International Development: Co-operation with the EU

Lord Lea of Crondall Excerpts

Tuesday 11th December 2018 Lords Chamber

[Lord Bates]

One of the things that we can be incredibly proud of relating to the poorest countries in the world is the work done to give tariff-free, quota-free access to UK markets and to the EU for about 100 of the poorest countries in the world. We are committed to replicating that. In fact, we have already done so through the cross-border trade Act, which has already passed through your Lordships’ House.

[Lord Lea of Crondall (Lab)]

My Lords, would the noble Lord agree that if the EU did not exist, this sort of Question would be a very good reason for inventing it? I give the examples of Burundi and Gabon, which each have only about one person competent to deal with a whole number of areas. Would it not be ridiculous if each European country came and told them that the criteria for auditing and testing were to be done 27 different ways? It is vital that this kind of co-ordination continues, preferably by the EU with British participation.

[Lord Bates]

Actually, for the vast majority of interventions of the type the noble Lord mentions we are talking about not EU but UN systems where we seek to have greater harmony. A lot of the things we seek to do with the sustainable development goals are a UN commitment. Our climate change ambitions are driven by a UN framework. There are lots of things that we work together on, but they tend to be more supranational, rather than in large bodies such as the European Union.

Brexit: Bank of England Report

Lord Lea of Crondall Excerpts

Thursday 29th November 2018 Lords Chamber

[Lord Bates]

We do indeed need to look at a range of figures. The most reliable measure is what business is doing. Businesses are hiring people, which is why we have record levels of employment; businesses are exporting, which is why we have record levels of exports; and businesses from overseas are investing in Britain, which is why we have the largest stock of FDI in Europe. That is the true evidence that we need to look at.

[Lord Lea of Crondall (Lab)]

My Lords, is it not surprising that someone should say that by using the measure of GDP, which is consistent with the OECD and every other major nation’s measure—one could discuss reconciling income, output and expenditure at some other point—the Governor of the Bank of England is inventing some sort of false crisis? Is it not the case that the charge concerning Project Fear has been replaced not by evidence and forecasting for the future but by decisions by industry, which are now being announced? In Britain, FDI decisions—not forecasts—are down 80%.

[Lord Bates]

The noble Lord has great expertise in economic analysis. He will recognise, therefore, that what we are discussing today is a scenario: it is a tool that is used to assess and stress-test risk. What is being put forward here is a worst-case scenario. I am not a pessimist; I am an optimist and a believer in the best possible outcome. I believe that that is the Prime Minister’s deal, which I hope will be supported.

ONS New Crime Statistics

Lord Lea of Crondall Excerpts

Friday 20th July 2018 Lords Chamber

[Baroness Williams of Trafford]

My noble friend makes a very valid point. Many people have pointed to the increase in knife crime and moped crime around London. This is not solely a job for the police: elected people such as the Mayor of London have their part to play. As I say, there are a number of initiatives going on in this area. The police are doing some incredible work, but everyone has their part to play.

[Lord Lea of Crondall (Lab)]

My Lords, as my noble friend has said, some of the statistics are very disturbing. There is a whole pattern, not just in knife crime and violent crime, but in the numbers of what we might call ordinary crime. Something like 80% of robberies are not solved or even subject to charges being made. I wonder whether Cressida Dick, the new commissioner, should produce in two or three months a real-time, online assessment of what targets should now be set by the Met to reduce these appalling numbers.

[Baroness Williams of Trafford]

As I have said on many occasions, the targets that police set are for individual police forces to decide, depending on the challenges they have in their communities.

National Debt

Lord Lea of Crondall Excerpts

Wednesday 14th March 2018 Lords Chamber

[Lord Bates]

There are two things that we can do. One we have done already: the action that we took on payday loans, placing a cap on the appalling rates of interest that were being charged, was the right thing to do. Extending that to other areas of financial services is also right. But ultimately, the best thing that we can do for people who are struggling with debt is to provide work and opportunities so that they can repay that debt and provide a living and a hope for the future of their families.

[Lord Lea of Crondall (Lab)]

My Lords, is the Minister aware—

[Lord Hamilton of Epsom (Con)]

This side, my Lords. I ask my noble friend to resist the siren call from the Liberal Democrat Benches—

Brexit and the Labour Market (Economic Affairs Committee Report)

Lord Lea of Crondall Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, the debate about Brexit is becoming a debate about what are settling down to be three broad options for the country. The first is a hard Brexit, by which I mean pulling up more of a drawbridge on migration. At the opposite end, the second is the status quo as near as possible. The third, which I would put somewhere in the middle, is the European Economic Area option, where you still have the four freedoms but with some degree of tweaking of the agreed criteria on migration. That is where there is at least a 50% chance we will wind up, as it is in our national interest—certainly our economic interest—for the reasons stated by every speaker, beginning with my noble friends Lord Livermore and Lord Darling, moving through to the noble Lords, Lord Burns and Lord Turnbull.

It has been said by many people that we need the flexibility we currently have. We certainly cannot overnight, say, treat all the Poles the same as those from the rest of the world. It would just be a catastrophe for the economy. There is a labour market in Europe, and I am a bit surprised that the report did not pay some attention to the nature of that market. One or two noble Lords spoke about this at the edges, saying that of course people may go back to Poland for whatever reason. Those reasons include the state of the Polish economy; for people from Portugal, it depends in part on the state of the Portuguese economy.

As for the trade union movement—I speak in the presence of a former general-secretary of the European Trade Union Confederation, my noble friend Lord Monks—we have European works councils in hundreds of firms, where we meet and discuss matters and people get to know best practice in all the different countries. I wish the report had paid more attention to the nature of the European labour market. The most obvious example, which everyone can understand, is the single factory floor in big component-supplying companies along with the final output in Rolls-Royce, Airbus and Jaguar Land Rover. Then there are logistical companies, as well as those dealing with food and pharmaceuticals and so on, for example Unilever. They are not only in one enterprise; they move around many of them all the time. We are having this debate against a background where even today a newspaper says that the majority of the Cabinet want a migration policy that would be the same for Europeans as for the rest of the world. I repeat that that would be a catastrophe. However, I do not think it will happen; reality will overtake it, and the Conservative Party will have to sort itself out.

There is a question over why we have so many problems in our own labour supply. People have mentioned education, but I would like to refer to the lax behaviour of British management in many of these questions. You get to do all sorts of things when you are a TUC official, and for some time I was secretary of the construction committee. I remember going one day to Canary Wharf, which was under construction, with the boss there, Mr Reichmann, and the secretary of the construction union, Albert Williams. Mr Reichmann said on an informal basis, as we admired the view of London from the top floor, “Mr Williams, I’ve got an issue. I’m short of spidermen”. Mr Williams said after a time, “Well, Mr Reichmann, we’ve had cowboys in the industry for many years. You can get these spidermen from the Rockies, so I don’t think there’s any problem if we have a few more Indians”. Perhaps that anecdote is not politically correct these days, but the reality is that there is an international labour market in different ways. Think of Toscanini, or someone who has transferred from Real Madrid to Manchester United—perhaps we need one or two more of those. That is another aspect of the labour market, and I am in favour of a greater degree of manpower planning in that area. I look forward to hearing the latest take on this from Migration Watch.

We have gone to the extremely liberal non-regulated end of the idea of having our own standards of obligation on training. We have a different situation now with the structure of our corporations; there was a letter in the Financial Times the other day from directors saying that we need new corporations to deal with PFI-type companies, with different stakeholders involved. The fact is that the likes of Carillion are not interested in the quality of the labour supply because they are not really a company at all in the old sense: there are those at the top who are earning a few bob, and below them are the actual construction companies. So, because of the obsession in the City of London with takeovers and mergers, we in this country have a company structure that is very much in need of reform. All these factors come into play.

Labour markets can give us a picture of where we are in the economy, so simply to stop it all up would be very ill advised. Take the Anglo-Irish labour market. We have known all our lives how that works and will have to go on working. I do not think there is any doubt about that. Indeed, we are now committed to it and the Government will have to get off their high horse and sign up to the formula that Michel Barnier has more or less written out. There is a flow backwards and forwards. When the Irish economy had its last boom—it is coming to another one now—more people wanted to go back to work in Ireland; more wanted to come this way on other occasions. Whether it is academics or conductors of symphony orchestras, we have to think of the European labour market.

Finally on labour standards, we had the Taylor report yesterday. There are posted workers within companies. We need to update the formula to deal with workers who cross frontiers, and we can do that only if in some central areas we do not take back control but share sensible ways to determine an agreed policy. That is why we need to pay attention to this being, in many respects, a European labour market.

Budget Statement

Lord Lea of Crondall Excerpts

Monday 4th December 2017 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, the state of the economy at the moment is gloomy in the extreme. I am sorry to those people who think that we ought to say that there is light at the end of the tunnel, but at the moment, there is not. I follow the noble Lord, Lord Skidelsky, in saying that we have to target one thing above all: we have to jack up the rate of economic growth to 2% or 3%. Nothing else will work unless we do that. That sounds a bit like George Brown in 1964; I say, “Come back George Brown, all is forgiven”.

[Lord Whitty (Lab)]

Not quite all.

[Lord Lea of Crondall]

Some parts are forgiven. We have to have a new deal in both senses of the term: a TVA-type new deal and a new deal for workers. There is an ambiguity to what a lot of the speeches add up to of where this productivity problem arises.

In passing, the noble Lord, Lord Tugendhat, made a speech that could have been interpreted as saying he does not quite believe the statistics and that the economy is growing in a way we have not recognised. I used to be a bit of a guru on national income accounting. Income, output and expenditure have to be measured to match. I cannot see how the ONS can be all that wrong in saying that the economy is not growing by nought point something.

On the idea that there is some mysterious factor in the economy we are not measuring, a lot of people in Silicon Valley believe the zillions of extra things we can do with the things in our pockets—our phones—must mean that productivity is rising. There is a puzzle there, but for the moment the statisticians are correct: they are not adding to our productive potential. We are just playing around on our mobile phones; we are not doing anything useful with them. That is a big factor, but at the moment there is nothing that is measurably happening.

We can have a look at measuring the rate of economic growth, but everything else is second order. The main candidate for something the Chancellor can do about it is public investment. It is a long time since we have been worried about productive potential, but it is the only term that meets where we are at the moment. It goes back to the strange discussion we had the other day on the industrial strategy with the noble Lord, Lord Henley, when he took some comfort from the fact that unemployment is down and that this was a good way of justifying lower productivity—“Don’t you people want lower unemployment?” It is one of those questions you get on the BBC’s “Today” programme, as our friend Mr John McDonnell found out the other day. You cannot look at a dynamic economy by trying to stick to questions and answers such as that.

We have to jack up the rate of investment. Whether we get the money off the Norwegian wealth fund, which is now worth $1 trillion, or not I do not know, but there has to be a dynamic piece of arithmetic and we can agree on some the answers—if you did get the economy to grow at that pace, then you would get this return through business growth and tax returns. We ought to raise the level of public discussion, whether at the BBC or anywhere else. We are not short of excellent material. The number of excellent reports we have heard mentioned is extraordinary. I will not go through them all because I only have two more minutes, but they all say roughly the same thing: we have a low pay trap, a low productivity trap and low investment, and we ought to transform the economy in some way. Mr McDonnell has said most of the right things about how to increase our productivity potential, as has the Social Mobility Commission. I congratulate Mr Milburn and the noble Baroness, Lady Shephard, on the way they identified these cold and hot spots around the country, because that is also very important in terms of where public investment should be going.

We have to make sure there is some targeting in numerical terms in this debate—how do you get to, say, 3%? Even as a paper exercise it would show us where we need to do something. Without sounding as if it is all to do with pay, the fact is you cannot change the definition of value added without recognising that value added is pay and profits. There are people at the top earning zillions, but pay and productivity are low. I am not saying you do it just by increasing pay, but we cannot wallow as a zero economy, with zero growth in real pay and in productivity.

I have one final word on the Brexit effect. There are undoubtedly three very bad Brexit effects relating to this. First is an investment problem relating to trade barriers. The second is the spectre of the exchange rate falling, as it has at 90p to the euro. We can see circumstances in which it could well have parity with the euro. The third is the prospective collapse of investment in those industries with a single factory floor in Europe, whether it is Jaguar Land Rover, Airbus or Unilever, and all the other sorts of investment which require a change in the policy so that we stay in the single market and the customs union.

Paradise Papers

Lord Lea of Crondall Excerpts

Monday 6th November 2017 Lords Chamber

[Lord Bates]

Each of these things will be checked by HMRC, but the point is that evasion of tax and attempting to evade tax is against the law and will be pursued with all vigour by HMRC. Avoidance continues to be part of the international financial system and we recognise and value it.

[Lord Lea of Crondall (Lab)]

My Lords—

[Noble Lords]

Order!

Sterling: Euro Exchange Rate

Lord Lea of Crondall Excerpts

Monday 9th October 2017 Lords Chamber

[Lord Bates]

My noble friend is absolutely right that we are out of the eurozone as far as that is concerned. The strength of the UK can be recognised not only in how people respond to our market but in how they respond in terms of foreign direct investment. That is a much more concrete and long-term form of investment. The UK continues to be the second-largest recipient of foreign direct investment in the EU and second in the world only to the United States. The fact that companies such as Nissan, Toyota, Apple and Bloomberg are making major long-term investments in the UK should encourage us to do the same.

[Lord Lea of Crondall (Lab)]

My Lords, in saying that we do not have an exchange rate policy but simply an inflation policy, the Minister has repeated the Written Answer that he gave to a Question that I tabled. In the hypothetical situation of the pound falling further, is it not ever more obvious that it is a totally false binary to say that we have a policy on inflation but not one on the exchange rate, when the one feeds into the other in a very material way?

[Lord Bates]

I acknowledge the noble Lord’s great professional experience in economics, but I am saying something slightly different. I am not saying that we do not pay attention to that and do not watch it at all; I am saying that the way in which it has been configured, through successive Governments, is such that this is a matter for the Monetary Policy Committee of the Bank of England to respond to. Where inflation rises above 3%—its target is 2%—it has to respond. Where it sees matters which are causing concern, it can choose to cut interest rates—as it did after the referendum, to historically low levels of 0.25%. We are not saying that we do not have any policy; we are saying that we have a core set of policies which the Government are responsible for and we are acting on them.

Brexit: United Kingdom-Africa Trade and Development

Lord Lea of Crondall Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Bates]

That conversation happened when Liam Fox, the Secretary of State for International Trade, was in South Africa talking about how we could enhance trade co-operation between our two countries. It is important that we do that. We also need to see Africa as a tremendous opportunity—I know that the noble Lord shares my view on this. Africa will be a market of some $30 trillion by 2050 and will have a middle class the size of Europe. It is in our enlightened self-interest to build those strong links and maintain free trade.

[Lord Lea of Crondall (Lab)]

Does the noble Lord accept that the elephant in the room in this debate is a country called China? China is growing very fast in Africa and says quite explicitly that it thinks it very important that the main Chinese relationship will be with the EU. Instead of saying that everything in the garden will be lovely, would not the Minister find it more useful to think how the constructive relationship with EU countries and the EU as such will continue?

[Lord Bates]

I totally agree but refer to the point I made before that the problem in the crisis we face at the moment, particularly in sub-Saharan Africa, is a shortage of investment rather than too much. All the investments made by other countries and private investors are of course a matter between that particular country and the investor making those decisions. We do not want to get in the middle of that. We want to encourage as much investment as possible in that area so that growth can happen.

Equality and Human Rights Commission: Funding

Lord Lea of Crondall Excerpts

Monday 9th December 2013 Lords Chamber

[Baroness Northover]

I do not have any information about what would happen to money that has not been allocated. Nine bids were submitted and five of them have been approved. One of them was somewhat contingent on the progress made within that bid, after which further money will be brought in if it goes well. However, I do not have any information about the money that is left over.

[Lord Lea of Crondall (Lab)]

My Lords, we are told that core funding is okay because that is a totally separate question. However, one’s impression is that we passed legislation with a need to implement it through secondary legislation, and the EHRC has many times been given the responsibility to monitor and implement that secondary legislation. Is the Minister saying that the core funding is keeping pace with all the extra secondary legislation that we are asking the EHRC to implement?

[Baroness Northover]

I am sure that the noble Baroness, Lady O’Neill, will come and tell us one way or the other. However, my understanding is that the Ministers responsible are working very closely with the EHRC—I am very glad to see the noble Baroness, Lady O’Neill, nodding—to ensure that it can focus on those core responsibilities. There was, as the noble Lord will probably remember, a previous concern—for example, from the National Audit Office—that some of the extraneous activities around the edge were taking away from those core responsibilities. The bids here do not relate at all to the monitoring of how statutory instruments and so on might operate. That would all be part of the core responsibilities. To come back to the previous question, neither would one assume that all bids would automatically be approved—to do so would be fallacious. Just because the EHRC put in bids for the amount up to the limit of what might have been available, that should not indicate that it will all be allocated if all those bids do not pass the same tests as those that were accepted.