Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Livingston of Parkhead Excerpts

2nd reading
Tuesday 21st November 2023 Lords Chamber

[Lord Livingston of Parkhead (Con)]

My Lords, I would like to join others in welcoming my noble friend Lord Cameron of Chipping Norton to this House. Like many others, I am here due to him. I had the great honour of being appointed as Trade Minister, so it is very appropriate we are talking about trade, particularly as my noble friend Lord Cameron was such a great proponent of trade. I joined him on many export missions around the world. Also, if there was ever somebody considering investing in the UK, the Prime Minister, as he then was, would always make time to see them. The UK during that time was the number one by a very long distance for FDI in Europe. I thank him and I welcome him. I would also like to congratulate him on his outstanding maiden speech; it is not a surprise—it is almost as if he has done this sort of thing before.

Turning now to this Bill, it is, as many noble Lords have commented, an unusual Bill, as it relates to technical implementation and there is a lot of scrutiny that still has not happened. However, I think it is important to look at the agreement as a whole and ask: why does it matter? First of all, as my noble friend Lord Lamont referred to, it matters because free trade is being pushed back upon. We have to speak up for free trade in the UK.

Why is free trade important? First, it is good for consumers—the people who seem to be forgotten so often—who get more choice and cheaper products. Competition is good for consumers. Free trade has been, is, will and would be good for consumers.

Of course, free trade is good for our exporters, giving them access to fast-growing markets and inward investment. It also raises the quality of our own industry. Exporters produce better products; they are more competitive. When they compete against other products coming from around the world, they improve their own standards, again, to the benefit of UK productivity —something which we clearly need.

Another area that often gets forgotten is that free trade is important for the development of countries. While most countries in this agreement—though not all of them—are pretty advanced, any trade agreements we do around the world, particularly the number we have in Africa, will raise standards in these countries and also help with their development. This may be even better than straightforward aid. Trade and aid together make a big difference to countries.

The President of South Korea will be speaking here; we can see what this country has done over the last five decades as a result of becoming a trading powerhouse. This agreement is also important for international relations. We will be getting closer to many countries with which we have shared and similar interests in a very important part of the world.

This particular agreement—I will probably it call “this agreement”, rather than CPTPP, as most people seem to be struggling over it no matter how many times we try and say it; it is not the best marketing brand, I have to grant you—is a good agreement. One of the things we forget is that we are acceding to this agreement; we were not part of creating it. To get such a good agreement is a great credit to the Department for Business and Trade and to the civil servants and the Ministers involved in it. I think it is an excellent agreement. We know, of course, that it gets a big reduction in tariffs on goods. It covers data and critically, services, for the UK. The UK, as has been said before, is the second-largest exporter of services in the world. It is a strength, and this, excellently, covers it.

On government procurement, UK government procurement has been reasonably open for some time, but not all other countries are the same. One of the things I agree with the noble Lord, Lord Frost, on—there were not many—is rules of origin. The rules of origin are very helpful, particularly in building up supply chains through various countries, as it can be seen would happen with this trade agreement. It is very helpful to have cumulative rules of origin.

Technical barriers to trade are also being dealt with as part of this agreement. One thing that is often not understood with trade is that tariffs are, frankly, only part of the story. The barriers to trade in areas of conformity are very important as well, and it is excellent that this is being dealt with and will hopefully be taken further from here.

The agreement also protects UK standards. One thing we should remember is that other countries look at the UK and are not happy about certain things that the UK produces. Haggis is banned in the US; they think, for some reason, that it contains things that are not healthy. It is remarkable. Marmite is banned in many countries. So, while we will be able to maintain our own standards, it is important to understand that it is not only the UK that looks at standards. As we are doing a trade deal with countries like Australia, New Zealand and Japan, I would much prefer that we are looking at maintaining standards together with them, rather than, for instance, with China, or others doing it with China. Perhaps we will set a higher world standard than we might otherwise.

The NHS is also being protected. The accusation that the NHS is going to be privatised is a bugbear that always comes around. We have had it with every single agreement. In every agreement that the UK Government have been involved in, it has been front and centre that the NHS is not an area in which privatisation would form any part of the agreement. In fact, I remember in negotiating TTIP, as it was then, the US Government said that they did not want the NHS to be part of it, the EU said the NHS would not be part of it and the UK Government said the same. Yet in every single discussion we heard, “The NHS is going to be part of it”. The NHS is not going to be part of this agreement either.

I would also like to say something about ISDS, because this is something that gets a lot of criticism, like it is just a bad thing. Why do we have ISDS at all? It is because companies invest in a country in the knowledge that, should that country’s domestic legislation attack them or their country in particular, they cannot always, particularly in certain types of countries, rely on domestic courts to protect them. That is why you have some supranational panel.

The UK has about 90 ISDS agreements already. According to the review from the UN’s trade body, UNCTAD, between 1987 and 2020, 90 UK companies took action under ISDS clauses against countries outside the UK. How many were taken against the UK? One. How many has the UK lost? None. The reason why we do not lose these is that we respect laws and treat countries favourably. That is why we should not be that bothered about Australia and New Zealand—but there are other countries where it is more problematic.

Under that UNCTAD review, Argentina has had 62 cases against it. It has been involved in expropriating without compensation, and that is the sort of thing on which people win cases under ISDS. There are some spurious cases under ISDS that people tend not to win, so just quoting cases where people have tried to take action and not won is not sufficient. I am a big supporter of ISDS and it is good that we have access to it, particularly through a modern ISDS clause.

We know that this not a replacement for the single market, so this is a bit of a spurious discussion. Of course, it is not as big or as good, but it is pointless repeating that. If you look at the countries with which we might want to do trade agreements, the US has put up the “closed” sign on trade deals with anyone. That is a great pity and a great failure of the US. It is about the one bipartisan thing you will see in the US; it does not want to do trade agreements. We will talk about China later; it has particular issues. India will be a slow process; of course we would like one with it. Basically, we are hitting most of the next tier of countries: Japan and Canada, for example.

We may be forecasting only a relatively small enhancement to GDP, but if noble Lords use the word “only” followed by a number involving billions, they have to be a bit careful—it is worth billions. These forecasts are based on relatively static assumptions. Their real focus should be on how we can get more from this agreement than these static assumptions would say. The President of South Korea was not far from here earlier, so it is worth reflecting on the agreement with his country. There was trade agreement between the EU and South Korea in 2011, when my noble friend the Foreign Secretary was the Prime Minister. Since then, our trade with South Korea has gone up by a factor of roughly three times, so trade agreements can make an enormous difference.

What the Government need to do is focus on more than this agreement, with all its perfections and imperfections; however you debate it, it is only a very small part. We need two things. First, we need a proper activation programme for the Government. That is what you would do in business: you would say, “I have an agreement; now, how do we take advantage of it?” Secondly, we need a UK education programme. The FSB, in giving evidence to the International Agreements Select Committee, highlighted that small companies do not know about trade agreements and the opportunities arising from them. We have to get out to see them.

UK middle-sized companies are also laggards. When I was Trade Minister, only one in six UK middle-sized companies exported outside the EU. You may say that that was something to do with the EU, but the figure was one in four in Germany and, even more shockingly, one in three in Italy. UK middle-sized companies need to be helped; the big companies can generally do their own thing.

Generally, businesses are also not aware of what is on offer from the Government. The Government provide a lot of help and support, but they do not make businesses aware of it. It was a failure in my time, and it remains a failure. We need to ensure that there are sufficient trade staff at our embassies and consulates. We need to ensure that there are government-supported trade trips to those countries in the sectors that are important: decide what they are and have a focus there. I would like to hear my noble friend the Minister talk about that later. We need support for trade shows, and year after year, not just once. My noble friend Lord Marland talked about trade envoys; they have done a tremendous job, so we need to reinforce their work in these countries.

Remember that trade is not just for the Department for Business and Trade; it is a pan-government effort, so we need, for example, the Ministry of Justice to push legal services, the Treasury to push financial services and Defra to push food exports—although, perhaps we should steer clear of too many speeches about cheese, as they have not always gone well. We also have to ensure that we put a lot of effort into attracting inward investment from these countries. Canadian and Australian pension funds are two of our biggest inward investors; we have to do more. This is a multi-year effort, and we need to move forward with consistency. I would like my noble friend the Minister to talk about whether the Government will set targets for how much we can do for both FDI and exports.

I know I have taken up too much time, but, finally, we also need to strive to make this agreement wider and deeper. We need to work with more countries. China has been talked about, but it should be remembered that this agreement has four of the Five Eyes countries—or eight of the 10 eyes, as you might call them. I suspect that we, along with Japan, will have similar interests regarding the role of China. Many other countries are interested in joining.

We have to work more on services, and we have to do more on product conformity, so I hope that this enabling Bill will move swiftly through the House and that we can move on to the important things. We do not know what the ceiling is on what can be achieved, but we will be better as a country if we look outwards and upwards, rather than downwards, backwards and inwards.

Israel Defense Forces

Lord Livingston of Parkhead Excerpts

Monday 8th July 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

I totally agree with the noble Baroness that any plan for alleviating the plight of the suffering, albeit an economic plan, must include a political settlement. Our position is clear: we need to see a viable two-state solution to resolving the conflict between the Israelis and the Palestinians. We will continue to lobby and campaign for that.

[Lord Livingston of Parkhead (Con)]

My Lords, would my noble friend agree that, while the Israel Defense Forces are not perfect, the obsession with focusing on them—despite their being the most moral and professional army in the Middle East—is very strange? At the same time, one must also focus on, for example, the Palestinian authorities having more than 30 schools named after terrorists who have murdered Israelis. These issues have to be looked at as well.

[Lord Ahmad of Wimbledon]

As we have consistently made clear, Israel has a right to self-defence. We have also repeatedly called for Hamas to stop firing rockets into Israel. Whether a life is lost on the Israeli side or on the Palestinian side, we are equally appalled. We must work towards a resolution of that conflict. It has gone on far too long.

Exports: Government Support

Lord Livingston of Parkhead Excerpts

Thursday 29th January 2015 Lords Chamber

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, I am extremely grateful to my noble friend Lady Wheatcroft for initiating this important debate. It seems only a few years ago that we were both in the retail industry. She was then editor and part-owner of Retail Week and I was a mere finance director at Dixons group. We have aged not at all since then. I am also encouraged to hear so many positive interventions in support of UK exports.

As my noble friend Lady Wheatcroft said, this is a difficult time to try to grow our exports. In the UK, we have seen a strong economic recovery, reflecting a good long-term economic plan, but the economies of many of our closest trading partners who have followed different paths continue to struggle. As my noble friend Lord Lang commented, the strong pound has had an impact. Imports and exports of precious metals, diamonds and oil have led to a muted export performance.

My noble friends Lord Selsdon and Lord Sherbourne both raised the issue of the current account or balance of payments deficit. I should clarify that this is different from the balance of trade. We have seen a worsening of the current account deficit, reflecting greater investment in the UK in areas such as gilts. The UK has run a high trade deficit over a number of years and that is one of the reasons for it. As a Government, we are at the forefront of reducing that deficit and returning to surplus, which will, in turn, improve the current account.

The trade deficit element of the current account is a better story, although there is still more work to do. In past years, when the UK grew faster than its competitor countries, we sucked in imports and the trade deficit worsened. This year the deficit is running at about 2% of GDP. By contrast, under the previous Government, it ran at 2.5% of GDP. In the past three months, we have seen further improvement still. Last month’s numbers were the best for 17 months.

We should also not forget that the UK is the world’s sixth largest exporter. I can reassure the noble Lord, Lord Kirkwood, that manufacturing is hugely important and we are very proud of it. We are also proud that we are the second largest exporter of services in the world. I do not see these as alternatives; in fact, they support each other. We are also the second largest aerospace exporter in the world. Many noble Lords have mentioned our car industry, which is now the second largest in Europe, with the vast majority of what it produces being exported.

Despite problems in the eurozone, we are seeing strong growth in many new markets, with exports to China having doubled over the past four years. So we should not talk down our export capability, as some of our detractors do. When I go around the world promoting trade, I increasingly find that people have a positive image of British products and services. We are seen as innovative, cutting-edge and high-quality. We need to do much more; but we should do it by building on these strengths, not by ignoring them. I make no apology for our ambitious targets in doing so.

The Government have tried massively to enhance the support and advice available to UK companies to help them export. This is not a short-term role. UK Trade & Investment has increased the number of businesses we support each year from 27,000 in 2010 to 50,000 now—a near doubling in the support provided. For instance, we have substantially increased support to trade shows, events, missions and programmes. The noble Lord, Lord Stevenson, asked about this. The Tradeshow Access programme has increased by one-third since the previous Government. It is a bit lower this year than last, but last year was a record year. This is not just about helping companies to attend roadshows but about providing pavilions and assistance to make sure that those attendances are productive. This year alone we expect to help more than 50,000 companies at international events and trade shows, rising to 60,000 next year. We are working closely with trade associations to plan next year’s events well in advance.

We have also run a number of major festivals. We were heavily involved in the Liverpool International Festival for Business and I commend the city of Liverpool for its efforts in creating the largest single business festival in the world last year.

We also held the Commonwealth Games in Glasgow. We invited a number of Commonwealth countries and had two days of business events around it.

The NATO summit at Celtic Manor was also a wonderful event. It was not just a meeting of Prime Ministers and Defence Ministers but also an opportunity to show our defence industry exports.

This year, we will have a major exhibition of the UK’s creativity at the GREAT festival in Shanghai. We will also have an impressive presence at Milan Expo, which will highlight the UK food and drink sector and innovation in particular. I commend it to all noble Lords to try to attend that event.

We have also been targeting our efforts on the projects that are worth most to the UK. Our High Value Opportunities programme has delivered more than £20 billion of business for the UK over the past three years. It has won business for large companies and for small companies in their supply chain as well. Railways, healthcare and oil and gas are but three sectors where this has happened.

As my noble friend Lord Cope stated, smaller businesses need particular help. Last month the Government announced an additional £20 million of funding to help smaller companies become first-time exporters. Export advisers will give them access to a new incubator service, insight visits to markets and an expanded programme of trade fair and events support. For those small companies, online is often a good first step into new export markets. As part of our e-exporting initiative we have signed partnerships with major e-marketplaces from China to South America to Japan. We also provide specialist advice on how to set up websites for overseas markets and a databank of more than 400 international e-marketplaces. I believe this is a world first.

My noble friends Lady Hooper and Lord Sherbourne mentioned languages. We recognise that companies need help, to overcome not just language barriers but also cultural and localisation barriers, to succeed in their export efforts. We have supported more than 700 companies through our innovative service, including the e-commerce for international trade master classes, which take place throughout the UK. Our new language and cultural advisers are helping hundreds of companies. We are piloting a number of events and services that take advantage of the ability of the foreign students we have in the UK. We create temporary placements for graduates and postgraduates in companies to help with both language and cultural understanding. I was recently in Sheffield, launching such a scheme with Chinese students to help local companies.

Finance is an issue for businesses. I am grateful for the many positive comments that noble Lords have made. UK Export Finance has launched new products to meet the needs of smaller companies. It has recruited 24 new specialist export finance advisers to guide them through the increasingly difficult and complex world of export finance. Our progress has been recognised by the British Exporters Association. In 2010, it rated the UK for its product set at five out of 10. Last year, the rating was nine out of 10. Our export credit agency was voted as the best in the world last year—a really strong achievement.

Last year, UKEF supported 55% more companies than in the previous year and it is on target to do so again this year. I hope that with the changes introduced by the Small Business, Enterprise and Employment Bill we can look forward to a substantial increase in help for small companies.

The noble Lord, Lord Stevenson, asked particularly about the export refinancing facility. It was launched last year and its role is to support banks with long-term loans. It is a stand-by facility if there is a lack of liquidity in the market. Fortunately, a number of the efforts that this Government have made are supporting liquidity for long-term loans. So far it has not been called upon by the banks but it is absolutely in our locker.

There is also great potential among our medium-sized businesses. My noble friend Lord Shrewsbury raised this very issue. Only one in seven medium-sized businesses generates revenue outside the EU, whereas in Italy the figure is one in three and in Germany it is one in four, so we need to improve that. As I promised, I have written to every single MSB in the land to invite them to take up our offer of export support. They will get a named adviser and an export plan, and they will receive assistance to work in areas such as intellectual property and export finance. I am pleased to report that almost one-third of MSBs have taken up that offer, which is a pretty impressive achievement in less than a year.

My noble friend Lady Wheatcroft is correct in saying that this is not just about UKTI; there has to be a cross-government approach. We very much share that view. Together with the Treasury, for example, we are promoting UK financial services—which are very important for our export effort—with the newly created Financial Services Trade and Investment Board. Healthcare UK, together with the Department of Health, is another example of cross-government working. It has helped Britain to win overseas business worth more than £1 billion since 2013.

My noble friend Lord Leigh commented on our embassies. I echo the view that the support provided by embassies and the ambassadorial network has improved substantially. Many, many businesses comment on the positive support that they receive. A few months ago when I was in Japan, 50 British food and design companies were in the ambassador’s residence receiving support, and the event attracted 500 distributors in Japan. Similarly, when I was in France, we had French special forces at the ambassador’s residence buying equipment from small defence manufacturers from the UK. The FCO and the Department for International Development are two other departments that are working together. We are also developing a joint Africa framework, which will increase our presence in African markets. Indeed—this really goes to the question about the Commonwealth—UKTI has recently added resource to 13 of the fastest-growing economies in Africa, most of them Commonwealth countries.

I was in India just a couple of weeks ago and met Prime Minister Modi, among others. I went with 60 UK companies. I am sure that my noble friend Lord Bamford will be pleased to hear that many Indians think that JCB is an Indian company, so strong is its presence in India. That is great, because I feel much the same way about Tata—that it is a British company—and I welcome it here in the same way that JCB is welcomed in India.

I have said a lot about what the Government are doing, but clearly we do not work in isolation. The Government are working with major retail banks, professional services firms and trade associations to support the trade agenda. We have now established more than 20 overseas business networks with the chambers of commerce to complement UKTI’s international reach. If you are a small businessman going to Mexico City, Dubai, Bangalore or Warsaw, to name a few places, you will find a British business centre where you can set up, have meetings and get advice to help you with your export efforts.

The UK is a free trading nation. Many of my noble friends, including my noble friends Lord Lang and Lord Leigh, asked about progress with free trade agreements. Perhaps I may give a little bit of historical context. Korea was mentioned. Since the EU-Korea agreement came into force, our exports to Korea have more than doubled. We now have a trade surplus with South Korea of more than £2 billion. We did not have any trade surplus before that agreement. That highlights the success that free trade agreements can bring to a free trading nation such as the UK.

Last year, the EU concluded provisional agreements with Canada and Singapore, and we will be encouraging UK exporters to see these as an opportunity to take their products to new markets. The UK remains one of the strongest proponents of free trade both in and with the EU. We will be pressing continually for great progress to be made this year with TTIP—the agreement with the US, and indeed with Japan, as we must not forget. We are also supporting proposals to restart talks with India and to begin agreements with China. That is in addition to our work with the WTO and on international agreements such as TiSA and the trade in green goods. Free trade helps to bring down prices, so it is good for consumers, it helps small businesses—I highlight that TTIP will have a special small business chapter—and it is good for British jobs. I know that I have the backing of the majority in this House in my strong support for these agreements.

Perhaps I may pick up a few miscellaneous issues. My noble friend Lady Wheatcroft, among others, asked about the classification of exports. This is a challenge, particularly in the area of services. I think that the way in which we look at services is somewhat stuck in the past. Not only do services form the greatest part of our economy but many of the products that we sell come with services. Rolls-Royce was mentioned earlier. I believe that when it sells an aero engine, close to 50% of the value of the sale is a service. Yet the way that we report on services is stuck in the past. In fact, we are discussing with the ONS what we can do to improve the presentation of a number of these areas.

The noble Lord, Lord Hunt, and my noble friend Lord Kirkwood raised the issue of visas. To be clear, there is no limit on the number of visas available for students to come to the UK for proper courses. They are unlimited. Also, if those students take a graduate-level job, they can continue in the UK. However, I accept that there are perception issues, as is clear from comments in the papers. One of the discussions that I had with people from newspapers and so on when I went to India was about that very issue, and it has had an effect in India. However, overall it has not had an effect. First, students recognise that the UK has four of the top six universities in the world, the other two being in Boston, and, secondly, we are now getting record numbers of overseas students coming to the UK. Next year, we expect a new record in that number, and those students will get a very warm welcome.

Another issue raised was the EU. It is of course this Government’s policy to stay in a reformed Europe—a Europe that focuses on free trade, competitiveness and the single market. That is the Europe that we know UK manufacturers and exporters want to see. The noble Lord, Lord Hunt, also raised a question about Rolls-Royce. There is no change in the position; it is included in Rolls-Royce’s articles of association.

I also welcome overseas companies. We have talked previously about Jaguar Land Rover, which has been a rather better success under Tata than I recollect it being when it was owned by the British Government. Many British companies buy other companies abroad—for example, Rolls-Royce and AstraZeneca. The Astra in AstraZeneca is of course a Swedish company. Those sorts of companies, as well as long-term investment in areas such as R&D, are, I believe, very important.

My noble friend Lord Lang of Monkton made some excellent points about investment into the UK. Because of the right conditions that this Government have created, we are now the number one investment destination in Europe. We are increasing our lead over Germany and everyone else. An important part of that is helping the supply chain, which assists our companies in exporting. A number of months ago, the Prime Minister announced an important initiative, Reshore UK, to encourage companies to bring their manufacturing and other activities back to the UK. There is a one-stop shop within UKTI for doing just that.

A question was also raised about our progress in achieving the goal of £1 trillion of exports. Given the time, perhaps I may commend to noble Lords the 2020 Export Drive report, which I am pleased was mentioned by one or two speakers. This is a recent document in which we set out how we intend to make the next leap in our export performance. I thank my noble friend Lord Risby, in particular, for reading it, as well as for his wonderful work as a trade envoy. I share in the comments of the noble Lord, Lord Stevenson, about the work done by Members of this House as trade envoys. They are very much appreciated and very effective.

My noble friend Lady Hooper asked about Latin America. I cannot give her an update on the central America agreement but I can tell her that the Colombia BIT agreement was agreed a few months ago. We are making great strides in Latin America. I was in Mexico not so long ago with a major trade mission, and 2015 will be the year of the UK in Mexico and Mexico in the UK, which will include a state visit by the Mexican President. We have also recently established a British business centre in Mexico City. All those things will help and it will be an important market, particularly among the countries of the Pacific Alliance, which are embracing free trade and all the benefits it brings.

My noble friend Lord Sherbourne of Didsbury asked whether there is enough follow-through on trade missions. The answer is: we are doing better but could still do more. We will be looking to do just that. My noble friend Lord Trefgarne asked about DSO. I believe that the Defence and Security Organisation being in UKTI has been a major benefit. More importantly, defence companies tell me that, and a new head will be joining from the Home Office shortly. It is important to recognise that it is not just about selling aircraft, although that is important; it is about cybertechnology and security. We are working very closely with industry—I was at a reception for DSO just last week—and DSO’s performance has been extremely strong and the industry supports it very strongly.

To pick up on some of the later points, the noble Lord, Lord Stevenson of Balmacara, raised the question of the UKTI website. I echo the comments of my noble friend Lord Leigh and other noble Lords on the issue. It is very simple to contact your local ITA. Its job is to help to guide you through. I hope that all noble Lords will give that advice to many people.

The UK has great potential to build on its strength as an exporter. It needs a step change in effort, and we are delivering one. The challenges of the eurozone are not helping but we need to continue to be imaginative and ambitious. It needs to be not just a government effort but a UK-wide effort. I am grateful for the support of the whole House in this endeavour, and together we will be successful.

Trade Balance

Lord Livingston of Parkhead Excerpts

Thursday 11th December 2014 Lords Chamber

[Lord Empey]

To ask Her Majesty’s Government when the United Kingdom’s balance of trade will be in surplus.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, the UK balance of trade will depend on a number of factors, including the exchange rate and economic performance of our trading partners. This Government will continue to make supporting our exporters a key priority.

[Lord Empey (UUP)]

Does the Minister agree that it is more than 30 years since our balance of trade was last in surplus and that the policies of successive Governments have been totally inadequate in tackling this fundamental economic weakness? We have no policy on import substitution and we give no incentive to companies to provide their staff with international trade and export qualifications. How can any country achieve long-term economic success and stability if this level of trade deficit continues indefinitely?

[Lord Livingston of Parkhead]

I commend the noble Lord for his enthusiasm for exporting, although I think that he does the UK some disservice. We are the sixth largest exporter in the world—the second largest exporter of services. I agree with him that it has not been a key priority for past Governments, but it most certainly is for this Government. With regard to import substitution, while I would not refer to it in these terms, there is for instance the recent announcement by the Prime Minister of a Reshore UK service within UKTI to encourage manufacturers to come back to the UK. That is just one example of the many things we are doing to help our position in the long term on the balance of trade.

[Lord Tomlinson (Lab)]

Will the Minister do the House a favour by reminding us what the balance of payments deficit is at present, and then perhaps address the original Question about when we are likely to be in surplus?

[Lord Livingston of Parkhead]

The original Question was on the balance of trade, not the balance of payments; they are, of course, two quite different things. The balance of trade is in deficit to around £30 billion; it is a deficit of about 2% of GDP, which is significantly better than under the previous Government, when it was on average 2.5% of GDP. As the UK is growing much faster than its partners it is difficult to forecast exactly when it will come to zero. Certainly the OBR expects to see a significant improvement going forward, but I am reminded of the words of J K Galbraith, who said that the only purpose of economic forecasts is to give astrology a good name.

[Lord Anderson of Swansea (Lab)]

There has traditionally been a deficit on our balance of trade, but always this has been counterbalanced by a large surplus on our service industries. Will the Minister therefore pay tribute to them, including the creative industries and the City, for ensuring that?

[Lord Livingston of Parkhead]

The noble Lord is correct that services have been and remain a very strong surplus for the UK. It has to be recognised that, increasingly, services and goods are becoming intermingled. I know that when Rolls-Royce sells a jet engine, almost half the value is a service. One of the things that we should cease doing to a degree is separating off goods and services, because increasingly they are the same. I commend our creative industries, our professional and financial services, our aerospace sector and, indeed, our growing motor vehicle industry which, of course, is the second largest producer of cars in the whole of Europe.

[Lord Howell of Guildford (Con)]

My Lords, my noble friend has reminded us that this country is a huge exporter of services—I think he said that we are the second biggest in the world. That will increase more and more as information and data will play the key role rather than actual physical products. Free trade in services is what we have not got—particularly in Europe but throughout the world. Will my noble friend reassure us that huge efforts will be made to free up the service trade so that our exports can prosper even more in the future?

[Lord Livingston of Parkhead]

I certainly confirm that that is a key priority: both extending the single market to services, which we are pushing for in the EU, and the trade and services agreement, which is a plurilateral agreement between many countries. The UK is championing that. As such a large producer of services, we certainly support both those measures to increase trade.

[Lord Kakkar (CB)]

My Lords, as business ambassador for life sciences and healthcare, may I ask what assessment Her Majesty’s Government have made of the contribution of the life sciences industry to the UK economy?

[Lord Livingston of Parkhead]

First, I thank the noble Lord for his contribution to life sciences, which is very much appreciated. The life science sector is hugely important. From pharmaceuticals onwards, the UK has a very strong position. The appointment of George Freeman as the Minister responsible shows how important it is, and the measures taken on R&D allowances and tax relief on the exploitation of IP in the UK will carry on supporting this industry. I was in Boston recently, talking to a number of life science companies that are thinking of coming to the UK.

[Baroness Armstrong of Hill Top (Lab)]

My Lords—

--- Later in debate ---

[Baroness Armstrong of Hill Top]

My Lords, does the Minister recognise that in the north-east we still have the highest proportion of manufacturing in the country as part of our economy? However, the large companies there, such as Nissan and now Hitachi, see membership of the European Union as absolutely critical to their ability to trade, particularly with Europe. They want to be in the north-east because of the quality of the workforce and because it is English- speaking, but they want the clear access to Europe. Are not the Government potentially putting this at risk, and will the Minister fight within his Government for this country to stay in Europe?

[Lord Livingston of Parkhead]

The north-east, indeed, is one of our manufacturing powerhouses and is part of the UK that actually has a trade surplus with the rest of the world. The Nissan factory is producing more cars than the whole of Italy. I recognise that a number of exporters wish to remain in the EU but I also recognise that they wish to remain in a reformed EU—and that is what we on this side of the House are fighting for.

[Lord Stoneham of Droxford]

At the start of this Government, only 30% of components in our successful car manufacturing sector were sourced in the UK. Can the Minister tell us how the Government’s industrial strategy has been seeking to improve this performance?

[Lord Livingston of Parkhead]

The Government’s industrial strategy brings together academia, the Government and also businesses in producing a long-term commitment to the next generation of technologies and industries. I know that the motor vehicle industry in particular welcomes this. I mentioned earlier the Reshore UK proposal. These things together are helping significantly, both with companies coming back to the UK and, for instance, companies such as Gestamp, a Spanish company that recently announced a significant investment in the UK.

UK and Sri Lanka: Bilateral Trade

Lord Livingston of Parkhead Excerpts

Thursday 11th December 2014 Lords Chamber

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, I thank my noble friend Lord Sheikh for initiating this important debate and for his wider contribution to the relationship between Sri Lanka and the UK. I have to admit that I was concerned this morning when I came in and saw the annunciator saying that the final QSD today was on the subject of trade with Syria. It is a relief for all of us that this was incorrect. I also thank the other noble Lords for their contribution to this debate. We may have been lacking something in quantity, but it has been more than made up for in quality. I wish to ask my noble friend Lord Naseby whether he will give me a copy of his guide to exporting. It would be interesting for our team to see what, if anything, has changed since it was written.

Trade is important not only to the prosperity of the UK but to Sri Lanka and its people. However, the UK’s commitment to free trade goes hand in hand with our commitment to human rights. That point has been made volubly. I appreciate that there are divergent views on this issue. Let me set out the Government’s position. The UK co-sponsored the United Nations Human Rights Council resolution in March this year. This resolution requested that Sri Lanka make progress on human rights and reconciliation. As my noble friend Lord Naseby mentioned, it also mandated the Office of the High Commissioner for Human Rights to undertake an investigation into alleged violations of international law by both sides of Sri Lanka’s conflict.

To echo the comments of the noble Lord, Lord Bach, we continue to urge Sri Lanka to co-operate and ensure the protection of those providing evidence to the investigation, and to implement the recommendation of its own internal commission on resettlement and rehabilitation. Sri Lankan presidential elections have been called for next month. We have encouraged the Government of Sri Lanka to invite international observers so that the elections can be fairly assessed. We understand that Sri Lanka’s Election Commission has invited the Commonwealth and the South Asia Association for Regional Cooperation to observe. We welcome these moves.

I want to pick up on a couple of points made by the noble Lord, Lord Bach. The first was on the subject of arms. As he will know from his history, the British Government have a rigorous policy of assessing all export licences to each country, including Sri Lanka, very much on a case-by-case basis. We seek not to export equipment where we assess that there is a clear risk that it might be used for internal repression, would provoke or prolong conflict within a country, or would be used aggressively against another country. The equipment concerned included antennae for military transport, carbon fibre tows, some software to do with internet access, and things such as sporting cartridges. On these cases, which we reviewed carefully, we decided that export licences could be granted. It is also something that we will keep under review, as we do with all countries.

The noble Lord, Lord Bach, also raised the recommendations of the Foreign Affairs Committee. The UK Government’s position on this is that it is premature to do anything more prior to the UN reporting on the matter, and we are expecting the UN’s report in March 2015. When we receive it, it will be appropriate for the Government to take a view of which, if any, of those recommendations should be taken up.

I turn to the subject of trade. The UK has strong family, historic, and—particularly today, even if I am a Scotsman—sporting ties. Of course, both countries are members of the Commonwealth. We have a strong commercial relationship. In Colombo, the Council for Business with Britain actually boasts 151 members across a wide range of sectors. Britain is Sri Lanka’s largest export market in the EU and the EU is itself the largest market for Sri Lankan goods. In 2013, bilateral trade was more than £1 billion. While my noble friend Lord Sheikh pointed out that this was weighed heavily in Sri Lanka’s favour, we have started to see some change. Last year, Britain saw an increase of 14% in goods and exports to Sri Lanka. Commercial contracts worth $3 billion to Britain were signed in 2013, as a result of the order by Sri Lankan Airlines for 13 Airbus aircraft with—I am delighted to say—Rolls-Royce engines. There are therefore, in a number of areas, positive signs of improved British performance.

We are Sri Lanka’s leading business partner—as was mentioned by a number of noble Lords—in the field of higher education and professional training. Some 28 British universities offer access to their qualifications through local education providers in Sri Lanka. A further two universities are currently considering establishing their first satellite campuses in Sri Lanka. It also hosts—and this hurts me, as a member of the Institute of Chartered Accountants—the largest number of Chartered Institute of Management Accountant members outside of the UK anywhere in the world.

The British Council has been operating in Sri Lanka since 1950. More than 200 staff deliver services across the country, including teaching English to more than 12,000 students a year at the British Council teaching centres. However, there are more opportunities—that has been made very clear by all the speakers in the debate—and more that we can do and are doing to help UK exports. As my noble friends Lord Sheikh and Lord Naseby commented, UKTI held a recent trade mission entitled, “Putting British Business on the Front Foot”. That was just at the end of November. During the three-day event, delegates from 21 British companies met potential Sri Lankan business partners from all parts of the country. They were briefed on new business opportunities and they heard from British companies. It is always very important to hear from British companies actually operating in Sri Lanka so that they understand the position on the ground. UKTI Colombo has already been able to assist with new business worth £15 million as a result of this trade mission and a further £17 million deal is now close to finalisation. In addition, a major British company is now considering entering the Sri Lankan market, and we very much welcome that.

Sri Lanka is actually the highest rated country in south Asia in the World Bank’s ease of doing business index. That is good, but we think that there are opportunities to improve the position still further. It can be done through a number of things. First, there should be a reduction in unnecessary red tape, albeit that that is true across much of the UK and Europe. There could also be improvements to security of contracts, protection from what is apparently arbitrary decision-making, and better transparency and governance. We are encouraging the Government of Sri Lanka to take steps to make it easier for British companies to do business there and to reduce the barriers to foreign investment. We believe that Sri Lanka and Britain can also build further trade relationships through the Commonwealth by utilising the expertise and drive found in organisations such as the new Commonwealth Enterprise and Investment Council, which I am delighted to say is being partially funded by this Government.

The Government will also look to hold further trade missions to Sri Lanka so that companies can understand the scale of the opportunities, as they are indeed immense not only within the country itself, but also as a regional hub. We will encourage exporters to look beyond the standard markets of the EU and the US and try to support them both across the UK through our regional trade advisers and on the ground in Sri Lanka through the high commission and UKTI. Finance and credit insurance are also important issues for exporters, particularly in countries like Sri Lanka. Last year, UK Export Finance provided almost £100 million of support to Sri Lanka. It has the further capacity and desire to support business with Sri Lanka going forward.

My noble friends Lord Sheikh and Lord Naseby raised the perennial issue of visas. While I appreciate that the perception of visas is an issue, some 99% of business visas were issued in under 15 days. For business people coming here, there is also an option for a five-day visa. We will continue to listen as issues arise, but with visas it is always important to separate issues of policy from those of process and perception in order to try to establish what exactly the issue is. However, we absolutely will listen if there are issues on a day-to-day basis going forward.

It is important to make the point that UK companies should not let some of the real difficulties of doing business in Sri Lanka blind them to what are also real opportunities, but they should also not let those opportunities blind them to the difficulties. UKTI is here to help them with both.

In conclusion, the Government want to build an even stronger bilateral trade relationship with Sri Lanka in exports, in imports and in investment. At the same time, we will continue to urge Sri Lanka to make progress on the important matters of human rights and reconciliation. In that way, and together with trade, Sri Lanka can secure long-lasting peace and prosperity for all the people of that country. I know that that is what all noble Lords most definitely wish to see.

Transatlantic Trade and Investment Partnership

Lord Livingston of Parkhead Excerpts

Tuesday 18th November 2014 Lords Chamber

[Baroness Falkner of Margravine]

To ask Her Majesty’s Government what discussions they have had with other European Union member states about investor-state dispute settlement, in relation to the Transatlantic Trade and Investment Partnership.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, the Government have ongoing discussions on investor-state dispute settlement provisions in the Transatlantic Trade and Investment Partnership, TTIP, with EU member states, the European Commission, MEPs and other stakeholders. We want investment protection provisions that guarantee the right of Governments to legislate in the public interest while ensuring access to justice for investors who are discriminated against or treated unfairly.

[Baroness Falkner of Margravine (LD)]

My Lords, I belatedly welcome my noble friend to the Dispatch Box. I think that this is my first interaction with him. He will know that in the past 15 years 1,400 investor protection agreements have been agreed by EU member states. In 2012, 60% of them were brought by the EU states alone and only 7.7% by the US. Therefore, it is very depressing to see that it looks like there may be a real backlash against ISDS. What discussions is my noble friend having with the Commission, which has now split the responsibility for this between the vice-president and the commissioner? Indeed, what are the UK Government doing to assure the public that state regulation for the public good will be exempted from this safeguard and that it will be a very good thing for the UK as part of TTIP?

--- Later in debate ---

[Lord Livingston of Parkhead]

My noble friend is entirely correct that investor-state dispute settlement provisions have existed for a long time. There are a great number of them and, to the extent that they are used, they are often used by the EU and not by US corporations. We are having detailed discussions not just with other member states and the Commission but with MEPs. I had the joy of two days in Brussels just last week discussing such matters. We are also engaging NGOs—I am meeting a number of them and other interest groups—and we continue to make the clear case that we will ensure that the UK’s interests and public services are protected in all such discussions.

[Baroness Coussins (CB)]

My Lords, what progress has been made on incorporating into TTIP some of the features of the investor-state dispute mechanism that were achieved in the free trade agreement with Canada, which I understand incorporated provisions about transparency of proceedings, costs and other issues that meet some of the concerns that have been expressed?

[Lord Livingston of Parkhead]

The noble Baroness is entirely correct. The agreement with Canada is far more the state of the art. Although we are waiting to see the results later next month of the consultation on ISDS, I hope and assume that they will incorporate much of what we have learnt from CETA. From speaking to the US representatives, I know that they too are very much for things like transparency in ISDS clauses, thus meeting some of the genuine concerns about some of the past ISDS clauses.

[Baroness Ludford (LD)]

My Lords, is it not the case that these trade negotiations are probably the most transparent ever? Quite rightly, the negotiating mandate has been published, which is good, and it confirms that EU member states will agree to the inclusion of investor protection and ISDS mechanisms only if they allow EU member states to pursue legitimate public policy objectives, including the regulation of public health. This is a great improvement on the past and gives a guarantee that what matters is the substance.

[Lord Livingston of Parkhead]

My Lords, my noble friend is entirely right. The substance of the ISDS clauses is nowhere near as fearful as some of the claims. Although we can improve the transparency of the discussions, and the UK is certainly seeking to do that, the EU should at least be commended on the degree of public consultation that has taken place on these discussions.

[Lord Stevenson of Balmacara (Lab)]

My Lords, we share the aspirations for TTIP, as long as the benefits flow to consumers and employees. We welcome the Minister’s mention of discussing the ISDS, which has become a lightning conductor for general discontent about the TTIP treaty. Given that we are talking about mature democracies with strong and robust legal structures, why does he not learn from the great example of Canute, drop the problematic ISDS and get on with selling the rest of the treaty to the country?

--- Later in debate ---

[Lord Livingston of Parkhead]

Given the scale of investment by our two countries, it is appropriate that companies of all sizes have protections. It is also important that we create the right sort of clause for the future. We should not have two classes of country: ones with which we have ISDS clauses, because we do not trust their legal systems, and those with which we do not. It is important to establish the right sort of clause with the US, which, as the noble Lord says, is a stable democracy, that we can then roll out to the rest of the world, making sure that we have the rule of law.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, can the noble Lord assure the House that there will be no lowering of current EU standards on things like air quality, water quality, employment standards or animal welfare by virtue of TTIP negotiations?

[Lord Livingston of Parkhead]

The President of the EU, President Barroso, has made it very clear that TTIP is not about lowering standards. It was much the same with the single market which did not, I believe, create lower standards. EU laws and fundamental rights are going to be protected as part of these discussions and in discussions with the US. The US is not seeking to change that, although it regards some of the EU regulations as being too low and it also worries about similar matters.

[Lord Foulkes of Cumnock (Lab)]

My Lords, does the Minister accept that there is genuine concern that if there is private investment from overseas in our health service and then an incoming Labour Government want to restore it into public financial control, there could be seriously high claims against us which would cause great difficulties? What is being done to ensure that that kind of claim does not cause great difficulties for the NHS in future?

[Lord Livingston of Parkhead]

I can assure the noble Lord that such claims would not arise because of TTIP, although there may be contractual claims which are a matter of domestic law. CETA, which was mentioned earlier, states:

“The EU reserves the right to adopt or maintain any measure with regard to the provision of all health services which receive public funding or State support in any form”.

It is quite clear that the decision about how these services are provided is a matter for national and, in the case of the UK, commissioning authorities. It is not going to be decided by TTIP or, indeed, any other trade agreement.

[The Countess of Mar (CB)]

My Lords, can the Minister give the House an assurance that the influence of major multinational companies will not overcome the rights of individuals and small groups of people?

[Lord Livingston of Parkhead]

I can very much give that assurance. The groups we consult with in the UK and the steering group used by the EU are a mixture of large and small companies, consumer groups and NGOs. That will continue and we are hearing their voices very strongly. It must be understood that TTIP is going to be most beneficial to consumers, who will see lower prices, and to small companies which find the barriers caused by trade distortions far more difficult to cope with than the global multinationals. This will be the first agreement to have a small business chapter and I welcome that very substantially.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, I have listened extremely carefully to the Minister. He said that, provided the Government do not wish our National Health Service to be privatised, it will be protected. Can he give a guarantee that all parts of our current Government do not intend, with or without TTIP, further to privatise our National Health Service, because they have already started doing it?

[Lord Livingston of Parkhead]

Decisions regarding the NHS are made by the commissioning authorities. If I recall correctly, substantial privatisation of the health service took place under the previous Government. It will be a matter for the democratically elected Government and the commissioning authorities as to what may be done by private services and what may not.

[Baroness Brinton (LD)]

My Lords, there has been a great deal of scaremongering about the National Health Service and TTIP. Might it be helpful for BIS to highlight the EU directive on NHS procurement which makes it absolutely clear that the NHS will not be caught by TTIP contracts?

[Lord Livingston of Parkhead]

That is absolutely correct. In fact, Commissioner de Gucht has been very clear:

“Public services are always exempted ... The argument is abused in your country for political reasons”.

That is pretty clear. The US has also made it entirely clear. Its chief negotiator said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way. The EU is very clear on that and trade agreements to date have always protected public services. That will absolutely continue within TTIP.

Free Trade Agreement: US and EU

Lord Livingston of Parkhead Excerpts

Thursday 23rd October 2014 Lords Chamber

[Lord Anderson of Swansea]

To ask Her Majesty’s Government what assessment they have made of the prospects for the free trade agreement between the United States and the European Union.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, we are pushing for a broad agreement that eliminates the vast majority of tariffs and reduces other unnecessary barriers to trade. This will help small businesses in particular and promote growth and jobs. There have been seven rounds of negotiations with good progress, given that it is slightly over a year since the negotiations started. We are aiming for an ambitious agreement in 2015.

[Lord Anderson of Swansea (Lab)]

My Lords, the Minister will be well aware that at the EU Council meeting in June 2013 the French won a signal victory by using their political veto under the cultural exemption to exclude audio-visual services from the negotiating mandate because they considered them a matter of national interest. I should also mention that the Commission was given leave to produce further changes to the negotiating mandate. Do we consider the National Health Service to be a key national interest? If so, have we tried to exclude our health service from the investment provisions? If not, why not?

[Lord Livingston of Parkhead]

The difference between the NHS and audio-visual services is that audio-visual services were included originally, whereas the NHS was always exempted. It is probably best if I quote the EU Trade Commissioner on the matter:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds”.

[Baroness Scott of Needham Market (LD)]

Is the Minister aware that there are a growing number of anti-TTIP campaigns right across Europe and that a record 150,000 responses to the Commission’s consultation were received? Can he tell the House what the Government’s strategy is for dialogue with interest groups, with business and, above all, with citizens to make sure that concerns and worries are founded on fact?

[Lord Livingston of Parkhead]

My noble friend is right: there are a number of concerns about TTIP, some of them genuine but some of them ill conceived. We are engaging with a number of interest groups, particularly NGOs, consumer associations and small businesses. In fact, I have a meeting within the next two weeks with some of the people who were protesting outside BIS’s offices quite recently.

[Lord Tomlinson (Lab)]

Will the Minister now manage to put aside any concerns about the malign influence of UKIP on the Government’s policy in relation to the European Union, particularly in the light of the opinion poll in last night’s Evening Standard? That showed that, were there a referendum tomorrow on withdrawal, it would be defeated by 20 percentage points.

[Lord Livingston of Parkhead]

The UK is a great champion in the EU of free trade and the single market. As Trade Minister, I take this role very seriously. The UK continues, and will continue, to have a lead position in promoting free trade within the EU and from the EU to other countries around the globe.

[The Countess of Mar (CB)]

Following on from the question of the noble Baroness opposite, to protect human health will the Minister ensure that the major manufacturing companies do not force on members of the EU American standards relating to food quality and chemical residues in food, which are less stringent than those of the European Union?

[Lord Livingston of Parkhead]

The EU and the UK have been very clear: standards will not be reduced as a result of TTIP. EU laws will remain EU laws, and the US negotiators have accepted that fact.

[Lord Stevenson of Balmacara (Lab)]

My Lords, we on this side support TTIP and are reassured by the answer just given by the Minister on public services. However, for many people the proposed preferential arbitration rules for foreign investors represent all that is perceived to be wrong with international trade deals—that they are too secret, too undemocratic and too skewed to the interests of international capital over the interests of our citizens. Indeed, the ISDS clause has become a lightning rod for dissatisfaction with TTIP. Should this issue not be tackled head on by removing the ISDS clause from the deal?

--- Later in debate ---

[Lord Livingston of Parkhead]

As was mentioned earlier, the EU is conducting a consultation on ISDS clauses and has received a large number of responses. I think the appropriate question on ISDS clauses is, “Which ISDS clause?”, rather than whether one should have a clause. Noble Lords should understand that, in the UK, we have 94 ISDS clauses that have in total lasted for 2,000 years. The number of cases that the UK has lost during that time is zero. Many of the claims made about ISDS clauses are based on misconceptions. The UK is pushing for is an ISDS clause that rightly balances the interests of people and organisations with the right that big business—businesses of all sizes—has to a stable investment environment. We will continue to push that, as we have recently with an excellent clause in the agreement with Canada.

[Lord Avebury (LD)]

My Lords, if by some mischance Britain were to leave the EU at some future date, would we have to renegotiate all the bilateral agreements the EU now has or may have in the future with third parties?

[Lord Livingston of Parkhead]

That is a hypothetical question. As the Prime Minister has stated very clearly, he will be campaigning to remain in the EU—an EU that will be founded on free trade. Free trade is a very important part of the EU and we will continue to push for that.

The Bilateral Agreement for the Promotion and Protection of Investments between the United Kingdom and Colombia

Lord Livingston of Parkhead Excerpts

Wednesday 30th July 2014 Grand Committee

[The Lord Bishop of Sheffield]

My Lords, I shall speak briefly to support and echo the excellent remarks of the noble Lord, Lord Stevenson, and the points made by other noble Lords on the dangers posed by this treaty, in three specific areas.

First, on the protection of land ownership rights, as we have heard, this is no small issue in Colombia. A concern for the common good of the international community must surely include ensuring the ability of Colombia to continue to regulate in the interests of its own people, especially on this key issue. Such a concern would clearly preclude the binding of the Colombian people to corporate rather than national interests. We must therefore work to achieve greater reciprocity in the balance of protections afforded to investors, the Colombian Government and the wider citizenry, including the indigenous peoples in respect of land ownership rights. To this end I, too, urge the Government to incorporate safeguards to the investor-state dispute settlement provision to ensure that the UK complies with its human rights obligations and commitments made in Good Business: Implementing the UN Guiding Principles on Business and Human Rights.

Secondly, I wish to echo the excellent remarks of the noble Lord, Lord Stevenson, on the dangers posed by this treaty to the protection of the human rights of the Colombian people. Assurances are needed from the Government that the necessary changes will be undertaken to ensure that the treaty does not undermine Colombia’s ability to meet its international human rights obligations. This is particularly necessary with respect to upholding the indigenous peoples’ right to free, prior and informed consent, and their right to self-determination and their own development, as guaranteed in the United Nations ILO Convention 169 and the treaty on the rights of indigenous peoples.

Thirdly, I strongly urge the Government to establish an annual monitoring system for the treaty, to measure the impact of this agreement on both human rights and peace agreements. In the interests of accountability, as has been suggested, such monitoring ought to be incorporated into the annual FCO human rights report.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, I thank the noble Lord, Lord Stevenson, for proposing this debate and I thank other noble Lords, particularly on the last day of the session, for their contributions. I know that many in this House take a close interest in Colombia, the progress that that country has made and the challenges it has faced over recent years. As I think noble Lords will be aware, this matter has also been debated in the other place.

I make it clear at the outset that the Government believe that the UK-Colombia investment treaty will benefit both countries. It will encourage increased levels of investment that will contribute towards economic growth, which I believe is in everyone’s interests. This view is shared by the democratically elected Colombian Government. They ratified this treaty in 2013 and have been pressing since then for the UK to ratify it as soon as possible. They have stated that they believe it will stimulate investment flows, guarantee the transparency and protection of investments within the standards recognised by international law, strengthen Colombia’s commercial ties with the rest of the world and guarantee equal treatment to Colombian investors in the UK.

In the next few years, there will be significant investment opportunities in Colombia in sectors where British companies are world leaders, including infrastructure, extractives, education, science and innovation. With the investment treaty in place, I believe that British companies are more likely to invest in projects which will help to deliver the right answer for Colombia. Colombia has investment treaties with many other major trading partners, including the US, China, India and Spain. They have also recently reached an agreement with France and it is right that UK investors should enjoy similar protections.

A number of concerns have been expressed in this debate and in other fora. I believe that some fears are exaggerated, but I understand them. First, it is suggested that the treaty will harm Colombia by impacting on the ability of the Colombian Government to regulate because of the risk of having to compensate investors who may bring compensation claims under the agreement, particularly through the ISDS clause, which has been mentioned.

Before I deal with individual questions, some facts are useful. For example, the UK has 94 such agreements. In aggregate, if you add them all together, they have been in existence for more than 2,000 years. There have been two cases and neither of them have been successful. The point about ISDS clauses is that they kick in only when there is not sufficient domestic process to deal with such matters. ISDS clauses are instead of adequate domestic processes. In that context, it is worth pointing out that I do not believe that Colombia has ever faced an ISDS claim.

However, despite the fact that history tells us that that is not a route for corporates to override domestic policy—a view that many have expressed—we have sought to modernise the ISDS clause to protect the state. Several noble Lords have mentioned TTIP and CETA. Although this agreement was made before they were, it contains many of the items raised in relation to TTIP. We cannot replicate the TTIP clause—not least because the TTIP clause does not exist. In fact, there is some debate in the EU whether there will ever be an ISDS clause in TTIP. I think that there may well be.

I would like to go through some of the protections in the treaty. First, it excludes shell companies from investment protection. That is important because some of the more egregious uses of ISDS clauses between third-party countries have been through the use of shell companies. There are also measures to prevent vexatious or frivolous claims. The scope of what is deemed to be fair and equitable treatment is limited; that is important. Indirect expropriation is explicitly defined; I will mention that later in relation to public policy matters. Investors must pursue resolution through the domestic legal system first for six months before submitting the claim. Having read through the treaty again, it aims to cover many of the issues raised.

Taken as an overall package, this is designed to discourage speculative claims. The Colombian Government and the UK Government negotiated it at some length. Investors should rightly have grounds for a claim if they have suffered discriminatory and genuine mistreatment. It has been used in other countries in that manner. By prioritising domestic resolution, ISDS itself would represent a last resort.

The noble Lord, Lord Alton—and, I think everyone else—raised issues about human rights. Of course, in Colombia, this issue is complex and difficult. The Government recognise the progress that the Colombian Government have made in tackling human rights issues, but clearly they are not there yet. There are still challenges and more that can be done to improve the situation in Colombia, especially for human rights defenders, victims and land restitution claimants and to prevent sexual violence. The UK Government will continue to discuss the matter and raise it with the Colombian Government.

The continuing armed conflict is one of the major issues—

[Lord Alton of Liverpool]

Before the Minister leaves that point about monitoring the situation, several noble Lords suggested having a formal mechanism in the department and within the Foreign and Commonwealth Office to log each year our assessment of human rights in Colombia and how they are being impinged on by business interests. Will he do something more formal than simply saying that it is an issue that concerns the Government?

[Lord Livingston of Parkhead]

I was going on to talk about the FTA, which covers a number of human rights issues and discussions. I will discuss with my colleagues in the Foreign Office the monitoring and reporting of human rights in Colombia as a more general issue. It is clearly one area of the world—regrettably, there are many—which has been a challenge.

The armed conflict is one of the main sources of the problems in Colombia. Like the noble Lord, Lord Monks, I support the efforts of the Colombian Government to find a solution through a negotiated peace process. Three or four months ago, I was in Colombia and had discussions with the Colombian Government. I do not doubt their genuine approach to finding a peace solution. In many cases, they will have to take some of the people of Colombia with them during this process. Some have made the corollary with some of our efforts in Northern Ireland and there is, of course, a lot of hurt over the years to make up. I hope that they make progress, which would lead to a number of better solutions.

The UK Government take a balanced approach. We realise that there are problems. It is very important to recognise the progress and effort of this Government in Colombia. They have made significant progress and we will continue to urge them to make further progress. We will also raise specific issues, and will urge that appropriate investigations take place and that protection measures are afforded.

The noble Lord, Lord Alton, and others raised land reform. We do not agree that the treaty presents a threat to Colombia’s land restitution programme. As noble Lords know, under the programme, businesses can lose their land, or have to pay compensation, if they cannot prove they undertook due diligence to ensure that the previous occupants were not forcibly displaced. However, in practice, the risk of a business owned by a UK investor losing land or having to pay compensation appears to be small. Very few businesses appear to be losing land and we are not aware of any claims against British businesses under the programme.

I support the concerns expressed by the noble Baroness, Lady Hooper, and the noble Lord, Lord Alton, and others that it is very important for British companies to observe international standards, such as those set out by the UN and the OECD. That is reflected in the EU-Colombia FTA, signed in 2012, which is much more the current state of the art. It contains significant commitments relating to human rights, labour rights, environmental protection and sustainable development. The Government also have an existing dialogue with the Colombian Government on these matters.

In view of this, reopening the treaty negotiations would be somewhat superseded by the EU-Colombia FTA. It would lead only to an unnecessary delay in bringing the treaty into force. I must stress that the treaty would be good for Colombia as well as for the UK. I do not believe that reopening the negotiations would add value on human rights. I am also unclear whether an investor could make a claim under the treaty that is in a way detrimental to human rights. The Government are not aware of any cases involving UK investors under any of our 94 treaties.

On the contrary, it is arguable that any state actions which may breach an investment treaty by harming an investor are more likely to damage local communities given the economic benefits, including employment and generating tax revenues, which stable, responsible—I believe that UK companies are responsible—foreign investment delivers.

Environmentally, Colombia is one of the top ecological hotspots in the world. I think that the noble Baroness, Lady Hooper, also mentioned Brazil. I thought that there would be nothing better perhaps than to read the clause relating to the environment in the bilateral agreement, which states:

“Nothing in this Agreement shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure that it considers appropriate to ensure that an investment activity in its territory is undertaken in a manner sensitive to environmental concerns, provided that such measures are non-discriminatory and proportionate to the objectives sought”.

That seems like a reasonably balanced approach to environmental concerns.

In a similar way, on public interest concerns, the same issues have been raised in relation to TTIP. In relation to indirect expropriation, which usually is the basis on which people worry about these clauses, the agreement clearly states:

“For the purposes of this agreement, it is understood that … non-discriminatory measures that the Contracting Parties take for … public purpose or social interest … including for reasons of public health, safety, and environmental protection, which are taken in good faith, which are not arbitrary, and which are not disproportionate in light of their purpose, shall not constitute indirect expropriation”.

I am struggling to understand some of the claims that have been made regarding this treaty. It is a modern addition to historic bids and ISDS. As I said, it was debated between the individual parties. While events in some ways have overtaken it with the FTA, the UK-Columbia investment treaty is still an important milestone in the development of our wider trade and investment relationship. The growth and success of Columbia on a wider scale will be important. It was negotiated and supported by the democratically elected Government of Colombia. It will encourage UK investors to do further business in the region that will be to the benefit of the Colombian people. It will contribute to Columbia’s economic development through the benefits that increased levels of investment will bring. I strongly believe that we should welcome it and the benefits and safeguards that it will bring to the people of both countries.

Transatlantic Trade and Investment Partnership (EUC Report)

Lord Livingston of Parkhead Excerpts

Tuesday 17th June 2014 Lords Chamber

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, I am delighted to respond for the Government in this important debate. First, I would like to express my appreciation to my noble friend Lord Tugendhat and the whole committee for their thoughtful assessment of the opportunities and the challenges presented by TTIP. It is rare that a Minister can say he found his appearance before a committee to be both stimulating and enjoyable and also mean it.

I confirm to my noble friend Lord Jopling that the report has indeed been warmly received by the Government. The Government are considering its findings and will respond—we have two months to do so—by 13 July. If the noble Lord, Lord Stevenson, would like a first edition of the committee’s report, I think a deal could be done, as I have two copies. I have to say that the report was an excellent read, something I read from cover to cover. I am also grateful to all noble Lords who have spoken this afternoon for their contributions during the debate. I will attempt to cover the points raised, and I apologise in advance if there is anything I miss. I will write in detail later.

I welcome the report’s recognition of the significant opportunity that TTIP offers to reinforce what is already a very strong relationship between Europe and the US. As many noble Lords, including the noble Baroness, Lady Henig, said, the agreement could have not just an economic impact. There is an opportunity for a major geopolitical impact to reinforce the relationship between our two continents, but I will concentrate on the economic effect.

TTIP is an ambitious agreement. The numbers are by their nature speculative in some ways because we do not know what ultimately will be in the agreement, but it could be worth £10 billion annually to the UK economy alone. Whatever the number, it will create jobs and reduce prices for consumers in the EU and the US. It should not only eliminate almost all tariffs—that is sort of de rigueur in trade agreements now—but it goes much further. It could provide better access to markets and drive regulatory coherence across the Atlantic. In fact, regulatory coherence will account for more than half of the benefits that could arise from this agreement.

As we, the Commission President and President Obama have all emphasised, this is not about lowering standards—I really want to emphasise that—but about aligning or mutually recognising different standards that have similar intents. This represents a new territory for a major international trade agreement. I agree with noble Lords that it is not easy, but we should go for it.

Many detractors seek to describe the benefits of TTIP as being for big corporations, but I think that is entirely wrong. Many big corporations have the ability to overcome regulatory differences. If you have production lines that make 10 million of something, you can have a couple of them making it in a slightly different format. If you have one production line making 10,000 of something and there is a slightly different arrangement in the EU or the US, the net result is that you probably do not export at all. It is actually small and medium-sized businesses that will benefit far more. They are the ones that suffer through non-tariff barriers and differences in regulation.

There could also be a substantial gain for consumers. The EU’s estimate—and, of course, it is an estimate—is of a potential average gain of more than €500 for a family of four. That will come through lower prices. More choice, more trade and more competition give lower prices.

The noble Earl, Lord Sandwich, made a point about the impact of TTIP on other countries, and some have made the point that it will have a negative impact on other countries. I believe the agreement will benefit other countries. First, it will increase global growth, and that gives an opportunity for many. It will also allow countries wishing to export to two of the largest trading blocks in the world the opportunity to make one version of a product. Later, I will talk about the idea of a living agreement. I certainly share the view expressed by many noble Lords that the agreement should not be static and that other countries should be able to join. Perhaps we are starting to create worldwide standards for others.

While TTIP could bring huge benefits, concerns have been expressed—the noble Baroness, Lady Quin, among others, expressed them—about the impact of TTIP on regulatory standards, the effect of the ISDS clause and what it could do to public services. I shall address these issues in turn. As I said earlier, TTIP will not erode regulatory standards in the EU or the US. It is interesting that, when I go to both continents, I hear the complaint that the other has lower standards. We are talking about high standards in both. TTIP provides a good opportunity to take stock of existing rules on both sides of the Atlantic and remove any unnecessary regulatory duplication. This is not a static process. It is very important that we create a living agreement to deal with rules that have diverged over time for no reason at all.

My noble friend Lord Lamont raised a point about the difficulty of this process. He is right that it is difficult, but it has been done in other industries, sometimes with varying success. Accountancy bodies have managed to create a body of international accounting standards and we are seeing convergence over time. I know from my past in telecoms that one of the reasons that you can connect calls around the world is because of global standards, so it is possible. It will be easier for some industries, such as the automotive industry, and for some it will be more difficult. Again, that can be done without lowering environmental, labour or consumer safety standards.

Some noble Lords have raised how the inclusion of an ISDS clause in TTIP might affect a state’s right to regulate. These provisions, which will help to create a positive investment climate, are not new. They are being described by many NGOs as though they have been invented just for TTIP, but in fact the UK currently has over 90 of these sorts of agreements with other countries. To date, there have been only one or two cases against the UK and neither has been successful. However, investment provisions in TTIP must strike the right balance between protecting investors on the one hand, which we would want for investment into the UK and for our investors outside the UK, and on the other hand protecting the host nation’s right to regulate and determine policy.

The European Commission has recently launched a public consultation, which we very much welcome and we are listening to the concerns. It is good to have discussion because there is much misinformation. While some of the concerns about ISDS appear to be based on accidental—or, sometimes I suspect, intentional—misunderstanding of ISDS clauses, it is important to make the dispute resolution more transparent and to limit spurious claims. It is in the UK’s interests to create a modern investment agreement that will both encourage investment and create a model for future agreements with other countries.

Concerns have also been expressed that TTIP will somehow have a material impact on how the UK provides public services. It should be noted that we already have certain obligations under the General Agreement on Trade in Services. We are not seeking to expand those, and we have made it clear to the European Commission that it should be for member states to decide whether or not to open up public services to competition. This is the approach that the Commission is indeed taking.

A number of difficult areas were raised. My noble friend Lord Tugendhat mentioned financial services, which were also mentioned by the noble Lord, Lord Giddens. First, it is too early to start saying whether anything is in or out. Certainly, we will try to push back against red lines. We will continue to work with the Commission and industry—including in the US —regarding financial services. It is important to remember that financial services is not just banking; it also includes areas such as insurance and fund management. We must also recognise that, with Dodd-Frank, it is a sensitive time in the US. We have to be clear that we are not seeking to weaken US protection for financial services.

I agree that we must make a better job of explaining why their inclusion is important. There are a number of areas on which we will push further, but financial services are central to trade. If you do not have aligned financial services regulations, that will itself weaken the capability for global trade. It is also a global industry, as almost every financial services company operates around the world. There are conflicting rules that are meant to do broadly the same thing—protect banks and make sure that they do not cause systemic issues in the economy—so it is in everyone’s interests to deal with those. We have got to find ways of coming together to improve that.

That is not the only thing being challenged—the audio-visual industry was mentioned and people have made a number of other attempts to draw red lines. We will, however, continue to push the financial services industry, and we will continue to stress that this is not about weakening standards. We are not alone in that. The French and the Spanish, for instance, also have large interests in the financial services sector and are working with us in pushing these areas.

I now turn to another difficult area, which is procurement. It is important for Europe to obtain openness in US procurement, largely because Europe is today more open. However, I agree with a number of comments made by noble Lords about how Europe could also work on its single market. That is something quite separate that we will continue to push very strongly. It is important to gain agreement with America on the federal level and the state level, and the more that Europe can set an example, the better. States of course present a particular problem, but a lot of people have referred to the success that we have had with Canada on CETA, and the same is true for the US. We will continue to push the issue of the states as well as the federal government being included in the agreement.

One of the ways we are seeking to do that is with publicity. There has been some very good work by the British embassy in the US, which has produced a paper outlining the benefits of TTIP to every single state in the US in terms of jobs and economic benefit. I think this is the right approach. We have also stressed that the United States will not be able to pick and choose among individual states for individual matters.

I turn now to other issues, one of which is GIs or geographical indications. A number of European countries have concerns about the willingness of the US to accept them—feta cheese is raised in more Council meetings than you would believe. From the UK’s point of view, we believe that composite GIs are appropriate, such as for “Scotch whisky” or “West Country cheddar”, but we do not necessarily believe that cheddar on its own is something that needs to be protected, as it has become generic—the same probably applies to the hamburger and the frankfurter. We will continue to seek a balance on GIs and push for that.

On energy, which was mentioned, we are pushing very much for free trade. Recent events involving Ukraine and Russia have really indicated that a free trade agreement must include free trade in energy. That is something that is important on an economic level but even more important on a geopolitical level, and I suspect the US is increasingly recognising that.

The issue of China was raised by the noble Earl, Lord Sandwich. Today we have a very large Chinese delegation, including the Chinese premier, visiting the UK, and we will continue to discuss a free trade agreement. We have raised with the EU the commencement of a free trade agreement and we have seen greater Chinese interest in pursuing that. The Chinese were obviously involved in Bali and they have been involved in TISA, which is the Trade in Services Agreement. We have also seen them trialling free trade zones within their own country, changing their attitude as to what is and is not allowed. We would very much like to bring China into a free trade agreement. I think it is probably too early to suggest that China could be one of the early candidates to be included in a living agreement under TTIP.

We are also pushing free trade agreements with Japan and India—Canada has recently completed talks on the Pacific Alliance, which I think is very interesting—as well as, of course, multilateral trade agreements. Bali was a success, but we have to move on from that and the Doha development agenda is very important to us as well.

The noble Lord, Lord Jones, raised a point about US subsidies for aerospace. I will very much continue to champion the British aerospace industry, including Airbus and Rolls-Royce. Indeed, I visited Bombardier in Northern Ireland recently, where they are making the wings for the C series aircraft at one of the most advanced wings factories in the world. Every 2.5 seconds an aircraft takes off somewhere in the world powered by a UK company. We are the second largest producer in the aerospace industry, so I absolutely champion it and will continue to do so. There is a dispute about US subsidies for aerospace that has been ongoing at the World Trade Organisation between the EU and the US concerning the US Government’s funding of aircraft development programmes. The European Commission has already raised concerns about this subsidy package, and the Commission and the UK consider it to be an extension of the existing measures that the WTO has already found to be illegal. So we will continue, together with our EU partners, to take a robust line on this dispute. I think it is something that is separate from TTIP, but I can assure the noble Lord that both this Government and our EU partners are very much behind taking a robust line.

My Lords, I agree with the many noble Lords, including the noble Lord, Lord Radice, who raised the issue of making the case for TTIP. I also agree with the committee’s recommendation that it is really important that the Commission and all member states continue to reach out to citizens and civil society to set out the opportunities that TTIP will provide. It is important that we debate it openly, talk about the benefits and counter some of the myths. Within the UK, there are regular meetings with core stakeholder groups representing a number of business groups and, for instance, the consumer group Which? as well as a group of NGOs. We have also organised sectoral round tables as well as national roadshows in conjunction with BritishAmerican Business.

The noble Lord, Lord Radice, asked about the involvement of senior Ministers. I am sorry that I do not rank among them, but I hope that Ken Clarke—a big beast if ever there was one as a Minister—who has taken a special role in promoting TTIP will meet that requirement. In fact, he has been touring around both the UK and parts of Europe pushing for TTIP. Also, across the Cabinet, the Prime Minster has made it very clear that this is one of our key objectives and it will be so in the next period for the EU. So across the UK and across government we will push it very strongly.

I would caveat some comments that were made about the support for TTIP across Europe. Yes, Germany is unhappy in that it has some questions about ISDS clauses and it is unhappy about Snowden, but Germany is pro free trade, as is France. When I was in Spain last week, we saw very strong support for TTIP. From speaking to the other 28 Trade Ministers, I know that they are very supportive, so I think there is a strong majority in the Council. Of course, we have to see what final agreement we actually get.

As the negotiations become more substantive, we will increase the range and the frequency of our engagement activities. This will involve more stakeholder events, more involvement with the press and more digital engagement to promote the dissemination of accurate, substantive, user-friendly information that shows what the benefits are to small companies and to individuals. We will be holding, and participating in, a number of further stakeholder events around the country. For example, in a few weeks’ time there will be another regional event, and the Liverpool International Festival for Business includes an event in a few days’ time. So there is a series of events planned and we recognise the need for Government—as well many other parts of civil society and, indeed, this House—to make the case for TTIP.

There have now been five rounds of TTIP. On the last round in Arlington, Virginia, I have provided updates to the European Scrutiny Committee, to both Houses and to the All-Party Parliamentary Group on European Union-United States Trade and Investment. As the noble Baroness, Lady Henig, reminded us, a lot has actually been achieved in a year. It is only a year and we have made huge progress. Our assessment is that we are making reasonable headway, but it will be more difficult as we come across more difficult things. It is not easy—important things rarely are. We have got the mid-terms to concern ourselves with in the US. Hopefully, after that, fast-track authority will be easier. At the same time, the US is a bit focused on TPP with the Pacific countries, but we remain very focused on achieving a result by 2015.

My Lords, in summing up, I believe that TTIP is an important and ground-breaking agreement, but it will require a lot of hard work. Pascal Lamy, the former head of the WTO, commented:

“The new era begins with the Trans-Atlantic Trade and Investment Partnership”.

He contrasted it with every other trade agreement that had gone before. Someone as distinguished as the noble Lord, Lord Stevenson, said that it is a 21st century trade agreement, and I could not agree with him more. I thank the committee and the noble Lords who have spoken in the debate today for their role in helping us on the journey to achieving a breakthrough for the UK, for the EU, for the US and for the world economy.

Queen’s Speech

Lord Livingston of Parkhead Excerpts

Tuesday 10th June 2014 Lords Chamber

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, it is a privilege to open this debate on Her Majesty’s gracious Speech. We will be considering the Government’s priorities for business, employment, pensions, welfare, agriculture and the environment for the year ahead. The Government are committed to fostering and assisting the entrepreneurial spirit which thrives in the UK today. The measures in Her Majesty’s gracious Speech will open up new opportunities for businesses to innovate, compete, grow and, of course, to export.

The Government plan to introduce a small business, enterprise and employment Bill. This will contain a number of specific measures to better ensure a business environment that is supportive of small businesses, as well as further enterprise and employment measures. There has never been a better time to start, grow and operate a small business in the UK. Small businesses, as noble Lords know, make a huge contribution to the UK, accounting for around half of jobs in the UK and a third of private sector turnover.

In December last year, the Government published Small Business: GREAT Ambition, which set out our commitment to make it easier for small firms to establish and grow in the UK. The small business, enterprise and employment Bill will help deliver on that commitment and will further enhance it. Furthermore, the Bill will ensure that the UK continues to be recognised globally as a trusted and fair place to do business. It will deliver on the UK’s G8 commitment to introduce new rules requiring companies to obtain and hold information on who owns and controls them, which will encourage trust and growth within the UK.

The Bill will make it easier for small businesses to access finance. It will help improve payment practices between small businesses and their customers, particularly through greater transparency. It will provide small firms with better access to the £230 billion spent each year in public procurement contracts. The Bill will also aim to cut red tape by ensuring that there are frequent reviews of regulations which impact on business in particular.

The changes proposed to UK Export Finance’s powers will make it easier for small businesses to access export finance, which they so often need. The Bill will widen the powers of UK Export Finance, enabling it to support exporters itself, rather than, as is currently the case, only in relation to specific export contracts. UKEF will also have more flexibility when providing support for small businesses, such as instances where they are part of a wider and larger supply chain. The Bill will also enable UKEF to support exports of intellectual property rights and other intangibles. All this means that UKEF will be able to increase the number of small companies it can help.

The Bill will also introduce a number of measures to reduce unfairness. There will be tougher rules to make sure that public sector workers do not get high payouts if they are re-employed in the public sector. It will tackle misconduct by directors and unfair employment practices and will provide reforms to increase the efficiency of the employment tribunals system and further reduce its burden on businesses. It will increase the penalty for failure to adhere to the national minimum wage and prevent abuses of zero-hours contracts. Honest, hard-working businesses can be more confident that they will not be disadvantaged by those who do not play by the rules.

The Government are already playing a key role in supporting the success of small businesses. Last year alone almost 500,000 new businesses were created in the UK, a testament to the business environment that we have created. The measures outlined will help them prosper in a UK that prides itself on being very much open for business.

The Government’s long-term economic plan is working. We are seeing more people in work than ever before and unemployment is falling rapidly. To confound our detractors, it is the private sector that is providing these jobs, the number rising by more than 1.7 million since the general election. Government should be about creating the right environment for jobs, not about being the employer. We are committed to building on this outstanding progress and continuing our work to reduce long-term and youth unemployment.

The Work Programme is growing and transforming lives. Nearly 250,000 people have been helped into lasting jobs, but we are determined to improve the results still further. We are rewarding better performing providers and expecting weaker providers to improve. Nearly 200,000 young people have benefited from our work experience and pre-employment training. We are trialling new types of help for young people, including intensive support for 16 to 17 year-old NEETs—that is, those not in employment, education or training, and not in receipt of benefits.

We are piloting new day-one help for unemployed 18 to 21 year-olds to help improve their maths and English skills and thereby their employability. We are requiring some young people to undertake work-related activities at the six-month point of their claim. We are committed to supporting young people to expand their skills and long-term employment opportunities through apprenticeships and newly introduced traineeships. At the same time, the Government are delivering the biggest welfare reforms in 60 years. The Government have brought in universal credit, personal independence payments and the new Child Maintenance Service, alongside employment initiatives such as the Work Programme, Help to Work and Disability Confident.

We have capped benefits so that households no longer receive more in out-of-work benefits than average earnings. At the same time we have delivered employment programmes that have seen record numbers of people in work. We are delivering programmes that make work pay, encourage personal responsibility and deliver a fairer deal for the taxpayer.

In the past, welfare spending was not subject to firm controls and we saw the benefit bill rising under the last Government, even at a time of economic growth. We are determined to ensure that this does not happen again. The Government have already taken significant action since 2010 to bring welfare costs under control. To build on this programme, we have for the first time introduced a welfare cap that will bring over £100 billion of welfare spending under control. This cap will ensure that welfare spending remains on a sustainable footing for the future.

On pensions, we want very much to build on our achievements so far. Around 12 million people are not saving sufficiently to achieve their desired level of income in retirement, especially given—we hope—longer life expectancy. It is therefore vital that we ensure that there are high-quality, value-for-money pension schemes to encourage people to save sufficiently.

We have already made significant pension reforms: the new single-tier state pension from April 2016; automatic enrolment which will see millions more savers joining pension schemes; capping charges on default funds in defined contribution schemes; and setting minimum quality standards to ensure that savers get value for money. However, we are planning to do more still. Defined benefit schemes, where the employer bears all the risk and the employee is promised a specified pension, are, of course, in decline. On the other hand, defined contribution schemes, which are more flexible for employers but have no promise for the employee, are on the rise.

The best employers, of course, still want to offer good pensions, and for some, defined benefit or defined contribution schemes may still be the right pension arrangement. However, for those who want an alternative, our pensions Bill will allow a greater range of options. It will give employers and pension providers the opportunity to create defined ambition pensions, which will encourage greater risk-sharing between parties and allow savers to have greater certainty about their pensions. The Bill will also allow for new collective pensions, recognised in many countries as providing high quality, and enjoying support across the political spectrum.

The Budget announcement on new flexibilities in how savers can access their defined contribution pensions has been warmly welcomed. A Treasury consultation on this, named Freedom and Choice in Pensions, is due to close very shortly. The necessary changes to the tax regime will be via a Finance Bill later in the year. Those with a defined contribution pension will be offered free and impartial guidance on the options available to them at retirement. We will implement related measures through the pensions Bill.

I turn to environmental matters. The Government will publish a draft national parks Bill, which will enable the composition of national parks authorities and the Broads Authority to be widened in future, by an order of the Secretary of State. The main purpose of the draft Bill will be to provide for holding local elections to the authorities to improve local accountability.

We are also committed to reducing the use of plastic bags to help to protect the environment. Discarded plastic bags blight our towns and countryside; they are a waste of resource and a very visible form of littering, and can cause injury to marine wildlife and harm the marine environment. Over 7 billion single-use plastic carrier bags were given out in England by supermarkets alone in 2012; that is 133 bags per person. I am sure that noble Lords will consider that next time they stand in a Tesco self-service queue and they are asked the question, “Are you using your own bag?”. I hope that the answer will be yes, next time. In October 2015, the Government intend to introduce a 5p charge on all single-use plastic carrier bags in England. In another measure, the Government will allow for species control orders to control the invasive, non-native species that pose serious threats to biodiversity.

The measures in Her Majesty’s gracious Speech will help make the UK the most attractive place to start, finance and grow a business. The Government’s pension reforms will allow for innovation and give greater control to employees, and the Government will introduce measures to help protect the environment. I am most grateful for the opportunity to introduce this part of the debate on Her Majesty’s gracious Speech and I look forward to listening to the contributions to the debate from all around the House. I know that I speak for the whole House in saying how much we look forward to hearing in particular from the right reverend Prelate the Bishop of Durham and my noble friend Lord Bamford, who will make their maiden speeches today. They have contributed much to the spiritual and economic welfare of this country.