Net Zero (Industry and Regulators Committee)

Lord Bilimoria Excerpts

Friday 20th January 2023 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, I thank the noble Lord, Lord Hollick, and his committee for The Net Zero Transformation: Delivery, Regulation and the Consumer. I note that the date it was ordered to be printed was 23 February, the day before the sad war in Ukraine started last year, from which the global energy crisis resulted. In its report on net-zero transformation, the committee has said right up front that the current plans lack the necessary level of policy detail, and it makes lots of recommendations.

It should be noted that in 2021, after the Government had legislated in 2019 for a net-zero emissions target by 2050, they set two additional interim targets: a net- zero power system; and emissions reduced by 78% by 2035. Some 113 countries and over one-third of the world’s largest companies, including our FTSE 100 companies, have also set net-zero targets. The Government have set various policies, including: ending the sale of new petrol and diesel cars; the use of sustainable aviation fuel; investing in clean electricity and hydrogen production; providing funding for households to switch to low-carbon heating systems—the noble Lord, Lord Burns, spoke about that; incentivising farmers to use low-carbon farming methods; and planning to triple the rate of woodlands creation in England. They talk about bold commitments to meet these ambitions; energy technology policies, including long-duration storage technologies; a business model for carbon capture, usage and storage; and the potential for new nuclear, including small modular reactors.

I have asked time after time, like a stuck record: why are these small modular reactors not starting? Rolls-Royce says that it can produce reactors producing 500 megawatts for just under £2 billion. They would power about a million people, versus large Sizewell C for £22 billion and 3,200 megawatts. What is the delay? Rolls-Royce says that it can produce 16 of these clean, sustainable, low-cost, repeatable and scalable SMRs. Can we please start these as soon as possible?

Can the Minister also update us on the Cadent pilot that is taking place on using hydrogen to heat homes? One of my proudest moments at COP 26, when I was there as chancellor of the University of Birmingham and as president of the CBI, was the HydroFLEX. The University of Birmingham developed the world’s first retrofitted hydrogen-powered train and that was up and running. I chaired a meeting of transport leaders on that train in conjunction with business and government. That was universities, government and business working together.

Funding is addressed by the report, as is institutional architecture. It suggests an energy transition task force. What about a national centre for the decarbonisation of heat? This proposal is centred at the University of Birmingham in the West Midlands to implement the Government’s heat strategy. I chaired the heat commission when I was president of the CBI. The report also talks about price controls. The government response, which came pretty swiftly on 27 May, talks about SMRs moving three projects to a final investment decision. Have those decisions been made? Regarding gas, the Government stated that in meeting net zero by 2030, the UK might still need a quarter of current gas use, but this is a very important point. This is a transition. It is not an on/off switch.

This transition will create hundreds of thousands of jobs around the country and this is great news. The point that is not addressed in the report is: what about the potential for cross-border collaboration in this area, particularly with countries such as India, that are world leaders in solar power and solar technology? Should we not aim for much more cross-border collaboration in this area?

Government Departments: Communication with Industry and Commerce

Lord Bilimoria Excerpts

Monday 14th November 2022 Lords Chamber

[Lord Callanan (Con)]

I assure my noble friend that communication is very much on track. The first meeting that the new Business Secretary had following his appointment was with the “big five” business representative organisations, which collectively represent around 750,000 businesses.

[Lord Bilimoria (CB)]

My Lords, in my two years as president of the CBI, I saw the power of government, business and the CBI working together, whether it was the furlough scheme or lateral flow tests. Can the Minister reassure us that the Government are listening to the CBI regarding supply-side reforms, which are desperately needed for the 17 November Budget?

Also, the noble Lord, Lord Naseby, talked about business and government. Does the Minister agree on the power of business, government and universities working together, as with Oxford University on the vaccine and Birmingham University on the world’s first retrofitted hydrogen-powered train?

[Lord Callanan (Con)]

I am happy to agree with the noble Lord. The CBI was one of the organisations that my right honourable friend the Business Secretary met only last week.

Small Modular Nuclear Reactors

Lord Bilimoria Excerpts

Tuesday 28th June 2022 Lords Chamber

[Lord Callanan (Con)]

We are providing immediate support to Rolls-Royce to develop the SMR; we provided it with £210 million to do exactly that. However, it is important that we go through all the relevant design approvals to make sure that SMRs are safe and easy to deploy. That is an important step to go through and which is legislated for in this country, and we should make sure that we follow it.

[Lord Bilimoria (CB)]

My Lords, building a large nuclear reactor takes well over a decade but, once built, it can power 7% of this country’s electricity. However, I am reliably informed that these small modular nuclear reactors can be put up within four to five years. Why are the Government waiting? These reactors can power a city the size of Sheffield. Why not do it now in order to have cleaner energy and to be more energy self-reliant?

[Lord Callanan (Con)]

The noble Lord might want to ask the people of Sheffield whether they want an SMR beforehand. As a serious point, this is very important; indeed, it is a matter of legislation that reactors are proved to be safe. I agree that it is a shrunken design of existing reactors; these are on a much smaller scale and designed in a modular way. It is important that we go through all the relevant approval processes. The design is not yet complete, and they have not even been submitted yet for GDA.

Catapults (Science and Technology Committee Report)

Lord Bilimoria Excerpts

Thursday 19th May 2022 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, just to refresh the history, the catapults were proposed in a 2010 review called The Current and Future Role of Technology and Innovation Centres in the UK by Dr Hermann Hauser, commissioned by the then Secretary of State for Business. I worked with Dr Hauser at the University of Cambridge, where I chaired the advisory board of its Judge Business School for five years until 2020. Hermann Hauser said that the UK

“falls short on translating scientific leads into leading positions in new industries. This is in part down to a critical gap between research findings and their subsequent development into commercial propositions that can attract venture capital investment or be licensed.”

He also said:

“Other countries benefit greatly from a translational infrastructure that bridges this gap”.


His report in 2010 proposed that the UK developed an “equivalent capability” focused on

“sustained and substantive support for an elite group of Technology and Innovation Centres”.

That is what led to what we now have as the catapults. In fact, I thank the noble Lords, Lord Mair, Lord Patel, and the Science and Technology Committee for the work they have done on this excellent report.

To summarise—I know that the noble Lord, Lord Mair, said this earlier—there were initially seven catapults and then more were added, so you had: High Value Manufacturing; Cell and Gene Therapy; Digital; Offshore Renewable Energy; Satellite Applications; Transport Systems; and Future Cities. Later on, Energy Systems, Medicines Discovery and Compound Semiconductors were added, and in 2019, the Connected Places Catapult replaced the Transport Systems and Future Cities Catapults.

The Institution of Engineering and Technology summarises that catapults

“provide a crucial role in bridging a gap between academia and industry to provide academia with an insight into future needs of the sector.”

They

“play the role of catalyst in helping innovation to drive skills and vice versa, especially when supporting higher technical skills. … A systems thinking approach is necessary when planning a strategy for the R&D sector because policies across sectors are interlinked. … Catapults need sustained funding that transcends Governments to allow for stability.”

The reality is that the United Kingdom spends 1.7% of GDP on R&D and innovation whereas countries such as Germany and the United States of America spend 3.1% to 3.2%. Just imagine if we spent just 1% extra a year—an extra £20 billion a year—and how much of a difference that would make in powering our productivity and our growth. Would the Minister agree with that? That is leaving aside the shortfall of all these years where we have underinvested.

The Government say they have a strong ambition for R&D as set out in the R&D road map, saying that we should spend 2.4% of GDP on R&D by 2027, but I believe they are not being ambitious enough. They are committed to £22 billion by 2024-25 but I think the Government should target the German and American levels of 3.1% or 3.2% overall. Would the Government agree?

The catapult network is a key part of this. They are key in attracting increased private sector R&D investment and are also linked to the levelling-up agenda. On Innovate UK, the Government play a major role in this as well, and then there are the links with industry. One of my priorities as president of the CBI has been to promote industries and universities and government working more closely together, therefore catapults are music to my ears.

One of the report’s big recommendations is that funding needs to be reformed for catapults—I will come to that in more detail—and the Government need to develop

“a detailed strategic plan for delivering its R&D ambitions”.

The report, Catapults: Bridging the Gap Between Research and Industry, was produced in 2020, a year and a half ago, and it considered the role that technology and innovation catapults have played in encouraging investment and collaborations in UK innovation. It speaks about the funding of the nine catapults, which is an important point. One-third comes from a government grant via Innovate UK, one-third from industry partners, and one-third from collaborative funding—the CRD funding. This is where the report says there needs to be much more flexibility in the funding. Would the Government agreed that that should be introduced to improve the catapults?

To summarise the excellent recommendations of this report, the Government, UKRI and Innovate UK should create a clear plan for how public sector resources and private investment could match the road map ambition. The Government should scale up the catapult network. Do the Government agree with this? Without that, there will not be sufficient private sector investment. UKRI should help catapults and universities work together more easily and UKRI should allow catapults to bid for research council funding where there are clear advantages for R&D and innovation, and Innovate UK should offer greater flexibility in allowing public sector bodies to have a larger share of the CRD funding, particularly where more than one such organisation is involved. Would the Government agree with that last point in particular?

Professor Juergen Maier, who used to be on my president’s committee at the CBI and who is a former CEO of Siemens UK and chairman of the Digital Catapult, told the committee that the UK does not currently have the scale that large multinational companies need for conducting innovation projects, whereas some other countries have more capacity to support innovation.

On international factors, Felicity Burch told the committee that 48% of the R&D performed by businesses in the UK was by non-UK owned businesses. Professor Maier explained that multinational companies look for two things in a country when investing in R&D: quality and scale. He said that on quality the UK does very well but on scale we do “pretty badly”.

Other speakers have referred to Germany’s Fraunhofer Society. In terms of scope, scale and depth of links between academia and industry, Matthew Durdy said that the Catapult Network

“is probably less than a third of the scale of the Fraunhofer [Institutes].”

The Government are doing good things. I am a member of the Chancellor’s advisory board on the Help to Grow management programme, which has 30,000 mini-MBAs for SMEs. It is a fantastic programme, just the sort of thing we need to improve skills and encourage growth. Yesterday, I was privileged to chair the first CBI annual dinner for three years, with almost 600 people present. Our chief guest was the Chancellor of the Exchequer, Rishi Sunak. I shall quote from his speech, which was very relevant to our debate. He said:

“Over the long term, higher productivity is the only way to raise living standards … Our incredible universities produce the third highest number of publications worldwide and we have the second most Nobel Laureates of any nation.”


Cambridge University has the highest number of Nobel laureates of any university in the world.

The Chancellor went on to say:

“Our economy has decarbonised quicker than anyone else over the last twenty years ... We also need to overcome our longstanding weaknesses in investment, skills, and innovation. Even in the decade before the global financial crisis, capital investment had weakened. Research from the Resolution Foundation and the LSE shows that lower capital per hour worked explains around half our productivity gap with France and Germany … since the financial crisis, the rate of increase in innovation has slowed considerably. A weakness that explains almost our entire productivity gap with the United States.”


Then he said this:

“The problem I don’t believe is any longer the government. Public sector net investment is reaching its highest sustained level since the 1970s. Yet capital investment by UK businesses, as a % of GDP, is a lot lower than the OECD average … UK employers spend just half the European average training their employees.”


At the CBI, we estimate that over the next decade, businesses will have to spend £130 billion investing in training and nine out of 10 people today will have to retrain in one way or another in the next 10 years.

The Chancellor went on to say that

“over this Parliament, we in government are delivering our pledge to increase public investment in research and development by 50% to £22 billion. But businesses’ investment in R&D, as a % of GDP, is less than half the OECD average. In other words, further government action can only take us so far. We need you. The wealth creators. The entrepreneurs. The leaders. We need you to invest more, train more, and innovate more … our firm plan is to reduce and reform your taxes to encourage you to do all those things. That is the path to higher productivity, higher living standards, and a more prosperous and secure future.”

It is government’s role to create the environment for business to flourish and to invest in R&D and innovation. The Government did a fantastic thing in introducing the 130% superdeduction to encourage investment, but it is being taken away from us in April next year. We are saying that the Government should have a permanent, 100% reduction on taxes for investing by businesses. Do the Government agree that we should have something to replace the superdeduction: a 100% deduction to incentivise investment? That is what will create the growth that will create the employment that will pay the taxes that will pay down our debt.

The Government do not create the right environment for investing in R&D and innovation by having the highest tax burden in 70 years. We have already had a fragile recovery from the pandemic, exacerbated by the sad war in the Ukraine, and high taxes stifle growth and the recovery. I was on the universities and business task force that reported in 2020. One revelation that came out from that was that a huge proportion of the private sector investment that this report and the Chancellor are talking about comes from abroad. We need to continue to be a magnet for inward investment, but how can we be if we have the highest rate of taxes in 70 years? Historically, we have been the second or third largest recipient of inward investment in the world.

As chancellor of the University of Birmingham, I am so proud of one example of what the report talks about and the catapults are trying to achieve. In 2012, a PhD research project into producing a hydrogen-powered train led to a model hydrogen-powered train in the engineering department of our world-leading railway institute, headed by Professor Clive Roberts. That led to COP 26 in November last year, when we had the world’s first retrofitted hydrogen-powered train up and running. The Prime Minister and Prince Charles were on the train; I chaired a meeting of university leaders on the train. That happened only because of research by a world-leading university, working in collaboration with Porterbrook, the rolling stock company, companies such as Siemens and the Government with Innovate UK. That is what led to that world-leading innovation. That is the potential of catapults.

To conclude, catapults have a crucial role in eabling this country’s phenomenal ability to be creative and innovative in a world-beating manner: to get universities, government and business working together to create best-of-the-best, world-leading innovation.

Queen’s Speech

Lord Bilimoria Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the gracious Speech in Her Majesty’s Platinum Jubilee year starts with the Government’s priority being to grow and strengthen the economy and help ease the cost of living crisis for families. It talks about supporting the Bank of England to return inflation to its target by establishing an infrastructure bank. I am proud to have worked with the British Business Bank and I pay tribute to it for increasing its book from £8 billion to £80 billion through the pandemic.

The gracious Speech talks about championing international trade, and I pay tribute to the Department for International Trade for rolling over 66 EU bilateral agreements in time and the new free trade deals with Australia and New Zealand, on which I had the privilege of working closely with it as president of the CBI. We are now in the midst of the FTA with India being negotiated with an objective of completing it by Diwali. Last week, I was in India launching the UK-India industry task force between the CBI and the CII.

The gracious Speech talks about investing in our gallant Armed Forces. I remember the debate that we had in this House on the 70th anniversary of NATO in 2019, and I remember very clearly then—three years ago—saying that we should increase minimum spend on defence from 2% to 3%. I may boast, but I think that I was prescient. Would the Government agree that we need to do this now after the sad Ukraine war?

The gracious Speech also talks about the Commonwealth Games in Birmingham. I am the proud chancellor of the University of Birmingham and we are at the heart of these Games, with the athletes’ village in the university and with the baton relay being sponsored by us going to all 72 Commonwealth countries and territories around the world as we speak. Hockey and squash are also taking place at the university and there is a business event at our exchange building in the middle of Birmingham.

I have been president of the CBI for nearly two years now. My tenure started with completing Brexit, then we had the Covid pandemic out of nowhere and now the Ukraine war; I suppose I will be known as the “crisis president”. It is a fragile recovery—already fragile before the Ukraine war—with supply chain challenges, labour shortages, very low employment but energy price inflation, indeed inflation across all parts of industry. In fact, there is a danger of wage-price spiral inflation and a danger of inflation with no growth—stagflation. I first challenged the Government by asking the Chancellor in a meeting in February last year if he was worried about inflation. Businesses are now feeling the chill. There is a cost of living squeeze on firms and on consumers. We are very worried.

And what has happened? Taxes have gone up; national insurance has gone up by 1.25% for employers and employees. This is the worst time in history to have the highest tax burden in 71 years. The Chancellor talks about reducing taxes in 2024 by 1%. We should reduce taxes now, because businesses and consumers need the help now. What is the point of this Government having spent £400 billion, which is fantastic, to save our businesses and our economy and to have a vaccine programme that was world-leading? The tennis analogy is that we take a back swing—that is, we spend the £400 billion—and we hit the ball, but if we stop there then the ball will go into the net because you need to follow through to get it over the net. The Government need to be bold enough to follow through.

The Government have cut fuel duty by 5%, but our fuel prices remain some of the highest in the world. There has been support in the shape of VAT cuts on energy-saving materials. The energy Bill that the gracious Speech speaks about is great. Big and better nuclear is terrific and small modular reactors are fantastic. Working with countries such as India on solar will be great. The hydrogen investment road map is terrific. Investment in the energy-intensive industries compensation scheme is great. But we need to extend and broaden the recovery loan scheme. Do the Government agree? We need to create a growth guarantee scheme as a long-term replacement. Do the Government agree?

I sit on the advisory council of the Chancellor’s fantastic Help to Grow scheme for SMEs, but we need far more incentives for businesses to invest and grow. In green finance, we need to leverage North Sea production as the UK transitions, because going to net zero is not an on/off switch; it is a transition. Do the Government agree?

I believe hydrogen is the future. I am the chancellor of the University of Birmingham, which created HydroFLEX, the world’s first retrofitted hydrogen-powered train, up and running at COP 26—a great collaboration between universities, businesses and government to create world-beating innovation.

We have great clusters in this country. We had the Oxford/AstraZeneca vaccine, produced by AstraZeneca based in Cambridge in conjunction with the Serum Institute of India, the largest vaccine manufacturer in the world, which produced 2 billion doses of it.

The super-deduction is a great idea by the Chancellor, but it is being taken away in 2023. Do the Government agree that we need a 100% deduction for investment in future? In innovation and R&D, we need to invest more than 1.7% of GDP. America and Germany spend 3.1% and 3.2% respectively. Just imagine if we spent at that level.

I shall conclude with this point. From the start of the war on 25 February, the CBI has been working with the Ukrainian ambassador and his team on a humanitarian basis, with medical products, ration packs and food boxes. No wonder the Edelman Trust Barometer has found that business is the most trusted institution. This is business as a force for good.

Trade with the European Union

Lord Bilimoria Excerpts

Monday 21st March 2022 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, to mark the two-year anniversary of delivering Brexit, the Government have set out new plans to maximise the benefits of Brexit. I mention my right honourable friend the Minister for Brexit Opportunities; I think the House will recognise that this is a subject extremely close to his heart. A Brexit freedoms Bill will be brought forward to end the special status of retained EU law and ensure that it can be more easily amended or removed. This is very much to be welcomed.

[Lord Bilimoria (CB)]

My Lords, the Department for International Trade did a fantastic job in rolling over the 66 bilateral trade agreements the EU had with other countries. It is now starting to make them bespoke to our country. Does the Minister agree that, with the TCA with the EU, we have the opportunity to build on the agreement we have now? There is a “but”: when does the Minister think we will resolve the issues with the Northern Ireland protocol? The sooner we do, the sooner we can build on the TCA.

[Lord Grimstone of Boscobel (Con)]

My Lords, first, I thank the noble Lord for referring to the hard work being done by officials in the department. As to Northern Ireland, the Government’s absolute priority is to protect stability and the peace process. We believe that there is a deal to be done with the EU that protects the sovereignty of the UK and the integrity of the EU single market. This would deliver the stability that business and communities in Northern Ireland need. I know this is a subject very close to my right honourable friend the Foreign Secretary’s heart.

CPTPP (International Agreements Committee Report)

Lord Bilimoria Excerpts

Tuesday 1st February 2022 Grand Committee

[Lord Bilimoria (CB)]

My Lords, in a speech on 19 November 2021 at the University of Birmingham, where I am proud to be chancellor, His Excellency George Brandis, the Australian high commissioner, announced that in September the US, the UK and Australia had signed the AUKUS trilateral security partnership. He said:

“The Indo-Pacific has become a centre, perhaps the global centre for strategic competition, certainly it is one of the principal global centres of strategic competition today. Prime Minister Johnson has acknowledged that ‘the world is tilting on its economic axis and our trade and relations with the Indo-Pacific region are becoming ever more vital than before’. The United Kingdom Government’s recently released Integrated Review demonstrates that this country recognises the geopolitical and economic centre of gravity is moving to the south and to the east, to the Indo-Pacific region … the momentous trilateral partnership will promote security and prosperity in the region for decades to come. As will other arrangements in the region like, for example the CPTPP (the Comprehensive and Progressive Trans-Pacific Partnership), which Australia hopes the United Kingdom will accede to next year.”


On 21 January this year, the Australia-UK Ministerial Consultations, AUKMIN, took place. There, Australia

“welcomed the progress made by the UK toward its accession to the … CPTPP … as a priority of the CPTPP membership. Both sides looked forward to continuing to work at pace on the accession process, reflecting the importance of advancing the CPTPP’s high-standard rules and promoting free trade and open and competitive markets.”

This country makes up under 1% of the world’s population, yet we are one of the six largest economies in the world. The UK has always been a great trading nation. We are the second or third-largest recipient of inward investment at any time. We are the second-largest services exporter in the world. We punch well above our weight. The reasons for joining the CPTPP are to increase trade and investment opportunities, to diversify trading links and supply chains, to secure the UK’s future place in the world and to advance our long-term interests. It will be an important part of our strategy to place the UK at the centre of a modern, progressive network with dynamic economies and, in that, to live out this global Britain mantra for businesses and investors.

Joining the CPTPP will help us to forge a leadership position in a network of countries and send out a powerful signal to the world. It will also be about championing free trade and liberalisation, fighting protectionism and removing barriers all the time.

In July 2020, Liz Truss, then Secretary of State for International Trade, said:

“But of all the opportunities I’ve seen, I think CPTPP is one of the greatest. It covers 13% of the global economy—if you had the UK that would be 16% … Membership of CPTPP would hitch the UK to the fast-growing Pacific region. It also helps us strengthen our ties with some of our key international allies like Canada, Singapore and Australia … We would be able to accede to this agreement in ways that don’t damage our national sovereignty … What it allows us to do is to be part of a modern, rules-based free trade area.”


There are huge benefits: modern digital trade rules that allow data to flow freely; eliminating tariffs on UK exports more quickly, such as on whisky, down from 165% duties to 0% in Malaysia; and reducing car duty to 0% in Canada by 2022 if we finish the negotiations—two years earlier than through the UK- Canada trade deal. When it comes to market access, the CPTPP provides for the almost complete liberalisation of tariffs among the participants; tariffs are retained in only a few sensitive areas—I can give examples. Here is the good news: it provides a single set of rules of origin, allowing content from all CPTPP countries to be cumulated, meaning that if goods have at least 70% CPTPP content they qualify for preferential tariffs. That is great; that 70% can come from any combination of CPTPP countries.

The agreement covers 11 countries, and I congratulate the noble Baroness, Lady Hayter, and her committee on their report. For completeness, the countries are: Australia, Canada, Japan, Mexico, New Zealand, Singapore, Brunei, Chile, Malaysia, Peru and Vietnam. We formally made our request to join on 1 February 2021, and the Minister for Trade Policy, Penny Mordaunt, said that the Government hoped to have negotiations concluded by the end of 2022. Could the Minister confirm that it is very much the objective to do that? We of course signed the Australia free trade agreement on 16 December 2021.

The committee raised various concerns about food standards, climate regulations, intellectual property and the protection of data, and the Government responded. On personal data, for example, they said that the CPTPP would not affect the current position, which is that

“individuals’ data protection rights are protected and upheld when their data is transferred overseas”.

Could the Minister confirm that?

Could the Minister also confirm that we are making the most of our relationship now, having completed the Australia free trade agreement, which I will come to soon? We already have bilateral agreements with eight of the 11 CPTPP countries—nine if we add New Zealand, which we will hopefully conclude soon. Could he update us on how soon he thinks the New Zealand agreement will be concluded? Then it will be only Malaysia and Brunei that we do not have bilateral free trade agreements with.

With these 11 countries making up 13% of global trade, according to the World Bank, as I said earlier, that amounts to £110 billion of trade for the UK as things stand. That is higher than the amount of trade with China, which is just under £100 billion. This is one of the largest free trade agreements in the world. The first phase of the negotiations, from September to November 2021, covered the UK’s compliance against each of the CPTPP chapters. We have submitted our evidence, which the members are currently reviewing before giving the green light to progress on the second phase. Could the Minister update us on where we are on that?

We will then negotiate market access. There are, of course, political sensitivities that we have to accept around China and Taiwan both announcing that they want to join the CPTPP, and Thailand and South Korea wanting to join as well. China will require significant work to meet CPTPP rules. The good news—I would like the Minister to confirm this—is that this could add momentum to the UK’s accession bid because bids are looked at one after the other and not in parallel.

The CPTPP is key for the success of global Britain. Globally, as I said earlier, the axis is shifting. The world economy is thriving to become greener, more services-orientated and tech-driven. Asia is taking centre stage to become a key export destination of the world. CPTPP members are the fastest-growing economies in the world, with an expanding middle class that has an appetite for British goods, products and services. They respect brand Britain. For the UK to remain globally competitive it must position itself as a trading partner of choice in the region.

Membership of the bloc has potential to deliver new opportunities for British business across many different sectors. The CPTPP could enable UK businesses to make products for all different markets without the need to change processes, parts, suppliers or components. This would be a critical enabler of UK supply chains, allowing companies to import and export components more easily and making investments more competitive. A deal could free up data flows, the lifeblood of the modern economy, for UK business across the Pacific, cutting across the UK service sector.

There is also a chance—a tantalising prospect—that the deal might help UK-US trade. The US helped shape some of the provisions under this trading bloc and, although it is not a member, the decision to rejoin may still be up in the air. Could the Minister acknowledge whether this is the case?

Central to the success of this deal is to make sure that it works for business. It is key that negotiations are not rushed and that the necessary carve-outs are made to protect UK business interests. As president of the CBI, I was personally involved in the rollover of the EU bilateral trade deals of 66 countries; we played a crucial role to help that happen on time. We also played a major role in the Australia-UK free trade agreement, working alongside the UK and Dan Tehan, the Australian Trade Minister, who was the vice-president of the accession committee of the CPTPP, and George Brandis, the high commissioner I mentioned earlier. We also have the New Zealand deal, working with High Commissioner Bede Corry. Now, of course, we have just launched the formal negotiations of the India free trade agreement with the UK.

Businesses must have a seat at the table, particularly as the UK progresses towards more in-depth second phase negotiations with members bilaterally. Could the Minister assure us that business will be around the table? The CBI stands ready to help. The UK will need to think how it uses its existing bilateral deals with individual countries to facilitate the access. Dan Tehan of Australia has said very openly that he will help in every way to try to complete this by the end of this year.

This deal will contribute to the levelling-up agenda as well. For example, the east Midlands alone exports £3.1 billion of goods to these markets. Joining the agreement could further facilitate this trade and contribute to us closing the gap in regional disparities. But this will require supporting more businesses to export, particularly those that are new to it. To this extent the Government’s export strategy is welcome, but superstar exporters—that is, companies that export more than 10 products to more than 10 countries—make up 14% of our exporters. In Germany it is 40%.

The CPTPP is worth £8.4 trillion in GDP. It is a gateway to the Indo-Pacific region, which is going to account for the majority of global economic growth between 2019 and 2050. We are at the front of the queue. Let us make this happen very quickly. To conclude, I quote from George Brandis’s Birmingham speech again. Remember that the term has changed—it is no longer Asia-Pacific; we refer to the Indo-Pacific. George Brandis said in his conclusion:

“The future of the Indo-Pacific will impact all our futures. It will impact the future of Atlantic nations as well as Indo-Pacific Nations because increasingly it will become the fulcrum of world politics.”

Ethnicity Pay Gap Reporting

Lord Bilimoria Excerpts

Monday 25th October 2021 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, I am the first ethnic minority president of the Confederation of British Industry. From the outset, I wanted to find a way to champion ethnic minority participation across all businesses. I congratulate the noble Lord, Lord Boateng, on initiating this debate at this crucial time.

I am proud to say that, in the midst of the pandemic, the CBI launched the Change the Race Ratio campaign in October 2020. This aims to accelerate racial and ethnic diversity in business across the board. Our founding partners included Aviva, Brunswick, Deloitte, EY, Linklaters, Microsoft, Russell Reynolds, Schroders, the Investment Association, Unilever, Business in the Community, 30% Club, City Mental Health Alliance and Cranfield Business School. It is open to all businesses and institutions, large and small, and aims to create change in the business community. I am proud to say that, a year later, we have 100 leading organisations as signatories, from BP to Diageo to Odgers Berndtson to Glasgow University.

Organisations sign up to four things. The first is to champion the Parker review, launched in 2017, which recommended that there should be one ethnic minority director on every FTSE 100 board by the end of 2021 and one on every FTSE 250 board by the end of 2024. Sadly, today 20 FTSE 100 companies do not have a single ethnic minority director and only 54 FTSE 250 companies have one ethnic minority director. We have a long way to go. Research undertaken by campaign signatory Green Park, chaired by Trevor Phillips, revealed that there are no black chairs, CEOs or CFOs in the FTSE 100. We need to make a step change.

Secondly, organisations sign up to increase racial and ethnic diversity in senior leadership. Thirdly, they sign up to be transparent on targets and actions and specifically to disclose ethnicity pay gaps by 2022 at the latest. Fourthly, they sign up to create an inclusive culture in which talent from all diversities can thrive. I remember a Harvard Business Review article entitled “Diversity Without Inclusion Is Useless”. I have seen this first-hand from my own business, Cobra Beer, which started with just two of us. We built a mini United Nations, employing people from all over the world, from different backgrounds and cultures, and with different mindsets. That combination created a buzz, which created innovation, which created growth. I am so proud of it.

The CBI has just launched its economic vision for the UK for the next decade, called Seize the Moment. This includes creating an inclusive economy. The noble Lord, Lord Boateng, quoted the review of the noble Baroness, Lady McGregor-Smith, which said that improving participation would add an extra £24 billion to the economy. That is a huge underestimate; the figure would be far greater.

Many companies are leading the way. Eversheds, for example, set a public target to reach 10% ethnic minority UK partners by 2025. Google has set a target to support black executives and achieve at least 30% minority representation on its executive team by 2025.

We have learned from the experience with gender—specifically the Hampton-Alexander review—and gender pay gap reporting that change does not happen overnight. Gender pay gap reporting is now mandatory and what gets measured gets done.

McKinsey data from 2019 shows very clearly that the top quartile of companies that embrace diversity and inclusion are 36% more profitable than the bottom quartile. Deloitte has conducted surveys that show that companies that embrace diversity and inclusion are more innovative.

The ethnicity pay gap is over 25% in many companies. This gap should not exist. It is unacceptable. At the CBI, we report our ethnicity pay gap. Our director-general, Tony Danker, said in this year’s report:

“We still have a long way to go to eliminate institutional and systemic barriers in our workplace. It is in this spirit that we are committed to reporting on our ethnicity pay on a voluntary basis. Like our members, we want to do all we can to create a fair and inclusive workplace where everyone can thrive.”


To conclude, building diverse and inclusive workplaces is not only the right thing to do but has a strong business case behind it. Diversity increases employee satisfaction, helps to retain existing staff, attracts new staff, reduces recruitment costs, increases productivity and helps companies to better represent the communities they serve. Will the Government agree that we should make ethnicity pay gap reporting mandatory? What gets measured gets done.

Climate Change

Lord Bilimoria Excerpts

Tuesday 7th September 2021 Lords Chamber

[Lord Callanan (Con)]

As I said in response to a previous question, I admire the ambition of the noble Lord and his noble friend, but we have already achieved more than the vast majority of countries in the world. We have one of the most ambitious policies and one of the most ambitious reduction targets. We have made some of the fastest progress among all the G7 countries. Of course, it is right for the Opposition to keep pushing us to go further and faster, but we have done a lot.

[Lord Bilimoria (CB)]

My Lords, if anybody still has any doubts about the scale of the climate crisis, this report must surely put those to bed. As president of the CBI, I am very proud that one-third of the largest businesses in the UK with a market cap totalling £650 billion have already committed to net zero by 2050, but does the Minister agree that, although the UK’s 10-point plan is ambitious, we need to see more detail and clear timeframes for delivery?

[Lord Callanan (Con)]

Indeed. I can agree with the noble Lord on the first part of his question. It has been encouraging to see the number of major businesses that have joined us in the race to net zero. I pay tribute to the work of the CBI in helping us to do that. But we have already set a number of quite ambitious targets. We have legislated in this House for the carbon budgets, and we will produce the net zero strategy before COP, which will see further progress.

Covid-19: Vaccine Production

Lord Bilimoria Excerpts

Thursday 17th June 2021 Lords Chamber

[Lord Callanan (Con)]

My noble friend is correct and speaks with great authority on this subject, but the best way forward is voluntary licensing and technology transfer partnerships. They are making a real and positive impact on vaccine delivery, and the UK Government will of course do all we can to facilitate this process.

[Lord Bilimoria (CB) [V]]

My Lords, as president of the CBI, I chaired the B7, which fed into the G7. The B7 was attended by Dr Ngozi, the new director-general of the WTO. There was unanimous agreement on the free flow of trade for the manufacture and distribution of vaccines. Do the Government agree that there needs to be unhindered trade for vaccine manufacture and distribution? The Pfizer/BioNTech vaccine, for example, contains 280 different components, manufactured in 86 different sites across 19 countries. Does the Minister also agree that, although it is good that the UK and US have agreed to supply 600 million surplus doses of vaccines around the world, what is actually needed is for the wealthiest countries in the world to urgently finance and help enable the manufacture and distribution of 11 billion doses, including at the Serum Institute of India, which the Minister just mentioned?

[Lord Callanan (Con)]

There was a lot in those questions. The best way to facilitate this is through the COVAX initiative. The UK is proud to be one of its largest funders. We have helped to raise almost $1 billion for that initiative, which is helping to supply vaccines to 92 developing countries across the world.