Ethiopia Famine: 40th Anniversary
Lord Oates Excerpts(2 months ago)
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Lord Oates (LD)
My Lords, I declare my interest as chief executive of United Against Malnutrition and Hunger. I was 14 years old when that famous Michael Buerk broadcast led the 6 pm evening news on Tuesday 23 October 1984. It grabbed my attention like no news item ever had before or ever has since. It opened with these powerful words, which have haunted me ever since:
“Dawn, and as the sun breaks through the piercing chill of night on the plain outside Korem, it lights up a biblical famine, now, in the twentieth century. This place, say workers here, is the closest thing to hell on earth. Thousands of … people are coming here for help. Many find only death. They flood in every day from villages hundreds of miles away, dulled by hunger, driven beyond the point of desperation. Fifteen thousand children here now; suffering, confused, lost. Death is all around, a child or an adult dies every twenty minutes. Korem, an insignificant town, has become a place of grief”.
That broadcast shocked a pop star—Bob Geldof—into action, and a world out of its indifference. However naive the response was, it was the waking of a movement which made a huge amount of difference in years to come. It changed my life; it led me to run away from home. I managed to get myself to Ethiopia, feeling somehow that simply by the passion of my desire to do something, I could make a contribution. Noble Lords will not be surprised to learn that, when I arrived, I discovered fairly rapidly that the demand for unskilled 15 year-old English kids was not great and that Ethiopia, at that time under its Marxist military Government, was not a fun place to be. But, luckily, more strategic responses were in hand.
Over the next three decades, as we have heard, huge progress was made in reducing poverty and hunger. As my noble friend Lady Featherstone said, that led to the proportion of people in the world going hungry halving between 1990 and 2015—a huge accomplishment. In Ethiopia, following the defeat of that brutal Marxist-Leninist regime of Colonel Mengistu, remarkable advances were also made. Economic growth took off and a focus by the new Government on pro-poor policies, supported by donor countries, including and in particular the UK, saw rates of extreme poverty and hunger reduced by half.
Today, as we have also heard, much of that progress has been going into reverse around the world, including in Ethiopia. Internal conflict, disruption to food systems as a result of Covid and the Russian invasion of Ukraine, and drought and flooding, have led to a deteriorating situation across many regions of Ethiopia. The World Food Programme estimates that 19.7 million people are now facing high levels of food insecurity.
The UK Government have a long-standing commitment to development in Ethiopia and it was heartening that the Minister for Development, Anneliese Dodds, visited Ethiopia just a month after taking office and placed a real focus on the need to resolve conflict and secure peace and security across the country. It is also great to know that the noble Lord the Minister for Africa was also recently in Ethiopia. It is extremely heartening to have a Minister with such a long-standing commitment as a champion in the fight against malnutrition.
It is vital that we maintain our commitment to tackling the causes of malnutrition and hunger, because Ethiopia’s experience is not an outlier but part of a pattern where the achievements of the past three decades are going into reverse. Today, the World Food Programme estimates that 309 million people in 71 countries face acute hunger, and millions more are not getting the nutrients they need.
That matters because it means millions of children dying every year unnecessarily, and millions more who will not have the nutrients they need to develop physically and cognitively. It means lost productivity and economies that will not prosper, jobs that will not be available and societies that will be destabilised. In neighbouring Sudan, almost unnoticed by the world, a catastrophe is playing out that may prove even more devastating than the 1980s famine in Ethiopia. Already, as we heard in a debate we had at the initiative of the Minister a few weeks ago, famine has been declared in regions of Darfur and is likely to become far more widespread, and the displacement of people is having an impact on Ethiopia as well, adding to the pressures that it faces.
Even before the brutal civil war began over a year ago in Sudan, hunger was widespread and contributing to the displacement of people—because that is what happens when people go without food: they move, and when people move, tensions rise, with competition for pastureland and water, and other resources.
As in Ethiopia, so in Sudan—hunger drives instability and conflict, and conflict drives hunger, in a vicious and horrifying circle. Outside actors helping to sustain and fuel the conflict in Sudan have a wide series of motivations, one of which is the desire to secure access to food production. The United Arab Emirates, which denies involvement in the conflict but is widely held to be supporting the Rapid Support Forces, has invested heavily in agricultural land in Sudan as part of its efforts to secure food security for its own population, adding to this complex web of hunger and violence. In Ethiopia, Sudan, Gaza, Yemen and the DRC, conflict and hunger are coming together to cause immense human suffering. As Concern Worldwide (UK) warned in a report published today, climate change is only exacerbating the pressures on food systems, threatening hunger and instability across Africa.
If we are not as morally outraged as we should be about the suffering of millions of people around the world who do not receive the nutrition that they need to survive and thrive, perhaps we should consider the geopolitical consequences of a world that becomes ever hungrier. My hope and prayer are that we rediscover the moral outrage we felt in 1984 and marry it with our self-interest, so that I can look back at the 14 year- old me who sat and watched that BBC news broadcast and say, “In 2024, the world woke again from its indifference and demanded action”.
Sudan
Lord Oates Excerpts(3 months ago)
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Lord Oates (LD)
My Lords, I declare my interests as chief executive of United Against Malnutrition and Hunger and a trustee of the Royal African Society. I am pleased to follow the noble Baroness, Lady Cox, with her great knowledge and experience of Sudan. I join others in congratulating the noble Lord, Lord Collins, on his appointment as Minister for Africa. It was a pleasure to work with him in opposition and I welcome the renewed focus and vigour that he is bringing to addressing this crisis in Sudan. I very much welcome his powerful opening statement.
A few years ago, I had the opportunity to visit Khartoum and to meet with many brave people who were standing against military tyranny, and campaigning for peace and a return to civilian rule. Tragically, hopes that such an outcome might be achievable were ultimately betrayed by the self-interest and greed of the leaders of the Sudanese Armed Forces and the Rapid Support Forces. The result, as we have heard from the Minister and other speakers, including my colleague my noble friend Lady Suttie, who has such knowledge of the area, is catastrophe. Tens of thousands of people, perhaps well over 100,000, are already dead. Over 10 million people have been displaced from their homes, with 2 million of them externally displaced, causing tensions and instability in surrounding countries and driving migration further afield.
It is facile to pretend that there are simple solutions to a crisis of this scale and complexity. None the less, there is much more that the world can and should be doing to address the situation in Sudan and, as the penholder on Sudan in the Security Council, the UK obviously has particular responsibilities in this regard. I strongly agree with what the noble Baroness, Lady Amos, said in her powerful speech about how, ultimately, the political track is the most important, because we have to have a political agreement and resolution if we are to bring a sustainable end to the suffering, but I want to focus on three areas of practical action in my remarks today. The first is humanitarian access, the second the funding of the humanitarian need and the third the accountabilities of the parties to the conflict.
Humanitarian agencies tell us that hunger has become the primary cause of suffering for the people of Sudan. The World Food Programme estimates that over 8 million people, as we have heard, face emergency levels of food insecurity and that 755,000 people in 10 Sudanese states are facing starvation and death. Access to provide humanitarian relief to people in the greatest need is severely constrained by the warring parties. Aid deliveries are hampered by lengthy clearance and bureaucratic hurdles imposed by the Sudanese Armed Forces and, in RSF areas, by violence, threats to the security of convoys and attempts to elicit bribes. The World Food Programme told the All-Party Parliamentary Group for Sudan and South Sudan—the noble Lord, Lord Alton, referred to its excellent briefing—that 45 separate negotiations are required to get aid from the Adre border crossing point into Darfur. Meanwhile, the trucks that left Port Sudan three weeks ago for Zamzam refugee camp, where famine has been declared, have still not got there.
The situation, of course, is highly complex, but there are things that the UK and the international community could do to improve the supply of aid into these regions. First, international organisations argue that we should specifically delink negotiations for humanitarian access from ceasefire talks, so that if such talks fail, as they currently tragically are, a track to humanitarian access can continue separately. Secondly, we need to be willing to take greater risks and be innovative with our approach to aid if we are to reach the people in the most desperate need. That means being more open to supplying aid through local NGOs on the ground, which have the best chance of reaching the hardest areas. Innovative approaches to get food where it is needed are also required, which the UK could champion.
In addition to direct funding to supply food, emergency therapeutic supplements and medicines, the international community needs to use cash transfers and market mechanisms where they are the most effective means to reach people. Markets continue to function in Sudan and cash transfers can be the most effective methods of providing vulnerable people with the means to access food and other necessities. However, if such transfers are not to drive inflationary spirals, investment is required on both the supply side and on the demand side. Market operators need access to liquidity to meet increased demand, but they also need the assurance the cash transfer model can provide that demand for increased supply will be sustained.
The second area that I want to focus on is funding. The UN appeal for Sudan is only a third funded and the regional refugee response just 8.5% funded. The failure of the international community to come anywhere close to meeting these funding needs is short- sighted in the extreme. The shortfall in the Sudan appeal points to a likely spiralling of the hunger crisis within Sudan, greater displacement of people internally and externally, and further pressures on surrounding countries. Likewise, the almost complete failure to fund the regional refugee response is morally unacceptable, placing as it does huge burdens on neighbouring countries least able to bear them. It is also catastrophically short-sighted, as a failure to address the refugee crisis regionally is only likely to see migrant movements towards our borders and those of our partners. While the UK contribution is welcome, much more is needed to meet the scale of the refugee crisis.
According to data from the Economist magazine, 60% of the refugees in the camps around Calais are already from Sudan. Meanwhile, the UK expends huge amounts of aid funds intended to be used overseas to meet in-country refugee costs. Sudan demonstrates the counterproductive folly of this approach and I hope that the new Government will change it. I hope that, in his response, the Minister can reassure us that the UK will use its role as penholder to urgently convene donor countries to step up to the plate on both the Sudan appeal and the refugee response appeal, and to explain to them the catastrophic consequences of failing to do so.
Lastly on funding, while commitments are welcome, it is disbursement of those commitments that make the difference. Can the Minister look at how the £97 million pledged by the UK Government can be disbursed as rapidly as possible, utilising the approaches proposed by the humanitarian agencies, while being prepared to raise our risk tolerance for humanitarian funding?
On the accountability of warring parties, particularly what seems to be the deliberate use of hunger as a strategy in this conflict, can the Minister tell us what progress there has been towards the UK’s ratification of the amendment of Article 8 of the Rome statute to include starvation as a war crime in the context of conflicts not of an international character, as organisations such as Action Against Hunger have repeatedly urged? Can he also tell us what efforts have been made to reiterate the responsibilities of warring parties to comply with Resolution 2417?
No one who listened to the testimony given to the All-Party Parliamentary Group for Sudan and South Sudan on Wednesday could come away anything other than horrified by the suffering of the Sudanese people that they bore witness to, or by the silence and indifference of the world to that suffering. The leader of the delegation from the Sudanese women’s shuttle diplomacy initiative powerfully conveyed to us the sense of abandonment that the Sudanese people feel: “We have the right also to live as humans, but we are forgotten”, she said. We must ensure that the people are not forgotten, but we must do much more than that. We must use our role as penholder at the Security Council to galvanise international action to resolve this conflict and end the terrible suffering of the Sudanese people. I welcome the Minister’s obvious commitment to this end.
Financial Services Bill
Lord Oates ExcerptsWednesday 24th March 2021
(3 years, 8 months ago)
Lords ChamberRead Full debate Financial Services Bill 2019-21 View all Financial Services Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 162-R-I(a) Amendment for Report - (22 Mar 2021)
Lord Oates
“Review of capital adequacy requirements risk weights
(1) Within six months of the day on which this Act is passed the Prudential Regulation Authority must complete a review of the risk weighting applied to investments in—(a) existing fossil fuel exploitation and production, and(b) new fossil fuel exploration, exploitation and production.(2) In conducting this review, the Prudential Regulation Authority must have regard to—(a) the need to prevent the misallocation of investment to global warming accelerating activities as a result of artificially low risk weights; (b) the full implications of climate change for the risk of investments including physical climate risks, transitional climate risks and climate liability risks;(c) the likelihood of assets becoming wholly or partially stranded before the end of their normal exploitation cycle;(d) the impact of global warming accelerating activities on financial stability, in particular as a result of climate change related disruption of the economy; and(e) the advice of the Climate Change Committee.(3) The Treasury must lay before Parliament the outcome of this review within one month of the completion of the review.”Member’s explanatory statement
The purpose of this amendment is to place a requirement on the PRA to review the adequacy of risk weights applied to fossil fuel exposures in capital requirements having regard to the implications of climate change.
Lord Oates (LD)
My Lords, I declare my interest as the chairman of the advisory committee of Weber Shandwick UK. Amendment 3 is in my name and the names of the noble Baronesses, Lady Hayman, Lady Jones of Whitchurch and Lady Altmann. I thank all the organisations who provided me with briefing, in particular Finance Watch for its helpful advice and recommendations.
Before I speak to Amendment 3, I also want to express support for other amendments in this group, particularly Amendments 22 and 23 in the name of the noble Baroness, Lady Hayman, which deal respectively with climate risk reporting and the appointment of a senior FCA manager responsible for climate change. I have been pleased to put my name to both.
In Committee we had an excellent and productive debate about the impact of climate risk on the financial system and the wider economy. I am grateful to the Minister for his careful consideration of the arguments, and to noble friends and colleagues across the House for the excellent cross-party co-operation we have achieved on these issues. I thank the Minister for listening to the arguments on the need for the FCA and PRA to have regard to the UK’s 2050 net zero obligations and for introducing government amendments to achieve this end. That is a great step forward.
If we are effectively to respond to the existential threat climate change poses to our financial system—indeed, to our whole human society—finance will be critical in allocating the huge amounts of capital required to decarbonise the global economy. Today, however, finance is the principal enabler of climate change by financing the global warming-accelerating activities of the fossil fuel industries at an artificially low cost as a result of the inadequate pricing of climate risk within the financial system.
As long as capital adequacy risk weights are inconsistently applied within the capital requirement rules so that fossil fuel activities are under-risked, capital will flow towards them because the equity that has to be held on the bank’s balance sheet will be less than it should be and the return on equity consequently better than it should be. As a result, capital which could be better employed in the new technologies we will need to counter climate change will continue to be misallocated to the old industries that drive it.
Amendment 3 attempts to address this problem by requiring the PRA to complete a review of capital adequacy risk weightings in relation to existing and new fossil fuel investments within six months of the Bill being passed. That review would aim to ensure that risk weights for fossil fuel investments adequately take into account the impact of global warming-accelerating activities on financial stability, in particular as a result of climate change-related disruption to the economy.
This amendment is an attempt to meet the concerns of the Minister over my more direct amendment in Committee, which called for specific risk weights to be applied to fossil fuel investments in line with the existing capital adequacy rules of the capital requirement regulations, or CRR. The amendment in Committee required the application of a 150% risk weight to existing fossil fuel investment, in line with Article 128 of the CRR. That requires such a risk weight to be applied to
“items associated with particular high risk”,
for example, hedge funds or investments in immovable property.
It is clearly hard to argue that fossil fuel investments are less risky than either immovable property or hedge funds investments, given the likelihood of fossil fuel assets becoming partially or wholly stranded. The logic of CRR is, therefore, that such investments must be included under Article 128. That they are not indicates that the regulatory system is struggling to respond to the complex and interrelated risks posed by climate change to the financial system.
The original amendment also proposed that, for new fossil exploration and production, the risk weight should be applied such that investment in these activities would have to be backed by 100% equity on the lender’s balance sheet. Such a risk weight is merited by the fact that new fossil fuel investments are likely to become entirely stranded and that exploitation of new fossil fuel investments would push us far beyond the level of two degrees of warming that the Intergovernmental Panel on Climate Change warns us would have enormous and unpredictable consequences for human society, not to mention the banks and the financial system as a whole. It is right in those circumstances that the resulting loss of capital should be effectively ring-fenced so that the problem is confined to the bank equity holders and not allowed to spread to depositors and the wider financial system—adding a financial crisis to a climate crisis.
It is fair to say that the Minister and a minority of other Peers were resistant to the direct approach to risk weights I proposed. The Minister was concerned, as was the noble Baroness, Lady Noakes, that we were seeking to use prudential regulation to achieve policy objectives that they felt were better pursued elsewhere. The noble Baroness stressed that the system of prudential regulation should be about the
“risk to the capital of the banks and the resilience of the financial system as whole.”—[Official Report, 1/3/21; col. GC 244.]
To this, I can say only that I agree; that is the precise purpose of the amendments that my noble friends and colleagues across the House and I have been pursuing.
Last week, the deputy governor for prudential regulation and CEO of the PRA Sam Woods stated in a speech to the Association of British Insurers that
“it is a fundamental pillar of the prudential regime that it be risk-based: disregarding the risk in individual investments is a recipe for an under-capitalized financial system that would not be a robust or sustainable source of investment.”
I agree with the deputy governor, just as I agree with the Minister. My only difficulty is that the disregarding of risk in individual investments, which the deputy governor warns us against, is exactly what is happening in respect of fossil fuel investment because prudential regulation has not worked out how to adequately assess the impacts of climate change on the financial system.
The scale of the problem was highlighted by Mark Carney in his “Breaking the Tragedy of the Horizon” speech some years ago. He said:
“Take, for example, the IPCC’s estimate of a carbon budget that would likely limit global temperature rises to 2 degrees above pre-industrial levels. That budget amounts to between 1/5th and 1/3rd world’s proven reserves of oil, gas and coal. If that estimate is even approximately correct it would render the vast majority of reserves “stranded”—oil, gas and coal that will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics. The exposure of UK investors, including insurance companies, to these shifts is potentially huge.”
Is anyone seriously suggesting that these risks are currently being properly taken into account in the capital adequacy risk weights? If they were, it is inconceivable that existing fossil fuel investments would not be ranked under Article 128 of CRR as items associated with particular high risk. Of course, investments in new fossil fuel exploitation pose not only micro-prudential risks to banks arising from stranded assets, but the huge macro-prudential risks due to the acceleration of climate change which they will cause.
The Minister sought to assure us in the debate in Committee that the regulators have these matters under control. He prayed in aid, as did the noble Baroness, Lady Noakes, the climate scenario tests that the Bank will be conducting later in the year. These are no doubt worthwhile exercises and it is good to see that the Bank is setting the international pace. But these scenario tests will not fix the issue.
Although the Governor of the Bank implicitly recognises the role that capital adequacy requirements need to play in addressing climate-associated risks when he says that supervisory expectations will require firms to assess how climate risks could impact their businesses and to review whether additional capital needs to be held against this, he also states that, in relation to climate scenario tests, the Bank will not use them to size firms’ capital buffers. The reason the Bank is reluctant to do so is the difficulty of using such tests to measure hard-to-quantify future risk. So we have a dangerous scenario when regulators say that they cannot act until they can adequately measure risk, and on the other hand that the risk is too difficult to measure. The route through this is to apply the existing capital adequacy risk weights in an internally consistent manner, as proposed by the amendment that we put at Committee.
Although I stand by that position because I believe it is the only logically coherent and feasible way of dealing with risk in respect of fossil fuel activities, I have listened to the Minister’s arguments and those of the noble Baroness, and consequently I have put forward this revised amendment to require the PRA instead to conduct a review of the issue of risk weights and climate change and report back to the House. This will provide an opportunity to consider carefully the issues raised and also to inform the debate on risk weights at international level. I hope the Minister will see merit in this proposal.
I made it clear in Committee, and I stress again on Report, that neither my amendment then, nor the revised version before your Lordships today, is driven by any animus against the fossil fuel industries—quite the contrary. I have a huge respect for the people working in those industries and a huge determination that there should be a just transition for those employees as we decarbonise our economy. We will be able to achieve that much more easily if the financial system shepherds an orderly transition away from fossil fuel industries through the appropriate application of risk in the system.
I understand the reluctance of the Government to intervene in prudential regulation, but Ministers cannot abdicate responsibility. They must not cling to the idea that the technicians have got this under control, because it is an illusion—and it is an illusion that will have disastrous consequences if it is not corrected. When the system of prudential regulation is so evidently failing in its primary task of managing and controlling risk in the financial system, at least in respect of climate risks, there is an obligation to act. So I am hopeful that, having listened to the arguments during the debate, the Minister will accept the case for the review and provide sufficient assurance that this will be taken forward in a timely manner. However, if he is not able to do so, I give notice of my intention to test the opinion of the House. I beg to move.
Baroness Hayman (CB) [V]
My Lords, I remind the House of my interests as co-chair of Peers for the Planet. I have Amendments 22 and 23 in this group and will speak also to the government amendments and Amendment 44, from the noble Baroness, Lady Bennett. I have added my name to Amendment 3, to which the noble Lord, Lord Oates, has just spoken so powerfully.
Before I speak to any of the amendments, I will thank colleagues, the noble Lord, Lord Oates, and the noble Baronesses, Lady Jones, Lady Altmann and Lady Bennett, who have added their names to my amendments. I thank very particularly the Minister and his team for their very approachable actions in relation to discussions since Committee. They have been engaged in a sensitive and constructive way, and the noble Earl, as we have come to expect, has always been extremely courteous, endlessly patient and generous with his time. I think we have made real progress because of that.
Lord Oates (LD)
My Lords, I thank all noble Lords who have taken part in this interesting and engaging debate and I give particular thanks to the noble Baronesses, Lady Hayman, Lady Jones of Whitchurch, and Lady Altmann, for signing Amendment 3, and to my noble friend Lady Kramer, as well as to the noble Baroness, Lady Bennett. I am also grateful to the Minister for his engagement at all times.
I am sorry if the wording of the amendment caused any confusion to the noble Baroness, Lady Noakes, but I hope that the clear explanation made by my noble friend Lady Kramer has lifted it. I do not have anything to add to that, except to say that I have no doubt that the PRA will understand very clearly what it is being asked to do. The noble Viscount, Lord Trenchard, said that he felt that a review would be disproportionate. I am not sure what he is measuring the proportions against but, if anything, the amendment seems to be a disproportionately modest response to a desperately urgent issue that will impact on us all.
I am pleased that the Minister and the FCA have reacted to a number of the amendments, in particular Amendment 23 tabled by the noble Baroness, Lady Hayman, on the senior manager of the FCA, and obviously I welcome the movement on the Government’s “have-regard” amendments.
I reiterate my thanks to the Minister for his engagement during this process, although I am disappointed that he has not been able to provide the reassurance I had hoped for that risk weights would be properly addressed. He said that we had to move not with undue haste but with due speed—but I am not sure that we are doing either.
I am afraid that I do not accept that the issues are covered sufficiently by the existing work that he has taken the trouble to set out, not least because the approach being followed does not take into account sufficiently the specific issues set out for the review in my amendment, in particular the climate-related disruption of the economy. It is very important that this review should take place and that the PRA can use it to look properly into these issues. As I said in my opening speech, it should feed into discussions at international level. It is very important that it is looked at in terms of the remit of my amendment. So, on that basis, I would like to test the opinion of the House.
Financial Services Bill
Lord Oates ExcerptsMonday 1st March 2021
(3 years, 9 months ago)
Grand CommitteeRead Full debate Financial Services Bill 2019-21 View all Financial Services Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 162-IV(Rev) Revised fourth marshalled list for Grand Committee - (1 Mar 2021)
Lord Oates
“Considerations in setting capital adequacy requirements
In setting the capital adequacy requirements of a credit institution, the Prudential Regulation Authority shall have regard to—(a) the level of exposure of an institution to climate-related financial risk;(b) the level of compliance of the institution with the recommendations of the Task Force on Climate-Related Financial Disclosure; and(c) the objectives of the Climate Change Act 2008 as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019 (S.I. 2019/1056).”Member’s explanatory statement
The purpose of this amendment is to place a requirement on the PRA in setting capital adequacy requirements of a credit institution to have regard to its exposure to climate-related financial risk.
Lord Oates (LD)
My Lords, I declare my interests as the chair of the advisory board of Weber Shandwick UK, as set out in the register. In moving Amendment 28 in my name and those of my noble friend Lady Kramer and the noble Baroness, Lady Bennett of Manor Castle, I will speak also to the other amendments in this group. I once again express my thanks, in particular to Finance Watch, Positive Money and Carbon Tracker for their helpful briefing, and indeed to all organisations that have taken the trouble to provide me with information on this subject.
The context of our discussion of these amendments is one in which, at current levels of carbon emissions, the world will have exhausted within 10 to 15 years the carbon budget it must stick to if we are to meet the Paris objective of keeping warming well below 2 degrees. This is not the alarmist prediction of some fringe organisation or, indeed, even of a Liberal Democrat politician; it is the sober warning of experts in the field, including the United Nations special envoy for climate action and finance and former Governor of the Bank of England, Mark Carney, who spoke in his Reith Lecture at the end of last year of the struggle between urgency and complacency in tackling climate change, highlighting the contrast between the
“urgency of carbon budgets that could be consumed within a decade and the complacency of continuing to add new committed carbon … The urgency to reorient the financial system for the massive investment needed to create a sustainable economy, yet the complacency of many in finance”.
Mr Carney went on to warn that the tensions that exist in our desire to tackle climate change reflect the common challenge of values, including human frailties and market failures. Nowhere could market failures be more evident than in the failure to price climate risk appropriately within the financial system. That is what the amendments we are debating are all about. In the previous group of amendments related to climate, which we discussed last week, we talked about the purpose of prudential regulation, which is surely to manage and control risk. We spoke also about the fact that our system of prudential regulation is clearly not performing that function in respect of the greatest risk facing the financial system and, indeed, the planet as a whole: climate change.
Amendment 28 seeks to take the first steps in addressing this issue. It requires the Prudential Regulation Authority, in setting capital adequacy regulations, to have regard to climate issues, including the level of exposure of an institution to climate-related financial risk and the level of compliance of that institution with the recommendations of the task force on climate-related disclosure and the net-zero objective of the Climate Change Act, as amended.
Amendment 42 requires the Treasury to amend the credit rating agencies regulations to require such ratings to explicitly take account of the level of exposure of an institution to climate-related financial risk.
Both amendments aim to act as a wake-up call to regulators and the City so that, when setting capital adequacy requirements and issuing credit ratings, they take account of and act on the risks that climate change poses to individual institutions and the financial system as a whole.
Amendments 31 and 32 in my name and those of my noble friend Lady Kramer and the noble Baroness, Lady Altmann, focus specifically on fossil fuel exploration, exploitation and production. I am particularly grateful to Finance Watch for its advice and recommendations in this regard. Amendment 31 sets out the risk weight the PRA must apply to the funding of existing fossil fuel production and exploitation; Amendment 32 does the same in respect of new fossil fuel exploration, production and exploitation. They both seek to do so within the existing framework of the Capital Requirements Regulation, which sets capital requirements on a risk-based approach.
The two amendments apply different risk weights to the different activities addressed in each because the financial risks associated with the two activities are different: exploiting existing reserves runs a high risk that some fossil fuel assets will become stranded during their lifetime, whereas exploring and exploiting new reserves comes with a much higher risk—indeed, a near certainty—that they will become entirely stranded.
Amendment 31, dealing with the risk weighting for existing fossil fuel investment, is tailored around Article 128 of CRR as amended in CRR2. This deals with what it describes as:
“Items associated with particular high risk”.
Paragraph 1 of Article 128 states:
“Institutions shall assign a 150% risk weight to exposures … that are associated with particularly high risks”
and that for the purposes of the article, institutions should treat any of the following as exposures with particularly high risks:
“investments in venture capital firms, except where those investments are treated in accordance with Article 132 … investments in private equity, except where those investments are treated in accordance with Article 132 … speculative immovable property financing.”
Paragraph 3 of Article 128 goes on to state:
“When assessing whether an exposure … is associated with particularly high risks, institutions shall take into account the following risk characteristics: (a) there is a high risk of loss as a result of a default of the obligor; (b) it is impossible to assess adequately whether the exposure falls under point (a).”
As Finance Watch points out in its excellent report Breaking the Climate-Finance Doom Loop, paragraph 3 of Article 128 almost appears to have been written specifically to deal with stranded fossil fuel assets: first, because, if we manage to meet net-zero targets, a large proportion of existing reserves will have to remain in the ground, leading to the probability of default of the obligor, the issue addressed in Article 128(3)(a); and, secondly, because assessing the scale of the stranded asset risk is impossible given that it relates to a unique situation for which we have no historical precedent but in which we know that the future economic performance of the assets must be downward—the situation exactly envisaged and provided for in Article 128(3)(b).
Accordingly, Amendment 31 would apply an approach consistent with Article 128 of the CRR to make it explicit that the PRA must apply the 150% high risk weight in calculating capital requirements for existing fossil fuel funding. This risk weight is already applied to venture capital firms, private equity and speculative immovable property, and it is hard to understand how fossil fuel operations can be regarded as posing less risk. The fact is that the existing 100% risk weight is an incentive to the financial markets to continue to act as if nothing has changed. A 150% risk weight, by contrast, would provide a clear price signal reflecting the risk to assets but would not prevent the continued financing of existing fossil fuel operations, allowing an orderly and just transition for those industries and the communities that rely on them.
Amendment 32 addresses the much bigger threat to the climate and to the financial system that arises from new fossil fuel exploration, production and exploitation. It would require such investments to be funded entirely by capital by applying a 1,250% risk weight to this activity. This risk weight is calculated with reference to Article 92 of the CRR on own funds requirements, which obliges institutions to maintain at all times a total capital ratio of 8%. This provides the basis to determine the risk weighting to apply to ensure that new fossil fuel activities are funded entirely from equity.
The 8% total capital requirement is multiplied by the risk weight of 1,250% in accordance with the standardised approach, resulting in a 100% capital requirement for these activities. This risk weight is not some wild or punitive sanction; it is the considered application of the real risk such investments pose to the institutions themselves, to the financial system as a whole and to our ability to stabilise the temperature of the planet. It is also consistent with the existing risk weight applied under the capital requirements regulation for holding companies, as defined in Article 89.
Requiring any fossil fuel investment to be entirely equity funded is surely appropriate, given that these activities will either become non-viable because we have succeeded in stabilising the climate by reaching our net zero targets, or, if we have not, they will be fuelling runaway climate change which will threaten the viability of the whole financial system, not to mention our entire way of life.
The truth is that we have no chance of meeting the objective of the Paris Agreement to keep warming to well below 2 degrees, and ideally to 1.5 degrees, if we burn all the carbon in existing reserves, let alone exploit new ones. The regulatory system has to take account of that, and it has to adequately price risk for those institutions that wish to invest in activities which must become non-viable if we are to prevent catastrophic climate change. In doing so, it will help ensure an orderly and just transition away from fossil fuels.
I want to be very clear that these amendments are not driven by any animus against the fossil fuel industries, whose products have been critical to the development of human society, whether by keeping us warm or driving industry and prosperity. Indeed, my own title in this place is taken from Denby Grange colliery, where my uncles and my grandfather were miners, engaged in the critical but dangerous job of mining the fuel that provided heat and power for the nation.
As we know, coal mining as a major industry in the UK came to an abrupt end in the 1990s. The way it did so, driven by political malice and with no transition planning at all, devastated the mining communities which had fuelled the country’s prosperity over a period of more than 200 years. Abandoned by government, these communities were beset by huge economic and social problems, many of which exist to this day. We cannot allow that to happen in the oil and gas industry.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
Does the Minister wish to respond? No? In that case, I call the noble Lord, Lord Oates.
Lord Oates (LD)
I thank noble Lords from all sides of the Committee for their contributions. I am particularly grateful to those noble Lords who signed the amendments and spoke in the debate. I am grateful also to the Minister for his courteous response and for agreeing to continue to discuss these issues.
The noble Lord, Lord Sharpe, made the point that we are going to need fossil fuels for some time to come. That is precisely the point I covered in my opening remarks. That is why we need to risk existing fossil fuel operations properly and effectively so that they can continue as we transition.
The noble Lord, Lord Sharpe, and the noble Baroness, Lady Noakes, questioned which companies Amendments 31 and 32 might apply to. The intention was for them to apply to activities as opposed to specific companies, and specifically to fossil fuel activities to try to avoid capturing some companies’ non-fossil fuel activities. I am perfectly happy to accept that the amendments’ wording might be improved, but that was the intention. The issue we have to deal with is the threat of continued fossil fuel activities beyond what we have the carbon budgets for.
Overall, however, I was struck by the absolute complacency from the Government Benches—the lack of realisation of the issue that we are facing and of the urgency of dealing with it and of trying to use whatever tools we can to address it. The noble Baroness, Lady Noakes, appeared to question the very concept of using prudential regulation to achieve the objective of averting climate change. She said that the impacts of climate change were unlikely to find their way into credit risks in the short term. She also said, as the noble Baroness Lady Bennett, reminded us, that banks do not lend in situations where there is a high risk of default. History explicitly and categorically refutes that. The noble Baroness also informed us that credit agencies did not need any help in assessing credit risk—the same agencies which gave their highest ratings to complex securities associated with the subprime mortgage crisis.
Prudential regulation is a tool through which we can, necessarily and legitimately, regulate the sector and ensure its financial stability. My noble friend Lady Kramer quoted the current Bank governor’s rather extraordinary statement that we were not going to use the results of the stress tests of different climate scenarios to inform the size of firms’ capital buffers. But he did say that that does not mean firms should not be thinking about near-term capital requirements. He set out that firms must assess how climate risk could impact their business and review whether additional capital needed to be held against this. He expressly recognised the legitimacy of using capital requirements to tackle climate change.
The IPCC has warned us that if we do not act decisively to mitigate climate change, we are on a global warming path of between 3.8 and 4.8 degrees centigrade by the end of the century, with a range of median values between 2.5 and 7.8 degrees centigrade. That is the seriousness of the situation we face. Central bankers are clear about the huge risk that climate change poses to the financial system. But what is the reaction of the noble Baroness, Lady Noakes, and the noble Lord, Lord Sharpe? It is to say: “We don’t need to do anything now. Let’s wait and see.” We do not have time to wait and see.
We know the risks we face. If we do not act, we are culpable. Is our excuse to our children and grandchildren, nieces and nephews, and grand-nieces and grand-nephews going to be: “Oh, sorry, it was all too difficult. We were busy trying to measure everything and we thought the banks were quite good at predicting risk anyway, and they all let us down”? The noble Baroness, Lady Noakes, asked: why would we deny the City the opportunities of a relatively low-risk, profitable business? There is a simple answer to that: if those activities continue unabated, they will threaten the very future of human society. That is a reality. That is why we have to act.
In view of the Minister’s willingness to continue to discuss these issues, I beg leave to withdraw my amendment.
Financial Services Bill
Lord Oates ExcerptsWednesday 24th February 2021
(3 years, 9 months ago)
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Lord Oates
“(ca) the climate-related financial risks to which FCA investment firms are exposed,”Member’s explanatory statement
The purpose of this amendment is to require the FCA, in exercising its power to make general rules, to have specific regard to the climate related financial risks to which FCA investment firms are exposed.
Lord Oates (LD)
My Lords, I declare my interests as chair of the advisory committee of Weber Shandwick UK, as set out in the register. In moving Amendment 11 in my name and the names of my noble friend Lady Kramer and the noble Baroness, Lady Hayman, I will also speak to the other amendments in this group. Before doing so, I put on record my thanks to a number of organisations for their briefing and patient answers to the many and often ignorant questions that I have posed to them in preparing for the Bill, particularly Finance Watch, Positive Money and Carbon Tracker.
I am also grateful to the City Corporation and the APPG for Financial Markets and Services for the helpful information they provided, and, of course, to the noble Earl, Lord Howe, and his ministerial colleagues for meeting to discuss the Bill and, if not immediately signing up to all our climate amendments, at least recognising the seriousness of the issues that they raise. I hope that over the course of Committee we will be able to convince the noble Earl and his colleagues of the urgency of acting through this legislation.
There are essentially three categories of amendment in this group. The first addresses the rule-making powers of the regulators, requiring them when making the rules to take account of the climate-related financial risks to which the entities they regulate are exposed. This issue is dealt with in Amendments 11 and 12.
The second category requires regulators when making rules to have regard to the UK’s national and international climate change objectives and obligations. Amendments 13, 14, 15, 16, 17, 23, 34, 35, 36 and 37 address this issue in a number of different ways.
Finally, Amendments 48, 75, 76, 89 and 98 fall into a third category, which tackles disclosure and governance issues as they relate to climate change.
Turning to the first category, the objective of Amendments 11 and 12 is simply to ensure that the prudential regulation of FCA investment firms under Schedule 2 is fit for purpose; that is, that it properly takes account of and seeks to manage and control the risk exposure of the firms it regulates. It is hard to understand on any accepted definition of prudential regulation how it can be regarded as such if it fails to take account of exposure to climate risks, given the potential threat they pose, not only to individual firms but to the financial system as a whole.
There are those who argue that it is premature to take this approach, because the sector is in the process of working out how to measure climate risk, which is undoubtedly a complex matter, given the myriad interrelationships that exist and the fact that there is no precedent for measuring such dynamic risks. While I acknowledge that we do not have a perfect understanding of climate risk, we cannot wait for a perfect solution. We cannot accept that a potentially enormous risk exists for FCA investment firms, but, because it is difficult to measure its exact scale, we are going to act as if it does not exist at all. That is not prudential regulation; it is wantonly reckless negligence.
I hope that the Government will look at this matter very carefully and that the Minister will be able to give us some comfort that, if they will not accept our amendments, they will at least bring forward proposals to ensure that prudential regulation of FCA investment firms does not continue to ignore what is likely to be the most significant risk to which they are exposed over the coming decades.
The second set of amendments seek in different ways to ensure that the FCA and the PRA must have regard in rule-making to our net-zero target and our wider international obligations on climate change and biodiversity. Amendment 23 in my name, with the support of my noble friend Lady Kramer and the noble Baronesses, Lady Hayman and Lady Bennett of Manor Castle, would prevent the Treasury from using its power under Clause 3 to evoke capital requirement regulations unless the effect of the new regulation was compliant with the UK’s net-zero target.
Amendment 13 to Schedule 2 and Amendment 34 to Schedule 3 require the FCA and PRA, when making rules, to have regard to the
“the likely effect of the rules on the relative standing of the United Kingdom as an international leader in combatting climate change”.
Amendments 16 and 37 to Schedules 2 and 3 respectively require that, in considering that likely effect on the UK’s standing, the FCA and PRA have regard to our commitments under the Paris Agreement. This includes our nationally determined contribution of a 68% reduction in emissions from 1990 levels by 2030 and the UK’s net-zero target under the Climate Change Act 2008, as amended in 2019. Amendment 17 in the name of the noble Baroness, Lady Bennett of Manor Castle, adds the United Nations Convention on Biological Diversity to that list of “have regards”.
In these amendments, I have deliberately replicated existing language in the Bill’s rule-making clauses, which require the FCA and PRA to have regard to
“the likely effect of the rules on the relative standing of the United Kingdom as a place for internationally active investment firms to be based”.
That is an undoubtedly an important consideration, but it needs to be specifically supplemented by a requirement that takes into account the UK’s standing as a leader on climate change. This will force the regulators to raise their sights and ensure that we have the rules in place to cement the UK’s position as the leading financial centre in tackling climate change and providing green finance.
On an earlier group on Monday, my noble friend Lord Sharkey quoted the Barclays CEO Jes Staley, who said when asked which amendment he would like to burn now we had left the EU:
“I wouldn’t burn one piece of regulation.”
He went on to say:
“I would continue pushing the climate agenda, trying to make London a centre of innovation around financing climate and transitioning to a net zero economy by 2050”.
That might be a pretty brilliant idea and we agree with him, but we need an adequate system in place to allow it to happen. In the last 15 years, Governments in which all the main parties have been represented have ensured that the UK has established and retained international standing as a leader on climate issues. We need to ensure that leadership is reflected not just in our politics and Government, but across industry and society as a whole. Nowhere will this be more important than in the most significant sector of our economy.
If our financial services industry and its regulators show leadership on climate, the industry will not only have the opportunity to gain a clear market advantage in the years ahead but will help to address the current climate emergency. If they do not, instead of playing a key role in averting climate catastrophe, that same industry will be a key contributor to it. That is what is at stake here.
Amendments 14 and 35 tabled by the noble Baroness, Lady Hayman, have a similar objective although I must admit that they are a little more concise than my version. They would require the FCA and PRA, in making rules, to have regard to
“the likely effect of the rules on the United Kingdom meeting its international and domestic commitments on tackling climate change”.
Amendments 15 and 36 in the name of the noble Baroness, Lady Jones of Whitchurch, have a similar objective again but focus specifically on the net-zero target under the Climate Change Act, as amended. I put my name to both these sets of amendments because the purpose of all our amendments is a common one: the essential task of ensuring that our regulators take account of the most significant threat that faces the financial services industry, and indeed every one of us on this planet—the climate emergency. The intent of these amendments has support across the Committee, so I hope that the Minister will recognise the need to act and the Government will either accept a version of these amendments or bring forward one of their own. If they are unwilling to do so, I think the spirit of the House will be to come together on a joint amendment on these matters on Report.
Earl Howe (Con)
My Lords, I failed to cover the Pension Schemes Act. I apologise to the noble Baroness. The Act provides a power to bring forward regulations, placing various obligations on pension schemes relating to climate change risks. The provisions in the prudential package of the Financial Services Bill do something slightly different. They place a duty on the regulators to have regard to certain matters and to explain how they have been considered, given that the Bill imposes duties on the regulators to make rules relating to Basel and the IFPR. I reassure the noble Baroness that my officials and I have considered these provisions carefully, as we have the other amendments discussed today.
As regards her main question, my point was simple. As yet, there is no international agreement on what the term “green” means. Therefore, we cannot say with certainty that greener means prudentially safer. I do not say that we will never be able to, but it is not possible at present.
Lord Oates (LD)
My Lords, I am grateful to all noble Lords for their thoughtful contributions to the debate. I thank and pay particular tribute to the noble Baroness, Lady Hayman, for her important leadership on these issues through Peers for the Planet which is recognised across the Committee. I also thank all noble Lords who signed or spoke in favour of amendments for their co-operative, cross-party approach.
In quoting the Government’s approach, the noble Baroness, Lady Hayman, paraphrased St Augustine: “Lord, make me greener, but not yet”. I thank the Minister for his comprehensive response and characteristic courtesy, but it felt a little complacent. One could also quote from St Paul—that it was about “the good that I would I do not”. There is no doubt about the Government’s intentions, ambitions and targets. We welcome and are impressed by them, but it is now reaching the point where we have to act.
Business of the House
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Baroness Wheeler (Lab)
My Lords, I thank the Leader of the House for her Statement today and for the constructive usual channels discussions held away from the Chamber, including with my noble friends Lady Smith of Basildon and Lord McAvoy, who have, while working at home, continued to be active and involved throughout the week. It is vital that Parliament continues its essential role of scrutiny, particularly at a time of crisis, and this House must continue to play its part. It is right that the Leader of the House referred to the programme planned for after the Easter Recess, which has been discussed by the usual channels. It is also right that the business that the Government outline keeps to a more limited programme while ensuring opportunities for scrutiny of ongoing legislation, as well as preserving time for Opposition parties and groups. She will know that the leaders in the usual channels are all fully committed to keeping in close contact between now and when we return.
The Leader will know that Members across the House are very keen to see the introduction of changes to how we work in future, using new technology such as remote collaboration and videoconferencing. For example, committees can meet online, but there are many other ways in which we can fulfil our obligations and maintain social distancing, as a number of noble Lords have outlined in speeches this week. Many businesses are being far more innovative, and we should also be taking a lead on this. I underline that the working group the Leader of the House referred to needs to work with a sense of urgency so that new technological solutions to the current situation can be agreed and introduced as soon as possible, preferably in time for when we return from the Recess.
I also thank her for emphasising that the House returns on 21 April, as previously planned, as there was some confusion in the media, not for the first time, on this issue. Normal procedures will apply, even in this situation. However, should there be any significant change or action required, a recall of Parliament has to be an option.
I also thank the Leader of the House for her comments about the staff of your Lordships’ House. I too thank all the staff of the House, including the cleaners and the security and catering staff, as well the House administration and party staff. Whatever decisions are made on the future working of this House, we must consider them, too.
Lord Oates (LD)
My Lords, I, too, thank the Leader of the House for her statement, and I join other noble Lords in giving immense thanks on behalf of these Benches to all the people in Parliament who have worked so hard on our behalf. We understand the decision that has been made that the House should rise early, but there are some reservations in the country because we are facing the greatest national emergency in my lifetime.
I share to some extent the concerns highlighted earlier today, for example by the noble Lord, Lord Adonis. As he mentioned, we understand that the self-employed package will be announced on Friday. It is a big worry that there will be no ability for Parliament to scrutinise that. I also believe that other regulations and SIs will be laid on Thursday to put the powers in place to implement what the Prime Minister announced on Monday. Again, there will be no scrutiny.
There are also a whole series of other issues that people raised to do with PPE and testing which Parliament will not have a chance to scrutinise. Will the Leader of the House absolutely guarantee that Parliament will come back on 21 April, because the Leader in the other place seemed to suggest that there was a slight caveat to that? I really hope that it will, because it is very important that we are here. Could she also tell us whether it would be possible to arrange immediately a substantive debate on the emergency on that day, so that these issues can be discussed in detail?
I was pleased to hear what the noble Baroness had to say about remote working. My noble friend Lord Newby raised these issues in his Second Reading speech yesterday. He, my noble friend Lord Stoneham of Droxford, and a number of other Peers on all sides of the House have made many sensible suggestions. We know that Select Committees in the other place will meet virtually; indeed, I think one of them already has. Can the Leader of the House tell us that Select Committees, indeed any other committees of this House, can meet virtually immediately? If not, can we make very rapid progress on that?
There have been wider suggestions to do with how Members could ask Questions remotely. It should not be technologically impossible for them to also take part in debates remotely, and we should be ambitious about that. Given that a number of noble Lords have particular expertise on technological issues—I am not one of them—perhaps they might be consulted and be able to input into the committee which the noble Baroness mentioned. Can she ensure that that committee, and the House in general, has discussions with the various organisations that provide videoconferencing technology, as they may very well be willing to advise the House on how it could facilitate remote contributions? The noble Baroness, Lady Bennett, mentioned in the debate yesterday that her party’s conference had been held using a service called Hopin. We should investigate all these things; there are technologies out there that we could use. The noble Lord, Lord Anderson, told some of us earlier how the Supreme Court locked up its building and moved immediately, and its cases are continuing remotely. I really hope that we can move on that.
As the noble Baroness, Lady Wheeler, said, it is really important that we use the time between now and when we return to do this. It just will not be on for us to come back and find that progress has not been made. We cannot have this Parliament, and this Chamber in particular, being represented only by those of us who are younger, or more closely located geographically, or who do not have underlying health problems. Now, more than ever, when the people who are most affected are older people and those with underlying health conditions, not hearing from other representatives is a really bad thing.
I heed and understand the Leader’s point about the example that we as a House need to set for the public and the advice for people aged over 70. However, in our debates over the last two days, we have had some excellent and important contributions from noble Lords and noble Baronesses who are over that age, and the only way they could contribute in that way was by being here. We should not berate them for coming here; we should berate ourselves for not having put in place processes by which they could contribute remotely. We must not lose their contributions.
Zimbabwe
Lord Oates Excerpts(4 years, 9 months ago)
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Lord Oates
To ask Her Majesty’s Government whether they have held ministerial-level discussions with European Union member states about the current economic crisis and food emergency in Zimbabwe.
Earl Howe (Con)
My Lords, we regularly discuss the deeply concerning economic and political situation in Zimbabwe with international partners, including EU member states. Her Majesty’s ambassador to Zimbabwe last met her counterparts from the EU, the United States, Japan, Switzerland, Canada and Australia on 26 February. The UK has committed £49 million to provide humanitarian assistance to the 570,000 Zimbabweans most in need of food, including through cash transfers.
Lord Oates (LD)
I thank the Minister for his Answer. As he will be aware, the situation in Zimbabwe is now absolutely desperate. This is principally as a result of the disastrous failings of the Government of Zimbabwe, compounded by drought and cyclones. Does the Minister agree that, in addition to the restrictive measures against individuals who abuse human rights and continue to loot the country, we also need a positive offer to give hope to the Zimbabwean people in their struggle for political and economic justice?
Will the Government therefore work with our European and other international partners to agree an economic rescue package—a Marshall plan—that would be made available to any Zimbabwean Government who met specified criteria, including restoring democratic civilian government, upholding the rule of law and demonstrating a commitment to the well-being of its people, rather than the personal enrichment of its Ministers?
Earl Howe
My Lords, I acknowledge the noble Lord’s long-standing and close interest in Zimbabwe and its people, and I agree that we must continue to give hope and encouragement to all those who want to see genuine political and economic change in Zimbabwe. However, we have to face the reality that no package of external support will deliver for the Zimbabwean people without fundamental reforms, as he rightly says. Therefore, the onus must remain on the Government of that country to demonstrate true commitment to change. So far, we have seen limited progress.
European Council
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Baroness Evans of Bowes Park
Over the past year, since the referendum result, the Government have engaged extremely widely with a range of representatives from groups and organisations to feed into our thinking. For instance, DExEU has conducted analysis of more than 50 sectors of the economy, covering financial services, retail, agriculture, energy, infrastructure and transport. In your Lordships’ House we have had a lot of debate, and the Select Committees have published very useful reports to help feed into that thinking. We have put in place a solid foundation for further discussions, admittedly under an ambitious timetable. The UK and EU teams will meet every four weeks, coming together for a number of days at a time to progress discussions as quickly and effectively as possible. We have now started the negotiations and therefore hope that we will see progress, which we have not seen over the past year because we had not triggered Article 50.
Lord Oates (LD)
My Lords, although I regret that this announcement did not come earlier and is not unilateral, I none the less welcome that the Government have at least made some progress. However, there is discussion in the document about the fees for the new scheme being set at reasonable levels. Given that the current fee for settled status is almost £2,000, and given that the change of status for EU citizens has come about through no fault of their own but by a decision from which we are excluded, does the Minister think it right that the Government should carry this out with no fee whatever to EU citizens?
Baroness Evans of Bowes Park
I can certainly assure the noble Lord that fees and charges are being looked at as part of the negotiations. I can only repeat that our aim is to offer a streamlined and high-quality service for everyone and to keep fees at a reasonable level.
European Union (Notification of Withdrawal) Bill
Lord Oates Excerpts(7 years, 9 months ago)
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Lord Oates (LD)
My Lords, like many in your Lordships’ House, I deeply regret the circumstances that have brought us to consideration of the Bill. However, after the tirade from the noble Lord, Lord Forsyth, against the Liberal Democrats, I am at least reassured that we must be doing something right, and have never been prouder and happier than to be on the opposing side of an argument. Nevertheless, the referendum has happened and I accept that the Government had to carry out its instructions. But they had a choice about how they did so.
The Government could have acted boldly by consulting Parliament immediately and meaningfully, and publishing a Bill six months ago. They could have set out a policy which discharged their duty to negotiate withdrawal, but did so in a manner that took into account the views of the whole nation and gave protection to our economy. They could have acted decisively to reassure EU citizens in the UK, and consequently British citizens in other EU countries, that their rights would be protected. But they did none of that. Instead, they asserted the royal prerogative with the arrogance of a medieval monarch, and fought to prevent Parliament having a role. Instead, they decided to embark on extreme Brexit, exiting not only the EU but the single market and the customs union too—decisions which our current Chancellor warned, just a few short months ago, would be “catastrophic”.
On the crucial issue—the rights of UK citizens in the EU and of EU citizens in the UK—instead of a bold and generous offer, the Government have obfuscated and blustered. They have cast the lives of millions of people as so many chips in a game of poker. In doing so they have squandered good will towards our country, brought fear and uncertainty to millions of our fellow EU citizens and proven—if any further proof were required—how very little the Government understand about the art of negotiation.
I hope we will take the opportunity in Committee and on Report to ask the elected House to think again on some of these matters, including first, on protecting the rights of British citizens resident in other EU countries and EU citizens resident in the UK. The content of the White Paper on the subject is frankly derisory and an insult to the millions of EU and British citizens left uncertain and afraid by Brexit. Secondly, we need to look at how we can protect our economy by keeping the UK in the single market. Finally, we need to look at ensuring that at the end of this process, the British public have the final say on the deal that is brought back.
The Bill we have received from the other place does none of that. Its two short clauses, if passed in their present form, will grant the Executive unqualified and untrammelled power to negotiate an exit deal from the European Union on any terms, however pitiful the deal is for our country, however damaging it is to our economy, however much it strips British and other EU citizens of their existing rights and however much it tears up their lives.
At the end of all this, when the Prime Minister returns with a deal—or perhaps no deal at all—Parliament, if the Bill is passed in its present state, will have no more power in the matter than a meaningless vote on a take-it-or-leave-it basis. As for the public, they will have absolutely no say at all. They will have no say, however ruinous the agreement is for them, however damaging it is to their health services, however devastating it is to their jobs and whatever the cost to them in rising prices and deteriorating living standards. They will not even get the choice of “take it or leave it”—they will just be expected to take it.
So much for all the brave talk of the restoration of parliamentary sovereignty. So much for “take back control”. This is what has come of it. Those Brexiteers who so insistently proclaimed the importance of parliamentary sovereignty would surrender it to the Executive without a whimper. Those who agitated year in, year out for the voice of the people to be heard are determined that it must now be silenced for ever. For the noble Lord, Lord Forsyth, and his colleagues, the people have spoken—they must never be allowed to speak again.
Unless this House is prepared to act, the Government will proceed unhindered on a course of extreme Brexit, for which they have no mandate and which will cause the maximum damage to relations with our European partners, to the economy of our country and to the livelihoods of every single person in it. Most noble Lords know this to be the case. What remains to be seen is whether we are prepared to act—not to frustrate the will of the elected House but to discharge our constitutional duty to ask them to think again and, in doing so, to mitigate the huge political and economic damage of the course of extreme Brexit the Government seem determined to embark upon.
Syria: UK Military Action
Lord Oates Excerpts(9 years ago)
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Lord Oates (LD)
My Lords, as the noble Baroness, Lady Taylor of Bolton, remarked earlier, deploying the RAF to attack Daesh in Syria is in some ways a relatively simple decision. We are already attacking it in Iraq and providing surveillance and refuelling to our allies over Syria. I support that action. Daesh is a monstrous organisation that poses a direct threat to our citizens. We have every legal and moral right to respond to that threat. Indeed, as my noble friend Lord Ashdown said, the UN resolution places an obligation on us to act. However, the reason that this is also such a complicated decision is that we will not simply be attacking Daesh. We will be entering into a multipronged civil war, a religious war and a proxy regional war, not as a disinterested party determined only to destroy Daesh but as a protagonist committed to regime change by our preconditions regarding President Assad, but without any credible strategy to bring it about.
It would be tempting, given these complexities, to wash our hands of the whole thing but, as many noble Lords have said, inaction is not without cost. That cost is being paid in the towns and cities of Syria and Iraq every day. It was paid just a few weeks ago on the streets of Ankara, Beirut and Paris. What we need is action that can defeat Daesh and bring peace. Without peace, even if we do defeat them, we will soon find another vile incarnation filling the vacuum. The Prime Minister said, in his response to the Foreign Affairs Select Committee, that,
“our objective would not be to attack the Syrian regime”.
Yet regime change is the stated intention of the Prime Minister; indeed, the UK is involved in training the armed opposition to the Syrian Government. How does that fit with the wise stricture of the noble Lord, Lord Dobbs, that we must seek peace, not victory?
Before we proceed, we surely need, as a minimum, an agreement between those countries participating in armed action as to how they will end the fighting once Daesh is defeated. In the absence of such agreement, even if we can defeat Daesh without our own ground forces, what will prevent the Syrian Arab Army turning its fire on the moderate forces, with the backing of Russian air power? What would be the response of the western allies in such circumstances? Would the Russians have international law on their side? What would the legal position of the allies then be?
President Assad is using brutal force to suppress his people. However, as the noble Baroness, Lady Helic, said in her powerful speech, we cannot allow an obsession with Assad to paralyse the chances of peace as it has done to date. It was foolish of the American President to set this precondition, and foolish of the Prime Minister to repeat it. It is time to set it aside. The longer we make it a precondition, the less likely it is to be achieved and the more people who will be killed in the mean time. If Assad going is the precondition for peace, there will be no peace—that is the brutal truth.
Our closest neighbour and ally has suffered a terrible attack and has asked for our assistance. We cannot easily stand aside in such circumstances, but we urgently need a more compelling strategy than the Government have presented to date. If we are to embark on action, we must have no preconditions to peace; our only objectives must be to defeat Daesh, halt the conflict, and secure a political settlement that will allow the people of Syria to live in peace and security once more.