University of Bristol: Jewish Students

Lord Mendelsohn Excerpts

Wednesday 24th March 2021 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord gets to the nub of the issue with his questions. Academics of course have the right to espouse views that many might find offensive, perhaps even idiotic, and universities should be places where such views can be rigorously and vigorously debated. What makes this case concerning is Professor Miller’s comments about his own students, suggesting that their disagreement with his views is because they are political pawns of a foreign Government or part of a Zionist enemy, which has no place in any society. The International Holocaust Remembrance Alliance’s definition of anti-Semitism draws the important distinction between legitimate criticism of the Government of Israel and their policies and holding Jews collectively responsible for them. We are glad that the University of Bristol has adopted that definition and we hope that it will consider it carefully.

[Lord Mendelsohn (Lab) [V]]

My Lords, I draw attention to my interests in the register, including the fact that I am on the advisory council of the Hillel foundation, which supports Jewish students at universities. Does the Minister agree that the failure of the university’s leadership to act to protect its own students, for whom it has a duty of care, breaches three out of the four regulatory objectives of the Office for Students? Can he provide reassurance that that will be taken into consideration in any evaluation by the Office for Students, which would also include addressing and evaluating the performance of the university leadership and confidence in its ability to continue to lead?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is right to say that providers have a duty of care to students, which the Government expect them to take very seriously. All registered higher education providers, including the University of Bristol, are subject to ongoing conditions of registration with the Office for Students, which is responsible for ensuring compliance with them. In addition, students can notify the Office for Students of any issues that they think may be of regulatory interest to it, and the OfS has provided a guide for students to support them in that process.

Brexit: Withdrawal Agreement and Political Declaration

Lord Mendelsohn Excerpts

Wednesday 5th December 2018 Lords Chamber

[Lord Mendelsohn (Lab)]

My Lords, I thank the opening speakers for setting the scene for this debate so well. I particularly thank my noble friend Lady Smith of Basildon for setting the case for her Motion extremely well; I strongly support her. I have deep concerns about the withdrawal agreement and the political declaration, and I do not think that they are as illuminating as the Government believe. I am reminded of the old adage: it is darkest at the bottom of the lighthouse.

As a pragmatic businessman, I would have been open to accepting the Government’s intended plan at the very beginning to respect the will of the referendum and to set out a broad plan and timetable. But my confidence has strongly waned since then, and I truly believe not only that are we in the position of having an inadequate agreement but that it is time for us to return to the question of whether there is a place and time for another referendum.

The main long-term questions are still unresolved. The two-year period of negotiations has created an ever-larger series of negotiations, for many more years to come. All this is because the date for withdrawal was set before any plan was made. The planning and preparations continue to be inadequate, and options have not been properly evaluated. In business, we would call this stage of the process the heads of terms: we would come to the main agreement and be able to say that we had the basis of a deal, and then all the detail could be addressed in an orderly way. But this is not even remotely near a heads of terms. As an old mentor would say to me if I came back with an unfinished job, a cake with its ingredients missing is basically a biscuit. This is not a deal. Those so exhausted by this process that they believe any deal should come forward will be most disheartened by this deal’s consequences.

This deal is the unfortunate product of a process that has not just lacked long-term objectives and strategy, but been plagued by a piecemeal approach and lacked the most basic forms of consultation. It is too internally focused. There has been a deep lack of preparation and no desire to see the Government act in a way that would make this effort a national mission. It has been the story of internal political divisions and the agreement’s contents bear this out. That is not only on one party’s side, but one party is the Government.

The accompanying documents also cite the economic impact. The many economic projections all tell pretty much the same story: the loss of economic output over 10 years of a post-Brexit Britain will be somewhere between £40 billion at best and up to £200 billion. That is less than the projected £300 billion cost of the financial crisis, but it comes after it and after failed growth following the appalling austerity plan. One also has to admit that after we come to this agreement the period towards the next election will also have a tremendous amount of political uncertainty and fear for business, which will continue to be a drag on any prospect of growth. These objections also do not deal with some of the likely industry-specific consequences, be they in aviation, the car industry or across our services, which have a very uncertain future outside the EU. This is a terrible story of potential decline—one that we must be very concerned about, given the state of our public services, economy and development.

This is a matter that we must take deeply seriously and that we have to address with the public. The evidence is overwhelming. The future is not certain, but it is a certainty that we will be worse off. I might not share their view, but noble Lords can argue that Brexit is worth the economic damage it implies, that economics is not the most important consideration or even that some of these economic warnings are overblown, but it is absurd to say that there will be no damage at all. There are strong divisions in this country that will not be addressed by the outcome of the withdrawal agreement. It provides absolutely no certainty whatever, rather the prospect of continued division, uncertainty and negotiation.

The sense of betrayal from all sides of the debate has a poisonous impact on our body politic, and brings corrosion and a sense of disaffection. We can see this happening with awful things such as the terrible takeover of UKIP by the far right, which means that the next few years will be deeply unpleasant in our country unless we address this.

The agreement really does not help any of these matters and it is not the only option. Even if there is no capacity in anyone’s ability to renegotiate the arrangements with the EU, it is not the EU’s problem: it is our inability to have the right sort of vision or plan. It is easy to renegotiate. But there is now no doubt that even Article 50 can be stopped. When we come to crystallise our view we have the chance to make sure we make the right expression that we oppose the deal. We should say that it has no long-term vision, offers prolonged and ever worse division, and does not offer Britain wider economic prosperity and opportunities, and that we have to rise above our divisions.

Ultimately, we have to take a view on a new people’s vote. I truly believe we should also have remain as an option. This country has come to a point where it now understands Brexit’s consequences. They are too terrible to bear. Our position has not been resolved over two years. It is time to take this matter seriously with a long-term view.

International Trade Opportunities

Lord Mendelsohn Excerpts

Thursday 7th July 2016 Lords Chamber

[Lord Mendelsohn (Lab)]

My Lords, I draw attention to my entry in the register of interests, which currently holds a balance of winners and losers from the post-Brexit crunch. I congratulate the noble Baroness, Lady Mobarik, on her accomplished and comprehensive speech, in which there was much to agree with. It was very valuable to have the debate introduced and such an effective case made. I shall try to be helpful. I am hoping, in this moment when we have suspended animation, to try to make a case—and to convince the Government that it is necessary—for being bold and expansive. We are in a very different place, but we are where we are, and we have to think about our challenges and the right prescriptions. In that regard, I thought the speeches of the noble Lords, Lord Stoneham and Lord Green of Hurstpierpoint, were outstanding. Both identified that we need to be bold and that our plans need to be based on a correct estimate of our challenges. It has been clear for a long time that our trade has underperformed. One simple measure is how Germany’s trade with countries such as China has rapidly grown, way outside our own capability. Those sorts of things are great illustrations of some of the challenges that we face.

I shall touch briefly on three areas. First, there is the Government’s performance on promoting exports. Secondly, there are some of the challenges for exports, which we must address, as a consequence of the decision to leave the EU. Then I shall make some final observations on the risks ahead for our country.

We on this side of the Chamber had high hopes that, when the noble Lord, Lord Maude of Horsham, became Trade Minister, we might at last see some serious progress in addressing clear structural weaknesses in government that were holding back our capacity to perform effectively compared to our peers. I am not suggesting that it made us believe that we would hit £1 trillion, with a doubling of trade, but it certainly gave us some expectation that the whole of government could be galvanised. Traditionally, we have expected UKTI and UK Export Finance, admirable though those organisations are, to carry the sole burden of supporting exports. A consensus had formed that the whole of government needed to be mobilised, and the increasing engagement of the Foreign Office illustrated only how our performance lagged and how much more we could do. We can do better and we need all our overseas posts to show the laser-like pursuit of Britain’s commercial and economic interests—and, across government, all the departments that deal or engage with business sectors can encourage, support and help businesses to explore overseas opportunities. We were pleased that someone who had the ability to galvanise Whitehall was chosen to make this happen, and we are disappointed that there seems to be a gap. This is not to criticise the current Trade Minister, who, as I read in my Bloomberg stream, is doing a very fine job of flying the flag in his role. But we need an expanded group of Ministers to take on all these challenges. The noble Lord, Lord Green of Hurstpierpoint, made the right point about how we have to expand, and on the level of expansion that is required. We need to make the most of all those willing to fly the flag for British business abroad, and I thank all those Members of both Houses who act as unpaid trade envoys. Our business ambassadors also play an important role. But the case is clear that we have to scale up, and scale up massively.

We must look at what is on the agenda. It is not just a small amount of trade promotion; in the round, we have to look at how we will approach the WTO framework and the multilateral negotiations, the 100 or so renegotiations of trade agreements, as well as how long they take and how they are covered. The EU is in the midst of arrangements, for both implementing and discussion, with Canada, Singapore, the United States, Japan and Vietnam, India, Mercosur, Australia and New Zealand, Mexico and Chile. That is as far as I could work it out—I suspect that it is a whole lot more. So what are we going to do bilaterally? That is a huge challenge, and we will have to make sure that we are prepared to address it with the right resource.

On the second series of issues, we are concerned about the size of challenges ahead in dealing with the consequences of Brexit. There are myths about our current circumstances. First, on the argument that a decline in the pound’s value could stimulate exports, offsetting any downsides from leaving the EU free trade area, the evidence suggests that, at best, the answer is “not enough”, and by some distance. The stimulating effects of currency depreciation have been gravely overstated. A fall in sterling merely compounds the problem. It is no solution. We are import-dependent for food, drink, raw materials, semi-manufactures and finished consumer goods. Imports are relatively inelastic with respect to price. A depreciation merely generates domestic inflation or damages margins in manufacturing, wholesale and retail. Although weak currencies typically present an opportunity for increased output, this luxury is not available to the UK. Our exports concentrate on highly sophisticated services and goods, such as financial, legal and IT services, as well as pharmaceuticals. The economy’s core exports naturally suffer from low price elasticity. In volume terms, therefore, a 1% depreciation of the pound increases the UK’s exports by a mere 0.12 %. Meanwhile, a widening trade deficit, caused by a falling pound pushing up import prices, casts uncertainty on the UK’s capacity to substitute its large import values with domestic production. The result is rising consumer prices with little or no improvement in exports in return.

What is more, as the UK manufacturing sector continues to decline—we had an outstanding speech from my noble friend Lord Bhattacharyya on manufacturing issues—any further depreciation of the pound will lead to price increases. Currently, the UK’s trade deficit is experiencing its highest levels in eight years. With a lightweight manufacturing sector, the UK is unable to plug the widening trade gap domestically, causing price elasticity of supply to remain at zero. We have been far too relaxed over the decline in manufacturing and we are suffering the consequences.

There is also a fallacy that there will be some deregulatory boost from all this. I shall not go into that in too much detail, but those things are specious and we have to understand that we need some regulatory push to ensure that we have effective markets. I look forward to later in the year when the Minister introduces the better markets Bill. I think we may be able to accomplish some things there.

We also need to address the fact that, as a result of the shocks and challenges in our position, we need to institute some form of industrial policy, using our advantages to support industries while we have a competitive advantage, with a strategy to ensure that nothing makes it less attractive for large multinational companies to favour the UK over other countries, support for domestic clusters of industries, and connected ecosystems to drive innovation. Where we have capabilities in industry and science and technology, we need a larger global presence, and we must focus policy—on skills, infrastructure and other areas of capital and financial support—to make sure they can prosper. These things are essential.

We have two critical sectors on which we must keep a close eye. Before the referendum, the motor industry was the UK’s second largest export industry, worth £3.2 billion, an increase on 2015. Our automotive industry produces an average of 1.6 million cars each year, of which 77% are exported abroad, of which 58% are sent to EU countries. That is absolutely critical. In addition, the pharmaceutical industry is of major concern. I hope the Minister can give assurances that the EU regulatory approval system that aids the faster dissemination of drugs between the EU and UK will be a priority discussion in future negotiations. I would be grateful if the Minister could also address the question of the EU Medicines Agency, and our role in and view of it, and whether it is likely, given that it is based in London, that it will have to relocate in the circumstances of our exit.

There are some major issues that confront us. The noble Lord, Lord Green of Hurstpierpoint, made the speech that I wish I could make, but he set the context for the issues around the current trade deficit. Can we pay our way? Can we make enough from exporting to pay for our imports? Can our invisible exports, whether they are services, tourism, or things such as insurance—or even income generated from our overseas investment—help us to deal with this? We are now in the worst position in our history. Never has the Government’s inability to meet their objective and balance trade been starker. There are two serious crises. Our weak export performance, no matter what we have done, no matter what gloss we put on it, does not address where we need to be. Foreign direct investment is hugely underperforming.

There is one matter to which we must turn our attention. The money that we earn from British-owned overseas businesses minus the outflows to overseas owners of foreign-owned businesses located here is now negative. There is now a £250 billion deficit in the value of UK assets owned by foreign companies compared to foreign ownership. This number is only going up. FDI is now likely to sharpen the current account deficit. When I read the Government’s April press release headed:

“UKTI reveals record number of UK businesses looking to export”,

I raised a glass. Notwithstanding my scepticism when I read such things about when the records began, what they are and the nature of the data that were collected, I raised a glass, but it is nowhere near enough. Even before the decision to Brexit, trade, our current account deficit and FDI meant we were facing huge underperformance and there were conditions for major problems to our GDP, so we need the Government to rise to this new level of threat as well as to the opportunities. I appreciate that the Minister cannot provide the answers required in our current political circumstances but, most importantly, are she and the Government prepared to accept the level of the crisis we face? At a time when we can do something about it, I hope she is.