Visas

Lord Fox Excerpts

Monday 21st October 2019 Lords Chamber

[Baroness Williams of Trafford]

I shall do that with gusto. Every time the noble Lord asks me a question, I am educated.

[Lord Fox (LD)]

Turning from the high seas to our green and pleasant land, the Minister will be aware that there is already a recruitment problem for workers coming to harvest the crops in this country. The upcoming Immigration Rules will exacerbate this problem massively. It is not only tier 1 academics and people like that, but also people who work on the land, in our care homes and across our economy. That economy is going to be damaged by these rules. Can the Minister undertake to reassess the thresholds that are being used?

[Baroness Williams of Trafford]

We are trying to achieve a fair immigration system for those who are visiting, those who are staying for a short time and those who are coming to work, from EU and non-EU countries. Looking forward, we are going to create a points-based system so that we can attract the brightest and the best to this country.

Gender Pay Gaps

Lord Fox Excerpts

Wednesday 8th May 2019 Lords Chamber

[Baroness Williams of Trafford]

I thank the noble Lord very much for raising that. I do not disagree with him that BAME representation, not only in organisations but also on things such as FTSE 100 boards and FTSE 250 boards, is diabolical. We always saw gender pay gap reporting as a start on this journey—which is absolutely not to dismiss the noble Lord’s point that we have an awful lot further to go.

[Lord Fox (LD)]

My Lords, in her initial Answer, the Minister talked about holding businesses to account. Can she set out what sanctions the Government have to hold businesses to account and what thresholds they will use when they apply those sanctions?

[Baroness Williams of Trafford]

As I said to the noble Baroness, Lady Burt, the EHRC has enforcement powers if people are misreporting or not reporting at all. Although the story so far has been very good, with almost 100% compliance, sanctions are within the EHRC’s powers.

Trade Bill

Lord Fox Excerpts

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

Moved by

[Lord Fox]

66: After Clause 5, insert the following new Clause—
“Trade agreement with the EU: mobility framework
It shall be the objective of the Secretary of State to take all necessary steps to secure an international trade agreement with the European Union which includes a mobility framework that enables all UK and EU citizens to exercise the same reciprocal rights to work, live and study for the purpose of the provision of trade in goods or services.”

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[Lord Fox (LD)]

My Lords, we have come to the fourth day of Committee on the Bill. Before the noble Lord, Lord Liddle, became herald to this issue, we really had not talked about people. Trade is about people—it is about people who make and sell things, people who sell their services abroad, and people who come to this country to sell their services and goods to us. There are strong arguments for the preservation of free movement in any future treaty. Amendment 66 requires the UK to negotiate with the EU an international trade agreement that allows UK and EU citizens to continue to work, live and study abroad.

Free movement is good for the economy: it boosts efficiency and innovation. Meanwhile, its impacts on public services, crime and unemployment are generally positive—I will come back to those points shortly. There is a cultural and societal benefit which comes with the opportunity to work, live and study in other cultures and develop mutual understanding and friendships. These are often set to one side and referred to as “soft power” in a way which suggests that they are somehow less useful than hard power. However, these are important things, to do with the influence of our country in the rest of Europe. I will focus on the first two elements of the benefits from free movement.

In no small measure, we have a Prime Minister who is obsessive about the need to end free movement; this is reflected fully in the political declaration and the way we are moving forward. As the Minister set out, there is some outline in the political declaration, but of course, as the noble Lord, Lord Kerr, pointed out, it is merely a wish and not a reality. The political declaration says that free movement of people will end—we know that that is what the Prime Minister set out to achieve. The UK and the EU will provide visa-free travel, but only for short-term visits; both parties will consider visa conditions for research, study, training and youth exchanges; both parties will consider addressing social security co-ordination; both parties will consider measures to minimise border checks; both parties will seek to co-operate on parental responsibility measures; and there will be a framework to enable people to travel temporarily to the other territory for business purposes. The exception to this is the common travel area within Ireland, which will be unaffected. However, the rest of the immigration process, just like the rest of Brexit, is left hanging.

I am interested in what the Minister can say; clearly, he may not be able to say it directly. Those bullet points are interesting, and are clearly a result of a joint discussion between the European Union and the United Kingdom. Which of those points arose from the United Kingdom’s point of view and wish list, and which of them came from the European Union? In other words, what was the thinking of the two parties going forward?

Before we look at the trade influences specifically, I want to make the point clearly that ending the free movement of people in and to this country is a stupid idea. I shall take as my text to prove this the Migration Advisory Committee’s report of 18 September. When it comes to the impact of economic migrants from the EEA, the committee finds that, overall, there is,

“no evidence that EEA migration has reduced employment opportunities for UK-born people on average”,

and that overall there is,

“no evidence that EEA migration has reduced wages for UK-born workers on average”.

The committee notes that there is:

“Evidence that immigration has, on average, a positive impact on productivity”,


and:

“High-skilled immigrants increase innovation”.


I remind your Lordships that those two issues of innovation and productivity are key objectives of the Government’s Industrial Strategy. The committee also notes that EEA migrants,

“make a larger contribution both in terms of money and work to the NHS than they receive in health services”,

and that there is:

“No evidence that migration has reduced the quality of healthcare”.


Quite the contrary, I would say. Indeed, it is clear that the social care sector struggles to recruit sufficient people. With the current freedom of movement calling that into question, what will happen in the future?

The House of Commons Library estimates that in 2017 there were 10,705 doctors, 20,276 nurses, and 14,247 clinical support staff in the NHS who were EU nationals. It estimates that in the last two years the net number of nurses and midwives who were EU nationals, for example, has fallen by over 5,000. We heard in today’s Question Time about the struggle that the NHS is having to recruit future doctors. There were 41,000 nursing vacancies in England, and the Royal College of Nursing estimates that this will rise to 48,000 by 2023 as fewer start nursing degrees each year. In social care, things are much worse, with about 110,000 vacancies.

The Migration Advisory Committee found no evidence that migration has reduced parental choice at schools. Nor has it reduced attainment, and there is no evidence that it has an effect on the overall level of crime. The committee noted that EEA migrants pay more in taxes than they receive in benefits for public services. However, and tellingly, the committee is also not convinced that sufficient attention is paid to ensuring that the extra resources that have come in from those migrants is being spent in the areas where they live. That is a very important point.

Housing raises another important nuance. In pointing out that only a very small fraction of migrants occupy social housing, the committee also pointed out that, given that virtually no new social housing was being built, any migrant in social housing is excluding a UK-born tenant. The committee also found that migration has increased housing prices. It then went on to note that the housing issue cannot be taken in isolation from other government policy. “Hear, hear”, I say to that. For my part, it is clear that the woeful performance in housebuilding by successive Governments is a much larger irritant on the housing issue in this country than migrants. The evidence points to the need not to stop the beneficial flow of economic migrants but for targeted government investment in the communities that have generally been termed to have been left behind.

As the noble Lord, Lord Heseltine, so eloquently put it in his speech during our debate before Christmas, these communities will not be benefited by making Britain poorer, and one way to make the UK poorer is to end free movement.

It is fair to say that there is a huge cognitive dissonance between the published evidence of the Migration Advisory Committee and the political declaration and immigration White Paper. Her Majesty’s Government are seeking to exclude a group of people who contribute positively to our national life. Worse than that, in justifying their policies, they vilify that group for issues that are caused by government mistakes and mismanagement.

The immigration White Paper makes clear distinctions between what are termed skilled and unskilled workers—here we come to the point raised just now by the noble Lord, Lord Liddle. It uses the existing salary threshold of £30,000 to differentiate between those two groups of future employees. Yes, it makes the process of applying for tier 2 visas easier by proposing to abolish the 270,000 annual cap and the resident labour market test, which was a heavy administrative burden on businesses trying to hire from overseas. However, the salary cap is a fundamentally wrong proposal, because it conflates salary with skill. There are many jobs, not least in research and development, where experts are paid below that cap. They still have fabulous skills to offer this country, but they earn less than a £30,000 salary. The White Paper itself estimates that, overall, those restrictions would reduce the net inflow of EEA long-term workers by about 80% in the first five years. This would result in GDP being up to 0.9% lower in 2025.

So-called unskilled workers will not be offered a route into the UK in the long term, according to current proposals. In the interim, the Government will allow unskilled workers to apply for temporary, 12-month visas. This fails the logic test. High-skilled workers may be contributing more in tax, but lower skilled migrants are offering a huge contribution in the services they offer to this country. The Migration Advisory Committee report makes that clear.

There is also a tacit admission in the Government’s own words when they allude to work-related schemes. Once we start looking for sectors that might need such schemes, frankly, we can include the vast majority of the UK economy, but given that agriculture and the hospitality industry are two important parts of our international trade, perhaps the Minister can explain what volume of work-related immigrants the Government anticipate being admitted and how that equates to the stated needs of those two industries.

I am also anxious to learn the Government’s view on how self-employed people or freelancers will trade across the EU-UK border. Here I declare an interest, as I have at least one family member who is a freelancer. Self-employed people are vital to our service industry and dominate in particular sectors. I know that my noble friend Lord Clement-Jones will speak on their role in the tech and creative sectors, for example. How will self-employed people be able to contribute, going forward?

--- Later in debate ---

[Lord Framlingham (Con)]

I am listening very carefully to the noble Lord. Does he accept or acknowledge that there are any problems at all with the freedom of movement?

[Lord Fox]

If the noble Lord reviews what I said in Hansard, he will see that I talked about two particular issues highlighted by the Migration Advisory Committee.

In addition to listening for the reaction of the Labour Front Bench in this House, from the Government I am listening for the Minister to publicly acknowledge the benefits that EEA migrants have brought to the lives of all of us in the UK. More than that, I hope to hear the Minister confirm that Her Majesty’s Government understand that trade is intrinsically about people, whether working alone or in companies and organisations, and—as previous speakers have brought out—that this is even more important in an economy centred on services, such as ours. Therefore, the more they can move and trade, the better it is for the United Kingdom’s economy. I wish to hear that the Government understand that to restrain the trade of EEA nationals in the UK will not only forfeit the benefits they bring but materially restrain hundreds of thousands—if not more—UK people trading in the EU 27. I would like the Minister to rule out the use of this as a bargaining chip in negotiations. That is why I would like to write this into the Bill. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, my noble friend Lord Fox has introduced his amendment extremely eloquently and convincingly. In supporting it, I highlight the fact that without the right deal on movement of talent and skills, our creative industries will face major challenges. Some 5.7% of the UK workforce is made up of EU 27 nationals. However, 6.1% of the creative industries workforce is made up of EU 27 nationals. More than that, 10% of the design, publishing and advertising workforce are EU 27 nationals. Some 25% of our visual effects in film—VFX—workforce is from the EU, and that rises to 30% in gaming. We are highly dependent, in those areas of the creative industries, on EU 27 nationals.

Take the music industry, for example. Some £2.5 billion was generated by music in export revenue. Germany, France and Sweden are among our top export markets, and are major destinations for our musicians. In the recent ISM survey of musicians, 39% said that they travel to the EU more than five times a year; 12% travel to the EU more than 20 times a year. More than one in eight performers had fewer than seven days’ notice between being offered work and having to take it, and more than a third of musicians said they received at least half their income from working in the EU 27. There are warnings from these musicians from their experience with the rest of the world. More than a third of musicians had experienced difficulties with visas when travelling outside the EU. In fact, of those experiencing difficulties, 79% identified visas as the source of those difficulties. Musicians in particular rely on being able to work and tour in Europe freely, easily and often with little notice.

It is equally important that the other people vital to touring, such as roadies and technical staff, are able to travel on the same basis. It is also vital that instruments and equipment can be moved around easily, and this must be a reciprocal arrangement. On touring, the Government have said that the UK will look to reach an agreement allowing musicians and museums to tour major events with their equipment and goods. What is considered a major event is not clarified and there are few details on what an agreement would look like.

The Government propose that the new immigration system will preserve the current rules for employing non-visa nationals for short-term work to join a UK production. This allows them to work for up to three months without a visa, requiring only a certificate of sponsorship from their employer, which is cheaper and easier to obtain. For periods longer than three months, the Government are reaffirming that the current tier 5 creative and sporting route, which caters for creative workers such as musicians, actors or artists who are working and touring in the UK, will continue. This is welcome but, again, without the right reciprocal provisions, Brexit is likely to make touring much more difficult for musicians and crews to move across Europe. Increased red tape will make it harder to promote music overseas.

Then, if the withdrawal agreement is agreed, from January 2021 non-visa nationals looking to take up permanent employment in the UK, such as VFX workers, will need to obtain a tier 2 visa. This requires sponsorship from an employer, which must pay a skills charge to make the recruitment. Workers must meet a minimum salary requirement to be eligible for a tier 2 visa. Like my noble friend, I welcome that the Government now plan to consult on the appropriate level for this requirement in the coming year, but the Migration Advisory Committee—MAC—has recommended that it stays at £30,000. There will need to be considerable changes to these proposals if the Government are to ensure that sectors such as the creative industries continue to thrive post Brexit. As the Creative Industries Federation has said,

“high skills do not always command a high salary”.

There is still a huge lack of clarity. The UK Screen Alliance has criticised the plans for a post-Brexit visa system. It says the Bill’s proposed visa system will “severely limit” the VFX and animation industries’ access to international talent. It also says that expensive new EU visas will add significantly to operating costs and impact on the sector’s competitiveness in the global market. Alan Bishop, the chief executive of the Creative Industries Federation, said about the White Paper:

“Unfortunately there is very little in this white paper which will give creative businesses and freelancers in the UK any confidence for the future … government has failed to recognise the challenges freelancers face within the current immigration system—a significant challenge for the Creative Industries Federation where 35% of creative workers are self-employed. Freedom of movement has given British businesses access to the best and brightest freelancers from the EU, presenting those businesses with opportunities to grow and contribute to the continuing health of the UK economy. For international non-EEA freelancers however, the current immigration system provides no long-term route. This is why the Federation has called for the introduction of a freelance visa”.


Those are the words of two significant organisations in this field.

The Government have had plenty of time to consider all these issues and have had plenty of sound advice, not least from quarters such as the July report of the House of Lords European Union Committee, Brexit: Movement of People in the Cultural Sector. That is why this amendment is so important, and I very much hope that the Minister will reflect in his response that the Government fully understand the needs of the creative sector.

--- Later in debate ---

[Lord Bates]

I listened very carefully to the final words that the noble Lord used when he talked about “equal access”, and I draw back from that a little. But on the broad principle, when we talk about the scheme of preferences and economic partnership agreements that we have with Commonwealth countries, if we have an independent trade policy, of course we will be able to take that into account. We would be free to do that. Similarly, if we are not part of free movement within the EU and have our independent immigration policy, we are in a position to set out the terms on which we want to admit people to work in this country. I hope that is helpful to the noble Lord.

[Lord Fox]

My Lords, I thank noble Lords for the minimal debate that we have had around this. I will look closely at Hansard, but I did not hear the Minister refer to the £30,000 threshold issue and the false dichotomy between skilled and unskilled. Between now and Report, I would like the Minister to come back to that, and I apologise if he did indeed raise it.

[Lord Bates]

Before the noble Lord sits down—I have always wanted to say that—I did have some notes on that. Perhaps I could intrude on the noble Lord’s wind-up to say that the Government are committed to ensuring that the future immigration system works in the international interests of all the UK. The Migration Advisory Committee advised that the £30,000 salary threshold should still apply. The Home Office is undertaking an extensive programme of engagement on its White Paper proposals and will discuss with business and a variety of other sectors, including the creative industries, what a suitable threshold should be. If a skilled job is considered to be in shortage in the UK, a lower threshold is likely apply. I hope that helps the Committee and the noble Lord.

[Lord Fox]

It helps somewhat, and I urge the Government to consult extensively with the care and food service sectors. Hygiene skills, for example, benefit the food sector a lot. I am sure most employees there earn less than the scheduled threshold. There is also the issue of freelancers and self-employed people. I will not get the Minister up again but I will be looking for a response on that. I also did not hear from Her Majesty’s loyal Opposition anything other than what I would call a very weak response. It was, frankly, disappointing. With that proviso, I beg leave to withdraw.

Amendment 66 withdrawn.

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[Lord Bates]

That is the noble Lord’s position on this: the reality is that the Prime Minister is seeking an agreement that can command a majority in the other place and that requires compromise. That is what the agreement represents. The House made its view on the withdrawal agreement clear; she is now seeing whether that can be addressed with the Commission. Personally, I wish her well and every possible success, as opposed to my own mis-speaking. Lest it be on the record, I am sure that Sigmund Freud would have observed that perhaps I had momentarily let slip an inner feeling, which, of course, has nothing to do with the position of Her Majesty’s Government, which I consistently seek to put forward from this Dispatch Box and proudly support.

The noble Lord, Lord Purvis, asked about support for government amendments that preclude the facilitated customs arrangements. We would argue that there is nothing about the amendments made to the Taxation (Cross-border Trade) Act in the other place that is inconsistent with the draft political declaration that will inform the future relationship. On the point made by the noble Lords, Lord Hannay and Lord Stevenson, about insufficient focus on VAT implications, the Government have been clear that we are aware of the potential impact on businesses of any move away from the concept of acquisition VAT, but we have also set out that in any scenario we are seeking to avoid any adverse effects. Amendment 80 does not affect that in our view.

[Lord Fox]

On that last point, we keep talking about 29 March, but of course sales are already being made and shipping has already been arranged that may well arrive in this country or continental Europe after 29 March. The business decisions to invest, to make things and try to sell them have already been made, so minimising the impact is not possible. The impact has already started.

[Lord Bates]

Yes, there is a reason why we have brought back the agreement—to resolve the situation.

As for whether the amendments have been considered in the other place, the other place voted for two of the original amendments and had the opportunity to vote on another two but decided not to do so, so the other place made its view clear on that point.

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[Lord Fox]

My Lords, I am struggling, because I fear we are mixing our drinks a little. On the one hand, we have had some debate—particularly from the noble Lords, Lord McNicol and Lord Lansley—on the mechanics of a TRA. That is, what sort of people do we want, and how will they be governed? We clearly want competent people, which is to some extent going to be a tough ask—not because people are not clever enough, but because they have not practised this particular activity. On the other hand, the noble Baronesses, Lady McIntosh and Lady Brown, are talking about the politics and economics of trade remedy. In a sense, the noble Lord, Lord Lansley, alluded to the nexus between that decision—the politics of trade—and the role of the TRA. This debate is not unpicking those two activities.

We talk about having a wholly independent TRA, but as a country there seems to be some political convergence around the idea that we have an industrial strategy. Are the Government going to run one independently of the other? I am not sure that Germany does that. Even though Germany is beholden to Brussels, I am pretty sure that its trade policy—the way in which it works through Brussels—is very much beholden to its industrial strategy. Further homework is required for all of us.

I sympathise with the speech of the noble Baroness, Lady McIntosh, on the ceramics industry. That industry benefited in this country from the political clout of Spain and other countries which have similar problems. If we leave the European Union, that support and clout will be gone. That will be true for many industries in this country, not just ceramics—agriculture is a huge loser in terms of lobbying in a post-Brexit world.

The question to ask ourselves is how much clout this TRA will have, when you have got the United States, the European Union and China. Let us say that this is a steel-dumping question. Does it matter what the TRA will do in the face of those challenges? We are arguing all sorts of important things, but by coming out of the European Union, we are reducing any kind of clout we will have in future trade decisions.

[The Earl of Kinnoull (CB)]

My Lords, I rise briefly in support of the noble Baroness, Lady Brown, and associate myself with all her remarks. I also associate myself with the noble Baroness, Lady McIntosh—I agreed very much with what she had to say.

Amendments 101A and 103B are probing in nature, and I will address a few thoughts to this TRA membership question. In Schedule 4, the TRA is proudly declared to be independent. That is important in trade, because, as one goes through Article 6 of GATT, and the 1994 associated agreement on that article, one sees that the whole idea behind trade remedy processes is that they are fair and are not being used as political weapons by the countries wielding them. That independence is therefore philosophically important to preserve. And yet, in Schedule 4 we find that the Secretary of State will appoint all the non-executives. In addition, the non-executives will always be in the majority, and the Secretary of State can fire all of them. To add icing to the cake, the Secretary of State has the power to issue guidance, and the TRA must “have regard” to it. That does not look to me like a recipe for independence. It would mean that the TRA would begin life with a bad image, and it would be difficult for it to appear a useful, independent tool internationally.

I worry that, if another body had a similar structure which might have political interference—although I do not think we would actually operate it badly—we could be on the wrong end of something. We would not be able to criticise, because it would have the same structure. I join other noble Lords in very much looking forward to what the Minister has to say about the independence of the TRA, and about the points that I and others have made.

[Baroness McIntosh of Pickering]

My Lords, I shall speak to Amendment 101A and, without rehearsing the points, I entirely endorse what the noble Baroness, Lady Brown, and the noble Earl, Lord Kinnoull, said in speaking to the amendment. The Minister was kind enough to have a meeting with the team and myself, but I have this awful feeling that she will not support this amendment. I would like to give her a bit of bottle this evening and say why she must adopt the amendments, particularly Amendment 101A. A similar amendment was not carried in the House of Commons but by a very narrow margin and it goes to this point that a number of noble Lords have said this evening—the process must be, and be seen to be, fair in appointing and sustaining members of the TRA, and they must operate independently and impartially. I make this plea to the Minister: the Government must be seen to rein in some of the powers of the Secretary of State, which will be pretty broad if we let the Bill go to its final stages without making these points.

I entirely support what my noble friend Lord Lansley said about why an independent Trade Remedies Authority is required, and I should have declared an interest: I spent a very enjoyable six months in 1978 when I was very young, very keen, and very green, with the EU Commission—DG IV, now known as DG Comp. We did important things, such as read the Financial Times, which was amazing because a number of companies were announcing they were merging without having told the European Commission or the UK home authority, so it is absolutely vital that we have an independent authority such as the Trade Remedies Authority.

To respond to the point made by the noble Lord, Lord Fox, we need to give the businesses in this country the knowledge that there will be a remedy which replicates the remedies that are currently available. I entirely support his point that it will not be EU-wide, but we do need some anti-dumping and retaliatory measures at our disposal in this country.

[Lord Fox]

It will be very hard to do that—I was not suggesting that they should not have that support.

Trade Bill

Lord Fox Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 30th January 2019 Lords Chamber

Accepting and including these bodies would do just that. With the CBI, TUC and many other organisations calling on the Government to act in such strong language, I hope that the Minister can oblige us, and I look forward to his response. I beg to move.

[Lord Fox (LD)]

My Lords, I am grateful to the noble Lord, Lord McNicol of West Kilbride, for introducing this group. As he pointed out, there are 17 amendments that cover objectives for future free trade agreements. The noble Lord, Lord Hannay, is not in his place right now, and I would never disagree with him. He identified a different group of amendments as being the most important part of what we are debating, but, for many people and for the impact that this is going to have out there in the country, this group of amendments is the plumbing. They cover the day-to-day operations of life, so I consider this to be a most important group of amendments.

I am not going to speak to all 17 amendments, but I am going to speak to four of them, which means that, unfortunately, I will break my own rule of brevity, but I will try to be efficient in what I say. I am going to speak to Amendments 39, 43 and 44, to which my name is attached, as well as Amendment 69, to which my noble friend Lady Jolly added her name. She is unable to attend.

Amendment 39 requires the UK to negotiate with the EU an international trade agreement that creates a system for the mutual recognition of professional qualifications, as the noble Lord, Lord McNicol, set out. It must be at least as exhaustive as our current system and allow people to work across borders, allow workers to demonstrate the necessary requirements where qualifications diverge, and provide for co-operation between regulators. The noble Lord, Lord McNicol, used the example of architects; looking at the other side of the coin, 20% of the architects in this country come from an EEA or Swiss background. That is just one profession—one activity. The Government have the stated aim of building 300,000 houses; they will not have enough architects if we are not successful with this activity.

Under the current mutual recognition arrangements, for doctors, nurses, vets, dentists, midwives, pharmacists and architects the recognition is automatic, providing that conditions on minimum training and professional experience are met. For others, there is a general system whereby regulators cannot ordinarily refuse applications to practise from other EEA or Swiss nationals in this country if they hold the qualifications required by their home state. Since 1997, the UK has recognised over 142,000 EU qualifications. This is a big job. Noble Lords should remind themselves that there will be a lot of work to do around this, including for lawyers, social workers and engineers. Over 27,000 decisions to recognise UK qualifications have been taken in the EU.

The political declaration states:

“The Parties should also develop appropriate arrangements on those professional qualifications which are necessary to the pursuit of regulated professions, where in the Parties’ mutual interest”.


I suggest that replicating the system to be at least as good as the current one is in the interest of this party—the United Kingdom. On that basis, I hope that, as the noble Lord, Lord McNicol, said, we are pushing on an open door here. The four principles set out in this joint amendment are the same as the Government’s four priorities for a future mutual recognition regime. I hope that the Minister can confirm that that is the Government’s understanding; perhaps they can settle some nerves by putting this amendment in the Bill.

Clearly, a no-deal Brexit situation would make life much more difficult. A statutory instrument is running its way through the system; it has been published, but it is subject to the affirmative process and has yet to be debated in the House. I look forward to that; I say that because there are so many SIs, but I look forward to that process, because this is an important part of what we need to do.

The point made by the noble Lord, Lord McNicol, about UK workers working in the EU is equally important and vital. Clearly, if we leave the European Union with no agreement, we cannot mandate what happens to all our professionals in the EU 27, EEA and Swiss territories. However, I urge the Government to explain what representations they will be making in the event of a no-deal Brexit to carry over the qualifications at the very least, and then, of course, to put in place a regime that works.

Amendment 43 requires the UK to seek to negotiate an international trade agreement with the EU that binds the UK to EU rules on open and fair competition. We have had some discussion around state aid in the debate on a previous amendment, so I will not repeat that. However, this also includes mergers and anti-trust behaviour. The political declaration states:

“The future relationship must ensure open and fair competition. Provisions to ensure this should cover state aid, competition, social and employment standards, environmental standards, climate change, and relevant tax matters, building on the level playing field arrangements provided for in the Withdrawal Agreement”—


clearly, now we do not know what that agreement will be—

“and commensurate with the overall economic relationship”.

We have had this discussion in a different context, but a binding undertaking that there will be no regression on standards is important to a lot of people in this House, and other noble Lords who are not here today have made this point with strong arguments.

On Amendment 44 and REACH, the noble Lord, Lord Hain, spoke about regulatory divergence; if there is ever an opportunity for regulatory divergence, it will be around the complexity of something like chemicals legislation. I will not go into huge detail about UK REACH, but this House needs to understand the scale and the scope of this activity. I have experienced it from a business side, and the commitment of European businesses in sitting on literally hundreds of sub-committees, debating and working through the nature of chemicals, how they should be used, and the associated risks, laws and regulations is absolutely huge. I can see looks of consternation.

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[Lord Bates]

I reassure my noble friend the Chief Whip that I have no problem in keeping it going for as long as he indicates is necessary—such has been the quality of the debate.

I have had a note passed to me which might be important. On Amendment 39, on mutual recognition of professional qualifications, I may have said “Ireland” but I meant to say “Iceland”. I thank the officials for being so attentive.

[Lord Fox]

The Ireland/Iceland point is actually very important. The noble Lord, Lord Hain, made a point earlier about cross-border activity—of midwives who live in the north of Ireland and practise in the Republic, for example—which is now in jeopardy. I am less excited about Iceland, with all due respect, given that the island of Ireland’s economy is driven on the ability to have the mutual recognition of all these skills. I enjoin the Government to work quickly on that one.

[Lord Bates]

The Government are very happy to give that undertaking.

On legal services, raised by the noble Baronesses, Lady McIntosh and Lady Hooper, the outcome of the negotiations of course lies ahead of us, but I assure noble Lords that the Government will push very much for a strong relationship in this area. As EU and EFTA lawyers will be subject to domestic rules in the UK, UK lawyers in the EU and EFTA will be subject to the national rules and regulations of individual EU and EFTA member states, if the UK leaves the EU without a deal. This will vary between member states and within member states, where there will be multiple regulators.

The noble Baroness, Lady McIntosh, asked specifically about close participation in the European Medicines Agency. I think I have already dealt with that one and I do not want to tempt further interventions at this point. However, I am pleased that the Government have been clear that we want to remain part of the EMA, which will include remaining part of the falsified medicines directive.

Let me turn to horses—galloping into the final straight with Amendment 48. I am grateful to the noble Baroness, Lady Hooper, who spoke particularly about polo, and the noble Baroness, Lady McIntosh. I also thank the noble Lord, Lord Risby, who talked about his connections with Newmarket, and the noble Lord, Lord McNicol, who asked about this as well. Amendment 48 dealt with the tripartite agreement on the movement of horses. As part of our ongoing preparations for EU exit, the Government aim to ensure that the movement of horses will continue with minimal delay and bureaucracy, while safeguarding biosecurity and animal welfare. Let me reassure noble Lords that we are already working closely with the equine industry to retain the benefits of the tripartite agreement after the UK leaves the EU. The Government actively support a long-term industry-led proposal to allow horses of high health status from third countries to travel to the EU under the TPA arrangements.

I had a note on the pet travel service. As part of the ongoing preparations for EU exit, the Government aim to ensure that the movement of pets will continue with minimal inconvenience to pet owners while safeguarding the UK’s biosecurity and the welfare of travelling animals. We are already working closely with stakeholders in the veterinary and pet travel industries to ensure that the benefits of the EU pet travel scheme are retained after the UK leaves the EU. The Government will submit their application for listed status within the EU pet travel scheme imminently. The UK is seeking technical discussions with the European Commission on its application. Should the UK become a part 1 listed country, there would be little change to current pet travel arrangements. Only minor changes to documentation would be needed.

I hope that noble Lords will feel that in the time available I have dealt with as many issues as possible, and that the noble Lord will therefore consider withdrawing his amendment at this stage.

Mortgages: Cerberus

Lord Fox Excerpts

Wednesday 28th November 2018 Lords Chamber

[Lord Bates]

My Lords, I will not go into the technical detail, but one of the conditions for Cerberus to operate in this country was that it operate under a regulated body, so it operates under Landmark Mortgages. It is not active in the lending market, so the people who can move to get the better deals are those who are up to date with their payments, have equity in their property and can meet the new affordability test. That is the conundrum that we are seeking to find a way through.

[Lord Fox (LD)]

My Lords, my colleagues, in two different ways, have asked the same question, which is what lessons have the Government learned, and how will they avoid this happening again? Will the Minister please answer that question?

[Lord Bates]

Yes: I think that lessons have been learned. I am very happy to make available to the noble Lord the response that the Economic Secretary to the Treasury gave to the chairman of the Treasury Select Committee on 12 November this year—which sets out many of the details of what we can learn—as well as the response from the Financial Conduct Authority to the noble Lord, Lord Sharkey. I am happy to make both available.

Brexit: Economic Analysis of Various Scenarios

Lord Fox Excerpts

Wednesday 28th November 2018 Lords Chamber

[Lord Bates]

I do not have specific information on that. I know that, when we leave the European Union, the intention is to establish a fund to seek to address the points that the structural funds dealt with. On whether Wales will continue to benefit from or be eligible for the structural funds, I am very happy to write to the noble Lord on that and what is covered in the analysis.

[Lord Fox (LD)]

My Lords, the tabulation clearly links the importance of migration to future GDP. In fact, going from free movement to zero migration reduces GDP by a further 2%. In that case, does the Minister share my frustration that his colleague in the other place is still delaying publishing the immigration Bill? When will it be published? It is extremely important to this country’s future.

[Lord Bates]

The answer is, very soon.

Economy: Budget Statement

Lord Fox Excerpts

Tuesday 13th November 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, it will come as no surprise to hear that those of us on this Bench do not share the ebullience that the noble Lord, Lord Bates, displayed when describing the Budget. That is because, when we are out in our communities and back at home, we see a country that is very divided. We talk to people and they are extremely cynical about what goes on in this place. When you see the Budget, you can see why they have that cynicism.

Since the banking crisis, most people have seen their livelihoods eroded. While the very latest data shows that wages are at last exceeding inflation, the story of the last 10 years has been one of people’s spending power being eroded. This is particularly true for those working in the public sector. It is no good the noble Lord or the Chancellor relying on growth to get the Government out of that hole. The latest uptick in GDP more likely reflects—I apologise to Welsh, Scottish and Irish Peers in the House—England’s success at football than it does a major change in the economy. Overall, growth remains stubbornly low and holding below 2% in the next five years of the OBR’s forecast.

That has consequences. The Resolution Foundation—while not necessarily agreeing politically with the Conservative Party, it is a well-resourced, authoritative economic group—warns that day-to-day spending on things other than the NHS, overseas aid and defence will face real-term cuts of 3% per person by 2023. That is a huge consequence, yet even this dreadful prospect is overshadowed by the damaging impact that Brexit—if it happens—will have on the UK’s public finances. These costs could reach £80 billion per year in the event of no deal, some people say. To be honest, no one can estimate it, but we do know that it will cost many tens of billions of pounds. Meanwhile, as I have said, the underlying problem of the economy remains: the wealth gap, the difference between the richest and poorest in this country, which is widening. It has not been helped by the penny-pinching and debacle over universal credit; indeed, it has been hindered massively.

That brings us back to the mood of the nation. People feel that there has been no justice, and it is easy to see why. The acknowledged source of most of the problems arising from the crash was the banking industry, yet it enjoyed massive government bailouts and support to survive, with virtually no repercussions for its collective bad behaviour and certainly with no individuals really being brought to book. Indeed, there are signs that the banking industry is still finding innovative ways of storing up problems for the future, and the Bank of England has recently warned about toxic corporate loans. Meanwhile, in the wider corporate sector, executive remuneration is pushing all the wrong buttons for the rest of the country. Therefore, is it any wonder that voters are cynical? Should we be surprised when people whose pay rates have been frozen for so long feel sore, and can we really complain when collectively they tell us that politics is wrong and has a bad name?

Budgets are as much about theatre as they are about economics, and we saw some theatre last week. Often, what they achieve is as much an indication of the direction of travel as an indication of any major movements, and so it is with this one. The noble Lord, Lord Bates, should be congratulated on his optimism. His colleague the Chancellor generally has a well-deserved reputation for dullness but, among the spectacular ruins that we see in other elements of political life today, even Philip Hammond felt the need to shed his reputation, play politics and try to do more exciting things with his Budget. We have heard from the noble Lord, Lord Bates, some of the eye-catching things that were put forward.

Of course, the Chancellor’s real wriggle room was blunted by his boss’s promise of a birthday present for the NHS. Therefore, as the noble Baroness, Lady Smith, pointed out, he spent most of the borrowing improvements in the OBS’s forecast on the NHS, and I am sure that my noble friend Lady Jolly will say more about that later in the debate. As the noble Lord, Lord Bates, pointed out, the Chancellor has left the country with £15 billion of headroom against future borrowing targets, but I am sure that he will need much more than that if Brexit occurs.

However, it is not just healthcare by which we should judge this Budget or this Government. This and any other Government should be judged by a number of fundamental criteria, and those were touched on by the noble Baroness, Lady Smith. I propose three main touchstones for seeing how well a society is performing. I would judge it, first, on how well it equips its young people to embrace the future; secondly, on how well it looks after its elderly and frail; and, thirdly, on how safe and secure people feel in their homes and neighbourhoods. On all three counts, Her Majesty’s Government are failing.

I turn, first, to schools. As we heard, the Chancellor scattered some crumbs for schools but the minimal joy that that might have given them was banished by the throwaway phrase about “little extras”. That indicated just how little the Government grasp the financial plight that our schools are in, and just how little they understand that schools are looking not for treats but for money to pay their teachers and classroom assistants. The Budget does not address the unfunded pay rises, and even more pain is looming for our schools. The spectre of increased employer contributions for pensions next spring will create another financial black hole for many schools. I was speaking to a head teacher who has just been brought in to rescue a failing school. He is already looking at what he will have to do to meet the shortfall in his budget due to increased pension contributions. It will mean losing classroom assistants and possibly teachers. I ask the noble Lord to take that back to colleagues and to remember that a big issue is looming—one that we have not really seen yet because so many other things have been going on.

There are, of course, other crises in education. The funding of children with special educational needs is really important and has plunged a lot of our councils, if not all of them, deeper into the red. As with many elements of public expenditure, the Government are underfunding the local authorities while expecting them to bear the brunt and maintain—or enhance—levels of service. The Government do not seem to understand that this cannot go on for ever. They cannot do things with nothing.

The same is true in the care of older people. There is a crisis in social care. While the NHS did get a raise, social care did not get anything near the black hole of £2 billion that it faces. It is taking a cut every day. It is up to the Government of the day to lead on this issue and fund the care needed by people up and down the country now. The here and now of social care is that many people are suffering because the system is being bled of resources. It is no good just floating ideas for future possible solutions, having yet another inquiry, and not backing that up by embracing the problem and funding the solution today. I would like to hear what the Government will do today to address today’s problems.

The third measure was personal safety—in other words, policing. However the Government choose to judge themselves, they are not doing well on policing. It is going very badly, and this is not the fault of police officers. I know an officer in a response unit with a few years’ experience. To start with, his unit is short of 10 vehicles, which have been carted off to another region, so he already has one arm tied behind his back. Then, in addition to being asked to respond to incidents, he has been given eight cases and asked to clear those up in the meantime. This gives an indication of how front-line police officers are being stretched, and why many are considering their future in the force. Without changes, the police system is going to really collapse, and we have to do something about it. That is one anecdote, and many other police officers have similar anecdotes to tell. The situation in our police forces is not sustainable.

Those are the three factors by which we can judge a Government. Yet what does the Chancellor do? He gives a little money here and a little there, but then proposes tax cuts, which, as we have heard from the noble Baroness, Lady Smith, benefit the most well-off and not the poorest in this country. The Liberal Democrats would ensure that the wealthy paid their fair share. We have proposed alternatives that would help to fix the tax system. We would tax wealth and commercial land value, and would use that to invest in public services, schools and police. The commercial land value tax would also help hard-pressed local businesses.

At the outset, I said that a Budget indicates a direction of travel. This being the case, it is clear that the Government do not grasp the big issues facing people. In deciding to maintain cuts in corporation tax and in reducing personal tax for the most well-off in the country, the Government are rewarding the wrong people. It is the opposite of virtue signalling. Meanwhile, the majority of people are experiencing no or low growth—and sometimes falls—in their income. They are prey to catastrophically underinvested public services. This Budget, coupled with the spectre of Brexit looming over the horizon, just demonstrates that the Government have a tin ear to the real issues facing the United Kingdom.

Taxation (Cross-border Trade) Bill

Lord Fox Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 4th September 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, as we have heard, this Bill sets out an alternative customs regime—an alternative to a customs union that has served us well. The Bill is so clearly inadequate that the Government have had to hide behind the designation of a supply Bill, which is obviously designed to thwart sensible democratic scrutiny. We are lucky to have a Minister who has outside experience and sees things from beyond the hall of mirrors here. A lot of his experience is based in the north-east of England, so I am sure that he knows that the Bill sets out a significant downgrade for the United Kingdom—a degradation of our future, not an enhancement.

We currently have a customs and trade relationship with our biggest trading partners that works. Goods move seamlessly, paperwork has been minimised and duty gets paid. Even if everything in the Bill works as the Government expect—which of course it will not—the Minister knows that the nation’s customs regime will be substantially worse than what we have today. Goods will be held up at the border; paperwork will be increased; duty will be dodged; and supply chains will slow, and ultimately bypass the United Kingdom altogether. In the Government’s parlance, we will not have a frictionless system; we will have a great deal of friction. But there is still time for the Minister to renounce the briefs in front of him and submit to what he and others on his Benches know to be true: the customs union and the single market offer so much more to the people of Britain than what is before us today.

Elsewhere, the Government have trumpeted their industrial strategy, highlighting the need to tackle disappointing productivity numbers, which is a Treasury priority. Yet everything that this Bill stands for will reduce productivity. Efficient activity such as just-in-time manufacturing will be totally disrupted. For example, suppliers are already being asked to increase their inventories, massively reducing cash flow in small businesses and adding to costs and to complication. The Government have claimed to be planning for the future, so what does their analysis say that the Bill will deliver in practice? How much will it cost? How many extra people will be needed in both the public sector and in business to administer the red tape? Big business can probably afford it, but small businesses most certainly cannot, as my noble friend Lady Kramer said.

What is the lost opportunity—something that cannot be accounted for—of using our talented people on this activity rather than on something that is actually productive? Does the Minister not agree that we should be using the energy and intellectual resource of our people to address the real challenges facing the country? There are huge global changes going on, never mind the ones we are trying to effect. The march of the digital revolution is going to change everything, and the demographic time bomb stands already as a significant change. Would the Government not rather that the talents of our people were employed on those things rather than on this useless, non-productive activity?

Meanwhile, in the ports and the Channel Tunnel, roll-on roll-off will be replaced by “hang around a minute while we have a look”. What is the contingency plan here? What is the estimated holding capacity that will be required at our ports? What advice will the Government be giving regarding the checking and segregation of loads? People and businesses need to know how to restructure their supply chains to meet these challenges.

We know that the Bill makes us worse off compared to the customs union and the single market. By how much will the customs regime reduce productivity in the United Kingdom? How much further behind France will it take us? How much GDP growth are the Government prepared to surrender in order to push the policy through—1% per year, 2% per year? The compounded effect of that reduction in growth in GDP will be disastrous—but of course this Government will be long gone before the real effects are felt.

There is more, not least—as we heard so eloquently just now from the noble Lord, Lord Hain—to do with Ireland and the border. Brexiteers have huffed and puffed and say that the issue is exaggerated. Then they posit some solution that has not been invented yet and clearly is not practical. The Bill creates two discrete customs systems on the island of Ireland. Nothing in the Bill facilitates a border solution that maintains the Good Friday agreement. That is because the two conditions of having two customs regimes and the Good Friday agreement are mutually exclusive. This Bill is anathema to the Good Friday agreement.

Much else needs the proper scrutiny of this House—scrutiny that is being denied. For example, we have heard a lot already about the facilitated customs agreement. We should thank the noble Viscount, Lord Trenchard, for explaining just how simple it will be to operate. In fact, it is impractical. How do the Government expect it to work? What plumbing will go together to make it work? How will the Bill enable the maintenance of non-tariff trade in both directions? As we heard from previous speakers, it seems clear that this will be extremely difficult. Who will maintain and track the rules of origin, and how? What are the details behind the rules for outward processing and repair? Is that a loophole? If not, how will we make sure that it works properly? How will the provisions to offer preferential access to developing countries change from what we have, and who will benefit? That is just a short list of all the missing details that we need—as set out by the noble Lord, Lord Kerr—to understand the plumbing of the customs agreement. These details will be left hanging as the Tory party continues to squabble among itself.

The Bill represents a proposal to make things worse for the citizens of the United Kingdom—not just slightly worse but very seriously so. The Government know that; the Minister knows that. I echo the mention of history: perhaps the Minister could cast his mind back, or get his officials to, and give us an example of where any Government have made changes that they know will downgrade the living conditions of their citizens. What other Government in history have knowingly made such a self-harming decision?

The Liberal Democrats oppose the Bill. Leaving the customs union and the single market will cost the people of the United Kingdom dearly. That individual cost should be explained, and voted on in a people’s vote. The Bill establishes a separate customs regime from that of the European 27, so there can never be a friction-free border between the Republic and Northern Ireland. That means that the Good Friday agreement cannot be honoured. The hiding of the Bill behind the false status of a supply Bill shows the Government at their weakest, and the grabbing of so many Henry VIII powers for the Executive is tantamount to unconstitutional. That is why I will support my noble friend’s amendment to the Motion.

Economy: Productivity

Lord Fox Excerpts

Thursday 28th June 2018 Lords Chamber

[Lord Bates]

If that criticism were true, we would not see that the UK is regarded as the number one location for foreign direct investment and we would not see companies coming here in the numbers that they are. We have a great strength in our economy. We have an historic weakness in productivity and we need to look at all the possible contributions to that and address them; that is what this review is all about.

[Lord Fox (LD)]

My Lords, I remind the noble Lord that foreign investment has halved over the course of the last year, so perhaps that is not the best statistic to choose. Meanwhile, manufacturing output has fallen for three successive months, construction output is 3% down year on year and the trade deficit is widening. We are pleased to hear that the industrial strategy does not have dust on it, but when do the Government think that some of their measures might actually take effect?

[Lord Bates]

On the point about foreign direct investment, just look over the past couple of weeks: we have seen Amazon announce 3,000 jobs in the east Midlands; a major biomass investment in Cheshire that will bring 3,000 jobs; and Vauxhall has announced the investment of 1,400 jobs in Luton. We are seeing record investment levels and a doubling of tech investment in the UK. This is all part of a strong, vibrant British economy that we are absolutely confident will continue to progress and improve beyond Brexit.

Sterling: Euro Exchange Rate

Lord Fox Excerpts

Monday 9th October 2017 Lords Chamber

[Lord Bates]

Since 2010, the economy has grown by 15.3%. That is 1.5 times the level of France. I do not necessarily want to remind the noble Lord, who was standing on this side of the Dispatch Box during 2008-09, that the economy contracted by 6.3% during that period. The fact that we have record levels of employment and are seeing sustained growth should be welcomed and built upon.

[Lord Fox (LD)]

My Lords, a fall in the relative value of the pound was advanced by some of the most enthusiastic Brexiteers as the antidote to future potential export tariffs. Can the Minister tell this House whether that is also Her Majesty’s Government’s policy? If the answer is yes, what evidence has been amassed over the last 12 months of a phenomenally low pound to support that view?

[Lord Bates]

As I have said, the Government have not said exchange rates are their responsibility. Those matters are driven by the markets and sentiment. We have to make sure we have a strong, competitive economy. That is why we have lowered taxation rates, why we have high employment levels and why the Chancellor has announced a new national productivity investment fund of £23 billion. We have to do everything in our power; the markets will respond as the markets respond.