in a year; I have lost count of the number of Chancellors we had in that same year.

I thank the right reverend Prelate the Bishop of St Albans for initiating this really important debate about the UK’s changing role in the world and its implications for foreign policy. The last integrated review, in 2021, was pretty good in predicting that Russia would be a serious threat—it got that spot on. It spoke about global Britain and about being a science superpower and world leading. We have now had the refresh this year, which addresses the Russia situation as well as China, as the noble Lord, Lord Alton, spoke about. We have the quandary of needing to be tough on China while having mutual economic dependency. How do we de-risk our supply chains, particularly with regard to energy?

Looking back in history, our Prime Ministers have built great relations with other world leaders, such as Margaret Thatcher with Ronald Reagan. Tony Blair, before Iraq of course, was a very successful Prime Minister, including economically; and we must not forget Gordon Brown and the role that he played at the time of the financial crisis in convening the G20 leaders to help save the global economy, which was very effective.

I hate it when people talk about Britain as a “middle power”. That is utter rubbish. We are not a superpower, but we are very much a global power. We may not be a member of the European Union, but we are still the sixth-largest economy in the world. We are still in the G7, the G20, NATO, the Five Eyes, AUKUS and now the CPTPP. I suggest that we go even further: we should join the Quad—the security alliance between India, Japan, Australia and the United States. Let us make it Quad Plus and circle the world with the United Kingdom as a member. Would the Minister agree?

James Cleverly, our Foreign Secretary, has said that our influence is in persuading and winning over a broader array of countries based on shared interests and common principles. He referred to this as “patient diplomacy”. As an entrepreneur, the word “patient” does not exist in my vocabulary; we have to be restless and to go forward at speed.

The noble Baroness, Lady Meyer, spoke about Russia’s awful invasion of Ukraine. One of my proudest moments in my time as president of the CBI was helping India in its time of need when it ran out of oxygen; lives were literally saved thanks to British business. Thereafter, I convened British business to provide humanitarian aid to Ukraine in a big way, part of which was about unblocking the port of Odessa to get the grain flowing. I personally spoke to Chancellor Olaf Scholz before the G7 meeting—I was there representing Britain in the B7—and it worked. After talks with Turkey, Russia and the UN, the grain has started to flow now.

I feel that there is so much that we can do with the European Union. The Windsor Framework is a great step, but we need the Northern Ireland Assembly to recommence. The trade and co-operation agreement is a light agreement; we could do so much more. The noble Baroness, Lady Northover, spoke about Horizon. Does the Minister agree that we need Horizon to start immediately?

There does not seem to be any sign of a trade deal with the United States but, whether we like it or not, the United States is our number one trading partner by far.

During the Cold War, our defence spending was 4% of GDP. In the debate in 2019 on the 70th anniversary of NATO, I said that current spending should go up to 3%; the Prime Minister has said that it will go up to 2.5% when “circumstances allow”. Does the Minister not agree that we should be at 3%, with all the threats we face right now? When it comes to Russia, that situation is on our doorstep. On China, our tilt towards the Indo-Pacific is spot on.

When it comes to aid, I personally think that the merging of the Foreign Office and DfID was a huge mistake. Those two big departments should be separate, with their two different cultures and two different approaches, both doing great work. They should be demerged to be far more effective. We have reduced aid from 0.7% to 0.5%, with it likely to remain at 0.5% until at least 2027-28. Can the Minister give us some idea of when that will go back up to 0.7%?

I am a passionate believer in the Commonwealth, with its 2.4 billion people and 56 countries. It is a voluntary organisation; countries join it voluntarily. India, with 1.4 billion people, is of course the largest past of it. It is highly underutilised and we need to do much more.

This country has benefited from good migration, without which it would not be the sixth-largest economy in the world. There is no question that we must deal with the awful situation of boats coming across the Channel, but we also need to deal with the good migration that business needs through the points-based immigration system and the shortage occupation list. I was happy to learn that construction was put on that list in the last Budget; more sectors need to be put on it so that we have access to the workforce we need.

In his opening remarks, the right reverend Prelate spoke about international students. I will not repeat what he said but, as a former international student, chair of the All-Party Parliamentary Group for International Students and president of UKCISA, I know that this is one of our biggest elements of soft power. It brings in more than £30 billion to our economy and builds generation-long bridges—I am from the third generation of my family to be educated in this country. As he mentioned, we educate more world leaders, along with the United States, than any other country.

Can the Minister say why we include students in our net migration figures? We should do so when we declare them to the UN, but when we report them domestically we should exclude them like our competitors do. The moment you take them out, the figures are nowhere near as scary as they appear. Students are not migrants at all. Of course, we have one of the most diverse Cabinets in the world, with our Indian-origin Prime Minister; ethnic-minority people hold three of the great offices of state.

The City of London is still one of the top two financial centres in the world, but having the highest tax burden in 70 years is not the way to be an attractive investment destination. Putting up corporation tax from 19% to 25% is a very bad move. It may be the lowest in the G7, but it is still higher than the OECD average. If there is a Labour Government, any talk of equating capital gains tax with income tax will be disastrous. Money will flow out of this country and investment will leave.

Our Armed Forces are some of the best in the world, but they are too small. They number less than 200,000. When he was commander in chief of the central Indian army, my father was in charge of 350,000 troops—our whole Army, Navy and Air Force number less than 200,000. They are too small. I am proud to be an honorary group captain in Number 601 Squadron of the Royal Air Force. Our Armed Forces are very well respected, but too small.

We have some of the strongest elements of soft and strong power in the world, such as our defence services. Our manufacturing may now be less than 10% of GDP, but we are a top 10 manufacturer and I am a proud manufacturer in my business. Some 500 million people watch the BBC around the world at any one time, and of course we have the Royal Family. I am so proud of the Coronation of King Charles III coming up this weekend. Our Royal Family is one of our strongest elements of soft power. Her Majesty the Queen was amazing; she was not only the most famous but the most respected monarch in the world. I think His Majesty King Charles will be exactly as respected. On the environment, he was decades ahead of the game.

I asked His Majesty yesterday, “Why don’t we have a state visit to India?” We need a large prime ministerial delegation, with Rishi Sunak leading a jumbo jet full of Cabinet Ministers, Ministers, business leaders, the press and university leaders going out to India to make that impact. That is what we need to push forward and enhance our trade relations with what will be the third-largest economy in the world and the third superpower; it will be the US, China and India—India must be our best friend going forward. We are not a superpower but we are a global power with huge reach and influence. We must always maintain our respect on the global stage.