Colombia: Bilateral Investment Treaty
Lord Fox Excerpts(1 week, 4 days ago)
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Baroness Chapman of Darlington (Lab)
My Lords, as of today His Majesty’s Government have not been formally approached by the Government of Colombia about this, but we are of course always open to hearing the views of our trading partners. Established forums exist for civil society organisations to raise and discuss trade-related issues with government Ministers. Most recently, my right honourable friend the Minister for Trade Policy and Economic Security hosted a civil society round table in December, which included a discussion on ISDS. Ministers will continue to engage with a range of stakeholders, including from civil society, across the full range of trade policy issues, including investment.
Lord Fox (LD)
My Lords, as we have heard, ISDSs are not rare—there are many of them. However, increasingly they are coming under scrutiny and, moving forward, some countries are not seeking them because, as in high-profile cases such as the ones we have heard about, and in others, democratically elected Governments are being challenged and are having to overturn legitimate public policy. Can the Minister tell your Lordships’ House whether she recognises the improper regulatory chill that these agreements can create for democratically elected Governments? Can she set out, in a general sense, the Government’s position for the future? Will the Government continue to seek ISDS agreements in trade deals that they are currently negotiating?
Baroness Chapman of Darlington (Lab)
I am grateful to the noble Lord. I appreciate, as he invited me to, that these agreements stand over a very long period of time. Between an agreement being put in place and 10 years later—which is where we are now with Colombia—at which point there is an opportunity to look at it again, many things may change and it is open to either side to seek changes to the agreement, or to walk away entirely. At the moment, the Colombians have not indicated to us that that is their intention. It should be remembered that these bilateral treaties are helpful in providing assurance to investors, and that is something that we would not want to harm in any way.
China: Human Rights and Security
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Lord Fox (LD)
My Lords, like others, I thank the noble Lord, Lord Alton, for securing this debate. Unlike others, I also praise him for the propitious timing that he managed to secure for this debate. We will leave this as the last message of the year.
We have already heard important speeches on human rights, and I am sure that we will hear more. As the noble Lord, Lord Alton, intimated, I want to change gear. I want to take a, let us say, secular approach, perhaps a utilitarian approach, to the issue of technology and the threat of Chinese technology to our security. I will use the specific to illustrate the general.
My first specific is lidar: light detection and ranging technology. It is used for mapping and sensing in autonomous vehicles, drones, trains and airports; and utility providers and infrastructure operators use lidar to monitor pipelines, power lines and rail networks. As your Lordships will understand, these are all important areas. In 2020, Chinese firms had a 58% share of the global automotive lidar market. I do not have later stats, but I expect that the share will now have risen due to the copious use of subsidies, market protections, procurement preference and the systematic acquisition of foreign intellectual property. Chinese lidar poses a danger because it collects sensitive data and can receive over-the-air updates enabling potentially undetectable changes to systems, which could compromise operation.
Next, we have cellular IoT—internet of things—modules. These are what connect everything to the internet. They are used in a vast array of critical infrastructure applications: energy, logistics, manufacturing, transport, health, and security, to name but some. They remotely monitor and control complex systems and collect vast amounts of data and metadata for analysis, processing and response management. Chinese pricing is often up to 25% below manufacturing cost, helping China to gain a 70% share of the world market—already. Quite apart from the leverage that can be applied via this dominant position, China has potential access to very large amounts of data and can remotely interfere with devices, switching off or degrading critical national infrastructure.
Domination of key markets is a Chinese strategy across many technologies. Photovoltaics is one example, and China’s share of all manufacturing stages for solar panels exceeds 80%. Once again, this has happened by the use of very low price levels that are supported by subsidy, with China having crushed most of its international opposition.
Lithium-ion batteries are another example. China dominates the whole battery supply chain, producing well over 80% of all key components. Graphite, copper, nickel and cobalt are the raw materials needed for batteries and their use will rise staggeringly. For example, by 2040, estimates point to a ninefold increase in lithium requirements above current use. While US and European companies play significant roles in some areas of lithium and copper asset ownership, China invested $10 billion in overseas mining in the first half of 2023 alone. China dominates nickel and cobalt production, notably in Indonesia and Congo, and it controls 93% of battery-grade graphite refining.
Rare earth minerals, vital for manufacturing not just batteries but wind turbines, phone displays and fibre-optic cables, will see a surge in demand. Again, China dominates refining and production, and is expected to increase its share above the current 80%. In AI and quantum computing, the Chinese effort is currently somewhat behind that of the US and the West, but we have already seen that if China decides to move forward, it moves forward at pace. Chips are key to this and China continues to grow its domestic chip industry: a $47.5 billion investment fund was announced this year, and the West has been slow to respond. Delays applying sanctions allowed China to buy time and stockpile, while an increase in its chip purchases now indicates that it is still stockpiling for future problems.
Meanwhile, quantum computing has the potential to completely change the way our computers and devices work, and poses significant security risks. At the moment, China and the US lead, but China is certainly further ahead in moves to try to deploy this technology, with infrastructure and two satellites with quantum communication capability.
Thanks to the tireless work of some of the people speaking in this debate, the last Government began to wake up to the dangers. In October 2022, work started on removing Huawei from UK telecoms infrastructure, but this is due to be completed only in 2027, and there have been partial moves regarding Hikvision’s surveillance cameras, but not even scratching the surface of this problem. Where is our co-ordinated approach to this? The pattern in the UK is piecemeal, slow and, I would say, largely ineffective.
To conclude, this is not paranoia: the danger is there and the Government need to be honest in their audit. China has a predatory pricing strategy based on massive subsidies, and sometimes slave labour, designed to eliminate its western rivals. It has acquired global dominance in key raw materials and their processing. It has launched programmes to gather IP from across the world by any means, as we heard from the noble and learned Lord, Lord Garnier. Perhaps most worryingly, it has established deep penetration of our critical infrastructure and key equipment, with the capacity for detailed covert surveillance and remote control. This is not the half of it, as we heard from the noble Baroness, Lady Lawlor. It is clear to all who look that China’s technology strategy is a serious threat to our security and an existential threat to our capacity to deliver manufacturing when we need it. I ask the Minister to confirm that she too recognises this threat and that the audit will take this on board.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, I convey my gratitude to the noble Lord, Lord Alton, for securing this debate. I pay tribute to his work on China, as vice-chair of the Hong Kong APPG and as a member of the APPG on Uighurs. I thank all noble Lords for their insightful contributions to this, the last debate of 2024. The quality of the contributions has been first class, as might be expected.
Across the board, the Government are clear that the UK’s approach to China means co-operating, where we can, on issues such as net zero, as the noble Baroness, Lady Bennett, said, and, as some said, on health and trade. It means that we compete where our interests differ—I will say a little more about that later—and that we challenge, as we have to, where that is what we must do to protect our national security, as many noble Lords have asked us to say, but also our values, as has rightly been said.
As the noble Lord, Lord Purvis, indicated, we need to reset and recalibrate our relationship with China, as we do with the EU, and to be a full and active participant in the CPTPP. All these things are closely interconnected, but we also need a relationship with China that is consistent and long term—and, yes, one that is pragmatic and rooted in UK and global interests.
The noble Lord, Lord Purvis, suggested that we need to be clear-eyed about this at all times. Whether it is on stopping Russia’s illegal invasion of Ukraine or tackling the causes of climate change, there will be times when we have to speak candidly and robustly not just on areas of co-operation in the UK’s national interest but on areas of contention as well.
The noble Baroness, Lady Bennett, made the important point that our concerns about Chinese state activity should not be interpreted as extending to the Chinese people themselves, and I thank her for that. As the world’s second-largest economy, our fourth-largest trading partner and a major economic power that is the largest driver of global growth this decade, we are not going to—and should not try to—ignore China. We must recognise that China, including Hong Kong, presents significant opportunities for growth that can benefit Britain and help other countries grow their economies right around the world.
In pursuit of these opportunities and a renewed partnership, we must be clear-sighted and honest—not shying away from difficult discussions over practices that harm the sort of secure and resilient growth we want to see, and, where our wider values do not align, making that absolutely clear. In doing so, we must build a platform for a relationship that works squarely in our national interest, helps grow our economy sustainably and makes working people in every corner of Britain better off, while rightly putting our national security and resilience first, recognising that the UK-China relationship exists in an increasingly challenging and unstable geopolitical context.
We recognise the importance of the UK’s robust export control system. We will continue to make sure that it has an impact. We continue to use the powers that we have through the National Security and Investment Act to scrutinise investments and other acquisitions, no matter where they come from, and to intervene where that is what is needed to protect our national security.
Of course, the UK and China share many interests—including helping the world achieve a just transition to green energy, as well as our economic links—yet we have significant differences, including on democratic values and freedoms, on Hong Kong and on Russia’s war in Ukraine, where Chinese companies continue to supply significant quantities of dual-use goods and components to Russia. So we must recognise that the UK and China by no means always agree. As a responsible global player, we must engage frankly where we have different perspectives and co-operate where that is possible.
That is why it was important for the Prime Minister to meet President Xi at the G20—the first leader-to-leader meeting in six years—and why it was right both for the Foreign Secretary to visit China in October and for my colleague, the Minister for the Indo-Pacific, to visit Hong Kong last month. As noble Lords know, we are examining the UK’s interests with respect to China through the Government’s China audit, in order to improve our understanding of the challenges and opportunities posed by China and to meet them more effectively.
I was asked about FIRS. I can say today that we have not yet made any decisions on which foreign-power and foreign power-controlled entities will be subject to the enhanced tier. The foreign influence registration scheme will further strengthen our national security while maintaining the UK as an international hub for business. Announcements will be made in due course; I knew I would have to say that at some point today.
The noble Lord, Lord Ahmad, asked about the China audit, including whether I might undertake to facilitate the engagement of the House. I would be happy to do that at the appropriate time. I join the noble Lord and others in their call for the removal of sanctions on parliamentarians. These measures are wrong and should end immediately.
We have a long, shared history with Hong Kong, and, like others, I have family links. My grandfather and father lived there while the first airport was being built. We have strong links between people and strong links on trade. I pay tribute to the work of the noble Lord, Lord Alton, and others over many years. We are now, as many have said, 40 years on from the signing of the joint declaration. We will always stand up for the people of Hong Kong and we remain committed to Hong Kong’s future as an open, dynamic and vibrant city.
The noble and learned Lord, Lord Garnier, and others correctly highlighted the situation in Hong Kong. Like him, we are deeply concerned to see the erosion of the rights and freedoms of Hong Kongers following China’s imposition of the national security law in 2020. The noble Lord, Lord Alton, asked me about the activists. The recent sentencing of the 45 pro-democracy activists is another demonstration of the Hong Kong authorities’ use of the national security law to criminalise political dissent. Those sentenced were exercising their rights to freedom of speech, assembly and political participation. These rights are guaranteed under the International Covenant on Civil and Political Rights of basic law.
The Jimmy Lai case remains of deepest concern. The noble Lord, Lord Alton, the noble and learned Lord, Lord Garnier, and many others spoke movingly on his behalf and I thank them for that. He should be released. He is a British national. He stood up for freedom and it is vital that he is released. It is a priority for the Government and we raise it at every opportunity that we can. In response to the noble Lord, Lord Callanan, I say that the UK will of course continue to call on the Hong Kong authorities to end their politically motivated prosecution. We will continue to seek consular access for Jimmy Lai, including to enable us to verify his health and welfare. I assure noble Lords that UK diplomats in Hong Kong continue to attend Jimmy Lai’s court proceedings—as they should.
The noble Lord, Lord Alton, asked about British nationals named in the trial and he is right to highlight this. All I can say is that attempts by foreign Governments to coerce or intimidate through the mechanism of this trial and to harm critics overseas are completely unacceptable and, just like the trial itself, they should stop.
I share the concerns that many speakers have raised on human rights in China. Across China, people face restrictions and violations of human rights and other fundamental freedoms. As the right reverend Prelate the Bishop of Guildford explained powerfully, in Xinjiang China continues to persecute and arbitrarily detain Uighurs and other predominantly Muslim minorities.
We raise these concerns with the Chinese Government when we can. The Prime Minister and the Foreign Secretary raised human rights with their counterparts, President Xi and Foreign Minister Wang. I am glad that they have been able to have those meetings in order to raise those concerns. I know that Members opposite will say, “But you haven’t got a solution to this yet; nothing has changed”. I do not think that one single engagement gets you that. It is about consistency, continuing to raise issues and being firm in our beliefs and articulating those beliefs at every opportunity we get.
The Government conduct independent visits to areas of major concern whenever possible, and we are supporting NGOs in exposing and reacting to human rights violations. We will continue to co-ordinate efforts with our international partners, which is why we joined Australia’s statement on Xinjiang and Tibet on 22 October at the UN General Assembly. We also joined the US’s statement on Xinjiang at the human rights court on 24 September.
The noble Lord, Lord Callanan, asked about sanctions. He will know what I am about to say. We do not comment on designations ahead of time for reasons that he will understand, but I thank him for raising that none the less.
The noble Lord, Lord Alton, was right to raise our eradication of the use of forced labour in global supply chains. The noble Baroness, Lady Smith, made a really thoughtful and well-informed speech about this. No company in the UK should have forced labour in its supply chain; it just should not.
The approach we are taking is that the Government will work with businesses and international partners, so that they properly understand what they need to do to combat forced labour so that they have an impact in tackling this. We understand that it is all very well making statements but we want to see the impact. We have been working closely with business to make sure that we achieve that.
I commit to discussing Chinese student associations with the Security Minister at the earliest opportunity.
As the noble Lord, Lord Alton, said, China’s repression of the people of Tibet is utterly unacceptable, as it restricts freedom of religion or belief and the right to assemble and associate freely. The Government stand firm on human rights, and we champion freedom of religion or belief for all. We recently appointed our FoRB envoy, and we wish him well in his work. We champion this both in our bilateral relations with China and through the UN, the G7 and other multilateral groups.
Members of this House are familiar with recent tensions in the Taiwan Strait. Our long-standing position, and that of the previous Government, remains that this issue should and must be resolved peacefully by people on both sides of the strait, without the threat or the use of force or coercion. Peace and stability in the strait matter immensely, for not just the UK but the wider world. As we outlined in a statement in October, recent Chinese military exercises around Taiwan increase tensions and risk dangerous escalation.
I thank the noble Baroness, Lady D’Souza, for the helpful suggestions in her speech, particularly on language training for officials, which she was right to raise. I assure her that that is happening.
A conflict across the strait would be a tragedy for the people there, and it would be devastating for the wider global economy. I am glad that the noble Lord, Lord Alton, reminded the House of a study by Bloomberg Economics at the start of 2024, which estimated that it could cost the global economy some $10 trillion—roughly 10% of global GDP. That is why the UK does not support any unilateral attempt to change the status quo across the Taiwan Strait, and we have made our views on this clear to China. We are working with our partners to make sure that they are doing the same.
The noble Baroness, Lady Smith, raised an interesting point about polar regions. China has an interest in natural resource exploitation. Increasingly, China is attempting to undermine existing protections and multilateral co-operation, such as through the Antarctic Treaty, to further its own interests. Its increasing use of the Northern Sea Route as a transportation link poses threats to this pristine environment. We think that there is a risk here if this is mishandled.
The Foreign Secretary set out the UK’s concerns over China’s aggressive activity in the South China Sea in conversations with the Chinese Government during his visit to China in October. The UK is committed to international law, to the primacy of the United Nations Convention on the Law of the Sea, and to freedom of navigation in and overflight of the South China Sea. We take no sides in sovereignty disputes, but we oppose any action that raises tensions or the risk of miscalculation.
The speeches of the noble Baroness, Lady D’Souza, and the noble Lord, Lord Fox, focused on technology—they were both interesting and sobering. We will continue to work on improving this country’s cyber protections.
Critical minerals are a really important point. We will shortly publish a UK critical minerals strategy, because our energy security depends on it, frankly, and it is the responsible thing to do. But I take the important point of the noble Lord, Lord Purvis, about how we must not be seen to lecture partner nations on whom they should and should not do business with. We are a good partner when it comes to extractive industries: we work responsibly, environmentally and with the local workforce in country. We would like to be more strategic in our thinking about this—so, when that strategy is published, I look forward to the response of the noble Lord, Lord Fox, in particular.
Baroness Chapman of Darlington (Lab)
Indeed—I think that was an invitation that I did not need to make.
Lastly, I underline that this Government’s re-engagement with China aims to enable a consistent, long-term and pragmatic relationship through which we can pursue the UK’s interests on security and growth. We will challenge and compete where that is the right thing to do, and the smart thing to do, and we will be ambitious on areas of co-operation. That is our duty to the British people and as a responsible global actor, and that is at the heart of our commitment to re-engage, including through the long-overdue leader-level meeting, the Foreign Secretary’s successful visit to China and the Minister for the Indo-Pacific’s visit to Hong Kong. Indeed, in the new year my right honourable friend the Chancellor plans to visit China as well.
In all our engagement, from the Taiwan Strait and South China Sea, where any escalation, or deterioration in stability, would have a significant impact on UK and global growth, to Hong Kong, to the completely unwarranted and unacceptable sanctions against UK parliamentarians and others, the Prime Minister has set us all a clear direction: to co-operate with China wherever we can, to take action to protect our interests and at all times to stand up for our values.
Ukraine: Reconstruction
Lord Fox Excerpts(1 year ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the United Kingdom, alongside the G7, has underscored that Russia’s international law obligations are clear. Russia must pay for the damage it has caused to Ukraine. G7 partners are urgently discussing this; we are exploring all avenues to aid Ukraine in obtaining compensation from Russia, consistent with our respective legal systems and under international law. I assure the noble Lord that I will keep the House updated on significant developments, as I have done before, and update the Front Benches, where we can, on the actions we plan to take.
Lord Fox (LD)
I thank the Minister for his Answer; I hope he does not mind if I probe a little bit. There have been widespread reports that the US specifically is leading discussions about seizing up to £300 billion of Russian government assets. During the Economic Crime and Corporate Transparency Bill, responding to amendments that I tabled, the Minister, the noble Lord, Lord Sharpe, was very clear that the Government would not countenance seizing assets. So can the Minister say that the Government are now countenancing the option of seizing assets?
Lord Ahmad of Wimbledon (Con)
My Lords, of course we are working very closely, as I said in my original Answer, with G7 members, particularly the United States. On seizing assets, we will ensure that any action we take is legally robust. All elements, including asset seizure, are considered. In December last year, leaders at the G7 confirmed that, consistent with our respective legal systems, Russian sovereign assets in our jurisdictions will remain immobilised until Russia pays for the damage. I assure the noble Lord that we are working closely with the US in that respect.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Lord Fox ExcerptsTuesday 21st November 2023
(1 year, 2 months ago)
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Lord Fox (LD)
My Lords, as my noble friend Lord Razzall alluded to, this has been a longer debate than it probably would have been had not the Secretary of State, who has now departed the Chamber, been involved. However, it has been a very interesting debate, and I dare say never have so many “t”s, “p”s and “c”s been used in your Lordships’ House—most of them in the right order, so very well done all of you.
Despite the clumsy branding, this really is an important development in UK international trade. It must have been important because the noble Lord, Lord Cameron of Chipping Norton, chose it for his charming, graceful and amusing maiden speech, for which he has received universal plaudits, to which I add my name. It is a shame that he had to leave before the denouement of this debate, but I am sure he will be beating a path to Hansard in the morning. We look forward to many opportunities to hear from him and ask him questions in your Lordships’ House.
We heard from the chair of the International Agreements Committee, of which I am also a member, about how we should be scrutinising this treaty, and we heard many other pleas from your Lordships about how we have an opportunity to have meaningful and proper scrutiny. One thing that has not been noted is that the change in the machinery of government, to which the noble Lord, Lord Grantchester, referred, has changed the Select Committee structure, which means that we no longer have a designated trade Select Committee, which further dilutes the amount of scrutiny we are getting.
This has been a proxy debate: we have been debating the treaty without any of the proper information we need, and many of us have been somewhat ignoring the actual substance of the debate. We thank the noble Lord, Lord Lansley, for belatedly pushing our nose to the grindstone while looking at the technical issues in the Bill, which we are supposed to be debating. However, the debate we are having about this Bill is more of a debate than the Commons got on the Australian deal. That was promised and never given, so we have to take the opportunities when we can get them, but we should not be begging Ministers and the Government for Parliament’s right properly to scrutinise this really important trade deal.
I turn to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The name is an indication of the journey it has taken: with every step it has made, another letter has been added to its acronym. We should also note that it is, uniquely, a trade organisation designed by the United States but of which the United States is likely never to be a member. However, it was interesting to hear last week the US Chamber of Commerce—its largest business organisation —berate successive US Governments for not doing trade deals, so you never know; maybe something will turn up.
However, we should bear in mind that design hand that went into this organisation, because there are differences between a bloc with essentially US systems and processes, and us, with essentially EU systems and processes. It was interesting to hear the noble Lord, Lord Trees, set out the gradient between those two ways of looking at standards. I believe that we will see more of this. The noble Earl, Lord Sandwich, also referred to those differences and disparities. It is something we should be very concerned about and, if we have the opportunity to scrutinise it, we should get under the skin of it.
We know that the Government’s projected benefits for this treaty are relatively tiny—everybody has mentioned that. Frankly, if they were aiming to meaningfully boost trade the Government would have been better employed reversing our decline in exports to Germany, where we have fallen from number two to number nine. Perhaps, given the dexterity of our Minister, he could even try to do both at once.
With this backdrop of only a small nudge in trade, it is no wonder that so many in your Lordships’ House have emphasised the politics and the new focus on Asia-Pacific. I see this point and recognise its importance; I think we all do. We look forward to further discussions on this and its implications—politically, economically and in security terms.
Going back to the case at hand, during the run-up to the accession to the Australian FTA, there was much concern regarding agriculture. There were and are still significant concerns that in order to get that deal, the UK conceded too much on animal welfare and environmental concerns. As we have heard from the noble Lords, Lord Trees and Lord Curry, there are similar concerns that UK farming standards could and would be compromised by this agreement. Additionally, UK pesticide standards could and would be undermined. There are 119 pesticides that are banned in the UK that are allowed to be used in one or more CPTPP member states. We are back to this gradient again—to the differences in the way standards are operated in our respective organisations.
The Australian deal kicked off this spring. What have we learned so far from the Australian experience? Perhaps the Minister could set out how he sees reciprocal opportunities for British farmers, not just in Australia but in the whole of the CPTPP, and what his department and Defra will be doing to organise themselves so that we can take advantage of those opportunities and get some British food on CPTPP plates. As many noble Lords have noted, this will need a bit of export oomph.
Many of us watched with admiration how Australia stood up to the Chinese when China launched politically motivated and punitive tariffs on some of its products. The Aussie response was not to launch tit-for-tat tariffs against the much bigger China; instead, it weathered the storm by getting out and selling its products to other places and other countries. Now China has started to withdraw those tariffs.
Looking beyond agriculture, this country needs to be able to be on the front foot, like Australia was, when it comes to trade. There seems to be a lot of work to do. We have heard from the noble Lord, Lord Udny-Lister, and others about what needs to be done and the inadequacy of where we are now. As we have heard, small and medium-sized companies make up half the economy. When we were taking evidence from their representatives, it was clear that they do not feel they are getting the support and the help they need to get the activation energy they need to export things.
It was hard enough when Brexit happened; indeed, many small businesses have stopped exporting because they have not got over that barrier. But getting their products to Vietnam is a whole order of magnitude harder, and the Government need to be at least one order of magnitude, if not two, better at giving them the help they need. So can the Minister acknowledge that there is a huge amount of work to be done by his and other departments? If he does not, the export opportunities will not be taken up and, frankly, what is the point of a trade deal if you do not trade?
The risks of inadequately exploiting the opportunities extend beyond domestic farmers. The first thing I will point out is the treatment of workers, which was mentioned by the noble Lord, Lord Collins. While the Government are flirting with ILO violations with their strikes Bill, these infractions pale in comparison with those seen in countries such as Brunei, Mexico and Vietnam. How do the Government intend to deal with non-ILO-compliant economies and their products?
Meanwhile, there is a real danger to the UK’s commitment to the sustainable development goals, in that they could be undermined by the CPTPP. Since Brexit, the UK has been mindful of developmentally sensitive products, including bananas—here we are in “fruit territory”. We have to be careful to maintain the value of trade preferences when designing unilateral trade policies, including the UK’s global tariff and the recently launched developing countries trading scheme.
In recent bilateral and multilateral trade negotiations, however, there has been a less consistent approach. The market access schedules for bananas—I am using bananas as one example of such products—negotiated as part of the UK’s accession to the CPTPP included concerning concessions. As I am sure the noble Earl opposite knows, the UK granted a reduced tariff to both Peru and Mexico, and slightly lowered concessions for other CPTPP members. While at present Peru and Mexico are relatively marginal suppliers to the UK market, the change threatens to set a precedent. The same point was made earlier—if they do it for one, when we are negotiating another deal, perhaps with a central American country that has a much stronger and larger banana export market, we are undermining the market access provided via economic partnership agreements to least developed countries. This jeopardises our sustainable development goals. Will the Minister comment on how that is being addressed and what his department expects to happen in that area?
The UK economy has a much larger service sector, as we have heard, than its manufacturing sector. FTAs traditionally stumble when it comes to the services part of exports and imports; I would like the Minister to reflect a little on that. In particular, I would like to look at where we stand on future mutual recognition of qualifications, because services are driven by things such as mutual recognition of qualifications. It would be good if the Minister could explain where we are. Will that be dealt with through CPTPP or will there need to be bilateral or other ways of actually delivering that?
Another way that services work is through short-term visits by our professionals into those territories. It is not 100% clear to me where we are on short-term visas to facilitate that kind of work.
The noble Lord, Lord Lansley, set out some issues on data localisation. It is important to have some idea of how far we can take this, because that will be the blood that makes services flow through the system.
My noble friends Lord Razzall and Lord Foster set out really important concerns regarding the IP and GI sections of this Bill. I hope the Minister has been listening and takes on board the concerns we have here.
The noble Lord, Lord Lansley, is also correct on procurement. We spent a lot of time talking about procurement; we suffered more amendments from a Government than I think has ever happened before, yet straight away the Government are turning their backs on some of what we decided. That is not unique, by the way—in the negotiations for the Swiss free trade agreement for mutual recognition of qualifications, they also turned their backs on aspects of the Professional Qualifications Bill that we also worked on. There is a disconnect along the line here sometimes; we spend many hours scrutinising legislation and then a bunch of trade negotiators go off and ignore the legislation. Why and how is this allowed to happen? There is a bigger question, as well as the individual question that the noble Lord, Lord Lansley, raised.
I look at the time and I have already talked for too long, so I will sit down. I look forward to the Minister’s response to this debate and to Committee stage. But, most of all, I look forward to us having meaningful scrutiny of this treaty.
Social Security (Additional Payments) Bill
Lord Fox ExcerptsMonday 27th June 2022
(2 years, 7 months ago)
Lords ChamberRead Full debate Social Security (Additional Payments) Act 2022 View all Social Security (Additional Payments) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 22 June 2022 - (22 Jun 2022)
Lord Fox (LD)
My Lords, I should first explain that my noble friends Lady Kramer and Lady Janke, who normally speak on these issues, are unable to attend today so your Lordships have me instead.
This is a small and, in a sense, relatively modest Bill that we do not oppose—indeed, we cannot oppose it due to its nature as a money Bill. We have heard some really knowledgeable input from the noble Baroness, Lady Lister, and the noble Earl, Lord Clancarty, who made important points on the subject of children and families with children and about the self-employed, particularly those working in the creative sector. I hope that the Minister will take those on board.
As we heard from the Minister, the Bill implements some of the cost of living support that was announced by the Chancellor in his emergency Statement—specifically, the £650 support for households in receipt of means-tested benefits, which comes in two instalments, as the Minister set out, and the £150 for recipients of non-means-tested disability benefits.
The Bill does not include the other support mentioned by the Minister, presumably because it is not needed from a legislative perspective. As I intend to suggest later, it also does not include many of the measures that the Chancellor should have announced in the light of the situation that the country finds itself in today. Even as we debate here today, the economy is the major concern on everyone’s radar, especially with the official rate of inflation predicted to reach double digits very soon. Then, as well as the worry of inflation, households are facing the highest tax burden in 70 years. The typical family will see a hit of £1,200 a year thanks to the Conservative Party’s tax rises. I hardly need to remind the Minister that the UK is in very difficult territory.
At the heart of all this is a much wider endemic issue that needs to be at the front of our minds when we debate an issue such as this. I am going to presume that the Minister would describe herself as a capitalist; I describe myself as a capitalist as well. However, for the UK to be a successful capitalist country, its citizens need either to have capital or to have a reasonable expectation that they will obtain it. Yet, in Conservative Britain today, it is quite clear that the gap between those with capital, and therefore a stake in the economy, and those who stand little or no chance of ever acquiring it is getting wider every day.
Worse than that—never mind savings and capital—while the top 10% of the country’s earners tighten their grasp on our economy, an increasing number of citizens are slipping below the subsistence line. It is not just global shocks that have caused that to happen, as the Minister put it. The slide was already happening, then Covid came and made it worse, and now inflation is rapidly increasing the number of people in economic peril and the pace with which, in some cases, they are traveling towards destitution. Proud families who never dreamed that they would find themselves in trouble are now struggling to pay the bills.
At the last election, the Conservative Party successfully campaigned on the idea that there are specific geographic areas that have been economically left behind. Although that is undeniably true, the party’s careful selection of particular towns and cities skirts over the underlying issue: the ever-widening income gap across the whole of our country. Although that gap is somewhat defined by geography, it is far more complex than that, being caused by demographics, educational opportunities and—let us face it—who your parents are.
That ever-widening gap is the real challenge at the heart of many issues that we are seeing in the UK today. So what is the modern Conservative take on it? While one part of the Government is signalling for the EU cap on already huge banker bonuses to be lifted, another department is seeking to limit public sector pay increases to one-third or one-quarter of the rate of inflation. Clearly this Government are not even trying to address the gulf between the richest and the rest of our country; in fact, it seems to look like the opposite.
When it comes to acknowledging the need to arrest the pain inflicted on the poorest in society, the Bill takes a few small steps in the right direction. However, as the noble Baroness, Lady Lister, eloquently expressed, it is a completely inadequate response to the cost of living crisis. It fails to reinstate the £20-per-week universal credit cut, which would have provided households on universal credit with an additional £1,000 a year. It fails to cut the main rate of VAT to 17.5% for one year, which would have put an average of £600 in the pocket of every UK household while lowering inflation and, importantly, helping our high streets, giving them a much-needed boost and increasing economic growth. A similar VAT cut in 2008 was found to increase retail sales by 1% and increase aggregate expenditure by nearly one-quarter of 1%.
The Bill also fails to consider repealing the national insurance rise and freezing the income tax thresholds. These are unfair tax rises that are making the cost of living crisis worse for millions of families across the UK. It fails to support rural communities concerned with rising fuel prices through the rural fuel duty relief scheme, which was promoted today by the newly elected MP for Tiverton and Honiton. It also fails to include those claiming the carer’s allowance from the list of benefit recipients qualifying for additional support.
Furthermore, provisions in the Bill allow for payments to be made in two instalments. By paying all the support on 14 July, the day of the first instalment, the Government could have supported people who need assistance more immediately. Perhaps the Minister would concede that, given the increase in the rate of inflation, the second payment should be accelerated as well.
It has been a pleasure to speak, briefly, in this short debate. I am looking forward to the Minister’s explanation of how the ever-widening income gap will be addressed in the second half of this Parliament. Most of all, I am looking forward to the Minister explaining how the Bill even scratches the surface when, across the country, thousands of honest, hard-working families are slipping ever deeper into poverty.
Following the by-election defeats inflicted on the government party last week, the current Prime Minister, Boris Johnson, said:
“We’re now facing pressures on the cost of living … spikes in fuel prices, energy costs, food costs—that’s hitting people. We’ve got to recognise there is more we’ve got to do.”
What is this “more” and when will it be done? Or, as is usually the case, is the Prime Minister’s statement merely empty words with no substance, no policy and no prospect of implementation?
Baroness Stedman-Scott (Con)
I am very happy to go back to the department and request that. I am not in a position to commit to doing it, but I will go back and write to the noble Earl with the outcome of those discussions.
Another important point that the noble Baroness, Lady Lister, raised was about how we are making customers aware of these payments. We are working on an extensive communications plan. There will be digital advertising, social media and display materials such as posters and leaflets for jobcentres and stakeholder premises.
The noble Baronesses, Lady Lister and Lady Sherlock, raised the issue as to whether the household support fund is sufficient. Local authorities in England have ties and local knowledge to best determine how this support should be provided to their local communities. They have the discretion to design their own local schemes within the parameters of the grant determination and guidance to the fund. We are going to publish new guidance for local authorities for this latest extension of the household support fund ahead of the fund going live at the start of October.
The noble Earl, Lord Clancarty, asked about low-income and self-employed people. We accept that earning patterns can vary substantially and it would be impossible to choose qualifying dates that work for every person on UC. However, a second qualifying date certainly reduces the risk that those with non-standard pay periods on UC miss out on a cost of living payment altogether.
The noble Lord, Lord Fox, raised the point about whether the Government are putting up taxes during the cost of living crisis and whether taxes should actually be reduced. The actions the Government have taken to return the public finances to a sustainable path post Covid mean that we are in a strong position to respond to the cost of living challenge. The Government’s goal is to reform and reduce taxes. The Chancellor’s Spring Statement set out the Government’s tax plan, which includes reducing the tax burden on working families by increasing the threshold at which people start paying NI contributions—a tax cut worth over £330 for a typical employee—and by cutting fuel duty by 5p for 12 months. The tax plan also shares the proceeds of higher growth with working people across the country by cutting the basic rate of income tax by one percentage point to 19% from April 2024, saving more than 30 million people £175 per year on average.
The noble Lord, Lord Fox, asked whether the cost of living payments are a sticking plaster. In total, the measures the Chancellor announced in May provide support worth £15 billion. Combined with other plans, as I have already said, this raises the money to support people during this cost of living crisis to £37 billion. This is more than or similar to the support in countries such as France, Germany, Japan and Italy. Importantly, around three-quarters of that total support will go to vulnerable households.
The noble Lord, Lord Fox, asked whether the Government were wrong to reduce the £20 uplift to universal credit. It was always to be a temporary measure, and it was a temporary measure. I do not think there is anything else I can say to noble Lords about that.
The noble Lord, Lord Fox, asked what we are doing to help people in rural areas. The boiler upgrade scheme has a budget of £450 million to support households in England and Wales to make the switch from fossil fuels to low-carbon heating. This helps people in rural areas transfer from fossil-based fuels to low-carbon heating with grants of £5,000 towards the cost of installing an air source heat pump, £6,000 toward the cost of a ground source heat pump and £5,000 for biomass boilers for properties not suitable for a heat pump, provided they are in a rural location and not connected to the gas grid. The home upgrade grant will provide upgrades to low-income rural households living off the gas grid in England to tackle fuel poverty and meet net zero. The Government have allocated £1.1 billion to the home upgrade grant over the next three years.
Again, the noble Lord, Lord Fox, asked why we are delaying half of the £650 to later in the year. Cost of living payments for those on means-tested benefits are deliberately being delivered in two payments to help support budgeting. This approach will also ensure that any newly eligible claimants can be paid the £324 payment even if they did not get the £326 payment and that all recipients of the second payment receive this closer to winter.
The noble Lord, Lord Fox, asked whether we were being more generous to those on means-tested benefits and said that £650 is not going to scratch the surface. The Government are providing over £15 billion in further support, as I have said. Three-quarters of it will go to low-income households. Each cost of living payment will be paid to 8 million people on a means-tested benefit. Millions of the lowest income households will get £1,200 of one-off support. I have said that the Secretary of State will use the CPI in September to decide on the uprating of benefits.
The noble Baroness, Lady Sherlock, asked what impact the cost-of-living crisis is having on poverty. The latest available—
Lord Fox (LD)
I thank the Minister for giving way. I appreciate the spirited defence of the measures that the Minister has just made. I am assuming that the Prime Minister was fully aware of what the Government are planning in terms of support when he spoke on Friday. On Friday, the Prime Minister unequivocally said that we are not doing enough, and we need to do more. Would the noble Baroness therefore agree with her own Prime Minister that the Government are not doing enough and need to do more?
Baroness Stedman-Scott (Con)
I agree that the Government have made great strides in providing additional finance. If my Prime Minister said that we need to do more, he was not saying that we are not doing enough. This will probably get me into trouble, but he would be daft to say that we need to do more in the current climate. It has been very nice knowing you all in this job.
Minister for the Oceans
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Lord Goldsmith of Richmond Park (Con)
I am just not convinced that we would have a better approach. We may enjoy self-flagellating in the UK but, outside this country, the UK is seen as a leader on ocean conservation issues, on ocean-related climate change issues and in standing up for the rule of law in international waters and beyond. I am just not convinced that having a single Minister would meaningfully change anything. This issue touches almost every department of government. It is therefore right that, instead of creating new positions, we focus on improving cross-government discussions.
Lord Fox (LD)
My Lords, the Minister has talked a grand game about policing the oceans of the world. Does he understand why we might be sceptical when the waterways under his and the Government’s direct control are infected with tonnes of sewage every day?
Lord Goldsmith of Richmond Park (Con)
That is a very different issue. The noble Lord will not be surprised that I disagree, but again I challenge him to give me a single example of another country that has either protected more waters directly or done more heavy lifting internationally to get the rest of the world to increase its ambition. More than 100 countries are now signed up and committed to protecting 30% of the world’s ocean by the end of this decade. That would not be happening if it were not for UK leadership.
Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2022
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Lord Clarke of Nottingham (Con)
My Lords, I fully support these sanctions and I congratulate the Government on the packages brought forward. I look forward with interest to the replies to be given to several of the detailed points raised about exactly how firmly they will be enforced.
I will look forward a little. The medium to long-term reality is that we are applying these sanctions against Russia, but Russia is almost certain in the end to achieve some degree of military success. A new reality will dawn, probably with a puppet Government in Ukraine, and the whole issue will start fading from international debate, from the media and so on. What are the Government’s plans for the medium term and, if necessary, the longer-term future in sustaining these sanctions and this level of pressure on the Russian regime?
In reality, there will be quite rapidly a tendency to put pressure on the Government to allow people to return to a new normality: to allow Russian companies to have access to the City of London again and to ease sanctions causing financial losses to lawyers, accountants and firms here. Is the Minister able to assure me that, as far as the British Government are concerned, we intend to retain this degree of sanctions until some satisfactory solution to the political problem is achieved, with a genuine agreement with a respectable Ukrainian Government who have proper regard to international law and national sovereignty? Will the British Government remain one of the more robust in the western lands? There will be considerable pressure to stop doing so much once we have, as it were, done our best to protect the Ukrainian regime during the conflict.
The sooner we start addressing that problem, the sooner we will start facing up to realistic problems that we must plan for. The Russians will undoubtedly, for example, try to ensure that the sanctions do quite a bit of damage to western economies, and will start trying to use their influence on the oil and energy markets to demonstrate that they can cause us some continuing loss unless we begin to lose interest—shall we say?—in the crisis that has so shocked the world. Are we determined to be one of those western countries that will seek to maintain the fullest force of sanctions we can unless and until a satisfactory solution is reached with the Russian regime?
Lord Fox (LD)
My Lords, it is a pleasure to follow the noble and learned Lord, who has just given the Government some wise advice which I hope the Minister will carry back to his colleagues.
We welcome the sanctions and look forward to the arrival of the economic crime Bill when it comes from the Commons the week after next. That has flushed out quite a lot of advice and some very strong comments from people who have been looking at the area of economic crime and kleptocracy in this country. One of the threads coming through, which goes back to the issue of what we can do now to stem that flight of capital, is that we are not fully using the anti-money laundering laws that we already have on statute in order to do that now. Will the Minister agree that more can be done with current legislation, which can be used to help stem the flow of money stolen from the people of Russia? Does he undertake to redouble efforts with all the bodies that have the power to use these anti-money laundering laws to get on and do it?
Lord Purvis of Tweed (LD)
My Lords, I welcome these measures on behalf of these Benches and I thank the Minister for maintaining contact and giving advance notice.
These are both the culmination of weeks of lobbying from Parliament to have sight of further measures but also, as noted in this short debate—including by the Minister—the start of a process. They are of a differing character, as the noble and learned Lord, Lord Clarke, indicated. Perhaps these are now of a more strategic nature which will be medium and long term, and perhaps they will have a different characteristic from the sanctions regime that we have put in place, which is different from what the EU scheme envisaged.
The noble Lord, Lord Austin of Dudley, rightly raised a number of weeks ago with the noble Baroness, Lady Williams, in the Home Office, why, as my noble friend Lord Fox indicated, we had not been using existing legislation. It has been highlighted for a number of months that the weak point in the global efforts against money laundering and kleptocracy is in fact the UK. Therefore, questions such as that of the noble Lord, Lord McDonald, are quite right. There is a niggling fear that the UK is still behind the US and the EU in making sure that there is, as the Foreign Secretary said a number of weeks ago, no place to hide for kleptocrats. However, as we have seen, because the Government have now, due to persuasion from Parliament, brought forward the first of the economic crime Bills, there have been, regrettably, plenty of places to hide.
REACH etc. (Amendment etc.) (EU Exit) Regulations 2020
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Lord Fox (LD)
My Lords, at the start of this debate, the disembodied voice of the Minister floated out over the Chamber. I was reminded of an airline pilot seeking to calm his passengers as unwelcome noises came out of one or two of the engines. Here, in the economy seats of the cabin, anxiety remains high—and, indeed, following this high-quality debate, it is probably higher. Whether through complacency, underestimation or shortage of resources, it is clear that Defra and Ministers have taken an iterative approach to this issue, with statutory instruments following statutory instruments. There have been tweaks and improvements along the way, and we should welcome those.
In essence, the long and detailed speech that I made when the first of these statutory instruments was introduced remains true. Then, as now, the Government played deadline roulette. They introduced deeply unsatisfactory secondary legislation just before it might be needed and dared the opposition to stymie or kill it. This is not the best way to get regulation right. I will not repeat the issues set out by the experts in today’s high-quality debate, but it was amazing to hear a Conservative Minister flow over the idea that one of the most important industries in this country will be burdened by £1 billion of extra costs with no benefit whatever. Here is growth that will not happen, taxes that will not be paid and public services that will not be supported. It is absolutely insane that we countenance this approach.
As your Lordships have heard, the big cost is in data, or in the prospect of having to duplicate data merely to re-register chemicals that are already legal in this country. At one point, we had hoped that the Government would seek associate membership of ECHA, but this seems not to be the case. It is disingenuous for the Minister to try to separate UK REACH from this statutory instrument. This SI is, de facto, a central part of UK REACH and it is, therefore, perfectly legitimate to have this wider debate today.
It seems clear that no kind of data sharing will happen on 1 January, with or without a deal. As we heard from the noble Viscount, Lord Hanworth, the Government have said that it will be supplemented by publicly available data. Like the noble Viscount, I contend that using public data is a non-starter. It is just not adequate for implementing controls or for defending those controls against litigation, which is what will happen. In the event that data is not rolled over, the Government have also said that animal testing of substances already registered under EU REACH will not have to be duplicated under UK REACH. However, if we get to the end of the grandfathering process and companies wishing to register chemicals have not had access to these data, either the HSE will have to lower its data standards or new data will have to be generated. Which do the Government prefer: less data, and therefore less safety, or new data, which will inevitably lead to more tests, some of which will be on animals?
Divergence will be a massive burden on industry. The EU recently announced a big reform of its chemical safety laws, which will lead to a rapid divergence between where we are now, with UK REACH, and where the European situation will be. What is the Government’s view about divergence? Will they actively seek to track the EU, or will they simply head off in the opposite direction? If it is the latter, the situation in Northern Ireland will become even more untenable and harder to manage. I had prepared a detailed description of how difficult things would be in Northern Ireland, but I shall forgo it and refer your Lordships to that given by the noble Viscount, Lord Trenchard. If he and I both think it will be total chaos, there is a fair chance that it will be.
The position of the HSE and its ability to regulate the chemicals market in this country is clear. It will not have the firepower it needs to deliver the safety it needs and support to industry it needs or do what this country needs to have a safe, functioning chemicals industry. This is a mess of the Government’s making. Your Lordships have tried to sort this mess out in the past, and there have been improvements. Whether or not we vote for this regret amendment, the Government have to go back and think again. The passengers in the aircraft are anxious, but that anxiety may not be irrational; it may be a rational response to a real problem that will create great difficulty for one of our most important industries and for a product that affects and touches everybody, every day and all the time in the United Kingdom.
Chemicals Regulation
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The Minister of State, Department for the Environment, Food and Rural Affairs, Foreign and Commonwealth Office and Department for International Development (Lord Goldsmith of Richmond Park) (Con)
My Lords, leaving the EU provides a unique opportunity to set up our own system for chemicals that will deliver high standards and be flexible to the current and future needs of the UK. It will give us the freedom to do things differently, where that is in our best interest. There will be transition costs, but by keeping changes as straightforward as possible, we will minimise the burdens and costs for business.
Lord Fox (LD)
I thank the Minister for his Answer and for speaking to me earlier today, but, as he is aware, the costs are unlikely to be minimal. If we take the statutory instrument currently laid as our model, the costs will be at least £1 billion simply to reregister chemicals that are currently legal under the EU system. This is a tax on British business, and even if it is spent over two years, it still constitutes a large number. Will the Minister undertake to work in close co-operation not just with his colleagues in BEIS but with the industry, which is extremely concerned throughout the sector, from manufacturing through basic chemicals industries down to cosmetics? Will they work with the industry to look at stretching the implementation period, cutting registration costs, finding ways to reuse data and all ways to make this a costless transition?
Lord Goldsmith of Richmond Park
We absolutely recognise that the costs may be substantial. That is why we are aiming to keep the transition to UK REACH as simple and straightforward as possible. We are considering a wide range of measures to minimise the burden and costs for businesses and will continue to work with BEIS, which we of course already work closely with, and the wider industry sector to keep these measures under review. We have developed grace period provisions, grandfathering and downstream user import notifications to minimise disruption to businesses and supply chains at the end of the transition period, while ensuring that UK regulators know which chemicals can legitimately be placed on the market. These measures give businesses two years, starting from the end of 2020, to provide the information required to be compliant with UK REACH
Flooding Update
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Lord Goldsmith of Richmond Park
I thank my noble friend for his question. I cannot provide him with specific information in relation to that river, but I will gladly do so following this exchange. Government support will go where it is needed. There are a number of different supports available centrally and locally for those areas most badly affected.
Lord Fox (LD)
My Lords, I am from Herefordshire, my wife is from Herefordshire and most of our family lives in Herefordshire. It is a county under an unprecedented amount of water. The short-term clean-up measures announced in the Statement are very welcome, but it goes much deeper than that. The already appalling state of the roads has been made much worse now that they are rivers. They are frankly little more than rubble in some cases. The flooding in people’s homes has been exacerbated by the raw sewage that is coming out of poorly maintained sewers and drains. A big reconstruction job is needed. Will the Minister undertake to recognise the scale of reconstruction required if a place such as Herefordshire is to recover? Will he take the county’s case—my county’s case—to the Chancellor so that when the Budget is announced, there is money not just to clean up but to rebuild places such as Herefordshire? Herefordians need to see that their lives are valued by this Parliament.
Lord Goldsmith of Richmond Park
I thank the noble Lord for his question. I absolutely make the commitment to take the case of Herefordshire initially to my colleague, the Secretary of State for Environment, Food and Rural Affairs. As I said earlier, there is no exaggerating the impact of what happened to the people affected. I can stand here and provide figures showing that the areas affected this time were affected even more so a few years ago. I can provide all kinds of examples of our intervening with conventional flood defences having yielded very impressive results. However, none of that is going to improve the situation for people who have sewage in their homes or whose businesses risk going bust as a consequence of this natural disaster. Yes, I will emphasise the Hereford case when I talk to the Secretary of State later today.