International Trade

Lord Giddens Excerpts

Thursday 23rd January 2014 Lords Chamber

[Lord Giddens (Lab)]

My Lords, I congratulate my noble friend Lord Harrison on having initiated this important debate. It is a pleasure to follow the noble Lord, Lord Marland, and to see him back here, in such ebullient form as always, even if he is going to desert us half way through the proceedings.

I have been a practising social scientist for several decades. Over that time, a principle of working has always done very well for me. That principle is—this might be the first time this word has ever been uttered in the House of Lords—“think dialectically”; that is, do not think that the future will be like the past; the future will often be the opposite of the past. There are transition points in history when the world starts to look very different. I feel that we are at such a transition point in the world economy today.

Therefore, when people go with the easy assumption that this will be the Asian century, I do not think that is necessarily true at all. The assumption that there will be an inevitable and significant decline in the West is not necessarily true either. The same thing applies to the process of deindustrialisation, which has perhaps been the dominant feature of the western economies for the past 30 years or so and which has transformed them essentially into heavily service-based economies. Although most observers see this as a continuing process, I do not think it will be or that deindustrialisation is a trend which will simply run and run.

I would like noble Lords participating in this debate who are interested in how we can produce a resurgence of global trade in this country to take very seriously the discussion about reshoring which is going on in the United States and several other advanced industrial countries around the world. Reshoring, which I have mentioned in a previous debate in your Lordships’ House, is the opposite of offshoring. It is the idea that industry will come back to the advanced economies and that there will be processes of reindustrialisation. It is very important that the UK is at the forefront of such processes should they indeed take place. We can all see that the “effort bargain” that has dominated the world economy over the past three decades can no longer be sustained. This now pivots on the role of China. Over that period there has been a kind of odd coupling between the United States and China, and to some extent Europe and China, based on the fact that the Chinese produce manufactured goods for the United States and the industrial economies. The United States cannot afford to pay for those goods so it has to borrow, and the situation is much the same for Europe. How does the United States borrow? It borrows from the Chinese, who invest in American bonds. It is surely the case that we have come to the end of that relationship now. It is also the case that China will move back much more towards domestic demand rather than simply exporting. Wages have also gone up significantly in the manufacturing centres in China.

When we look to our trading relationship in the future, we should not suppose that it will just depend on a continuing increase in the export of services. Instead, we should be back making things, which is crucial for the future. There is a kind of convergence between what is happening in the world economy and the emergence of digital production. Reference was made to the noble Baroness, Lady Lane-Fox. It is a matter of the expansion of not just the digital world but digital production in the form of 3D printing and things well beyond that now. These are massive processes of change. With these localised forms of production many things that used to be made thousands of miles away can now be—and in the future will be—made locally.

When we think about the resurgence of UK trade it is a mistake just to make the simplistic assumption that we should turn our eyes to the east or, if you like, that the main driving force should be how to be nicer to China. For that reason, I would like to expand on the comments made by my noble friend Lord Harrison about the significance of the free trade system now under discussion between the United States and the European Union. I see this as a kind of core of the possible pivot of change in the global world economy. It could be a crucial source of transformation for the whole range of industrial countries involved. Looking at the potential impact of the EU-US Transatlantic Trade and Investment Partnership, to give it its full name—it is usually called TAFTA, which is the term that I shall use because it refers to an area—you could say that it might be the most important source of job creation and wealth creation for western economies for many years.

There are some disputes among academics about the implications of TAFTA for GDP, but I have looked at the Commission’s estimates in some detail and think that they are pretty reliable. The Commission’s estimate is that TAFTA will yield €120 billion for the EU states and €130 billion for the United States. I remind noble Lords that trade is not a zero-sum game. It does not follow that a consolidated western trading relationship will have adverse consequences for the developing world. Actually, it is the contrary: according to the Commission’s estimates, €100 billion extra GDP will be generated for the developing world as a result of this process. The implications are huge.

As the noble Lord has hinted, we know that there are significant problems in establishing the free trade agreement; there are problems getting it through Congress; there are problems at a state level in the US; and there are problems within the European Union—for example, at least some French thinkers and politicians are not as enamoured of free trade as other parts of the European Union and have made perhaps not terribly helpful comments on the process. Nevertheless, I think that there is a strong will in the United States to push it through—President Obama has made it a legacy issue for himself—and there is also a strong will in Europe.

The free trade deal has been widely criticised from the left. It is said that it will give more power to footloose corporations and have negative environmental consequences. These criticisms are strongly misplaced and quite wrong. For example, increasing collaboration between the United States and the European Union is likely to be the only way of having a significant impact on tax loopholes, eliminating tax havens and creating greater corporate responsibility. I think that the FTA will bring greater corporate responsibility, not less. There is a sticking point around the precautionary principle environmentally, but I think that the precautionary principle is not a principle and that Europe should be encouraged to abandon it. Not taking a risk is itself a risk; therefore I see a fruitful possible source of collaboration here, too.

I have three brief questions for the Minister. What is his assessment of the progress of TAFTA so far and have the Government made a clear assessment? Secondly, do the Government accept the Commission’s estimate of GDP growth and job creation for the UK and, if not, why not, because it seems to me quite valid? Thirdly, to pick up on what the noble Lord, Lord Harrison, said, do the Government accept that were the UK to leave the EU in the relatively near future its chances of inclusion would be slim to non-existent?

--- Later in debate ---

[Lord Sharkey (LD)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Thornton, and I congratulate, as she did, the noble Lord, Lord Harrison, on securing this debate. There seems to be a general, if qualified, consensus among the commentariat that international trade does promote both employment and growth, both in exporting and in importing countries.

However, this consensus is not uncontested. In a 1999 paper, Warzynski and Westergård-Nielsen comment:

“International trade and outsourcing are often blamed for destroying jobs”,

and the current position of China serves as an example of the problems that imperfect international trade arrangements might generate. As Irwin Stelzer wrote in the Sunday Times four days ago,

“China, running its largest trade surplus in five years, manipulates its currency, subsidises its state-owned enterprises and steals intellectual property from America and Germany—or demands it in return for access to its market”.

However, as I said, the balance of expert opinion seems clearly of the view that international trade, provided that certain regulatory mechanisms are in place, promotes both growth and employment. An OECD paper of May 2012 called Trade, Growth and Jobs summarises that organisation’s view. It concludes:

“Trade improves employment and wages through growth … Trade—both imports and exports— contribute to creating better jobs … there is no systematic long run link between import levels and unemployment ... Trade can also improve working conditions”.

In addition to all this, there are some compelling examples of where the absence of international trade damages both growth and employment. The world uses sanctions as an instrument of persuasion precisely because of the damage caused by constraint in external trade. There is a compelling example in the middle of the Mediterranean: Northern Cyprus has been effectively cut off from any significant internationa1 trade for 40 years, and the consequences have been poverty, unemployment, and low growth and investment.

However, the benefits arising from international trade may not be as clear or as straightforward, or as equitably distributed, as a Panglossian reading might suggest. There are, of course, two kinds of international trade: goods and services—and financial services are a major component of the second group. I do not think that anyone would argue that the collapse of 2007-08 has not damaged growth and employment in very many communities. The connectedness inherent in international trade can be a major cause of reversals in growth and employment. That is especially true when regulation proves inadequate, and I shall return to the theme of regulation a little later.

However, I note that even when international trade promotes growth and employment, as it frequently does, it can also have other important consequences. It can have cultural consequences that may be seen as undesirable—France’s attitude to the Anglo-Saxon model, mentioned already by the noble Lord, Lord Giddens, is a case in point. The opening up of new markets may also have unpredicted cultural consequences. For example, I believe that Prince Philip is still worshipped as a god by a cargo cult on the island of Tanna in Vanuatu.

International trade agreements may also significantly advantage large corporations over SMEs and micro-businesses. They may act to reduce economic stability via contagion. We have seen examples of that both in sovereign debt and in the Asian markets. Finally, international trade may act to reduce democratic oversight of the operations of the market. This can take the form of simple distance from the transactions, complexity and lack of transparency in trade agreements and non-accountable dispute resolution procedures. In the time remaining, I shall comment on just three of these areas.

The first is the question of whether international trade agreements should now concentrate more on supply chains than on tariff reductions. The World Economic Forum at its meeting a year ago focused on reducing supply chain barriers, which it is estimated would give a bigger boost to GDP than removing tariffs. Improving border administration and transport and communications infrastructure could increase global GDP by 5% and would have six times the effect of removing all global tariffs. I would be grateful if the Minister could tell the House how the Government currently see the proper balance between reducing supply chain barriers and reducing or removing tariffs.

The second area is the position of SMEs in all this. The CBI reports that, in the UK, only one in five SMEs currently exports. It also notes that businesses are 11% more likely to survive if they export. Perhaps part of the problem is that SMEs are not properly represented in large-scale multilateral or bilateral trade negations. In January last year, the WEF recommended that SMEs be at the negotiating table when there is discussion of the regulatory framework and environment. Does my noble friend the Minister agree with that recommendation, and is it actually happening when the UK negotiates bilaterally and multilaterally through the EU?

My final point is on these negotiations. There is an alphabet soup of these things: FTAs, WTO, TPA, TPP and TTIP. Much of what goes on in these negotiations is complex, opaque and takes an awfully long time. Occasionally, it is all punctuated by a dramatic announcement. For example, a year ago the EU Trade Commissioner suddenly announced that he had personally saved the WTO,

“from the darkness of multilateral irrelevance”.

It may well have been true, but I cannot see that kind of thing quickening the pulse of anyone in an SME in, say, Merseyside.

That begins to illustrate a point. We need all our business communities to understand and feel that they have a part in trade negotiations, but we also need to make sure that Parliament has an effective oversight role. This was a point made forcefully by the noble Lord, Lord Harrison. This is currently a question in the TTIP negotiations which envisage, as they should, dispute resolution procedures. This is obviously vital when trading between different jurisdictions, but the question that has arisen is whether these non-governmental arbitration panels will have the power to override or amend local laws.

In the TTIP negotiations, there is a procedure called ISDS—investor to state dispute settlement. The EU acknowledged on 20 December last year,

“that ISDS, if not properly designed, can raise a number of legitimate concerns about whether legislation can be undermined by investors”.

Put another way, it is possible that in settlement of a trade dispute large companies can rewrite national laws. For example, Eli Lilly is currently suing the Canadian Government for $500 million under the terms of a trade treaty and demanding a rewrite of Canadian patent laws.

George Monbiot said in the Guardian on 4 November 2013,

“Brussels has kept quiet about a treaty”—

he means TTIP—

“that would let … companies subvert our laws, rights and national sovereignty”.

Ken Clarke responded to this a week later. He did not agree. However, the issue is clearly important. What role will Parliament have in determining the final text of the ISDS? What opportunity will we have for scrutiny? I would be grateful if the Minister could reassure the House on these points and on the proposed dispute resolution in general.

[Lord Giddens]

My Lords, the fact that George Monbiot says something does not necessarily mean that it is true. The Commission is well aware of the issues surrounding this. I do not think that we can say that this is not being discussed, because it is.

[Lord Sharkey]

I apologise if I suggested that everything that George Monbiot says is true. I did not mean that.

Returning to the issue of ISDS, I was saying that I would be grateful if the Minister could reassure the House on the points that I have made and on the proposed dispute resolution mechanisms in general.

Since I have mentioned Ken Clarke once, I will quote him once more, talking about the advantages of the TTIP deal:

“According to the best estimates available, an ambitious deal would see our economy grow by an extra £10bn per annum. It could see a rise in the number of jobs in the UK car industry of 7%. British companies—of all sizes—currently pay £1bn to get their goods into the US—this cost could be removed altogether. Perhaps most importantly in the long-term, such a deal would safeguard the liberal trading rules which we British depend on—but which the growing economies of the east are less keen on—for generations to come”.

I think that puts a succinct and powerful case for international trade as a promoter of growth and employment—growth and employment abroad and, critically, growth and employment at home too.

European Union (Referendum) Bill

Lord Giddens Excerpts

Friday 10th January 2014 Lords Chamber

[Lord Giddens (Lab)]

My Lords, I am a strong and committed pro-European, and if noble Lords will forgive me, I shall describe the reasons for that as three Ps and an S. First, I am a pro-European because of peace. Many people say that dealing with conflict in Europe is a thing of the past. That is manifestly not so. There was a bloody and horrible war in the Balkans some two decades ago. It is highly important for Serbia, Kosovo, Albania and the Balkan countries to enter the European Union. Secondly, I am a pro-European because of prosperity. It sounds an odd thing to say given the travails of the eurozone, but the single market adds something like 2.6% to the GDP of its member nations, and the eurozone is in the process of basically positive reform.

Thirdly, I am a pro-European because of power. In our globally interdependent world, if Europe cannot collectively exert an influence over the rest of the world, we will live in a kind of G2 world in which we will be a backwater and will simply be subject to the decisions of others. Fourthly, and this is important in this debate, I am a pro-European because of what I call “sovereignty plus”—that is, because, contrary to what many people seem to imagine, each nation gets more sovereignty from being part of the European Union than it has outside it. This was recognised in the Prime Minister’s Bloomberg speech where he said that in foreign policy we get much more clout from being a member of the European Union than we would otherwise. This can be generalised to most aspects of EU membership.

I am a committed pro-European, but I am not one of those who hold that it would be economic and political suicide for the UK to leave. I think that the UK could at some point leave the European Union and could survive outside it, but the conditions of doing so would be extremely damaging indeed. Like most other noble Lords who have spoken, I think that at some point the people should decide. I am therefore in favour of a referendum, which would be sensible and democratic to hold at some point.

However, no one should doubt that if Britain were to exit the EU, there would be a wrenching and protracted process of readjustment. Other noble Lords have drawn attention to this. The idea that the country would magically retrieve lost sovereignty is superficial and foolish. What matters in the contemporary world is not paper sovereignty but real sovereignty in a world that has been transformed out of all recognition over the past two or so decades. For example, the European economies and the American economy are likely to be transformed by the transatlantic free trade agreement. This is very much on the books; it is likely to happen within the next two years. There is very strong support from the Obama Administration. You cannot tell me that if the UK were outside the EU and had to negotiate individually it would have more sovereignty than it would inside the EU.

This is not a trivial thing; a tremendous process of transformation is envisaged here. Essentially, the country would have to reinvent itself and the reinvention that would have to follow would be the opposite of UKIP’s “beer and cigarettes, back to 1950s” version of Britain. It would have to reinvent itself not like Switzerland or Norway but, if you want a really positive model, like Canada—as a kind of open, small economy, heavily dependent on a much larger one to which it is adjacent and to which it must orient its actions, with far less influence in the world than the UK has at the moment, but nevertheless a society that survives well. That could be a model for the future but it would be a dramatic process of transformation. The country would have to be anti-UKIP because it would have to be much more cosmopolitan and open-looking. There would have to be more immigration, rather than less, just as Canada has.

I think a referendum should be held but only if certain conditions are satisfied. Since these have been widely discussed in the debate, I shall zoom through them fairly quickly. First, as many noble Lords have noted, it should not be driven by short-term political concerns but by the long-term interests of the country. As I have just stressed, it would be the biggest transformation that the country has faced for more than 60 years. It would be quite different from the 1975 referendum, which was held when Europe was in the process of being formed. We would be leaving an entity of 520 million people, which is still moving forward. It would be a very dramatic and consequential step to take, and the whole country should realise that.

Secondly, a referendum should not be held until it is clear what shape the EU, and specifically the eurozone, will assume. This point has also been made previously by noble Lords. Europe is in flux and in movement; we do not know what the outcome will be. What we can be sure of is that there will be treaty change; I think that is inevitable. That treaty change is likely to happen within the next five or six years. That is the process to be monitored at the time when people should be asked to decide in an “in or out” referendum in this country.

Thirdly—I feel this very strongly as I am very worried about it and I do not like the impact of the Bill on it—there must be a full and fair open public debate. It takes a long time for such a debate to be set in motion. What really worries me is that the UK could drift out of the EU without most citizens fully understanding the consequences and implications. I think a great deal of attention needs to be given to this because it would be the very worst outcome for anyone.

In conclusion, I am strongly against the Bill because not one of the three conditions is realised. It deserves, at the minimum, to be substantially overhauled in this House and I am strongly persuaded that it will be.

EU: Reform

Lord Giddens Excerpts

Thursday 9th January 2014 Lords Chamber

[Lord Giddens (Lab)]

My Lords, I, too, congratulate the noble Lord, Lord Dykes, on having initiated this debate. As he said, it is a useful preface to the mega-exercise of tomorrow. I wish the noble Baroness—genuinely—good luck in keeping awake during the 750,000 speeches, or 75 speeches, that will be given tomorrow. Perhaps I should not say this, but I have just written a book on the future of Europe and I have had the occasion to travel quite widely debating it, during which travels I have met a range of European political leaders past and present. I always greatly respect the speeches of the noble Lord, Lord Howell, and quite often agree with him. In this case I have to say that I disagree with quite a chunk of what he had to say in assessing European political opinion about the current position of Britain.

I think that the UK still stands at fundamental risk of being isolated and finding itself in a marginal position in Europe, and it is in the process of alienating some of its best allies in eastern Europe because of the current debate about migration. One only has to look at Viviane Reding’s comments yesterday, reported today in the Times, to see the current of opinion in Europe about some of these policies.

When the Prime Minister gave his Bloomberg speech, European leaders were at one in saying that Europe à la carte is not an option. Having talked to quite a few of them I know that that view is strongly held today. The Prime Minister wants an open and flexible Europe. Everyone wants a more open and flexible Europe, and many reforms are being pushed through to try to achieve this. However, it is absurd to identify flexibility with cherry picking. Flexibility often means, for example, enhanced leadership. In the case of the eurozone, for example, as the noble Lord, Lord Dykes, mentioned, we need more leadership and more capability to respond quickly. That is not achieved by a version of fragmentation.

It is easy to see what would happen if the government approach was generalised and every country wanted the benefits of being in the EU without the commitments. The whole enterprise would become unworkable. It is for that reason that when I travelled around I found a response to the UK’s position that sees it as a mixture of special pleading and blackmail. I fully agree with my noble friend that the Government must surely seek to cut through this and break away from it.

Although it has not been mentioned, this discussion is about the British review of competences. One should begin by saying that there are substantial differences between our review and that being carried out in the Netherlands, which is often thought of as being a similar exercise. The Dutch approach is not based on the idea of securing treaty change—as our approach seems to be—rejects an approach based on opt-outs, and is concerned with subsidiarity as such. I have read the literature on our review of competences and a lot of interesting ideas are developed in it, but I feel strongly that we should make a contribution to the Commission’s attempts in the REFIT programme to produce a more flexible and proactive Europe. That programme is for doing precisely that. It has already reached a sophisticated level.

The idea that the UK has a special view on the need for flexibility and clear leadership in Europe is totally false. All European leaders are conscious of this. One of the things on which I agreed with the noble Lord, Lord Howell, is that we have lived in a world of fantastic transformation, dominated by technology, throughout most of our lives. All states, not just the European Union as a collection of states, are stumbling in their attempts to deal with this new world. It is completely false to suppose that the major European leaders are not conscious of the need to do so and do not have in play programmes striving to do just that.

I should like to have a go at asking the noble Baroness four questions about this matter. When I tried to do so in previous debates, she did not always seem inclined to answer those questions. I suppose that I will be sympathetic, given her situation of being squeezed between the two debates, if she does not answer them today. However, they are questions that the Government should address.

Point 1 is that I read the first batch of reviews of competences, which seemed to contain a lot of interesting discussion. However, in those that have been published—those that I know of, anyway—I do not see any basis for renegotiation at all. If the Government do see one, I should like to hear it. A group of authors produced a detailed study of the first publication of the review of competences, which concluded that the,

“first set of … reviews reveals no grounds in the assessments of British stakeholders for any large repatriation of competences, nor for further opt-outs”.

The study was based on consulting major stakeholders in the relevant areas. I would like the noble Baroness to comment on this if she has enough stamina to do so, but she may be saving it all up for tomorrow—which would perhaps be a wise strategy.

Secondly, are the Government really serious about getting EU-wide agreement for proposals to place significant restrictions on immigrants from new entrant countries to the EU in the future? I have seen that mooted in the press but I do not see it as a feasible or desirable strategy. We clearly need treaty change. Is there not a contradiction between, on the one hand, the Government’s endorsement of the single market—which is, after all, the centre point of the whole Bloomberg speech—and, on the other, the apparent desire to block free mobility of labour? We cannot have a well functioning single market without free mobility of labour. It is arguable that we actually need more mobility of labour than we have at the moment for economic efficiency in Europe. In the United States, for example, mobility of labour is at something like twice the level that it is in Europe, and this is generally seen by all economists as contributing to the efficiency of the American economy.

[Lord Howell of Guildford]

As usual, the noble Lord is making a fascinating speech, but is there not a difference between mobility of labour for work, bringing the single market further success and action, and mobility of people and migrants for benefit purposes?

[Lord Giddens]

Of course there is a difference but there is now a lot of evidence which indicates that no more than a tiny sliver of migrants in the EU have come benefit-seeking over the past few years. There is no evidence for what the noble Lord suggests. The European Commission has carried out a systematic study of this, and personally I do not think that that point holds.

My third question to the noble Baroness is as follows. Everyone agrees that one of the UK’s major contributions to Europe in the past has been to support enlargement, it being the driving force behind part of the European Union’s success. We had a war in Europe in which 100,000 died. In my view, it will be crucial that the Balkan countries—Serbia, Kosovo and Albania—are incorporated into the European Union. Are the Government seriously threatening to block accession, as reported in the press, as part of a sort of blackmail tactic? Is there any truth in that assertion? Surely that would be wrong. We need those countries in the European Union. There is still the possibility of conflict in that area, and the UK has always supported such a process in the past. Is it now going to try to throw up a roadblock? I certainly hope not, and I hope that the noble Baroness will agree with that.

Fourthly and finally, it is pretty clear that the most that Britain is likely to get from the other 27 partners in this enterprise is a kind of patched-up, face-saving deal, because to a substantial degree it is based on special pleading. I have asked the noble Baroness this question twice before but I would still like to see whether she is willing to venture an answer. Following the Prime Minister’s Bloomberg speech, if the Government are still in power and if sufficient forms of response from Europe are not achieved, is there a situation in which the PM would actively campaign for the UK’s exit from the European Union?

Exports

Lord Giddens Excerpts

Wednesday 8th January 2014 Lords Chamber

[Lord Giddens (Lab)]

My Lords, we are in the early stages of some of the greatest transformations possibly ever to affect manufacturing and even service industries, with the advent of digital production. By that I mean 3D printing, what has come to be called by some 4D printing and beyond. As a result, it may be possible for us not only to make many things here that are at the moment made abroad but to export them to other countries. What are the Government doing to ensure that the UK is in the forefront of these extraordinary possible transformations?

[Lord Livingston of Parkhead]

The noble Lord is indeed correct that we are seeing much change in manufacturing capability. The Government are investing significantly and have ring-fenced a science budget to assist in many UK projects. We have the “eight great technologies” that we will be investing in, and we are increasing the links between companies and universities; I commend the universities on that. We are certainly supporting the advanced manufacturing capabilities as well as a number of other technologies that we believe will really help the UK to go forward, investing in the right industries that will grow in the future.

EU: UK Isolation

Lord Giddens Excerpts

Monday 22nd April 2013 Grand Committee

[Lord Giddens]

My Lords, like noble Lords here present, I have been travelling widely across Europe over the past few months and talking to a range of political leaders and academics. My reading of the situation with regard to the UK is a bit different from that of other noble Lords who have spoken because I think it is much more serious and difficult for Britain than we imply from the speeches that have been given hitherto. Being an academic, I shall express this in terms of a number of steps of reasoning and ask the Minister to say where the flaw in the argument lies because I do not see one.

It goes in seven quick steps: first, the economy of the UK is heavily dependent on that of the wider European Union and there is no chance of diminishing that dependency in the short term. Secondly, saving the euro and returning the eurozone to prosperity is of key importance to a stable future for the EU and hence to the UK’s economic fortunes. The collapse of the euro would have catastrophic consequences for all of us. Thirdly, the euro cannot be saved without greater European integration, including, at a minimum, some form of banking union in the eurozone and, almost certainly, some sort of loose federation for the EU as a whole down the line. Fourthly, you cannot have greater integration and variable geometry at the same time because they are mutually exclusive. This is the reason why our normal allies, such as the Danes, gave such a tepid response to the Prime Minister’s speech in January. Fifthly, the chances of treaty change along the lines the Prime Minister wants to produce are therefore, to my mind, pretty close to zero. The main reason is that they are simply in the opposite direction to that in which Europe has to travel if the eurozone is to be saved, and the eurozone must be saved; at least, it must be stabilised in the short term as a minimum. Sixthly, hence, if by some miraculous happenstance the Government win the next election, the Prime Minister will be forced, when a referendum is called, to campaign for a no vote. Seventhly, since the Prime Minister says that he wants the UK to stay in Europe, this outcome can be described in Shakespearian jargon as:

“Hoist with his own petard”.

--- Later in debate ---

[Lord Bowness]

Before the noble Baroness finishes, I have two specific questions which she did not deal with. Will she repudiate the policy advocated by UKIP of leaving the European Union and will she commit the Government to a categorical support of the four freedoms, to which I referred in my speech?

[Lord Giddens]

Mine were not undergraduate questions but Socratic propositions.

[Baroness Warsi]

On the question asked by the noble Lord, Lord Bowness, the primary supposition is very clear. It is very apparent that the Conservative Party’s policy is one of renegotiation. In my last job I spent many hours touring the country speaking to Conservative members. When I asked them whether they wanted out, in as it is now or renegotiation, more than 90% always went for renegotiation. That is the Prime Minister’s position and I hope that it is clear.

EU: Prime Minister’s Speech

Lord Giddens Excerpts

Thursday 31st January 2013 Lords Chamber

[Lord Giddens]

My Lords, the Prime Minister said in his speech:

“There are always voices saying ‘don’t ask the difficult questions’”.

I do not want to be one of them, so here are my difficult questions for the Prime Minister. First, if he can get a new settlement for Britain, he will campaign for a yes vote in a referendum,

“with all my heart and soul”.

What will he do if only minor concessions, or no concessions at all, are made?

Secondly, many EU leaders recognise that a new Europe built around the eurozone as it becomes more integrated should consider returning some powers to nations and regions. They have also made it perfectly clear that any such changes must apply to all member states; there will be no cherry picking. Is not cherry picking—in other words, a special deal for the UK— exactly what the PM seeks to achieve? Thirdly, some parts of the speech seemed to suggest that the PM might seek to derail the treaty change needed to stabilise the eurozone if he does not get his way on a special deal for the UK. Can we be assured that that absolutely will not be the case?

Fourthly, does the Prime Minister not see that his vision of the EU—

“whose essential foundation is the single market”—

is not shared by any other member of the Union? I refer to what the right reverend Prelate said. Other member states see the European Union as a far more rich entity than that. Is it not obvious that the bulk of the EU is moving in an entirely different direction from that specified by the Prime Minister? Fifthly, and finally, will an in-out referendum still be held by the date specified even if the longer term prospects for the EU are still not clear—which could very well be the case? I hope that the Minister will respond to all those questions in the absence of the Prime Minister.

European Union: Recent Developments

Lord Giddens Excerpts

Monday 17th December 2012 Lords Chamber

[Lord Giddens]

My Lords, it is a pleasure to follow the speech of the noble Lord, Lord Howell, at least some of which I agree with, especially the beginning and the end. It was good at least to hear him mention the London School of Economics. I begin by noting the curiously male dominated nature of debates in your Lordships’ House about the European Union. This one is no exception. Apart from the Minister, only two noble Baronesses are contributing, and one has conveniently been placed at No. 32, propping up the list of men. Perhaps the noble Baronesses present would get together informally and see whether anything could be done about this in future.

I want to concentrate on the economic situation of the eurozone and the EU. I base what I have to say on what is probably the most comprehensive and objective report on the state of the pan-European economy, produced under the auspices of the Lisbon Council and the Berenberg Bank, which is referred to as the Euro Plus Monitor. This year’s report is appropriately entitled, The Rocky Road to Balanced Growth. Rocky road or not, the results in the report stand out sharply from the despairing tone of many commentators, particularly in the British press. The report shows that fiscal deficits in the eurozone countries are being slashed at what it describes as impressive speed. The countries that have received financial backing—Greece, Ireland, Portugal and Spain—have all moved up the scale of indicators that the report provides in the reforms that they have instituted. These are real, not formal or promised, reforms. Greece is No. 1 on the scale, Ireland No. 2, Spain No. 4 and Portugal No. 5. The one in between is Estonia, which is No. 3.

The authors state, and I agree, that it is a mistake to counterpose austerity and growth in a simplistic way. Austerity can be a potent medicine, but should be in the service of clearing the way for economic growth. As with any other medicine, refusing to take it can add to the travails of the sufferer—indeed, lead to their demise—but so can an overdose. The latter, the authors say, is what is happening in the UK, and in a much more dramatic way in Greece, which risks entering a death spiral because of the strength of the dosage being forced down the patient. Greece may be No. 1 in terms of real reform, but starts from such a low base that it ranks at No. 17 in the eurozone on the other economic scale used in the report, a scale of overall economic health.

Another tranche of support for Greece has just been concluded, but I have to agree with the authors that, from this point on, the debate about Greece should shift towards long-term pro-growth reforms. Contrary to what many say, Greece is not likely to exit the euro and it is important, as the authors say, for the European Union to produce a specific plan for the future of that country at this point.

There are some very interesting further results in the report, which to many commentators will be counterintuitive. As for measures of economic health, the study shows a dramatic increase in external competitiveness as measured by a range of indicators, especially among most of the southern countries. In my view, that is an extremely important finding. It means that economic convergence is occurring under the pressure of change in the EU, something which the Lisbon agenda manifestly failed to achieve, economic convergence being a key condition for a return to health on the part of the eurozone economy.

The report shows amazingly widespread restructuring. It is going on almost everywhere. The authors also make the point that parallel changes to those transforming the eurozone are not happening in the United States or Japan, countries which are even more indebted than the eurozone average. If the eurozone countries can stay on the path of reform, the authors say, they could emerge as the most dynamic of Western economies. That is a big if, of course, but in the light of the data that the authors provide, it is no longer wholly implausible.

The analysis of the UK is both interesting and salutary. The UK, the report stresses, sees itself as an economy apart, with its own currency and so forth, pulled down by the fallout from the euro crisis. If the UK left the EU, it is often thought that it would be far more successful. The findings of the report do not bear that out at all. The UK is, in several ways, more vulnerable than most members of the eurozone. That is documented in detail in the report. For instance, the UK has one of the weakest fiscal positions of any EU country. Its ranking in terms of external competitiveness is no more than average, and a pretty weak average at that. In the second half of 2013, the report concludes, average growth rates in the eurozone are likely to be higher than those in the UK.

I hope that the noble Baroness will comment on those findings, based as they are not on supposition but on detailed economic analysis. I trust that her response will not consist of truisms or banalities but will be based on economic analysis in comparing the UK with the countries in the eurozone.

Older People: Their Place and Contribution in Society

Lord Giddens Excerpts

Friday 14th December 2012 Lords Chamber

[Lord Giddens]

My Lords, the most reverend Primate is sitting there basking in praise. I hope that he will not collapse under the weight of it if I offer a bit more and say how much I admire his work and his writings. I wish him a very happy transition to Cambridge. Someone spoke of Cambridge as an “ivory tower”. As someone who was a professor in Cambridge for many years, I fiercely reject that suggestion, as I reject it of all universities. I regard the remark as the moral equivalent of ageism for universities. I emphasise that universities are in-the-world institutions and I am sure that the most reverend Primate will find that to be the case when he comes to Cambridge.

Old age is a time, if I can use the word, for mordant, self-deprecating humour, and we have heard a good deal from noble Lords along those lines today. How do you know you are getting old? You keep in touch with your friends through the obituary column. How do you know you are getting old? You have a party and the neighbours do not even realise it. How do you know you are getting old? You enjoy hearing about other people’s operations. My experience in the House of Lords bears this out. One of the first things that I heard when I arrived in your Lordships’ House was someone saying to me, “We talk a lot about our operations in here”. I did indeed find that to be true.

Yet there is ageing and ageing. Last April, a marathon runner decided to make the London Marathon his last such race. He will now compete in what he called “short” runs of five or 10 kilometres. Fauja Singh is 101 and did not take up marathon running until he was 89.

We casually talk about the ageing society and regard it as a problem, yet in many respects we live in what I would call a “youthing” society. I mean that the lifestyle patterns of older people resemble those of younger groups today far more than they did a generation ago. I am not saying that that is all a good thing, but it is the case. There are dating sites for the over-70s, pop singers in their 60s and 70s continue to perform and draw large audiences, and people of these ages can sustain an active sex life—or so I believe.

As we know—other noble Lords have spoken on this—the frail elderly present major difficulties of care. It is important to see them not as a category just defined by age, as we can see from the example of Mr Singh. A high proportion of people over 60 are in relatively good health. Believe it or not, in terms of health statistics there is not much difference between those aged 60 to 70 and those aged 20 to 30.

How are we to make best use of their talents? For some reason, no one has asked the Minister questions but I take it that I can do so—and I propose to. I will briefly run through my questions. First, raising the pension age is a core economic necessity in all industrial countries, including this one. Does the Minister agree that the best way to defuse the pensions issue is affirming the right to work and therefore combating ageism? People of all ages should have the right to work.

Secondly, would she agree that combating ageism is especially important in the case of older women, who often face a double barrier of discrimination? Thirdly, would she agree that activist policies are needed to make lifelong learning a reality? Would she agree that neither the previous Labour Government nor the present Government have made much impact here? I have been working in this area for about 15 years. Lifelong learning has been talked about during all that time, but not many policies have actually promoted it, although many exist in other countries as possible case studies.

Fourthly, would she agree that expanding work opportunities for older people, such as in the schemes and incentives pioneered in Finland, does not reduce job opportunities for the young? This is a crucial point. A recent OECD study showed that those countries with the highest proportion of older people in work also have the highest proportion of younger people in work. Statistically and in terms of job generation, that is an absolutely crucial observation. Finally, would she agree that 89 is the best age at which to become a marathon runner? If so, many of us sitting—and standing—here have a good few years of training in front of us.

Antarctica: Centenary of Scott Expedition

Lord Giddens Excerpts

Thursday 18th October 2012 Lords Chamber

[Lord Giddens]

My Lords, I, too, congratulate the noble Baroness, Lady Hooper, on initiating this debate, which, in the light of what has been said, could have a real practical impact.

Scott is an iconic figure in British history. Like many such figures, he had feet of clay to some degree; his reputation waxed and then it waned; and now, in the light of a new definitive biography, it has waxed rightly again in recent years. All kinds of bric-à-brac about him and his colleagues on his final expedition have come to the surface recently. I like the story that has come to light of the depraved sexual activity of penguins, recorded by the medical officer, George Levick. It proved too outrageous to publish in its day. Far more racy than Fifty Shades of Grey, it was like fifty shades of black and white, and mostly black. It is not surprising that it was not published at the time. It was, however, strictly scientific and part of the scientific remit of the expedition.

I have spent the past several years studying climate change in an intensive way. On our maps, the Arctic and the Antarctic appear as the outer peripheries of the globe. In an era of accelerating climate change, however, they have become central to the dynamics of a warming world. Both are key laboratories for studying global warming. The warming seen in the Antarctic peninsula has been of the order of 3% over the past half-century, about 10 times the average rate of world temperature increase. Those figures come from the British Antarctic Survey, an organisation which, as other noble Lords have rightly said, is now threatened with extinction, at least as an independent entity. I am very perturbed about the proposed merger. Some of the points have been so well made by other noble Lords, especially by the noble Lord, Lord Oxburgh, that I will race through them fairly quickly, just as a penguin might do.

First, everyone recognises the need to cut costs, but the merger will not cut costs at all. This has been shown by other speakers and in independent reports. In my view, it will incur costs, especially if reputational damage is included. The UK, helped by the BAS, has played the dominant role in Antarctic legislation, something which has not been mentioned in the debate. Secondly, it is not just fundamental scientific work at stake. All work in the Antarctic and the proximate oceans now has major geopolitical relevance—a point made by the noble Lord, Lord Jenkin. What kind of signal will a contracted British presence send to other players in the region, especially the loss of the name of the organisation? Thirdly, all the former directors of BAS have expressed deep concern that safety may be compromised, which is really important in that environment. As one put it, “to run a serious and safe operation in the Antarctic and the dangerous waters of the Southern Ocean is not like running a travel agency or a bus company”. The noble Lord, Lord Oxburgh, made the point very effectively. For these and other reasons, I urge that the proposed merger should be abandoned and other solutions explored.

Middle East: Recent Developments

Lord Giddens Excerpts

Friday 13th July 2012 Lords Chamber

[Lord Giddens]

My Lords, the noble Lord, Lord Howell, is already basking in the praise of other noble Lords, but I, too, thank him for his excellent introduction. Even though I sit on the other side of the House from him, I think his contributions are universally outstanding —except when I disagree with them, which is the case today. In my contribution to the debate I shall make comments on the role of social media and communications technologies in the Arab spring.

The changes brought together under the term “Arab spring”, as the Minister said, are some of the most momentous of the past 20 years. In common with other great transformations of world history, they were essentially unpredicted, even by people who had spent their lives studying the Middle East. This was also true of the dissolution of the Soviet Union, of the rise of the internet and of the current global economic crisis. Many of the biggest transformations are not understood before they happen. They happen suddenly and their consequences are for that reason difficult to puzzle through. Who would have thought that some of the most despotic and conservative regimes in the world, those in the Middle East, could be challenged effectively almost overnight? I think that the answer is no one, but it has happened.

The term “Arab spring” seems at first sight not a happy one. After all, the term does not come from 1989, as many people seem to think; it comes from the Prague spring of 1968. Alexander Dubcek, who wanted to make reforms within the framework of communism, was removed from power by force and 150,000 Soviet troops occupied the country. It took 20 years before democracy came to what was then Czechoslovakia. Checking back over that period, I find it quite interesting how the headlines of the time duplicated what is being said today; for example, there was a BBC report headed,

“Russia brings winter to ‘Prague Spring’”.

One of the big differences between the Prague and Arab springs is the visible impact of internet technologies in the latter case. How important were these technologies and can we generalise about their transformational impact on democracy elsewhere? We know that the social media are in widespread use throughout the Middle East today. They were implicated at the point of origin of the Arab spring in Tunisia, through Libya, Egypt, Syria, Bahrain and, more latterly, further south in Sudan.

There was a lot of breathless discussion of all this in the newspapers to begin with, but, more latterly, it has become a fashion among commentators to question the influence of the social media. After all, internet talk, Twitter et cetera might seem very insubstantial when the tanks roll in, just as were the flowers that the Prague activists offered to the Russian soldiers. I want to argue that this is wrong and that the influence of the social media is deeply structural and almost certainly irreversible, not only in the Middle East but in other authoritarian states throughout the world.

There are two main reasons that I would offer for this. The first is the impact of voice. Facebook and Twitter have created what you could call a virtual civil society in countries which possess very few civil society institutions. A significant aspect of this is that groups which were previously excluded, such as young people, women and minorities—certainly in the beginning, have had an enormous impact. This is a very different group from the power system in those countries and it marks something new in terms of being a wedge for continuing change.

The second reason is the influence of cosmopolitan attitudes. In the era of the internet, it is impossible to close off the diversity of the outside world. This is true of all of us throughout the world today. For instance, you can download an interview with a Saudi hip-hop artist describing his work and arguing that it is consistent with his Arab identity. There is no way back from the inherent cosmopolitanism of a globalising, communication-driven society.

I conclude with three consequent observations. First, the Prague spring, in retrospect, was actually one of the conditions of 1989. It helped stimulate the development of Solidarity in Poland, similar movements in Hungary and, as I know intimately since I used to go there at the time, counter-movements in perhaps the most repressive state in eastern Europe, East Germany. There was a causal connection, therefore, between the Prague spring, even though it was repressed, and the democratisation which occurred later. It is not surprising in the light of this that the situation in the Middle East is currently so inchoate, so ambiguous and so fraught. There is no known example in history—at least to me—of a country which has moved from being an authoritarian state to becoming a reasonably fully fledged democratic one in a very short period. This is bound to be, therefore, a fairly lengthy process, full of conflict.

Secondly, internet technologies are generally liberalising but can also promote extremism. Closed groups of believers who concentrate on outlandish views of one kind or another are created and intensified. In other words, what happens on the internet is that extremist groups only talk to one another; they create closed circles; and these closed circles around the edges are closely linked to the possibility of violence. The internet has a double effect in this respect, which has consequences for the problem of schism across the Middle East and the sufferings of minorities, which have been mentioned by previous speakers.

Thirdly and finally, one of the paradoxes of new communication technologies is that while they promote democratisation in authoritarian states, they appear to undermine democracy in their heartland countries in the West or at least contribute to that process. In other words, at the same time as people are suffering so much to create democracy, in democratic countries there is massive and, surely again, structural disillusionment with democracy and political leaders. The origins of these things could be the same. Almost everywhere, political leaders are held in low standing and populist parties have arisen. The interest of this, as was mentioned by the noble Lord, Lord Empey, is that we should not assume that what unfolds in the Middle East is simply a process of catch-up with the West. We have all to do some pretty fundamental rethinking of how we can stabilise and accentuate democratic mechanisms in a society which has been transformed by global mass communications. I therefore support previous speakers who have said there may be various lines of evolution to democratic participation. We can perhaps learn as much from other parts of world as they can learn from us.