CPTPP (International Agreements Committee Report)

Lord Purvis of Tweed Excerpts

Tuesday 1st February 2022 Grand Committee

[Lord Purvis of Tweed (LD)]

It is a pleasure to follow the new member of the committee. I happily restate what I said on previous occasions: that this committee does the House a great and important service. This has been an important debate and I commend the noble Baroness on how she introduced it and the members of the committee on their thorough assessment. I appreciate also that they have taken by necessity an almost agnostic position while analysing the Government’s accession aims.

The Committee and the Minister will know that this House on a number of occasions has resolved that we would prefer that negotiating objectives were put to a resolution of Parliament, primarily the House of Commons. That would allow the very points raised in the helpful box 1 in the committee report to be attached to consideration of a resolution which improves the Government’s negotiating objectives. However, we have been round this course on a number of occasions, and I will not rehearse it.

As the committee indicated, and I will put on the record again, the Minister in particular is unfailingly accessible and helpful—as helpful so far as he can be in many regards—and he and his office are always very approachable, which is greatly appreciated.

The noble Lord, Lord Oates, and I are from the Liberal Democrats and our founding principles as a party are supporting free, fair and open trade. To that we now can add “sustainable”. That is why he made points about this being an opportunity for tackling climate change, and one we should not miss. It is to be noted, with regret, that even the Government’s own document suggests that acceding to this in the current way could increase emissions. That would be a retrograde step. I will return to that towards the end.

There have been a lot of column inches about the UK’s potential accession to the CPTPP. We heard a little from the noble Lord, Lord Udny-Lister, about this being a Brexit opportunity. The Minister is not known for hyperbole, which is welcome in this Committee. Nevertheless, we saw a glimpse in Questions of part of this narrative when he said that reductions in trade with the EU were being offset by growth from non-EU trade, primarily from the Indo- and Asia-Pacific area.

On the one hand, this could be seen as positive, but we need to analyse where that growth has been. It has been imports from China and Chinese trade that have seen that growth. It has not necessarily offset the reductions. But that trade with China in 2021, according to the Department for International Trade, was £92 billion—up 8.6% and double what it was a decade ago. The fastest period of growth of imports from China has been during Liz Truss’s tenure as Trade Secretary. Of that £92 billion, £66 billion was imports, representing a trade deficit with China of over £40 billion. That is unprecedented in our trading history and strategically worrying given that we now have a trade in goods dependence on China in many sectors. The Government have placed us in this situation. Our trade deficit is more than twice that of France with China, and Germany has a trade surplus in exports to China. Therefore, I question the narrative selling this application as one of the strands of an alternative to trade with China.

I have a further slight question mark over the net opportunity of growth in the UK’s trade with the region, because we tend to assume that the CPTPP’s trading growth in recent years has somehow not been connected with its growth of trade with China directly too. We could have seen the growth in that region simply as a result of the growth of trade with China. If we deduct that, we get a more realistic view of what the real opportunities for our growth are likely to be.

I agree with the noble Lord, Lord Lansley, when he counselled Liz Truss to stay quiet on China and CPTPP. He did not use those exact words; I am putting some words in his mouth in order for me to agree with them. But he hit a good point because he suggested, as the committee did, that we would probably stay a little quiet and wait and see. However, by having a quick look at elizabethtruss.com on 28 June 2021, I can see that she was far less reticent than the noble Lord. I can quote:

“By joining the CPTPP, we would strengthen it as a bulwark against protectionism and unfair trading practices from nations like China.”


It is some bulwark if we are dependent on the goods from that; it is even less of a bulwark if China is applying to be a member itself.

What also frequently goes unnoticed, and it has not been mentioned in the debate today, has been the creation of the world’s largest trade deal: 15 Asia-Pacific countries, including China, Australia and New Zealand, are members of the Regional Comprehensive Economic Partnership. According to UNCTAD, that represents 30.5% of global GDP in comparison with the US, Mexico and Canada agreement of 28% and the EU of 18%. The RCEP’s growth alone is estimated to be $200 billion to the world’s economy by 2030, according to UNCTAD. So, we would have a benefit from this growth regardless of whether we accede to any agreement.

Apart from the trade dependency aspect, China has applied to accede to the CPTPP itself. Furthermore, separate to those two agreements, there have been 16 rounds of negotiation between China, Japan and South Korea, for a CJK FTA. It seems as if China has prioritised the RCEP and has the CJK—if I get all of these correct during this debate, I will be impressed with myself. I cannot judge the respective prospects of China or Taiwan. As the noble Lord, Lord Hannay, indicated, we do not know whether they will indeed join the CPTPP, but the fact that there are common areas between those three is significant. It is significant to the terms that we want to have when we have to fit their rules. As the noble Lord, Lord Hannay, indicated, in many respects, that integration is already there. Therefore, we are acceding to a separate set of rules, over which we will have very little leeway if we accede to it, unlike the bilateral agreements we are a member of.

It already means that Liz Truss’s geopolitical assertion, that there will be a bulwark against China is plainly nonsense. First, we are dependent now on imports from China, and we are increasing our trade barriers with the EU, distorting our trade patterns over the coming years. It means that our strength, to try to secure carve-outs on any area of CPTPP, will be more important, but potentially weaker. So, I would be grateful if the Minister could say, during the discussions that are under way, what openness there has been to any UK carve-outs. My understanding of meeting the benchmarks on application is that we meet their rules—we simply demonstrate that we meet their rules. So, what areas and scope are there for specific UK carve-outs?

Secondly, taking up the point made by the noble Lord, Lord Hannay, with regard to accession, I looked at the accession rules. Rule 3.2 states that the commission of the CPTPP

“can take a decision as to whether separate Accession Working Groups are needed for individual aspirant economies or the processes can be combined into a single Accession Working Group.”

So, what is the position? Is there an accession working group that is unique to the UK accession, or are we part of the accession of other members? Is there clarity on the scope for the UK to deliberately state that it will not meet the rules?

It is the case, in the Government’s own estimates, that we are likely to see a very modest £800 million benefit to UK GDP over 15 years. I think it is worth reminding the Grand Committee that in one year we increased our imports from China by £18 billion. That is the comparison of the situation with our trade.

Before I conclude, returning at the end to what some of these areas of concern or carve-outs may well be, I note in passing a similar geopolitical argument has been made by the Minister in good faith, and by others, about our trading relationship with the GCC and the Gulf—because we also have other trade negotiations with other trading blocs, such as the Gulf. I know the noble Lord, Lord Udny-Lister, is very experienced in this regard as well. It is also worth noting that with the recent meeting between President Xi and the GCC Secretary General, after the fifth round of talks, there is a new impetus into that area too. The narrative of the UK geopolitical basis being a bulwark to China really is not the case at all.

Finally, returning to the very helpful box 1 of what the UK red lines may be, my noble friend Lord Oates indicated the concern about net-zero and the right reverend Prelate raised issues of standards. We will no doubt return to these areas with great focus, as we have done in all our previous trade discussions. It was very depressing to see two omissions in box 1; it is not the fault of the committee, but it is how the committee discerned what the red lines would be. We have raised many times the need for there to be a trade and human rights policy. One of the deficiencies of this agreement is the lack of a robust element on labour rights, human rights and the triggering of processes. That omission in the box is of great concern. Furthermore, as we raised in our debates on the China agreement, there is an omission on gender focus on those trade opportunities as well.

I agree with the Minister that trade agreements mean nothing if they cannot be operationalised and we cannot take up their opportunities. We have not needed a trade agreement to see some of the growth with some of our key competitors in these areas, and our dependence on China has been a result of there being no agreement. If we are part of a bloc over which we have little say, and if China is also a member, geopolitically we are weaker. That is an area of great concern, and I hope that the Minister will be able to reassure me.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

I apologise to the noble Lord. I should have said “brief”—I misnoted it as “consult”. However, I can equally confirm to him that we will not brief the EU on our negotiations. However, I can also confirm that our top priority is to protect the Good Friday agreement and the gains from the peace process, and to preserve Northern Ireland’s place in the UK. When we negotiate, the Government are negotiating on behalf of the whole UK, representing the interests of all the UK’s nations, including Northern Ireland.

I will say more on China, Taiwan and other economies seeking to accede to the CPTPP. As I have explained, as a non-member, the UK is not commenting—it would be inappropriate to do so—on the specifics of other economies’ interest in the agreement. The noble Lord, Lord Hannay—I hope I do not misquote him again—set out three theoretical scenarios. I will not give him my views on these in detail other than to confirm that we are the only country in negotiations with the CPTPP at the moment. It may also help the noble Lord if I note that there must be a full consensus between existing members to admit any new applicant. Once we are party to the agreement, the UK will have the same rights as other parties in respect of future applicants, which amounts to an effective veto. I hope noble Lords will understand that it is not appropriate for me to comment further at this stage on what are hypothetical situations.

CPTPP members and the UK rightly share the intention to be part of an agreement that embodies high standards in areas such as intellectual property, investment, procurement, rules on state-owned enterprises and data flows. Any applicant will have to satisfy CPTPP members that it can and will meet these standards. My noble friend Lord Gold and I share a common interest in financial services, and I welcome his comments on that topic. CPTPP has a dedicated chapter on financial services, which we believe will open up new opportunities for British businesses. The provisions in that chapter include matters such as non-discrimination obligations and liberalising cross-border flows of financial information. There is also an annexe on professional services that encourages mutual recognition of professional qualifications, which I think will be very helpful to us going forward.

It is a very good thing that more and more economies want to sign up in due course to the high standards of CPTPP, with Ecuador being the latest country to indicate an interest in doing that and submitting an application shortly before Christmas.

The right reverend Prelate the Bishop of St Albans certainly gave us food for thought in his speech. Of course, I have heard both his and other noble Lords’ concerns about potential impacts on UK food standards through the agreement. Let me be crystal clear: there are no provisions in this trade agreement that will force the UK to lower food standards in any area. I can give the noble Baroness, Lady Chapman, complete reassurance on that matter. I am pleased to be able to put that firmly on the record.

The Government’s strong position is that there is no inconsistency between the approach set out in the agreement and our existing domestic regulatory system. In other words, nothing in the agreement will change or lower the standards of food that we let into our country. The Trade and Agriculture Commission will no doubt be carefully studying that and will report to the House in due course on that matter.

Our wider environmental, product, labour and animal welfare standards will be protected too. CPTPP explicitly affords members the right to regulate for their own desired levels of domestic protection and thus will not undermine the UK’s objectives—on net zero, for example —in any way.

The noble Lord, Lord Oates, spoke eloquently about climate change. CPTPP retains the rights of members to regulate for their own levels of environmental protection and contains commitments to protect the environment. The system robustly protects the right of members to achieve their own ambitious net-zero goals. Of course, other CPTPP members, such as New Zealand, are also world leaders alongside us on climate action.

On the NHS and in answer to the noble Baroness, Lady Chapman, I do not think we could be clearer: protecting the NHS is a fundamental principle of our trade policy. During our negotiations to accede to CPTPP, the NHS and the price it pays for its medicines will not be on the table. The sustainability of the NHS is an absolute priority for the Government. We could not agree to any proposals that would put NHS finances at risk or reduce clinician and patient choice. This includes—and I say this categorically—making changes to our intellectual property regime that would lead to increased medicine costs for the NHS. I hope that reassures my noble friend Lord Lansley.

The Government have been listening closely to feedback from your Lordships and the wider business community about the importance of the European Patent Convention to the UK services and creative sectors, including today from my noble friend Lord Astor of Hever. I can once again confirm that accession negotiations will be consistent with the UK’s existing international obligations, including the European Patent Convention.

Regarding scrutiny, we remain committed to transparency. I wrote to the noble Baroness, Lady Hayter, about this yesterday evening in response to correspondence that the noble Baroness and I have been having. I can reassure the noble Baroness and other members of her committee that we will ensure that parliamentarians, businesses and the public have access to the information they need on our trade negotiations. The same transparency and scrutiny commitments we put in place for bilateral FTAs with Australia and New Zealand will apply to CPTPP.

The noble Baronesses, Lady Hayter and Lady Chapman, emphasised the importance of engagement with the DAs. I assure noble Lords that our approach to engaging DAs on trade policy is very comprehensive. We have engagement structures at all levels to make sure the DAs’ voices are heard. These include a quarterly ministerial forum for trade, regular bilateral ministerial meetings and the six-weekly senior officials’ group. The chief negotiators have regular calls running parallel to each negotiation round to keep the DAs fully informed of what is going on. Additionally, there are our six-weekly chapter-specific policy round tables and weekly working level engagement.

Your Lordships enquired about the potential for us to seek changes to the CPTPP text. I think that noble Lords recognise that this is an accession process, not a new negotiation, so it is not feasible to be seeking significant changes to the agreement. In this context, our negotiation objective is to be a part of a high-standard agreement, not to change it radically.

We are aware that other CPTPP parties have used side benefits to clarify certain specific policies. Let me reassure the noble Baroness, Lady Hayter, that this may be an option that is appropriate to explore in some cases. However, I hope noble Lords understand that the precise nature of that solution will be determined by negotiations. Offering a running commentary or setting out our intentions for side letters in public will undermine our negotiators’ leverage to secure any such solutions. It would be undermining the very thing we would seek to achieve through the side letters. I hope that the noble Lord, Lord Purvis, will accept that that is why I cannot be any more helpful in this regard. I can confirm that all such letters will be published before the CRaG process and thus will be open to the same full scrutiny as the agreement itself.

I will turn to a couple of other themes raised in the report. Regarding the sequencing of further applications, we have been repeatedly assured—this comes back to a point I made earlier—that our accession will be dealt with first, and interest from China or any other economy will not slow us down. In answer to my noble friend Lord Lansley’s question about ISDS, the extent of its coverage will be subject to negotiation during the agreement, but I am clear that we have nothing to fear from its use going forward.

On the expected economic benefits for the UK, our modelling does show—

[Lord Purvis of Tweed (LD)]

The Minister may not have anything to fear but the House does, and it has debated ISDS on a number of occasions. I recall from when we scrutinised the Canada agreement that it supports moving away from ISDS towards a multilateral approach, whereas the Japan agreement was neutral on it. Does that mean that the Government are now off the fence, as the noble Lord, Lord Lansley, asked us to be, and that we have landed squarely in favour of ISDS? I remain confused.

[Lord Grimstone of Boscobel (Con)]

My Lords, let me try to clear up that confusion, which I probably unwittingly added to. I know from my contact with investors that they all welcome some form of arrangements which allow investor protection to be secured. Many investors believe that the exact format of ISDS—one uses it often as a shorthand for how disputes should be settled—is not always necessarily the correct format. As the noble Lord will know, there are discussions about that in various multilateral organisations. When I talk about ISDS, perhaps it would be better if I said that appropriate forms of investor protection, with the right arbitration mechanisms agreed either bilaterally or multilaterally, are the way forward.

I thank noble Lords again for giving me the opportunity to speak on this topic today. I apologise for replying at probably too great a length, but I was anxious to deal with the points raised. CPTPP accession will boost prosperity and help to level up the country at home. It will deepen ties with key partners in the Indo-Pacific. I thank the noble Baroness, Lady Hayter, and the International Agreements Committee once again and look forward to further engagement with your Lordships, as I am sure we will have, on CPTPP in the future.

EU: Imports

Lord Purvis of Tweed Excerpts

Tuesday 1st February 2022 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

Your Lordships are very kind to ask me to take a second bite at the cherry, but I do not have anything to add to my Answer.

[Lord Purvis of Tweed (LD)]

My Lords, with the 12-mile queues on the A20 in Kent last week, the Commons Transport Committee took evidence from the Transport Minister, the noble Baroness, Lady Vere, who is in her place. The chair of the committee raised the concern that, with more checks and bureaucracy, there will be 17-mile queues. He asked which Government Minister is responsible for liaising with the European Union, and the noble Baroness replied:

“Not me. It is a fairly complicated picture.”


The chair said:

“Assume it is the role of the Home Office, which I would have thought it would be if it is to do with borders”.


The noble Baroness, Lady Vere, replied:

“And Trade. It might be Trade’s role as well because it is about customs checks; it could be HMRC.”


The chair said:

“It could be the Foreign Office. I suppose that is my concern.”


Well, my concern is that no one is in charge. Who is in charge?

[Lord Grimstone of Boscobel (Con)]

My Lords, first, on the queues at Dover last week mentioned by the noble Lord, it is not the case that those short-term delays to freight movements were caused by new customs procedures. I am reliably informed that the primary cause was ship refitting, which reduced capacity across the short straits, and higher than expected freight volumes. On the noble Lord’s main point, I assure him that all Ministers properly co-ordinate with each other on these matters.

Subsidy Control Bill

Lord Purvis of Tweed Excerpts

Committee stage
Monday 31st January 2022 Grand Committee

[Lord Purvis of Tweed (LD)]

As I understand it, the guidance states that every authority now needs to define for itself what a social equity is as far as deprivation is concerned, even taking into consideration what relative that would be. It says:

“Public authorities must use supporting evidence which … should include measures or statistical indicators set against appropriate comparators”.


That suggests that every public authority defining its own scheme will have to provide its own statistical basis and definitions. How will the CMA judge those against others? Given that there will be no commonly agreed areas of social deprivation, is it not likely to create even more bureaucracy and confusion if every public authority has to make its own definitions and provide its own necessary material and statistical basis?

[Lord Callanan (Con)]

It is for the CMA to provide guidance on those matters but for the authorities themselves to determine whether the subsidy in question is justified. Then, but only if it is challenged against the principles in the Act, will the CAT be empowered to make a judgment on whether it is in compliance with the specific provisions in the Act.

--- Later in debate ---

Lastly, I refer to those Bills mentioned earlier. We have not yet achieved the objective of having our climate change obligations running like a golden thread through policy and legislation. But when we have argued the case on individual Bills—I have been involved with three: the Pension Schemes Bill, the Financial Services Bill and the Skills and Post-16 Education Bill—the Government have recognised the advantage of explicitly spelling out how our net-zero and environmental obligations can be integrated in the legislation. In the end, that has been done not by defeating the Government but by persuading them. I am not sure whether I want to join the tête-à-tête of the noble Baroness, Lady Jones, with the Minister or to ask for a separate meeting, but I hope that he will be willing to speak between this stage and Report about how we can make progress on those issues.

[Lord Purvis of Tweed (LD)]

My Lords, if I speak briefly now, I need not intervene on the Minister. Relating to electricity and energy, having had a second weekend without electricity in the Scottish borders as a result of the storm, I may say that moving towards a more sustainable and reliable network is a key consideration for many people in the north of England and the Scottish borders. The Minister led the Statement on this issue, and I know that it is an important issue for him, but we are still vulnerable in this country.

It is a pleasure to follow the noble Baroness. Before I ask the Minister my question, it is worth putting on record that we are already a number of weeks behind member states of the European Union, which has now integrated within the subsidy scheme state aid for climate, environmental protection and energy. Whatever we secure as a result of any new scheme, we will be playing catch-up. It would be most interesting to know whether companies in Northern Ireland can now utilise the new scheme from the European Union within the areas of goods and electricity provision.

My questions to the Minister relate to Clause 51. The noble Baroness, Lady Jones of Moulsecoomb, referenced nuclear. I am happy if the Minister wants to write to me on these points. First, how will our approach on supporting nuclear power for both our domestic consumption and exporting technologies, which we will soon see in the Nuclear Energy (Financing) Bill that is going through Parliament, interact with this legislation? I understand that the Government’s proposal for funding nuclear is to make its funding model more akin to how we fund our railways and our regulated asset base. How will the regulated asset base for private sector companies, which will be able to use it, interact with the subsidy principles? We could see all the work we are doing here become completely irrelevant if private sector companies can use a regulated asset-based system. Can the Minister explain how they will interact? Does the regulated asset base fall into scope within the Bill?

Secondly, as I understand it, the Government, through small modular reactor funding, have already provided £210 million to Rolls-Royce as part of supporting small modular reactors. However, that is for export. Rolls-Royce is very keen to promote the fact that Qatar is interested in buying these technologies; a Minister who was in Qatar in recent months was saying how good that would be, with joint funding from a French company and an American company. My understanding is that support for export, unless it is WTO-approved or through export finance guarantees, is prohibited within this, so I would be grateful to know where that £210 million of small modular reactor funding fits. Is it a subsidy, or would the scheme supporting it be considered a subsidy? If the Minister could respond to those points, I would be grateful.

[Lord Fox (LD)]

My Lords, we have had a detailed debate. Before making a few comments—I emphasise “a few”—I return to the idea of having meetings. I recommend that perhaps the noble Baronesses, Lady Jones and Hayman, and others should all have separate meetings with the Minister. Then we can compare notes afterwards.

I find it interesting to read Schedule 2 because it refers to:

“Subsidies in relation to energy and environment”.


I am trying to think of any human activity that, strictly speaking, does not involve energy or the environment. Perhaps the Minister can suggest an activity that goes on which does not consume energy and/or affect the environment in one way or another, because that seems a false distinction. Many speakers have made the point that trying to put energy and the environment in a ghetto within Schedule 2 does not make any sense. Human activity, by its nature, is interacting with the planet at that level. It therefore seems clear that those activities pervade all elements of the legislation that we are talking about here.

Each of this suite of amendments—I have never heard a group of amendments called a “suite” before but it is nicer than “raft”, which I have always wondered about— seeks to address on a small scale, in its own way, the bigger point that speakers have made: these issues need to be at the centre of the Bill. I am not going to compare and contrast any of the amendments but I will pull out a point around Amendment 12 that is worth emphasising: supporting activity that can cause pollution. We have not heard much about that in these speeches, although I think my noble friend Lady Sheehan mentioned it. We have to be clear that if subsidies are there then they are not supporting pollution, which is another aspect of our environmental impact.

I reiterate—but without repeating—that we need a plan. Net zero is not an easy target. Whichever year we set for it, there is an awful lot to do; we need to find ways of developing technology that we do not even have yet. It is clear that subsidies will be a key element in delivering our response to net zero. However, the plans are not there to get us there. That is not my opinion; I take as my text the Climate Change Committee’s statement on its annual report to Parliament last year, showcasing the strategic blind spot that we keep coming back to:

“The Government has made historic climate promises in the past year, for which it deserves credit. However, it has been too slow to follow these with delivery. This defining year for the UK’s climate credentials has been marred by uncertainty and delay to a host of new climate strategies. Those that have emerged have too often missed the mark. With every month of inaction, it is harder for the UK to get on track”—


the point that my noble friend Lord Purvis was making. The committee says:

“An ambitious Heat and Buildings Strategy, that works for consumers, is urgently needed. Delayed plans on surface transport, aviation, hydrogen, biomass and food must be delivered. Plans for the power sector, industrial decarbonisation, the North Sea, peat and energy from waste must be strengthened. The … cross-cutting challenges of public engagement, fair funding and local delivery must be tackled.”


Subsidies are going to be a key way of making many of those issues happen—the Government sometimes use the phrase “pump priming”—but, instead of having a plan, the Government are settling back for what I can only describe as a free-for-all. It is clear that the amendments are trying to set out a structure where that free-for-all can be brought in and focused on something that matters to all of us every day.

[Lord Callanan (Con)]

I am grateful to all noble Lords who took part in this debate. The noble Baronesses, Lady Sheehan, Lady Hayman and Lady Jones, raising their favourite subject brought me a great sense of déjà vu—the feeling that I have been here before and will no doubt be here on many occasions in future. Nevertheless, it is important to highlight the crucial issues of our net-zero commitments, climate change and environmental protection.

Before I address the individual amendments, I will explain further the approach that we have taken in this Bill towards the vital subject of energy and environmental protections. As noble Lords are aware, the Subsidy Control Bill sets out a new approach that is tailored to the needs of the UK. Broadly, it addresses two objectives: first, to facilitate compliance with our international commitments, including the subsidy control provisions in the EU–UK Trade and Cooperation Agreement; and, secondly and perhaps more importantly, to ensure that markets in the UK function effectively and that we minimise the domestic distortive effects of subsidies.

However, in respect of energy and environmental objectives, it would be fair to say that our approach is slightly different. In this area, the UK’s existing commitments, regulations and practices are extensive and world-leading, from the Environment Act principles to support for Sizewell C and the clean heat grant. Given all this, I believe that we already have the right framework in place.

As a result, our primary objective in respect of the energy and environment principles is to fulfil our international obligations—specifically, to implement the provisions in the TCA. These are good, common-sense principles; it will not be a challenge for UK public authorities to comply with them. I am not trying to suggest that they have been included reluctantly or that they do not have this Government’s full endorsement, but, equally, we have not sought to introduce further requirements or extend the scope more widely than required because we believe that energy and environment rules in general should apply to all kinds of policy-making, regulation and funding, rather than having specific provisions just for one tool in the toolbox. This brings me to the question asked by the noble Baroness, Lady Jones, on why nuclear has been excluded from the principles set out in Schedule 2; I will come on to that in more detail.

I will start with Amendments 7 to 10, all of which would amend Schedule 1. I thank the noble Lords, Lord McNicol and Lord Whitty, and the noble Baronesses, Lady Sheehan, Lady Jones of Moulsecoomb, Lady Bennett of Manor Castle—I see that she is not with us—and Lady Boycott, for tabling and putting their names to the respective amendments.

Schedule 1 sets out the subsidy control principles that public authorities must consider for any subsidies that they award or subsidy schemes that they make. These common-sense principles will ensure that subsidies and schemes offer value for money while addressing important public policy objectives in the United Kingdom. Public authorities will need to consider the effects of subsidies in the round before awarding them. The areas currently listed under principle G are those that subsidies inherently affect: competition, investment and trade. Other negative effects should be considered for the purposes of principle G only in so far as they are relevant.

Net-zero and climate change considerations are not inherent to all subsidies. Placing additional emphasis on climate change in principle G, or adding an additional principle H, could lead to public authorities having to do bespoke, possibly onerous, assessments for every single subsidy awarded or subsidy scheme made, even when it has no meaningful impact on net-zero targets.

I turn now to Amendment 11 to Schedule 2. Schedule 2 sets out that energy and environment subsidies must aim at one of two objectives: first, delivering a secure, affordable and sustainable energy system and a well-functioning and competitive energy market; or, secondly, increasing the level of environmental protection compared with the level that would be achieved in the absence of that subsidy. I would have thought that the noble Baroness, Lady Jones, would support that. This amendment would add a third aim, specifying that subsidies in relation to energy and environment should incentivise the beneficiary to help to deliver the UK’s net-zero target.

As I have said—there is no disagreement among us here—I and the Government entirely agree that net zero is of critical importance. Indeed, the Government published their Net Zero Strategy last year. The Government have already announced new subsidy schemes that promote net-zero objectives, are compliant with the interim subsidy control regime and, of course, ensure good taxpayer value at the same time. These include schemes such as the clean heat grant, which will help consumers to overcome the high up-front costs of low-carbon heat and will build supply chains for low-carbon heat ahead of the introduction of regulations for existing buildings off the gas grid, which we will come to later in the decade.

However, I do not believe that it is necessary to add an additional aim in Schedule 2, principle A. Sustainability and environmental protection are explicitly mentioned in the principle already, and it is clear that progressing our net-zero priorities would fall into these categories. Adding a further requirement on all subsidies and schemes, on top of those existing principles and regardless of whether the subsidy or scheme has a specific net-zero aim or impact, is not necessary given the existing comprehensive set of regulatory requirements on public authorities. I have mentioned several of these already but they include the legally binding environmental targets in the Environment Act, for example. It could even disincentivise other valuable subsidies that improve environmental protections but would not have a direct net-zero component.

[Lord Purvis of Tweed (LD)]

The Minister and the Government have been consistent in saying that moves are unnecessary, specifically because of principle G, but principle G says that

“beneficial effects (in terms of achieving their specific policy objective) should outweigh any negative effects”.

The “beneficial effects” are the achieving of the “policy objective”, so if the policy objective has nothing whatever to do with sustainability—it could well be market support in one area—then only beneficial effects with regard to that “specific policy objective” will be taken into consideration. There will not necessarily be beneficial impacts on sustainability, net zero or climate because the beneficial effects are very narrowly defined under principle G. So the necessary element still stands because the Government have restricted beneficial effects only to those linked with the original policy objective.

[Lord Callanan (Con)]

I think we discussed this earlier. I am really not sure of the point the noble Lord is trying to make.

Amendments 12 and 29, tabled by the noble Baronesses, Lady Boycott and Lady Sheehan, and the noble Lord, Lord Whitty, would prevent subsidies that would relieve their beneficiaries from their liabilities as a polluter. Provision already exists in the Bill to protect the “polluter pays” principle for any subsidy in relation to energy and environment. Principle B in Schedule 2 sets this out explicitly:

“Subsidies in relation to energy and environment shall not relieve the beneficiary from liabilities arising from its responsibilities as a polluter under the law of England and Wales, Scotland or Northern Ireland.”


Clause 13(3)(b) ensures that a public authority

“must not make the scheme unless it is of the view that the subsidies provided for by the scheme will be consistent with those principles.”

As I have previously set out, it is right that the provisions in the “polluter pays” principle apply only where they are relevant. That principle has long-standing foundations in UK law—including, most recently, in the provisions of the Environment Act 2021, which I also covered earlier.

Amendment 33 would prohibit subsidies for fossil fuels, including those subsidies that fall within the definition used by the IMF for fossil fuel subsidies. This would include subsidies for fossil fuel development and for the construction of new unmitigated fossil fuel-powered electricity generation, either in the UK or abroad. The principles in Schedule 2 to the Bill will help ensure that energy and environment subsidies contribute to optimal outcomes for UK citizens, recognising the importance of a secure, affordable and sustainable energy system and increasing levels of environmental protection.

I am fully in agreement with the noble Baroness, Lady Sheehan, that inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change. However, I cannot accept this amendment because unabated gas-fired generation currently plays a critical role in keeping Great Britain’s electricity system secure and stable. New-build gas generation capacity will continue to be needed to ensure security of supply until clean alternatives are deployable at scale.

--- Later in debate ---

To summarise, I am entirely in agreement with noble Lords who have tabled these interesting amendments to the Bill. Of course, we agree on the importance of the net-zero agenda, although I cannot agree with all the views expressed on fossil fuels and nuclear power.

[Lord Purvis of Tweed (LD)]

Will the Minister address the points about how the regulated asset base will be considered—I understand his comments about that—and specifically about support for the small reactor scheme for Rolls-Royce?

[Lord Callanan (Con)]

The noble Lord makes some valid points on the RAB mechanism, which will be debated in full on the upcoming nuclear Bill, but I will write to him on the specific points, particularly about support for the SMR reactors he talked about. I point out that existing subsidy schemes are of course excluded from the Bill. No doubt he will want to ask what happens if we want to award a similar subsidy in the future.

In my view, the energy and environment principles provide helpful support to our energy, environmental and climate change ambitions, but they are not the main engine of those ambitions. Finally, to answer the other questions of the noble Baroness, Lady Jones, on community energy—not really a matter for the Bill—and the Government’s approach to net zero, I am very happy to follow that up and write to her with the details. We are fully in favour of community energy projects, but of course they have to pay their share of the costs towards the network, as all other projects do if they wish to be connected to the national grid. I will write to her with the details and follow up with the noble Lord, Lord Purvis, on SMRs and the basis of nuclear subsidies.

Economic Crime: Planned Government Bill

Lord Purvis of Tweed Excerpts

Monday 31st January 2022 Lords Chamber

[Lord Callanan (Con)]

There are indeed a number of positive elements to legislating on this issue. One of them is the issue highlighted by the noble Lord. However, we are again dealing with hypotheticals: something that may happen in good time. As I keep saying, we are committed to pursuing this legislation, but I am afraid I am going to sound a bit like a broken record when I say I cannot give a commitment at this stage to noble Lords on when we might be able to do it.

[Lord Purvis of Tweed (LD)]

The latest full accounts of Aquind Ltd give its directors as Mr K Glukhovskoy and Mr A Temerko. Four years ago, the Minister was a member of the board and at that time it had a controlling entity in the British Virgin Islands. It now has a controlling entity in Luxembourg. The last set of accounts showed a loss of more than £3 million and it paid no tax, yet it was able to find £213,000 for donations to the Conservative Party. Will the Government’s measures, which they say are urgent, also address the source of the wealth of controlling entities registered in the Virgin Islands—or, indeed, Luxembourg?

[Lord Callanan (Con)]

I thank the noble Lord for his fascinating question.

Vaccine Patents Waiver

Lord Purvis of Tweed Excerpts

Monday 24th January 2022 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, the UK remains open to all initiatives that will have a demonstrable impact on vaccine production and distribution, and we will continue to engage constructively in discussions at the WTO to that end and bring forward our own proposals as necessary.

[Lord Purvis of Tweed (LD)]

My Lords, when I raised the matter of a TRIPS waiver with the Minister during the passage of the Trade Bill on 1 October 2020, when my noble friend Lady Sheehan had an amendment to it, the noble Lord said that it was too soon. Nearly a year later, I pressed the noble Lord, Lord Parkinson of Whitley Bay, who said that the Government remained unconvinced. Six months on, only 10% of Africa is fully vaccinated and, shockingly, 100 million doses had to be declined because they were too close to their expiration date. Without there being a TRIPS waiver, what is the Government’s core estimate of when Africa will be as fully vaccinated as Europe?

[Lord Grimstone of Boscobel (Con)]

My Lords, I am afraid that there is no evidence at all that an IP rights waiver of the kind that the noble Lord suggests would help us to meet his objectives. The reality is that a proposal for a TRIPS waiver would break up the very framework that helped to produce Covid-19 vaccines at an unprecedented pace. That is the key point.

UK-Ukraine Credit Support Agreement

Lord Purvis of Tweed Excerpts

Wednesday 5th January 2022 Grand Committee

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Lord, with his great experience and knowledge from his role within society, but also in the context that he provided for. When the noble Baroness, Lady McIntosh, referred to his support in the campaigns with a majority of 36,000 or 3,000, I was not quite sure which one he was responsible for, but his modesty in his contribution masked that.

The Minister has an unenviable task today because, as the explanatory memorandum to this agreement indicates, this is an agreement from the DIT, but within the scope of negotiations within the Ministry of Defence and the FCDO as the parent body for the strategy. I agree very strongly with the noble Lord, Lord Lansley, that this is an opportunity to hear what the Government’s strategy is. I suspect that the Minister will focus more on export finance, but I hope that he will be able to touch on some other areas; I have full confidence that he will.

Like others, I thank the noble Baroness for bringing this debate to us. I have said on a number of occasions and repeat today that the International Agreements Committee is of great importance to this House, because it often highlights some of the details of agreements that are beyond the understanding of mere mortals such as myself. It also provides a broad sweep on an issue such as this, which has great significance both for Ukrainians and the UK at home. It has been interesting to hear a number of comments, including from the noble Baroness, Lady McIntosh, and the noble Lord, Lord Foulkes, highlighting that we at home have a stake in this also. Therefore, our support for Ukraine is very important. I will have a number of questions later—I think the Minister would be very disappointed if I did not—on some of the technicalities of the arrangement that we will have.

I have, like others in the debate, visited Ukraine on a number of occasions. I was there shortly after Euromaidan and saw the still-charred buildings after the demonstrations. It is a country that is both vulnerable but outward-looking. With our more recent history with Ukraine, it is important to re-emphasise that. Our approach to that area also has the sweep of history from the Victorian times. The noble Baroness, Lady Liddell, talked about the role that the Scots have played there. It is not just current: I read a fascinating biography a few years ago of Thomas Gordon, who was a unique character. He was a military commander in the Royal Scots Navy then, after the union, the Royal Navy. Then Peter the Great poached him to help to establish the Russian navy—so the Scots have been everywhere, as we always say.

As the noble Lord, Lord Foulkes, indicated, there is a competing historical narrative and, in many respects, it is hard to see a way through it. On one visit to Kiev, it was made very clear to me that we have to understand Putin’s approach: he sees Kiev as the mother of all Russian cities. He does not believe that there is a Ukraine; he believes that Kiev and Ukraine are part of Russia and that Ukrainians are Russian. That is a sweep that he takes but, as the noble Lord, Lord Foulkes, indicated, since independence, Ukraine is an internationally recognised sovereign state with borders that we agree with, and we will help to support those areas of the boundary. However, as the noble Lord, Lord Lansley, has indicated, it is not easy to see how this can be reconciled as long at Putin has this narrative approach.

As the noble Baroness, Lady Liddell, indicated, we have 13,000-plus casualties in an area where there is not peace. This is not a case of maintaining peace within the region. As Jeremy Quin, the Defence Minister, indicated at the international Crimea Platform, which the noble Lord, Lord Astor highlighted, it is a case of restoring peace: the de-occupation of Crimea and its peaceful return to Ukraine as part of the Crimea Platform. It was very welcome that a UK Minister was at the inaugural Crimea Platform.

Part of the ambition is also to prevent further human rights violations. On a visit that I made to Kiev as part of Parliamentarians for Global Action, we raised the difficulty for Ukrainians to seek recourse for human rights abuses as part of the conflict. Russia has been blocking the proper reporting of human rights violations that have taken place and continue to take place within that area.

Therefore, it would be helpful if the Government could indicate, as has been asked, what the UK’s overall approach is. We know that three sets of discussions are taking place. There is the French and German initiative, with Jens Plötner, the envoy of Olaf Scholz, and his French counterpart Emmanuel Bonne travelling there at the moment. There will be NATO discussions, and Josep Borrell is also seeking a role for the European Union. However, I do not think any of us is so naive as to think there is any unanimity among certain members of the European Union.

How does the UK see the approach that the EU is seeking under the French presidency? The French presidency is seeking strategic autonomy for the EU, acting increasingly independently of NATO. Are we approaching the discussions regarding Ukraine purely through NATO or do we have a bilateral strand on diplomacy? I commend our embassy in Kiev, but it would be helpful to know what the strategic approach is. The integrated review highlighted the concerns for us at home in the UK, but it was very light on how we will drive forward or work. Do we see ourselves working with France and Germany, in particular, in this approach? Has the Prime Minister spoken to Olaf Scholz since Christmas? I know that he spoke to the Ukrainian president before Christmas, but it would be helpful to know.

On the situation at home, over the break I reviewed the annual report of the Intelligence and Security Committee of Parliament, which it published just before Christmas. Of the Russia report, the committee stated:

“The Report questioned whether the Government took its eye off the ball with regard to Russia, because of its focus on counter-terrorism. The previous Committee found that until recently the Government had badly underestimated the response required to the Russian threat and is still playing catch up … in particular in response to the call for new legislation to provide the intelligence Agencies with the tools they need to tackle the intelligence challenges posed by Russia.”


That highlights the very point made by the noble Baroness, Lady McIntosh, with regard to our capability here at home, while we are also debating the capability of Ukraine itself to defend its own integrity and borders.

So the agreement that we are discussing is part of an overall approach. As has been highlighted, the United States is providing 10 mark VI vessels at its own expense. Another four boats will be paid for through a foreign assistance programme and there are others that can be purchased. What is the Government’s assessment of this agreement, as far as the overall Ukrainian requirements and capabilities are concerned? I do not know, because no contextual element is set out as to whether it is a significant proportion of what Ukraine considers to be its naval defences or whether it is simply a future add-on. While the explanatory memorandum sets the deadline for granting credits under the agreement to be no later than 31 December 2024, when do the Government estimate some of the capability under this agreement being on stream? It is clearly not an agreement that will meet the current needs of Ukraine; it is obviously longer term, so when do the Government estimate some of the procurement being completed? We debated in response to a Statement just before Christmas some of the horrific delays in military procurement, so this is not new. What is the Government’s current estimate?

Moving to some aspects of the export finance agreement itself, the latest UKEF annual report said that defence represents 10% of its liabilities, which currently stand at £1.24 billion. This is likely to more than double the defence proportion of all UK Export Finance liabilities. There is a question about whether arms manufacturers require public insurance, rather than bringing out insurance for themselves. I tend to think that arms manufacturers, compared to others that wish to export to Ukraine, may have a greater capability to seek market insurance for any of their contracts rather than to seek that credit from the taxpayer. Before carrying out this agreement, did the Government assess the taxpayer insuring arms companies and whether there was a market failure for arms companies obtaining that insurance themselves?

The noble Baroness, Lady Liddell, highlighted the good point that there is a lack of wider context about the scale of export finance. That annual report says that the £1.24 billion is made up of an agreement with Qatar for £1 billion and an agreement with Indonesia, so this is now likely to be the biggest export finance agreement for the defence industry. If the businesses operating under it are going to be in partnership with Ukrainian businesses, can the Government estimate the likely breakdown in the proportion of manufacturing? The press statement on the agreement suggested that it would all be UK-manufactured. The explanatory memorandum in the agreement highlights that it simply requires

“at least 50% UK content.”

That could be just 50% plus one, as far as this is concerned so, again, the UK taxpayer will be subsidising insurance for Ukrainian manufacturing. I am not necessarily against that in principle, but a business case would have helped to indicate why it is important.

My final question on export finance is that, if the Government now believe that defence taking a much greater share of export finance guarantees will be a major strand of their policies going forward, it would help to know what kind of financing clarity is in place. As the committee highlighted, there was a lack of certainty on the specific contracting in the finance arrangements that are likely to be put in place. Of course they will be negotiated but, as it stands, when we ratify this agreement, the borrower will be the Government of Ukraine, who will enter into credit agreements with UK Export Finance and

“a bank or consortium of banks guaranteed by”

UK Export Finance, but what is the Government’s preferred route? This could set some considerable precedents. As I said, I am not opposed to this in principle, although I have question marks over why our defence industry should have special treatment.

This is my final point. Given the agreement that was announced in October 2020, the Government had already agreed export finance to Ukraine of £2.5 billion. Is this over and above that or part of the export finance for Ukraine that was already announced? As was indicated, the export finance for Ukraine that was previously announced included defence, but also agriculture, infrastructure, energy and healthcare. If this £1.7 billion is part of that £2.5 billion, there is not much left for some of these other critical areas. Can the Minister say whether this has now increased the total UK export finance to Ukraine to £4.2 billion or if it is still £2.5 billion?

I hope, as others have indicated, that tension in the area will not escalate. The international Crimea Platform is a good basis for further work. I hope we will see the talks make progress, because the vulnerable people of Ukraine deserve stability and peace.

Storm Arwen

Lord Purvis of Tweed Excerpts

Thursday 2nd December 2021 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The Minister may have heard of a small village in Cumbria called Ullock. In Ullock, we were without power from Friday evening through to Tuesday afternoon, so I have an acute understanding of the impact of Storm Arwen and the extreme weather it brought, which has been so challenging for the district network operators to fix, but it now appears that we were fortunate in that we were off for only four nights. The severity of the storm and the difficulties in restoring electricity connection referred to in the Statement have highlighted a number of serious concerns that the Government need to address.

First, will the Minister tell us what consideration the Government have given specifically to the impact on rural communities that are not on the gas grid and not as accessible in poor weather? Without gas, communities rely much more heavily on electricity for heating, hot water and cooking a hot meal, and it has been really cold. The Government and power companies were warned about the storm, so why was more attention not paid and more preparations made to provide the support that the rural and more isolated communities would need?

Where I live, there are elderly residents in their 90s, who are not classified as clinically vulnerable, so they had no extra support, apart from neighbours—who were in the same position, with no heat, no light, no hot water and no hot food. Does the Minister agree that the very old should not be left in this position for days on end?

This brings me to my concerns, personally experienced, about the very poor quality of much communication. In the 21st century, we should surely be able to provide timely and accurate information to residents. Electricity North West told me that I was experiencing a “fault journey”. Unfortunately, I had no idea when or where that journey was likely to end. While I still had charge in my phone, I could go to the website to read the out-of-date and inaccurate information, which told me on a number of occasions that there was no fault in my postcode area. My husband called and was on hold for a long time, as were so many others. When he was finally put through, he was told that there was no information available and to keep up to date through the website. Of course, you cannot do this once your phone is flat.

Moving on to compensation, can the Minister categorically assure the House that there will be a prompt settlement of compensation claims and no attempt by any DNO to try to wriggle out of paying all claims in full? We should also remind ourselves that high levels of compensation are set by Ofgem to encourage DNOs to increase resilience. Will the Government ask Ofgem to increase the requirement on DNOs to improve domestic resilience, because if there is a lesson to be learned from Storm Arwen, it is that our long-term resilience against extreme weather is simply not good enough?

Yesterday, in the other place, Kwasi Kwarteng said that the Government would be

“trying actively to learn lessons”.—[Official Report, Commons, 1/12/21; col. 929.]

He also said:

“We have to be prepared for similarly extreme difficult weather conditions in future and make sure that our system is resilient in that eventuality”.—[Official Report, Commons, 1/12/21; col. 921.]


He is absolutely correct in that. We know that climate change will bring more extreme weather events and, as part of the efforts to tackle climate change, the Government are, quite rightly, phasing out fossil fuels. That includes petrol and diesel, gas and oil. There has been much discussion during the debate on the Statement about generators. What are the plans for generators once petrol and diesel have been phased out?

As we move away from oil and gas heating and towards electrical heating across all homes—because currently that is really the only option—how will the Government make the network resilient? Can the Government categorically say that it can be made completely resilient for the future in its current form? If we cannot rely on the resilience of the grid, we need to look at how we can make our homes resilient. What plans do the Government have for this? For example, what investment is being made into battery storage technologies? What work is being done to look at the future build of new homes to bring in this resilience? We could, for example, fit all new homes with solar panels with a battery storage back-up when that future technology is ready. We need long-term investment to make this happen.

Storm Arwen has been a warning to the Government and to the power companies that, with climate change and the likelihood of more frequent weather events, we cannot continue as we are. With the decarbonisation and electrification of domestic heating, there must be resilience built in for when the supply fails while the grid is being restored. What are the Government doing to get Ofgem to incentivise the DNOs to do this? How is Ofgem working with them to achieve this as quickly as possible? Will the Minister speak to the Government about reporting back to Parliament in six months on progress made in this area?

Finally, if the Minister is not taken by my suggestions on how we could make domestic properties more resilient outside of the grid network, can he inform your Lordships’ House how the Government are investing for the future so that we do not have to revisit the misery faced following Storm Arwen over and again?

[Lord Purvis of Tweed (LD)]

My Lords, I associate myself and these Benches with the points made so eloquently by the noble Baroness, Lady Hayman of Ullock, both now and at Questions earlier. Her frustration is representative of the many people who must declare an interest in this issue. When I came down from the Borders last Monday, I had no power in my house; when I arrived back there on Friday there were eight outages that evening and no power overnight on Saturday. However, I was one of the lucky ones because I had some power on Sunday.

I hope that the disproportionate effect on rural areas will be the key lesson in the post-incident review to which the Government have committed. For those living in Kincardine who still lack reliable power, there should be an equivalent test: how would this place treat it if it were Knightsbridge? We are asking people to do the same: to work from home, provide services and care for people. There should be no difference between a resident in Knightsbridge and a resident in Kincardine in the 21st century, especially during a pandemic when people want to be carers or to work from home.

I noticed in the Statement that the Minister had been in Berwick, so I declare my second interest. It is my hometown and where my mum and dad still live. I know that the Minister knows the north-east extremely well as he is a northerner; actually, he is a north-easterner. It is unsettling when you speak to elderly relatives who are genuinely scared about what is happening and are vulnerable due to what happens afterwards. The lack of support for vulnerable communities in rural areas has been shocking in this regard.

The question will be: who has the primary responsibility? I know that many local authorities and their staff have worked extremely hard over this time; I saw it for myself with the local authority for the Borders, and the farmers and others who cleared roads and supported people. Many people in these communities are also first responders and, during this situation, have been checking on vulnerable residents in local authorities. However, certainly in the Borders, local authorities have been extremely frustrated with the electricity companies due to their lack of communication with customers; this was outlined eloquently before.

I will say one thing to the Minister with regard to the Statement. Some people in the north-east of Scotland have had not only their power supply but their mobile phone masts go down. Many communities have now been passed over to voice through broadband phones, as in my house, but there has been no communication at all. Therefore, the Statement giving an indication that people should dial 105 from their landline or mobile when they have no mobile phone coverage is—how should I say this?—insensitive, to say the least. I do not know how the Minister will do it but one lesson that we must learn is how to have civil contingencies when so much now relies on mobile and electricity networks.

My other question relates to power lines. In a former life, before I was elected in the Borders, I worked for David Steel when he was an MP. I strongly remember the awful length of the power cuts then. I know about the modernisation of the network in the north of England and Scotland.

Do we stress test the local networks? We stress test banks and other institutions, but is there a lack of legislative power for the Government to insist that companies stress test their networks so we know that, when it comes to what could well be more frequent events, the networks have been graded on a stress-test basis? This has given a lot of people a lack of confidence in the network and many of the companies.

The final thing I would say is that we have seen through bitter experience—certainly in the Borders and other areas, and in the north-west of England—that there have been improvements in flood warning systems and the way communities are able to operate. These systems have been put in place so that, when flood alerts are indicated, the public bodies and the private sector are prepared. But it seems as though we are not learning from those experiences with floods when it comes to electricity outages. I would be grateful to know what the post-incident review scope is and, in particular, how customers, consumers and communities themselves can feed into it when they are back to having reliable energy supplies.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I thank both noble Lords for their contributions. Let me state that I totally share their frustration and annoyance. Storm Arwen has brought severe weather to many parts of the north of our country, and those in the north of England and Scotland have suffered the most. Many have been without power for several days, and we totally understand their frustration, annoyance and indeed fury. I am not immune to that, as someone who comes from that part of the world as well. Let me reiterate that we are all working incredibly hard to ensure we can return to normality as soon as is humanly possible.

Yesterday, my Secretary of State stated in the Commons that restoring power across the entire country is a “grave concern” of ours, and a top priority and focus for the Government. Officials are in constant contact with the distribution network operators to understand their response, and operators have a mature and successful programme of sharing and deploying qualified resources to those areas most in need. My Secretary of State is having daily calls with local resilience forums, including the various chairmen in the north of England, to discuss the ongoing response. The Government continue to reinforce that, if additional support is needed by the industry, it needs only to escalate it to senior officials. Let me say to the noble Baroness, Lady Hayman, that the Government remain in constant regular communication with the distribution network operators, to ensure that communication—which, frankly, has been lamentable in many cases—is up to speed.

In the case of Northern Powergrid, I understand its phone lines are now operating properly; obviously there were problems with calls initially. Waits are now down from several hours to a few minutes, so people can now contact it.

The scale of the restoration effort that engineers are facing is enormous. The storm brought down trees and debris on to power lines, and wind speeds were exceptional. Since the storm hit, on Friday 26 November, over 4,000 engineers have been working round the clock to repair damage in very difficult conditions. Nearly 800 generators have been deployed to provide people with emergency power, and I am pleased to report to the House that, so far, over 98% of those affected by the storm—more than 964,000 customers—have had their power supply restored so far. I totally accept that that will be no compensation whatever to the few thousand who are still without power. As of 4 pm today, that was about 15,000 households, and that includes about 9,000 in the north-east, focused around the Wear Valley, Eastgate and north Northumberland; about 3,000 in the north-west, especially in the north Peak District and the south lakes areas; and a little under 3,000 across north Scotland, mostly in Aberdeenshire and Perthshire.

To confirm, all customers who have faced electricity distribution issues caused by Storm Arwen will have their power restored before Christmas—there was no truth in the rumours Members were referring to this morning. We expect to have the vast majority of those customers connected within one week. We know people are desperate to return to normality, and my department has been reassured that power will be restored, as I said, to the majority of customers by the end of this week, at the latest.

On the lessons learned, I thank the people who have borne with us during these difficult times and give a final reassurance that everyone involved is straining every sinew to ensure that they are reconnected as quickly as possible. We will ensure that all the appropriate lessons have been learned and, if such a storm happens again, that we are as resilient as we possibly can be.

The noble Baroness, Lady Hayman, asked about compensation. Ofgem, the independent regulator, sets service levels that companies must meet, with rules on how quickly network operators must restore power. It also sets compensation payments for consumers if those standards are not met, as they clearly have not been in these circumstances. I will ensure that Ofgem puts maximum pressure on the companies for those compensation payments to be made as swiftly and speedily as possible.

Regarding vulnerable consumers, those who have reached state pension age can register as priority service customers with their network operator, and will then be prioritised in terms of support, including to rural communities. We are working with the network operators to reduce vulnerabilities in future and to ensure that the network is as resilient as possible to these disruptive events. We intend urgently to review the exercise with the network operators to stress test the appropriate systems and will be able to share the terms of reference for review once the incident is over. We can then finalise the appropriate scope. Ofgem will also consider whether there is need for any further regulatory investigation.

The noble Lord, Lord Purvis, made a very good point about people not being able to get in touch when mobiles are down. The priority service register means that when outages occur, operators will already be able to locate the most vulnerable affected people and help them. They set up strategic hubs in the disrupted areas to aid communication with other customers, but I totally accept that these are often sparsely populated areas, and often rural areas with poor transport and communication links. Many network operators did their best in difficult circumstances.

Professional Qualifications Bill [HL]

Lord Purvis of Tweed Excerpts

Tuesday 9th November 2021 Lords Chamber

[Lord Lansley (Con)]

My Lords, I hope noble Lords will forgive me, but I want to intervene briefly in the debate. I am Lord Lansley, of Orwell, which is nowhere on the route that has been mentioned; it is not even between the locations in Scotland and Boscobel. You could not even go via Orwell to get to Boscobel, which is where I hope we are going to end up.

I shall say just a couple of things. First, I was interested in what the noble and learned Lord was saying about the Constitution Committee and the legislative consent Motion process, but I have to say, in relation to this Bill, that we completed Committee stage at the end of June and I tabled my amendments in the early part of July. We are now in November. There has been no lack of opportunity for the devolved Administrations to see precisely what the Bill is intended to do, what the remaining issues of controversy might be and what the intended outcome looks like. Frankly, they have had every opportunity to consider a legislative consent Motion and to have passed one, so if they do not then I do not know why not.

Secondly, I am grateful to my noble friend Lady McIntosh. She was looking at why we are consulting with regulators over the powers to make regulations in Clauses 1, 3 and 4—that is in Amendment 13, which I support—but not other clauses. As it happens, I agree with my noble friend, or at least I hope I do, that Clauses 5 and 6, in so far as they are about tidying up the statute book, are not really appropriate for consultation processes; they are essentially just working out the legal statute-book consequences of the Bill.

However, I suddenly realised that there is a regulation-making power in Clause 10 that the Government are not intending to consult upon. I thought, “Hang on a minute, I thought I agreed with the Government because I tabled an amendment at the beginning of July to press the Government on the question of consultation with regulators”, so I looked back at it. Of course I subsequently withdrew it when the Minister tabled his own amendment, but when I looked at it I realised that what I said originally was, and I quote myself:

“Prior to making regulations under this Act, other than those made under sections 5, 6 and 18”—


that is, Clauses 5 and 6 relating to retained EU law and Clause 18 on commencement—

“the appropriate national authority must consult such regulators of regulated professions as appear to the authority to be likely to be affected by the regulations.”

So my amendment would have included consultation on the regulation-making power in Clause 10, which relates to the duty to make information available to overseas regulators. I freely confess that I had not noticed the difference and that gap. While I very much support what the Minister has tabled in Amendment 13—I very much endorse it because it largely achieves what I was hoping for in the amendment that I tabled way back in July—I ask him to explain the process of thinking by which Clause 10 has been left out.

[Lord Purvis of Tweed (LD)]

My Lords, I support my noble friend Lord Bruce in his questions. As other noble Lords have indicated, this is an opportunity for the Minister to give a clear position on the situation regarding legislative consent Motions. If the Government are not able to provide an assurance that there will be LCMs during the passage of the Bill, we will be in the uncomfortable position of now having a number of Acts where there have been no LCMs and the Government will have considerable regulation-making power over devolved regulators if the Westminster Government believe that the devolved Government are not acting. This could create those sensitive areas where there are devolved regulators which will then be instructed under regulations to change their procedures for areas where the UK Government will have considered that there is unmet demand but the devolved Administration may not, and there is no vice versa equivalent. Therefore, if there is no LCM process, and the Government will be acting over the top of the devolved Administrations, this will be a potentially problematic area, not least in those professions that are not likely to be exempted under these areas. So transparency will be helpful, if the Minister could give that indication.

Regarding consultation, this will be a consistent theme that the House will return to time and time again. We did so on the Internal Market Bill, and here, and, until the common frameworks are in a state of readiness—and I understand that they are quite far away from such a state—we will have to press the Government on how operations will cover the whole of the UK. Could the Minister give clarity on that?

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, the Opposition have been clear through the passage of the Bill that regulators need statutory protections to ensure that they are consulted on the regulations made under it. That is why my noble friend Lady Hayter of Kentish Town tabled Amendment 3. Other amendments in this group, Amendments 4, 7, 8 and 9, seek to achieve the same thing. I had a very positive meeting with the noble Lord, Lord Grimstone, a couple of weeks ago, and was happy to see a copy of his Amendment 13, which we support. It is welcome. The Government have listened, as the amendment requires the appropriate national authority to consult the regulator of a regulated profession before making regulations under Clauses 1, 3 and 4. We are happy to accept that, and my noble friend has no intention to divide the House on her Amendment 3.

The noble Baroness, Lady McIntosh of Pickering, made some very important points on consultation with the devolved Administrations. I very much agreed with those, and with the comments of my noble friend Lord Foulkes of Cumnock that we must always treat the devolved Administrations with respect for their mandate and the work they do. Equally, the United Kingdom Government is on a different level, and we are all proud citizens of the United Kingdom. I support the comments he made, and of course enjoyed his speech very much. I hope on his trip he will pop down to the London Borough of Southwark, a wonderful borough with historical connections to Geoffrey Chaucer, William Shakespeare, Charles Dickens, Michael Faraday, John Ruskin and many others.

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[Baroness Hayter of Kentish Town (Lab)]

My Lords, as the noble Lord, Lord Lansley, said, I have added my name to the second of the amendments in this group. There are two parts to the Bill, as we know. One arises from the trade talks, where the Government may want regulators to talk to their opposite numbers in relevant third countries. The other, which is what we are looking at now, is about enabling—or maybe requesting—regulators to process overseas qualified people where there is deemed to be a shortage here. Unmet “needs” is the word used. That is where I and some of the regulators have some concerns.

In many sectors, such as nursing, it already happens. Structures are in place and there is no need for the Government to intervene. The powers are there, everything is fine at the moment. However, there are two serious questions that need answering. First, is there any danger that consumer interests are at risk if underqualified people practise here because the Government say, “We have not got enough of that particular profession”? I do not need to go into why that is a risk; it is fairly obvious.

Secondly, which the noble Lord, Lord Lansley, covered, is how the shortage is to be defined. He already referred to why high fees are not always an appropriate measure. Sometimes, there are high fees because there is an international shortage; the price is set on an international market and therefore bringing in more of that profession would not solve anything. Or will it be defined by users or consumers who need those services? Amendment 6 sets out some far more objective criteria, which is why I was happy to support it.

Since we are on this bit, I should raise the other concern of the Law Society, which was not raised earlier by the noble Baroness, Lady McIntosh of Pickering. It does not expect to be covered by Clauses 1 and 2, but were they to be applied to it, and should the SRA get involved in such discussions, the Law Society wonders whether this would jeopardise the perceived independence of the legal profession as seen abroad by foreign Bars. Clearly, the consultation is very important, but—I am not saying that it said this because it was high fees—I think it would have a concern if there appeared to be any interference by the Government that would in any way question the independence of the legal regulators, which I know is so important for our international reputation in the world of law. For the moment, the main issue is the definition of where there is unmet need and whether the assurances will cover what we have set out in Amendment 6.

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Baroness and to agree very substantially with what she said and of course, the noble Lord, who made a strong case. I, too, commend the Minister because, as we have indicated in previous groups and as my noble friend said, the Bill may have had a pause, but the Minister did not. He and his officials have worked hard in engaging with us and with those who will be affected by it.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

My Lords, before I start, I will thank the noble and learned Lord, Lord Hope of Craighead, for the courtesy of his comments. I assure him that I took no offence at the words that he used in the earlier group. I thank the noble Baroness, Lady Blake of Leeds, for her Amendment 14, which I will address first. I unreservedly agree with the noble Baroness that the Bill has been greatly improved during its passage through the House, and I commend and thank noble Lords from all sides of the House for the work that they have done.

This amendment from the noble Baroness provides for the Secretary of State to consult appropriate persons. It then requires the Secretary of State to seek, on a time-limited basis, the consent of all the devolved Administrations before making regulations under powers in the Bill. If that consent were not forthcoming within one month, the UK Government could proceed to make the regulations without it, but would be obliged to publish a statement setting out why they had proceeded without consent.

I appreciate that this amendment recognises that there are occasions when the Government may need to make regulations without consent. It is a best-efforts approach, which requires the Government to evidence that they have made these efforts. However, as I have set out previously, it is absolutely not the Government’s intention to make regulations in relation to matters on which the devolved Governments could legislate without seeking their views. I have put this assurance on record many times, including in correspondence with my ministerial counterparts in the devolved nations. Perhaps because I am relatively new to the House, I was not tarnished by some of the discussions on the internal market, and I think I have maintained good and constructive relations with my counterparts in the devolved Administrations.

I am not convinced that the proposed amendment is preferable to the Government’s own, more flexible, proposals. However, I agree that working with the devolved Administrations is the way to make this Bill operate best for all our UK nations. That is why I wrote to my devolved Administration ministerial counterparts ahead of Report, offering to put a duty to consult with devolved Administrations on the face of the Bill. The offer was made to them and it also included a commitment to publish a statement setting out whether and how the regulations take account of any representations made in response to the consultation. I can give the House an assurance that we will continue to engage with the DAs, and if securing the LCMs, which is something that I would very much like and feel committed to do, means that we need to amend the Bill, this is something that we could consider. I am happy to give that assurance to the House.

Noble Lords will also be aware that the amendment tabled in my name on a duty to consult with regulators extends to regulators in the devolved nations; so, in addition to the consultation we would normally expect to undertake with the devolved Administrations, whenever appropriate we will be engaging directly with those in the devolved Administrations who are closest to the issues before making regulations.

I will continue to engage with my counterparts in the devolved Administrations to persuade them of the merits of the Government’s approach. If noble Lords from all sides of the House wish to join me in trying to convince them of this, I would very much welcome that. A Bill such as this, which provides benefit throughout all four nations of the United Kingdom, would be best dealt with on a consensual basis between the devolved Administrations.

[Lord Purvis of Tweed (LD)]

I am very interested in what the Minister said, and the House will welcome his initiative. In order to help that process, would the Minister consider placing his letter to the devolved Administrations in the Library, along with any reply that comes? Then we would at least know what the current situation is—but I welcome the Minister’s initiative.

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for his welcome. Let me consider that: I am not prepared to agree to that right away, because these letters, of course, contain a number of matters that are the stuff of correspondence between one part of the United Kingdom and another. There is nothing suspicious about my saying that, but, if I may, I will just review the letters to make sure that I am not breaking any confidences with the devolved Administrations before agreeing to do that. I repeat, however, that I will continue to engage with my counterparts in the devolved Administrations to persuade them of the merits of the Government’s approach.

I turn now to the next amendment, tabled by my noble friend Lady McIntosh of Pickering, the noble Lords, Lord Foulkes of Cumnock and Lord Bruce of Bennachie, and the noble and learned Lord, Lord Hope of Craighead. This seeks to place a requirement to consult relevant persons and then seek the consent of the devolved Administrations before making arrangements for the assistance centre. With all respect, I believe that this is taking a sledgehammer to crack a nut. The Government will, of course, ensure that provisions for the future assistance-centre service work for all four nations of the UK, and the service will be designed to complement the roles of regulators and professional bodies. No issues have arisen from the approach taken by the UK Government in providing a single centre operating across the whole of the UK to date. This centre has been in operation for well over a decade, and these issues have never arisen during the course of the last 10 years. Of course, it would not be in line with normal practice—it would not be expected—for the UK Government to seek the consent of the devolved Administrations before tendering for, or launching, a support service. The Government regularly consult devolved Administrations on these things in the course of business, but I fear that introducing this as a statutory requirement here would create a significant and frankly unnecessary precedent.

Much interest was shown in the assistance centre in Committee. I have often felt at times that the interest shown in the assistance centre was out of kilter with the actual, rather restricted body that it is. As I have said previously, it will offer a very modest, targeted service, similar to that already provided by the UK Centre for Professional Qualifications. A heavy-handed consent requirement therefore feels disproportionate for this. Many regulators and professional bodies already have productive working relationships with the current assistance centre and have welcomed its continuation in the Bill.

I turn now to the amendment tabled by the noble Baroness, Lady Blake of Leeds, on common frameworks. This amendment seeks to ensure that nothing in the information-sharing requirements under Clause 9 will prevent the establishment or operation of a common framework agreement relating to professional qualifications. Noble Lords will recall that this issue was raised in Committee. Again, I say without reservation that I share the House’s firm commitment to effective common frameworks.

I previously explained that there had been a hiatus in the development of the recognition of professional qualifications common framework while work paused during the election period in Wales and Scotland, but I am very pleased now to be able inform the House that, since Committee, officials across all four UK nations have made very good progress on a common framework on the regulation of professional qualifications to ensure a collaborative approach on powers that have returned following our exit from the European Union and that intersect with devolved competences. This has included two workshops and correspondence that focused on co-design, with officials from all the devolved Administrations, following which my officials continue to drive development of the framework, in line with these discussions.

In addition to co-operation in relation to returning EU powers, the Government have offered, if the devolved Administrations would find it helpful, to include proposals on consultation and collaboration on the operation of the Professional Qualifications Bill, once enacted, in that framework. Let me be clear, in answer to the noble Baroness’s concerns and those expressed by the noble Baroness, Lady Randerson, that the provisions of the Bill in no way cut across the establishment or operation of a common framework. This is a separate process. As the common framework will be non-legislative in nature—a proper consensus developed with the devolved Administrations—I worry that referencing the common framework in the Bill may be confusing and could hinder rather than help the development of the common framework.

The development of the common framework is a collaborative process, not one that the Government can or should impose. However, as I have outlined, this process is now reinvigorated, and I am confident that the professional qualifications common framework can be agreed in provisional form by the end of this year. I will of course keep noble Lords in touch with this to make sure that those who have spoken in the debate in relation to this are kept properly informed of its progress. I hope that I have been able to address the concerns of this House in relation to this, and I ask that this amendment is withdrawn.

Professional Qualifications Bill [HL]

Lord Purvis of Tweed Excerpts

Report stage
Tuesday 9th November 2021 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, as I said in Committee, there is a clear need to give those who already have their professional qualifications recognised in the UK certainty and confidence that this legislation will not affect them negatively, especially because, in many cases, the professionals and people working in these areas already live in our communities, have decided to call the UK their home and are people on whom all of us so often rely, particularly for our vital public services. Amendment 16 seeks only to enshrine the Government’s own central promise from the Explanatory Notes that

“nothing in the Bill prevents, qualifies or otherwise impacts the ability of those with existing recognised qualifications from continuing their areas of practice in the UK”.

The Minister said in Committee says that he completely agrees with

“ensuring that professionals who have already had their qualifications recognised in the UK should be able to continue to rely on those recognition decisions.”

Then why not put it in the Bill? Without this simple amendment, how can the Minister provide the reassurance that these workers so desperately need? He also stated in Committee:

“The regulations which commence Clause 5(1) will include saving and transitional provisions”


to

“ensure that professionals whose qualifications were recognised from the end of the transition period to the point when the 2015 regulations are revoked are unaffected”,

and to

“support a smooth transition to the new framework for recognising overseas qualifications.”—[Official Report, 14/6/21; cols. 1734-35.]

When will we see these regulations, and what does “a smooth transition” actually mean? Will it ensure that no one with qualifications recognised today will lose out on job prospects tomorrow?

We feel strongly about this issue, and I look forward to hearing unequivocal and clear commitments from the Minister tonight

[Lord Purvis of Tweed (LD)]

My Lords, an issue raised in Committee that it would be helpful for the Minister to provide an update on—in writing would be satisfactory to me—concerns those European Union workers who had been providing services, with their qualifications recognised, and had applied for settled status but on the fast-track element, which did not ask them to provide any more information about the qualifications recognition. With Clauses 5 and 6 revoking the previous EU scheme and the move towards the domestic schemes, there is still potentially a grey area for those workers who will have to provide proof of their qualifications recognition if they change employer, or indeed if they seek new rental or property agreements, et cetera.

Previously, the noble Lord, Lord Grimstone, indicated that the Government were aware of this, and he provided assurances. It would be very helpful if the Government could say how many of these workers could be in this position. It emphasises the point made by the noble Baroness, which I agree with, that, even if there are unintended consequences of putting at risk some of these workers, we can ill afford it.

The second element is that it would be helpful to know the Government’s intentions for the timing of the revocation of the EU scheme. Previously, the Minister indicated that it would be when the Government were ready to do so but that they were not in any rush to do it. It will be helpful to know what timeframe we are looking at, because the noble Lord, Lord Frost, in a Statement he provided to the House in September, said that the Government were now carrying out a substantial review of previous European legislation and retained EU law. Are professional qualifications separate from that review or will they be considered as part of it? If the Minister could give some reassurance on that, I would be grateful.

Finally, because this will probably be my last comment on the Bill in this House—which I am sure the noble Baroness, Lady Bloomfield, will be pleased to hear—I want to put on record how she and the noble Lord, Lord Grimstone, have engaged in this process. I have been in this House a number of years, and we hear at the Dispatch Box fairly frequently that the Government value the input and scrutiny from this House and take on board whenever we amend legislation, and we always welcome that. But our amendments quite frequently get buried in the dust in the other House, when all our great counsel and wisdom is turned back.

The benefit of the noble Baroness and the noble Lord listening and then acting by tabling the government amendments is that this is now government policy, and the Bill is now substantially changed. If I understand it correctly, this will be the first time that the autonomy of regulators will be respected in primary legislation. That is a considerable achievement for the parliamentary process of a Bill of which we had been not only sceptical but critical at the early stages, but which we now support. Therefore, I commend both Ministers and their teams for the work they have done. Personally speaking, I think the Bill is in a much better position. For the benefit of our regulators and those who receive services that the professions operate, it is a better Bill as a result.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lord, Lord Purvis, for his kind words; I will certainly try to continue to do my best at the Dispatch Box. I also thank the noble Baroness, Lady Blake of Leeds, for her amendment. In Committee, the House sought confirmation that professionals who have already had their qualifications recognised in the UK will be able to continue to rely on those recognition decisions. Indeed, those professionals will be able to continue to do so, provided of course that they meet any ongoing practice requirements. Nothing in the Bill, nor the regulations anticipated under it, will interfere with or reverse such decisions.

Regulations commencing Clause 5 will include saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation comes into effect by the commencement regulations will continue to be assessed under the relevant retained EU recognition law. It is possible to make similar provisions in regulations under Clause 6.

The noble Baroness, Lady Blake, asked what a smooth transition would look like. It will include regulations which ensure that the UK meets its international obligations under the EU-UK withdrawal agreement, EEA EFTA separation agreement and the UK Swiss citizens’ rights agreement. It includes saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation has commenced will be assessed under the EU system. Commencement of Clause 5(1) is timed to avoid burdening regulators or creating gaps in their ability to recognise overseas qualifications. The Government took a similar approach when amending retained EU recognition law in 2019 to ensure a smooth transition for businesses and professionals following the UK’s withdrawal from the EU.

The noble Baroness also asked why, if we are so committed to protecting the ability of those with existing recognised qualifications to continue practising, we are not putting this on the face of the Bill. We believe that this matter is best dealt with through saving and transitional provisions in secondary legislation. The UK Government and devolved Administrations took this approach when amending EU legislation on recognition of professional qualifications to prepare for leaving the EU. We see no reason to depart from this approach and enshrine this commitment in the Bill.

The revocation of the general EU-derived system will not impact the ability of professionals with recognition decisions awarded under that system to continue practising in the UK. This applies even where a professional takes a career break and chooses to return to a profession in which they were awarded recognition. The noble Lord, Lord Purvis of Tweed, asked about the fast-tracked settled status of EU citizens. We are unable to provide the House with the precise timetable at present, but we will engage with stakeholders as we go forward.

Professionals who do take a career break should check with their regulator to establish what, if anything, they will need to do to continue practising or to return to practice. This will of course vary between professions. If a profession has a continuing practice requirement, that will also apply for individuals currently practising. For example, where a registered medical professional has a licence to practise, they must revalidate their registration every five years. Similarly, when a professional returns to the UK, their first port of call would be to the relevant regulator in the UK to ascertain requirements for recognition.

The Bill does not make commitments in these areas, because that would be interfering with regulators’ ability to regulate. The main reason that this amendment has been proposed is to protect those with recognition decisions, but there is no threat from this Bill to those decisions. The Professional Qualifications Bill respects existing recognition decisions and any ability a regulator has to set professional standards. I therefore ask the noble Baroness to withdraw this amendment, if I have provided sufficient reassurance.

Climate Change: Trade Policy

Lord Purvis of Tweed Excerpts

Thursday 28th October 2021 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My noble friend is an assiduous champion of these matters. Our ambitious trade deal with Australia includes the first substantive climate change article that Australia has included in a deal, which affirms both parties’ commitment to the Paris Agreement. Of course, our very recent agreement in principle with New Zealand goes beyond this and breaks new ground on climate change. It will include the most comprehensive environmental goods list of liberalised tariffs in an FTA to date and precedent-setting commitments on coal and fossil fuels. I look forward to debating these matters further with your Lordships’ House when the full texts of these agreements are available.

[Lord Purvis of Tweed (LD)]

My Lords, we welcome the fact that the Government have added trade and shipping to the reporting of UK emissions. They represent about 50% of all UK emissions. The Minister will be well aware that the UK is heavily reliant on trans-shipment—that is, shipments that come to the UK primarily via European ports. The European Commission is planning an extension of the Emissions Trading System to include ports and shipping. Does the Minister agree that it makes no sense for the UK to have a wholly separate scheme and that there are mechanisms within the UK-EU TCA to open up discussions for a pan-European trading scheme for emissions for shipping and ports? There is a way—is there a will?

[Lord Grimstone of Boscobel (Con)]

My Lords, the shipping industry is of course very important to the United Kingdom. I am sure noble Lords have noted that my right honourable friend the Chancellor of Exchequer gave some relief to the shipping industry yesterday in terms of tonnage tax. If I may, I will follow up in a letter the particular points the noble Lord has raised this morning.