Subsidy Control Bill

Debate between Lord Callanan and Lord German

Committee stage
Wednesday 2nd February 2022 Grand Committee

[Lord Callanan (Con)]

The noble Lord is dragging me into hypotheticals, but obviously the purpose of the Bill applies to the whole of the United Kingdom, so the principles would apply across the whole country, yes.

[Lord German (LD)]

The Minister has mentioned the question of guidance twice. Guidance is not law, of course, unless it is. It exactly what it is meant to be: guidance. Given the importance of guidance to the question of what an area is, would it be possible for this guidance to be issued, even in draft form, before we conclude this Bill, so that we can at least know what is in the Government’s mind?

[Lord McNicol of West Kilbride (Lab)]

Just to take both earlier points, if the Secretary of State defined an area as the whole of the United Kingdom, and that covers it, part of the subsidies could be used to move businesses inside the whole of that area. If that is the case, it defeats the whole purpose of it, does it not?

Newport Wafer Fab

Debate between Lord Callanan and Lord German

Monday 6th December 2021 Lords Chamber

[Lord Callanan (Con)]

I do not have that information to hand. It would depend on what firms the noble Lord refers to and what form of suppliers they were. There are many hundreds of companies that serve some of these large manufacturing plants. As I said in response to an earlier question, we understand the importance of semiconductor manufacturers. We support this by the Engineering and Physical Sciences Research Council and we support the commercialisation of projects under the Compound Catapult, and we will continue to do so.

[Lord German (LD)]

My Lords, the suspicion locally is that the security part of the review is over, and the hunt is on to buy up shares for Nexperia to create a Chinese-UK company. Given the importance of this to electric vehicle manufacturing, of which there is a massive need at present, and to jobs to be created locally, does the Minister agree that this should be the Government’s prime initiative, and that we need a speedy solution so that investment can take place?

[Lord Callanan (Con)]

I know the concerns locally about the investment. I have spoken to Newport’s MP about this, and she expressed her views on the takeover. As I have said, we have taken all those factors into consideration, particularly that of national security, which the National Security Adviser is currently considering this takeover on, and we will reach a decision on that shortly.

Offshore Gas Rigs

Debate between Lord Callanan and Lord German

Thursday 11th March 2021 Lords Chamber

[Lord Callanan (Con)]

There are significant practical and operational difficulties, which the noble Lord alludes to. However, I am happy to tell him that flaring intensity decreased by 22% in 2020 from 2019 levels, as production facilities cut the overall volume to 33 billion cubic feet.

[Lord German (LD)]

Despite what the noble Lord just said, the portion of flaring due to what I would loosely call economic reasons has been rising over the last three years—that portion is economic. Given that Norway has now found ways of reinjecting this waste back in, and that there are other solutions as well, what are the Government fearful of in trying to tackle this rising problem?

[Lord Callanan (Con)]

The data that I have just quoted shows that it actually fell last year. However, the noble Lord makes a good point; we should try to reuse these gases as much as possible. A number of companies are working on solutions, such as generating electricity on platforms et cetera. However, there are significant practical difficulties.

Construction Industry: Retention Payments

Debate between Lord Callanan and Lord German

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

I join with the noble Lord in paying tribute to the work of the late Lord O’Neill: as the president of the Specialist Engineering Contractors’ Group, he was active on this issue for many years and instigated an inquiry on it in 2002. As I have said, given the complexity of the policy issues, there remains no consensus on the way forward, but we will continue to examine the issues, to work with industry and to seek a solution to this problem.

[Lord German (LD)]

The last two paragraphs of the Government’s responses paper lay out only two policy options: the retention deposit scheme or phasing out retentions completely. May I follow the noble Lord, Lord Aberdare, in pressing the Minister? He already has the responses and knows the two options before him. Can he tell us when the legislation will come forward to make this happen? It is much needed and will avoid late payments, non-payments and insolvencies.

[Lord Callanan (Con)]

Those are two of the alternatives that have been suggested as a policy response. Changes in this area would require primary legislation, and there is always pressure on the Government’s legislative timetable. We think that working with the industry to seek a consensus is a good way forward, but there is not yet a consensus: some notable companies are against a deposit retention scheme or the other policy option the noble Lord mentioned.

Rolls-Royce

Debate between Lord Callanan and Lord German

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

As I said in previous answers, we are supporting Rolls-Royce extensively, but Covid-19 has had a devastating impact on the aerospace industry globally—Airbus and Boeing, the two largest companies, have reduced production by around 40%. We are doing all that we can to help companies such as Rolls-Royce at this difficult time—as its chief executive, to be fair, made clear when making this announcement.

[Lord German (LD)]

My Lords, this pre-Covid decision by Rolls-Royce has an appalling effect upon the skilled workers in that company and, at the same time, on those workers who are to follow. Advanced manufacturing technology is an important part of the apprenticeship programme and apprenticeship numbers are tumbling. How are the Government going to rectify that matter and put back into place the sort of advanced manufacturing skills which the apprenticeship scheme should provide but is failing to do?

[Lord Callanan (Con)]

We are providing extensive support for training opportunities. I have already outlined the enormous support that we are giving to Rolls-Royce and other high-tech manufacturing facilities. I agree with the noble Lord that we need to do more in this field; we need to get more people online and more jobs in these sectors.

REACH and CE

Debate between Lord Callanan and Lord German

Thursday 17th September 2020 Lords Chamber

[Lord Callanan (Con)]

Under the terms of the Northern Ireland protocol, Northern Ireland will remain aligned with all relevant EU rules relating to the placing on the market of manufactured goods and with the EU REACH system.

[Lord German (LD)]

My Lords, the UKCA marking will not be applicable in Northern Ireland, whereas the CE marking will be, as well as the UKNI marking. Can the Minister afford the House some advice? What advice would he give to suppliers and traders working in the United Kingdom and producing in Great Britain if they might see their goods popping up in a shop in Northern Ireland? Should they register both with the CE marking and the UKCA marking to ensure that their goods can be marketed not only in Northern Ireland but across the European Union?

[Lord Callanan (Con)]

If those traders wanted to sell their goods into the European Union market, because that was the system they had, they would have to be CE marked. They would have to comply with similar standards if they wanted to sell them in the North American market.

Brexit: Trade in Non-financial Services (EUC Report)

Debate between Lord Callanan and Lord German

Monday 18th December 2017 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, it is a privilege to respond to the debate today on the Select Committee’s report, Brexit: Trade in Non-financial Services. I am conscious of the late hour so while I will endeavour to respond to as many as possible of the points that have been made, if I miss one or two then I will look at the record and will be happy to write to noble Lords to respond to them.

I put on record my appreciation of the work of the EU Internal Market Sub-Committee, chaired so excellently by the noble Lord, Lord Whitty, who provided an excellent introduction to our debate today. Indeed, I thank all noble Lords for their excellent contributions; I think everyone spoke extremely well. Obviously I do not agree with every point that has been made, but nevertheless I think it has generally been an extremely constructive debate. The committee’s expertise and strength of analysis is clearly demonstrated in the report.

First, I shall deal with a point that has rightly been raised by the noble Lord, Lord Whitty, and other noble Lords. I recognise the frustration that the Government have not yet provided a response to the report. The Brexit negotiations are the most important negotiations that our country faces, and reaching a new partnership with the EU is in the interests of both sides. As such, the timing of any information that we publish is carefully considered to support the UK’s negotiators in securing the best possible outcome, a point that my predecessor mentioned in her letter to the noble Lord, Lord Whitty, on 26 October this year. However, I assure noble Lords that a response to the committee is now in full preparation, and we will fully reflect policy developments and the progress of the negotiations in that. I expect to be able to publish it early in the new year.

[Lord German]

Which year?

[Lord Callanan]

The new year. Many of the points raised by this report about our future partnership with the EU and the future of the non-financial services sector relate directly to the second phase of negotiations, which I am delighted to say we will be beginning soon. As such, I hope noble Lords will understand that I will not be able to go into great detail on some areas at this stage.

Through the negotiations we will pursue a bold and ambitious free trade agreement with the EU to ensure the freest possible trade in services, and to support the continued success of the UK’s professional and business services. Since the publication of the committee’s report we have made good progress in the first phase of negotiations, as demonstrated by Friday’s announcement that sufficient progress has been made. A key element of any future partnership will be how the UK and EU continue to trade services, a sector where the UK is a global success story. However, we cannot be complacent about this, a point well made by my noble friend Lady Noakes, who rightly drew our attention the challenges that the future flexible adaptation of services will provide to this country—opportunities that are available outside the EU.

Services are one of the fastest-growing components of the global economy and accounted for 79% of the UK economy in 2016. In his excellent speech, my noble friend Lord Wei was right to draw our attention to the need to focus on the future prospects and how we can develop and expand the sector. Both the UK and EU member states benefit from our close trading relationship. The UK exported about £63 billion-worth of non-financial services, and about £27 billion-worth of financial services to the EU in 2016—I am mindful of the scepticism that noble Lords have expressed about statistics, but those are the latest that I have.

However, it should also be noted that the UK exported significantly more in both non-financial and financial services to countries outside the EU. UK services exports to countries outside the EU grew at a faster rate than service exports to EU member states over the period 1999 to 2016.

Let me now address some of the issues covered in today’s debate. On the subject raised by many noble Lords—but in particular by the noble Lord, Lord Liddle—freedom of movement, yes, of course it is the policy of my party, as exemplified in our manifesto at the general election, that we will end freedom of movement when we leave the EU. That is the policy of the Conservative Party. What he forgot to mention was that it is also the policy of his party to end freedom of movement—or at least it was last week; perhaps this week it has a new policy, but that was the policy. At least the Liberal Democrats have the benefit of consistency, although they got only 7% of the vote as a benefit of that consistency at the general election. Both the major parties committed to ending freedom of movement. Pointing out that it was the policy of my party is of course correct, but the noble Lord might have had the good grace to acknowledge that it is also the policy of his party.

The noble Baroness, Lady Hayter, asked me about consumer organisations. Two Ministers, Robin Walker and Margot James, recently held a round table with consumer groups. I am due to meet various consumer groups in the new year. In April, in evidence at the EU Justice Sub-Committee, another consumer group, Which?, said that it had very good contact with government throughout the process. We will of course have further meetings with those groups.

In response to my noble friend Lord Green, we will seek to ensure continuity, including as we move into any agreed implementation period. The way in which we maintain our international agreements during any implementation period will of course depend on the terms agreed with our EU partners.

The noble Lord, Lord Aberdare, asked about alignment. Of course, we start from a unique position, with the same rules and regulations, as the Prime Minister set out in her speech in Florence. We are committed to making the UK the best place in the world to do business, and this will mean fostering a high-quality, sensible, predictable regulatory environment. We are listening to businesses and want to minimise the regulatory and market-access barriers for both goods and services.

The noble Baroness, Lady Donaghy, asked how we are collecting more accurate statistics. We are working to best use current services data to inform our approach in future trade negotiations, and to explore new types of data. She also asked about the Trade Bill. The Trade Bill, introduced on 7 November, will ensure that the UK has the necessary legal powers and structures in place to enable us to operate a fully functioning trade policy on day one of our exit from the EU. The Bill will also establish an independent body, the Trade Remedies Authority, to conduct trade remedies investigations, providing a safety net for domestic industries against unfair and injurious trade practices or surges in imports consistent with our legal obligations in the World Trade Organization. The noble Baroness will also be aware that in the summer, we published a paper on enforcement and dispute resolution procedures. Given the absence of time, I shall not go through all the details of that.

I turn to the subject of professional business services, which a number of noble Lords mentioned. We agree with the committee’s recommendation that we must be mindful of the significance of professional and business services. The sector is the single largest exporter across all sectors of the economy, with 26% of services exports to the EU in 2016, a point well made by the noble Lord, Lord Whitty, in his introduction. The Government understand the concerns of the sector, including access to talent, being able to move people across borders to provide services, the importance of cross-border data flows and the mutual recognition of qualifications, on which I shall say more shortly. We also recognise the importance of access to talent and the fly-in, fly-out business model for the professional and business services sector. The Government will create a fair and sustainable immigration system that works for the whole of the UK.

To respond to the point made by the noble Baroness, Lady Randerson, and the noble Lords, Lord German, Lord Davies and Lord Whitty, the UK will remain an open and tolerant country that recognises the valuable contribution that migrants make to our society; it welcomes those with skills and expertise to make our nation better still.

The Government understand the report’s concerns regarding the challenges facing some parts of the sector, including the current provisions that support legal services trade. We also recognise the importance of rights of establishment to services sectors. The World Trade Organization estimates that around 55% to 60% of services trade relates to establishment overseas. The committee’s report noted how the trade in services agreement, or TiSA, provides an opportunity to update the global terms of trade for many services. The negotiations on TiSA are currently on hold; however, the UK continues to be committed to an ambitious agreement.

A number of noble Lords raised digital services, particularly the noble Lords, Lord German and Lord Aberdare. We are committed to ensuring that the UK is the global leader in starting and growing a digital business, trialling new technology or undertaking advanced research. On 1 March, the Government published the UK digital strategy, which has put in place the conditions to ensure that the UK’s digital sectors can remain world leading, alongside ensuring that the benefits of digital are felt across the whole of our country. The ability to collect, share and process data is crucial for many sectors, from financial services to tech and energy companies. The noble Baroness, Lady Randerson, was right to highlight the successes of that sector.

Data transfers are also crucial for our ability to co-operate across borders on law enforcement and security issues. On 24 August, we published a paper entitled, The Exchange and Protection of Personal Data. This set out how we want to ensure the continued protection and exchange of personal data between the EU and the UK, in light of the UK’s withdrawal from, and new partnership with, the EU. In addition, as part of the Government’s commitment to ensure that the UK’s digital sectors remain world leading, the Data Protection Bill was introduced on 13 September. The Bill is intended to create a new data protection framework fit for the digital age, which incorporates the provisions of the EU’s general data protection regulation into our domestic law. The Bill will ensure that the UK is prepared for the future after we have left the EU.

In response to the point of the noble Lord, Lord Aberdare, the Government agree with the report regarding the need to engage with the digital single market. To date, the UK has been a leader in the emerging digital single market, arguing for an open and flexible market with a regulatory framework that reflects the dynamic nature of the digital economy. The committee’s report highlighted the importance of data flows. We recognise the importance of the free flow of non-personal data initiative, and resisting the introduction of unjustified data localisation requirements by other member states.

The noble Lord, Lord Aberdare, drew our attention to mobile roaming. Of course, he is correct that roaming surcharges for travel within the European Economic Area were abolished in June. Of course, in the course of Brexit negotiations, we will seek the best possible deal that delivers for UK consumers and businesses in this sector.

A number of noble Lords raised the issue of creative services, particularly the noble Lords, Lord German and Lord Aberdare, who drew our attention to the successes of the music industry. They are, of course, right. The creative sector is one of the UK economy’s greatest success stories, and is growing by 8.9% a year, making it the second fastest growing industrial sector. The high-quality content and talent produced and developed is both recognised and respected across the world. The committee’s report recognises the broadcasting sector. The UK is the EU’s biggest broadcasting hub, hosting a large number of international broadcasting companies, a point well made by my noble friend Lord Inglewood. As the committee has observed, the EU regulatory framework underpins the business model of many international broadcasters currently located in the UK, as the noble Lord, Lord Aberdare, reminded the House.

We agree with the report that continued strong protection for intellectual property is important. It helps to protect individuality and support innovation in the creative sectors. The noble Lord, Lord German, asked about intellectual property. Globally, the UK has a competitive edge in protecting and enforcing intellectual property rights. We are discussing options with users to ensure that the UK’s intellectual property regime, including protection of unregistered designs, will continue to properly support innovation and the UK’s creative industries. The report also mentioned the limitations of TRIPS. As part of its WTO membership, the UK has committed to meet certain minimum standards of intellectual property protections set out in the TRIPS agreement. I am pleased to say that, in many cases, existing UK law—either domestic or EU-derived—goes beyond these standards. We do not expect that situation to change as a result of leaving the EU.

The noble Lord, Lord Whitty, asked me about air services. As a former Aviation Minister, this is an issue close to my heart. Aviation is a critical network industry that underpins the functioning of the economy and international trade. The UK has the largest aviation network in Europe and our airports service is the third largest aviation network in the world. It is in the interests of both sides to maintain closely integrated aviation markets. The Government are seeking the best possible relationship with the EU in the field of air services and are looking at all the options to deliver that. The precise form of the UK’s future air services relationship, including with EASA and SESAR, will be a matter for the negotiations. The committee’s report mentions bilateral air service agreements. Air services between the UK and a number of countries outside the EU—notably the US—are currently determined by EU-negotiated agreements. The Government will be seeking new, bilateral, arrangements with those countries as a matter of priority. The target is to ensure that market access levels are preserved and to have identified arrangements for this before we leave the EU.

We also acknowledge in the report that ownership and control rules may have implications for both UK and non-UK airlines. The UK is, and will remain, an excellent base to do business, to establish headquarters or to found a business, including in our world-renowned aviation sector. It would not be appropriate for me to comment on the contingency plans of individual airlines. The report correctly highlights that there is no WTO provision regarding aviation services. This is a fundamental consideration when it comes to negotiating our future relationship with the EU. EU member states benefit from liberal market access. We have a common interest in getting the best possible outcome.

A number of noble Lords mentioned tourism, education and health-related travel services. The noble Baroness, Lady Donaghy, in particular, talked about education. The Government recognise the social and economic benefits of a healthy tourism sector. The UK and the EU have a common interest in securing a mutually beneficial agreement on tourism in future. The noble Baroness asked about EU students. We highly value the contribution of EU and international students, researchers and academic staff. We have listened to the concerns of the higher education sector and taken action to provide greater certainty for it.

We have already committed to underwrite successful bids for Erasmus+ which are submitted while the UK is still a member state, even if they are not approved until after we leave and/or payments continue beyond the point of exit. Home fee status is also secure for the duration of students’ courses. Bids for higher education study periods submitted before the exit date will include mobility in the 2018-19 and 2019-20 academic years. We have also confirmed that research councils will continue to fund postgraduate students from the EU whose courses start in 2017-18.

The report mentions trade in education and health-related travel services. The reciprocal rights that will apply following the UK’s exit are subject to the wider negotiation on our future relationship with the EU. We support existing processes of voluntary co-operation in higher education, such as the Bologna process, which contribute to improving skills and employability in increasingly competitive global environments.

I will say a word about the mutual recognition of qualifications, which was raised by the noble Lords, Lord Whitty, Lord German and Lord Berkeley, and the noble Baronesses, Lady Donaghy and Lady Hayter. They all raised the importance of the mutual recognition of qualifications, which has also been the subject of negotiations on the withdrawal agreement. The Prime Minister has been clear that she wants EU nationals in the UK and UK nationals in the EU to be able to continue their lives broadly as now. That is why we have agreed the continued recognition of qualifications where recognition decisions were received or where recognition procedures were ongoing before the withdrawal date. This will cover qualifications recognised under the mutual recognition of professional qualifications directive, lawyers practising under host title and approved statutory auditors.

We are committed to getting the best possible deal for the United Kingdom in negotiations; that includes for the non-financial services sectors. We will continue to update Parliament on the negotiations for our departure from the European Union. Again, I would like to reassure noble Lords that we are working to formally publish our response to the committee’s report as soon as possible, and that will be early in the new year.

I am grateful to all noble Lords for their contributions over the course of this wide-ranging and informative debate. I am sure that the House will continue to play a valuable role in the work of the Government and contribute towards securing a deal that works for everyone.