Covid-19: International Response

Lord Purvis of Tweed Excerpts

Monday 18th May 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I wholeheartedly endorse the contribution of the noble Baroness, Lady Blackstone. I declare an interest as chair of the UK board of the charity Search for Common Ground, which is a global leader in peacebuilding, currently implementing over 140 programmes and successfully partnering with the UK Government in more than 20 countries across Asia, Africa and the Middle East. I therefore want to address my comments to the impact of Covid-19 in fragile and conflict-afflicted areas.

Covid-19 can shift relationships between civilians and authorities. Poor responses by the authorities may decrease trust, increase risks of violence against civilians and disproportionately impact marginalised groups. Many authorities have relied heavily on security forces to enforce restrictions, putting security actors in high-stress, close-contact situations with civilians, for which most lack adequate gender and de-escalation training. We know that economic frustrations triggered by the pandemic can fuel perceptions of injustice, inflame tensions in communities or increase competition for access to resources, which may increase violent activity.

Covid-19 is also likely to undermine women’s economic security and girls’ education. The pandemic is significantly disrupting many majority-female market sectors in fragile countries, such as domestic services, hospitality and petty trading in marketplaces. This threatens women’s economic security in the longer term, especially if women recover financially more slowly than men, as happened following the Ebola-related disruption in west Africa. We must not repeat the mistakes of the past. Restrictions on markets and border crossings interrupt informal trading, which is frequently women’s only path to financial independence. UNODC has warned that the crisis is creating the environment where women and girls are more at risk to trafficking. We know that temporary school closures disproportionately impact girls’ education and that girls are far less likely to return to school after income cuts leave their families unable to afford schooling for all their children.

All these impacts will have a much greater effect on conflict-afflicted and fragile states. I very much welcome the announcements to which the Minister referred and I appeal to the Government to ensure that a focus on peacebuilding is a continuous thread through all the programmes that she described.

International Development: Aid Distribution

Lord Purvis of Tweed Excerpts

Thursday 6th February 2020 Lords Chamber

[Baroness Sugg]

My Lords, the UK is a leading player in global health and nutrition forms a big part of that. We recently had debates on its importance. We continue to support the Government of Japan in organising the Tokyo summit and we will play a leading role in it.

[Lord Purvis of Tweed (LD)]

My Lords, the Minister said to the Chamber last week that 90% of the world’s most extreme poor would be living in sub-Saharan Africa by 2030. That is why the Government’s announcement in August 2018 that the UK would be the largest G7 investor in Africa by 2022 was such a significant target. Without any announcement, that target has been dropped and replaced by language, as the Minister said last week, about being “impactful” or, as in the report of the UK-Africa Investment Summit, an “investor of choice”. If global Britain is to mean anything, it must be that our word is our bond to the world’s most vulnerable. I ask the Minister a very simple question: why has this target been dropped?

[Baroness Sugg]

My Lords, on climate, we have announced the doubling of our UK international climate finance to help developing countries turn the tide against climate change. We will host COP 26 in Glasgow. Much of that support will be going to African nations that will be badly affected. We held the UK-Africa Investment Summit a couple of weeks ago, which underlines the importance we give to our relationship with Africa, and we will continue to do so.

Defence, Diplomacy and Development Policy

Lord Purvis of Tweed Excerpts

Thursday 30th January 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is always a pleasure to listen to the noble Earl in these debates, with his thoughtful and experienced comments. A common thread in the debate, so well presented by the noble Lord, Lord McConnell, has been soft power, as ably defined by the noble Baroness, Lady D’Souza. It has been a consistent feature in all the contributions, whether the focus has been on defence and security, development or diplomacy. At its heart, soft power is how the UK is perceived in the world, not how the UK perceives the world. The noble Earl said nice things about Scotland, where I live, and since I am speaking at a Burns supper tomorrow night in Inverness, I am reminded of the Bard:

“O wad some Pow’r the giftie gie us

To see oursels as ithers see us!”

It is quite remarkable how the world does see us—we start from a good base and in many respects it is because of the point made by the noble Lord, Lord McInnes. Our foreign policy, our diplomacy and development policy are a creature of all four nations, not just one. All have made contributions. He was referring to the excellent maiden speech by the noble Baroness, Lady Penn, and I was reflecting, as the baby of another Parliament when I sat in the Scottish Parliament, that the second Head of State, after Her Majesty, who spoke at the Scottish Parliament was Bakili Muluzi of Malawi. The Scottish links, historical and present, with development and supporting African nations are very strong indeed and I was so pleased to hear her refer to that. As a former baby myself, in a different place, I recall what Charles Kennedy once said to me: “Parliamentary babies and toddlers are to be seen and heard.” I hope that we will hear very much more from the noble Baroness in the House.

I think it has been consistent across the debate that we welcome the review. It is right to reflect on what kind of global citizen we are and should be, but, as the noble Lord, Lord Ricketts, indicated in referring, as others have, to the Foreign Secretary’s recent speech in another place, it is better to start with the direction in which we wish to head and then look at how we achieve that ambition. I hope it will be an open review and not just internal to the departments. We have seen references in the Foreign Secretary’s speech to global Britain—someone unkindly pointed out not long ago that it was a slogan in search of a strategy. If global Britain is to carry on through this review, it would be beneficial if it is not just about updating technology or the machinery of government but starts from the principal opportunities around the globe on which the UK can take leadership. It will fail if driven simply by how other departments can access DfID budgets.

As my noble friend Lord Chidgey indicated, another element to be cautious about is that the review will of course be led by the FCO and linked with DfID, the MoD and DIT working together. As other noble Lords indicated, the British Council and the BBC World Service are also of critical importance to the UK’s global presence. We were due to have the soft power strategy published; when the noble Lord, Lord Howell, ably led the International Relations and Defence Select Committee, on which I serve, we called for this to be published on a number of occasions. It would be helpful to know whether it is still intended to be published in advance of this review or whether it will be wrapped up within the review.

As my noble friend indicated, if we lose the single Department for International Development, with a Secretary of State, it would dramatically reduce our capacity in the world to be advocates for good. We are the only country in the G7 which has legislated to enshrine 0.7% on our statute book; we meet it and are a leader on it. If we do not have a Cabinet-level Minister to bang the drum around the world, that will diminish our ability to do so.

As the noble and gallant Lord, Lord Houghton, and others said in this debate, it is interesting to reflect that it is welcome to co-ordinate but not always preferable to integrate between departments. It is often good to be aligned, but often preferable not to be combined. Often our Ministers serve the UK best when they can come from a specific aspect of the UK’s position in the world rather than always believing that one HMG are good.

This leads me on to the development point. When the UK met its 0.7% target—which we have continued to do—I remarked in this House that, being in a broad cross-party coalition, as a Liberal I was very pleased because we had met the Liberal manifesto commitment. That commitment was given in 1970, and the assumption after the Pearson commission was that private sector and aid transfers would be met by 1975 and development would take track. It is because we are so far away from that that financing the global goals and other countries meeting their obligations are so important. That is why I was disappointed not to see any mention in the supporting materials of the Foreign Secretary’s speech or some of the background briefings that one of the core purposes of our review will be our contribution to meet the global goals and how we will work with other countries so that they can meet them.

The core element of our development budget has been reflected on by the Independent Commission for Aid Impact. In the autumn, it said in its review of UK aid from 2015 to 2019:

“The government has clearly signalled its intention to use the aid programme to pursue direct UK national interests, in particular, by helping to position the UK as a key trade and investment partner with frontier economies. While the pursuit of mutual prosperity is not necessarily in conflict with good development practice, the focus needs to remain on building long-term opportunities, rather than securing short-term advantage.”


I hope that that thrust is to be a core element of the review.

While I am asking for clarification, the noble Lord, Lord Howell, asked a relevant question regarding the timing of other strategies. I mentioned the soft power strategy; we are led to believe that there is an Africa strategy, but that has not been published; and there is likely to be an updated national security strategy. It would be helpful to know how all these will be linked. On Africa, this is important because one of the signature elements of UK development with regard to that policy was announced in August 2018, when Theresa May indicated that the UK was to be the largest G7 investor in Africa by 2022. That was to set the stage for the UK-Africa Investment Summit, which took place last week. I have seen no reference to that target, either in the Prime Minister’s speech or from the Government. It would be helpful if the Minister could confirm whether that target is indeed still valid.

I had mixed emotions this morning with regard to the impact of tomorrow on us. I walked across Parliament Square and saw 10 still, rather limp union flags hanging from the flagpoles. It might be just because of the angle at which I saw them, but they looked as if they were at half-mast, and were set against a grey, dreich sky. I think this is meant to be a celebration. However, I was cheered up because my destination was Chatham House, where I and the members of the International Relations Committee received a superb briefing on Africa and the opportunities there. If we are to be successful in the review and if our strategy is also to be successful, it will probably be seen in our relationship with the most exciting, growing, innovative continent on earth, and UK-Africa could represent all the best that could come out of this review.

--- Later in debate ---

[Baroness Sugg]

If the noble Lord will allow me, I shall go through where we are with the review. However, I fear that I may not be able to satisfy his question.

Many noble Lords have made helpful suggestions which we will make sure are fully considered by the review team. The noble and gallant Lord, Lord Houghton, talked about how the review should relate to defence, and my noble friend Lord Howell highlighted the important contributions which have already been made by your Lordships’ House in its reports. I was delighted to read in the House magazine article by the noble Lord, Lord McConnell, that he punched the air in delight when he heard about the strategic review. As the noble Lord, Lord Ricketts, says, it is a moment for hard strategic thinking.

The integrated security, defence and foreign policy review will assess three areas: first, how the UK can strengthen and prioritise its alliances, diplomacy and development; secondly, how we will reform Whitehall to support integrated policy-making and operational planning across departments and agencies; and, thirdly, all aspects of deterrence and the ways in which technological surprise could threaten UK security.

My noble friend Lord McInnes asked whether we will make sure that all parts of the UK are represented. We will listen to and learn from voices across the United Kingdom. The review will engage and collaborate with a range of stakeholders to ensure proper challenge and scrutiny. As the noble Lord, Lord Purvis, said—I will not attempt to repeat Burns—our reputation overseas is a reflection of all four nations of the UK. It is important that we include all four nations in the review.

My noble friend Lady Penn asked about the refreshing of the national risk register. It is under way and will happen in the first half of this year.

Many noble Lords underlined the importance of consultation in the review, and I agree. It is important that we speak to the organisations and groups that should contribute. We will engage and collaborate with a number of parties domestically and internationally, as I say, to ensure proper challenge and scrutiny throughout the process. We will listen to and learn from different voices from across society—from academics, international partners and, of course, Parliament. I am afraid I do not have further detail on the review. More will be forthcoming, but at this point that is all the detail I am able to give noble Lords.

I take the opportunity to underline the incredible work our Armed Forces do overseas to ensure the security of our people at home and abroad. The Government are fully committed to supporting them through enshrining the covenant into law and the Office of Veterans Affairs. The noble Lord, Lord West, and the noble and gallant Lord, Lord Houghton, spoke of the importance of sufficient spending for defence. The UK has never dropped below the 2% defence spending target through our membership of NATO, cementing our position as the leading European ally in NATO. We spend the most on defence in Europe, £41.5 billion in 2020-21. Our manifesto commits us to exceeding 2% and increasing the budget by at least 0.5% above inflation in every year of the new Parliament.

The noble Lord, Lord West, also encouraged us to use our influence as a nuclear power as we approach some of the challenges we face at the moment. We are collaborating closely with our E3 partners to trigger the dispute mechanism to help resolve the impasse we face. We are very clear that in triggering that mechanism we are seeking to bring Iran back into compliance with its commitments.

The noble Lord, Lord Howell, and the noble Baroness, Lady D’Souza, spoke about soft and hard power. Sadly, we have dropped from the number one position in the soft power ranking to number two. It is really important that we recognise the full scope of soft power, which the noble Baroness, Lady D’Souza, set out. Our strong second-place ranking is a testament to the depth and durability of our soft power assets, which include the culture, education and digital sectors. As the noble Lord, Lord West, highlighted, true global security is achieved through effective deployment of both hard and soft power.

The noble Lords, Lord McConnell and Lord Chidgey, spoke of the multiple challenges caused by conflict in our world, and the noble Lords, Lord Chidgey and Lord Browne, spoke of the importance of ensuring that we promote international peace. There is a clear rationale for the UK to prioritise conflict prevention. It is estimated that 80% of the world’s poor will be left behind in fragile and conflict-affected states by 2030. We will not be able to meet the sustainable development goals, or indeed UK national security objectives, without peaceful and stable societies around the world. Not only does conflict prevention save lives, it reduces national security threats, helps us achieve our development goals and ultimately will save money. Across government we have developed a range of conflict policy frameworks and tools, many of which the noble Lord, Lord McConnell, spoke of in his speech. The noble Lord, Lord Browne, highlighted the importance of sustaining peace, and the UK fully supports the UN Secretary-General’s sustaining peace agenda. We share his aim of an ambitious increase in activities aimed at preventing outbreak, escalation, continuation and recurrence of conflict. Last year, we contributed £16 million to the UN Peacebuilding Fund, providing funding for the UN Department of Political and Peacebuilding Affairs.

Our role at the UN is incredibly important. Our commitment to building a safer, fairer and cleaner world is championed through our active involvement in many multilateral organisations. We promote our values and our key international priorities bilaterally and multilaterally, but particularly through our role at the UN. We will continue to work there with our partners and allies to pursue our campaign against modern slavery, our Preventing Sexual Violence in Conflict Initiative, and on freedom of religion and belief, including addressing the plight of religious minorities where they face persecution. As a permanent member of the UN Security Council we have a prominent role in upholding international peace and security.

The noble Lord, Lord McConnell, spoke about reform of multilateral agencies. We will continue in our efforts to pursue reform. We are working very closely with the UN to ensure that it becomes more efficient and more effective, and generally to strengthen the rules-based international system. We strongly support the Secretary-General’s reform initiatives on peace and security, on development and on management. We will keep our focus on them to ensure they are fully implemented.

However, as my noble friend Lord Howell highlighted, there are 21st-century networks that we must be part of and influence. As we leave the EU, we must continue to bolster our bilateral and multilateral alliances through strengthening our historic ties, but also through forging new partnerships. We will reach out beyond our traditional alliances to advance relations with new partners and build broader coalitions that involve emerging powers.

The noble Lord, Lord Ricketts, spoke about the importance of our involvement in the future of NATO and highlighted France’s comments. Of course, we recently hosted the leaders meeting in London. Allies agreed to a reflection process to further strengthen NATO’s political dimension, which the UK fully supports. We look forward to the NATO Secretary-General’s proposal on that and to fully engaging with it.

My noble friend Lord Howell spoke of the importance of the Commonwealth, as he regularly does. We have an incredibly important relationship with it. We have an unbreakable connection to the Commonwealth and its shared values. We remain committed to its aims and objectives. We were very proud to host a successful CHOGM and are looking forward to the next one in Rwanda. With its 53 member states, including us, and one-third of the world’s population it has really shown commitment to working together to tackle the global challenges we face and to maximising opportunities over the past 70 years. That must be celebrated and encouraged.

The noble Earl, Lord Sandwich, spoke about our future relationship with the European Union after we leave tomorrow. We will continue to collaborate closely with our ECHO colleagues on a number of humanitarian reform priorities. We are pleased to be working together with them as donor representatives in the Grand Bargain’s facilitation group. We are of course looking for a positive relationship. The EU will be an important partner in global challenges and ECHO will remain an important partner in humanitarian response. Our political declaration sets out that the UK and the EU will continue to support implementation of the SDGs, and we will look to establish future dialogues and discussions on how we can co-operate with the EU.

The noble Lord, Lord Ricketts, spoke about our future foreign policy challenges and the importance of working together on them with the EU and other partner Governments across the world, including the US. When we talk about global Britain and our future, we must be more engaged and more outward-looking than ever before. Our future relationship with the EU will be different, but that does not mean that the UK and the EU should stop acting together to alleviate poverty and to tackle the many shared global challenges we face, where the EU will remain a very important partner.

Turning to the “fairer” element of the debate, one of the central purposes of my department, the Department for International Development, is to tackle inequalities and to help build a fairer world. As my noble friend Lady Stroud said, we have seen great progress in recent decades: the number of the world’s population living in extreme poverty has fallen by 36% since 1990. That is over 1 billion fewer people living in extreme poverty. But, while the number of extremely poor people falls globally it continues to rise in sub-Saharan Africa. Noble Lords mentioned the importance of our Africa partnership. Forecasts indicate that nearly 90% of the extreme poor will live in sub-Saharan Africa by 2030.

There is much unfairness and inequality in the world. It is not fair that children still die from preventable diseases, which is why we are committed to continuing our role as a leader in global health and a major contributor to Gavi. It is not fair that millions of girls are still denied an education, which is why the provision of 12 years of quality education for girls is one of the Prime Minister’s key priorities. It is not fair that hundreds of millions of women are denied access to contraception, which contributes to the issue raised by my noble friend Lord King. That is why, last year alone, DfID provided 23.5 million women and girls with modern methods of family planning. We also remain committed to the promotion of universal human rights.

[Lord Purvis of Tweed]

On sub-Saharan Africa and the Africa partnerships, is there an Africa strategy and will it be published? Is the target that the Government announced—that we will be the top G7 investor in Africa—still in place?

[Baroness Sugg]

Last week’s Africa investment summit showed that we are very keen to develop and deepen our partnerships with Africa. As far as I am aware, there is no plan to publish an Africa strategy but as can be seen, we are working on a number of projects with our African partners. In a speech at that summit, the Prime Minister made it clear that he wants to be the most impactful investor in Africa.

Many noble Lords touched on the importance of climate change and the environment in the “cleaner” section of this debate. This links to many of the points previously raised about ensuring a safer and fairer world. Many of the most fragile and conflict-affected countries—where, increasingly, the extremely poor will live—will be significantly exposed to climate change and less able to cope with its impacts. Protecting the most vulnerable and ending extreme poverty depends on making these countries resilient to the twin risks of instability and climate change. As the noble Earl, Lord Sandwich, highlighted, in September last year the Prime Minister announced the doubling of our international climate finance to at least £11.6 billion over the following five years. That will help to ensure that we can continue assisting countries to build their capacity to deal with the dangerous effects of climate change and support lower-carbon development. That was one of the focuses at the Africa investment summit, and we expect much of that investment to go to our partners in Africa.

We very much look forward to hosting COP 26 at the end of this year. We continue to be a strong, progressive voice in negotiations. We are working incredibly hard to secure an ambitious global agenda, not only as a convenor but also as a leader. We are calling on countries to come forward with updated emissions reduction commitments and long-term climate strategies. We want COP 26 to be a milestone for greater ambition, cleaner energy and a more resilient future, supported by green financial systems.

Many noble Lords from all sides of the House have expressed their views clearly and eloquently on the machinery-of-government changes. I am afraid that I have little to say on this. As has been said before from the Dispatch Box, the Prime Minister is of course responsible for all machinery-of-government changes, but I will make two points. First, as this debate has made clear, it is incredibly important that we use defence, diplomacy and development together to achieve our goals. Departments already work incredibly closely in this area. At the Africa investment summit, for example, the FCO, DfID and the DIT worked together seamlessly. I spent many hours around tables with officials, and I actually did not know which departments they represented, which is a sign of how closely they were working together. We see that also in the response to global events such as Ebola, as mentioned by my noble friend Lady Penn: the MoD, the FCO and DfID coming together incredibly quickly on the ground to drive rapid decisions and help prevent a health crisis that could have been far deadlier than it was, both in the region and globally. Of course, we can always work more closely on the ground, as my noble friend Lord Howell highlighted. Seeing more colocation between DfID and the FCO is important. They now share a 1HMG platform in country. When I have visited various countries, I have seen the head of DfID country office and the ambassador or high commissioner working hand in hand; that is incredibly important. That is how we will ensure effectiveness in our actions overseas. We do that already but we must do more. There is lots more that we can do, and the strategic review will look at that.

Secondly, the Government are committed to the international development agenda. That can be seen through our manifesto, with its commitments to maintain spending at 0.7%, to 12 years of quality education for girls, to ending preventable deaths and to tackling malaria. The integrated security, defence and foreign policy review will create the opportunity to reassess how the UK engages internationally. As noble Lords would expect, DfID and FCO teams are proactively supporting the work there.

I am running out of time and I apologise if I cannot answer all noble Lords’ questions, particularly those from the noble Baroness.

On the specific point about China, the UK continues to call on China to allow UN observers immediate and unfettered access and will continue to do so.

The debate has covered a wide range of issues. I am sure that I have not answered all the questions and I will follow up with a more detailed letter. I apologise again that I am not able to satisfy noble Lords’ requests for more details on the strategic review. Those will follow in due course.

The importance of integration in our policy going forward is clear. Being a truly global Britain is about reinforcing our commitment to be a force for good in the world through our efforts to end conflicts, combat climate change and promote our values of democracy, human rights and the international rule of law. We must take an integrated whole-of-government approach to this, ensuring that we use all the tools we have of defence, diplomacy and development policy to build a safer, fairer and cleaner world.

Domestic Abuse

Lord Purvis of Tweed Excerpts

Tuesday 16th July 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I concur with the Minister’s views about the noble Lord, Lord Judd. He will be greatly missed from the debate later today in the House. I served as a Member of the Scottish Parliament for the Borders and can recall casework where there were administrative problems with individuals who had to tackle cross-border issues with regard to the legal framework and relationships between local authorities in Scotland and England. That was prior to the welcome changes in legislation that the Minister referred to both for England and last year for Scotland, and prior to the changes in welfare legislation in relation to housing benefit in particular. What administrative relationships are in place to ensure that these changes do not exacerbate the potential difficulties that women, primarily, find themselves in on cross-border issues?

[Baroness Williams of Trafford]

The noble Lord makes a good point about having legislative alignment and making sure that legislation in one part of the UK does not contradict legislation in the devolved Administrations. Of course, those conversations and that work are ongoing to ensure that precisely that does not happen.

Sustainable Development Goals

Lord Purvis of Tweed Excerpts

Wednesday 10th July 2019 Grand Committee

[Lord Purvis of Tweed (LD)]

My Lords, it is very often frustrating following the noble Lord in these debates, because I agree with everything that he says and he says it much better. That includes the observation that, in the Chamber now, noble Lords are considering the minutiae of public lavatories. One of the global sustainable development goals for humanity focuses on the lack of toilets in public buildings in the least developed countries, and especially toilets and facilities in schools for girls. It should be the focus of all of us in the House to make sure that the UK is pushing that. A reverse of the situation would have been far more appropriate today.

That being said, I commend the Minister on securing this debate and on the very open way in which she introduced it. In many respects, she was very frank about the need for government to better co-ordinate on the domestic element of the VNR. However, I wish to approach a different subject and look at what I think will be critical to the last decade of the global goals: finance for development and the need for a new British approach.

Three weeks ago, the Independent Commission for Aid Impact published a synthesis of its findings on the current state of UK aid from 2015 to 2019. Its conclusion was stark:

“The government has clearly signalled its intention to use the aid programme to pursue direct UK national interests, in particular, by helping to position the UK as a key trade and investment partner with frontier economies. While the pursuit of mutual prosperity is not necessarily in conflict with good development practice, the focus needs to remain on building long-term opportunities, rather than securing short-term advantage”.


I agree with this recommendation and hope that the Minister does too; I hope that the Government are reflecting on it.

The current UK aid strategy dates from 2015 and has a similar timeframe to the global goals, as the Minister said. Introduced under Justine Greening and George Osborne, it heralded a “fundamental shift” towards national interest. This strategy is now almost four years old and, in a few weeks, we are likely to be on our fifth Secretary of State, which means that they have averaged just nine months in office during this period. As the ODI put it, the strategy is part of an unwelcome trend to define ODA as primarily within the national interest, as an element of the rising tide of political populism. The idea that aid should serve the national interest is gaining currency, but it is contrary to the founding principles of the goals and to why the UK took the lead on securing a 0.7% commitment. As the ODI itself has shown, there is little explicit recognition that aid orientated towards securing domestic interests is not always the most efficient or effective way of maximising global development ambitions.

The ODI’s new principled aid index ranks bilateral development assistance committee donors by how they use their official development assistance to pursue the long-term national interest but in a safer, sustainable and more prosperous world. A principled aid allocation strategy, while not excluding national interest, has lower scores for countries that have this as a stated principle or major aim. That is for good reason: too many developed countries, either formally or informally, still have tied aid, aid for arms or informal conditionality, or link aid decisions to votes in rule-making bodies such as the UN and the WTO. The UK has been a superb example of not doing that. If that is put at risk, it would be detrimental to our standing in the world. The principled aid index is therefore a superb means by which we can begin to open up this argument and have a finance framework for development for the remaining decades of the goals.

In spite of this, as the Minister said, we have seen UK leadership making major improvements and development around the world, pegged to the ambitions of the global goals. We are second on the principled aid index of all OECD countries. We fail to be top because of the national interest bias that I have outlined. Having an approach that may pander to some in the press is in fact likely to be a less effective and less efficient means of spending public money, which they claim is their concern when the pandering starts. It is an unvirtuous circle that we need to make sure is broken.

We should be proud of what we have already achieved—here I agree with the Minister’s comments. The past few decades have seen a dramatic fall in global poverty, with more than a billion people lifted out of poverty since 1990. It is estimated that around 650 million now live in extreme poverty, which is down from 1.85 billion in 1990. This trend has slowed. The rate of extreme poverty reduction is slowing dramatically. According to the World Poverty Clock, 40,000 people will be lifted out of poverty today but 13,000 will fall into it. The absolute number of people living in extreme poverty is still rising in 14 countries, primarily as a result of high population growth. Because of this and some other indicators, we are on course to miss a substantial number of goals. Aid flows are not progressing at the pace that we had expected and the UN needs. For example, there was $144 billion in development investment in 2017, but the need in that period was $2.5 trillion. We have to be open: the billions to trillions narrative is not materialising.

To attempt to address this, there will be a high-level dialogue on financing for development under the aegis of the UN General Assembly—after the dialogue that the noble Lord, Lord McConnell, mentioned—on 26 September this year. It follows the high-level political forum on sustainable development. The president of the General Assembly said that this was necessary because of the slow pace. Can the Minister ensure—maybe she cannot ensure, but certainly request—that whoever our Prime Minister is attends this dialogue on financing for development, consistent with the approach that David Cameron took when he was in office? If our Head of Government will be there, will he announce a refreshed and renewed international strategy for how we will mobilise a new coalition of the willing in the EU and the OECD based on the principled aid index? Will he also commit to an accelerated increase of flows?

We should consider a UK conference with the aim of mapping the remainder of the decade to match our long-term commitment. One reason why we in particular can lever this international leadership is that, over the next decade of the global goals, even if our economy remains stagnant, we are committed by law to provide £140 billion of international assistance. Over this decade, because we are committed to that fund, we can use this like no other country. A UN initiative to be convened in early 2020 as a result of the UN dialogue would be the best means of starting a decade of development to meet the goals.

Finally, if global Britain means anything, it is that our aid should be global in perspective and principled in execution. It should be our ambition to be at the top of the principled aid index and do everything in our power around the world to ensure that other countries reach the highest they can in that index too.

Aid: Anti-Corruption Measures

Lord Purvis of Tweed Excerpts

Tuesday 2nd April 2019 Grand Committee

[Lord Purvis of Tweed (LD)]

My Lords, I also draw attention to my entry in the register of interests and commend the noble Lord, Lord McInnes, for securing this debate on a very important subject. Like other noble Lords, I shall refer to Iraq. I strongly believe that development assistance is not the Government’s money: it is from the British public and therefore should be directed towards its intended purpose and spent properly and, where possible, used to lever in better governance and anti-corruption measures. In some respects, because it is diverted to the most vulnerable in the world, there should be even more transparency and probity over this kind of government expenditure than all others.

I had the privilege of taking through the Lords the 0.7% Act referred to. Some of the criticism levelled against it at the time was that if there was an increase in expenditure over a fixed period, that would increase the likelihood that it would be wasted. The Act’s purpose was to enshrine it in law so that government could plan on a much longer basis, as the noble Lord, Lord McInnes, said. It is a fact that now we can plan further ahead, we can take a longer view of some of the deep, systemic issues, and corruption is one of those. It is also a fact, however, that development assistance is now only a very small proportion of all aid transfers, given the depressing need for much greater humanitarian assistance around the world. Therefore, the focus on anti-corruption measures in humanitarian assistance is even more important.

I wanted to make one comment of sensitivity on this issue. On some of my visits to the least developed countries, and those in a post-conflict state, over the last couple of years, I have also heard comments about countries where a President has been elected, and then shown grotesque nepotism by putting a daughter, son- in-law or other family member in office, with other members of the President’s cabinet making huge profits out of that situation. I have heard comments about a Government elected on a minority basis, then granting serious cash flows to a minority party representing one sector or group for it to be sustained in government.

We must also be sensitive to the fact that we are not immune from unfair practices in the West. That said, the UK has a strong record on transparency and aid. I am a strong supporter of the International Aid Transparency Initiative to secure development and humanitarian resources, so that their results address poverty and crises. I am also a strong supporter of Publish What You Fund, and the Aid Transparency Index—the only independent measure of aid transparency —shows that the UK ranks the highest of all Governments in the world for transparency in aid and development assistance. When we reach 90.9 out of 100, compared to China with 1.2, it shows that other large and important countries can learn from the UK.

We can also learn from the work of Transparency International. A recent interesting report looking at the DRC, Iraq, Afghanistan, Syria, South Sudan—as the noble Baroness, Lady Anelay, mentioned—Yemen, Libya and Somalia also highlighted that those countries are the lowest performing in the Corruption Perceptions Index. There is a link to instability, poor transparency and corruption. In referring to some of those countries in the post-conflict scenario, a high level of corruption leads to constant instability. The work of the World Bank shows that even in those fragile countries at peace, if there are high levels of corruption, the likelihood of violent conflict increases when Governments do not adequately prevent corruption or ensure justice. In that regard, I have visited Iraq on many occasions over the last two years, one of them with the noble Lord, Lord McInnes, and the noble Baroness, Lady Anelay, and corruption in some parts is, as the noble Lord, Lord Alton, said, an inhibitor to proper social reconciliation, stabilisation and reconstruction.

Last week—this did not receive much reporting in the UK—100 people drowned in a ferry disaster on the Tigris in Mosul. The Iraq Council of Representatives sacked the former governor, with whom I had a number of difficult meetings in Ninawa in the last two years over misuse of funds. I met the anti-corruption commission representative on some of those visits and, yes, the commission has an office, but it is one person with no computer, no ability to bring cases and no ability to properly tackle the challenges.

If we are to show leadership in meeting our target, we can also show leadership in meeting global goal 16 on good governance being a condition of our support, and making sure that our long-term planning drives better standards of governance. There should not be a choice between getting aid through to the people who need it and building up good institutions. Both are necessary if we are to ensure that aid goes to those who need it most.

Customs Safety and Security Procedures (EU Exit) Regulations 2019

Lord Purvis of Tweed Excerpts

Tuesday 26th March 2019 Lords Chamber

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, in moving these regulations, I will speak to the three statutory instruments that are part of the Government’s package to prepare for the possibility of the UK leaving the EU without a deal. The instruments are related to safety and security, cash controls and the Economic Operators Registration and Identification scheme—EORI.

EU law provides the legal framework for implementing these policies across the EU. By virtue of the European Union (Withdrawal) Act, this law will form part of our domestic law on exit day and will continue to apply as retained EU law.

The relevant EU legislation was drafted to apply to EU member states. Therefore, it will not work as effective legislation for the UK without amendments. These instruments ensure that the UK has a functioning legislative rulebook by replacing references and terminology that will no longer be valid in the event of no deal. This ensures that the UK will have effective safety and security, cash controls and EORI regimes after the UK leaves the EU.

First, allow me to set out the context of the provision we wish to introduce for managing the safety and security risk of goods entering and leaving the UK. The Union Customs Code sets out that the movement of goods into and out of the EU requires entry and exit summary declarations, also known as safety and security declarations. So, for example, shipments from the US or China require a safety and security declaration before entering the EU. If the UK leaves the EU without a deal, UK importers and exporters will be required to complete safety and security declarations for goods moving to and from the EU, as well as the rest of the world.

As well as making required changes to retained EU law, this instrument introduces a provision to phase-in the legal requirement for entry summary declarations on goods imported from the EU. The legal requirement to submit entry summary declarations for goods imported from the EU will apply from 1 October 2019.

HMRC has listened to industry concerns about ongoing uncertainty and the readiness of businesses to comply with safety and security requirements on UK-EU trade from day one. Therefore, we are taking this approach to give businesses more time to prepare to submit declarations to HMRC. This does not remove the requirement for declarations for goods imported from the rest of the world. Goods entering the UK from the rest of the world will still have to make entry summary declarations as they do now.

When the UK leaves the EU, a separate customs union will be created between the UK and the Crown dependencies—the Channel Islands and the Isle of Man. This instrument includes a provision to support the operation of the UK and the Crown dependencies, namely that the movement of goods between the UK and the Crown dependencies will not require safety and security declarations. This instrument does not apply to the movement of goods between Northern Ireland and Ireland.

The second statutory instrument we are talking about today relates to cash controls. The EU monitors the international movement of cash by requiring individuals who are entering or leaving the EU, and who are carrying €10,000 or more in cash, to make a cash control declaration. This declaration must be made to the customs authority of the member state into which they are arriving or leaving.

The UK is committed to continuing this practice. The declarations provide information about the international movement of cash and are one measure that assists in the fight against money laundering, the proceeds of crime and the funding of terrorism. If the UK leaves the EU without a deal, this instrument will require cash control declarations at the UK border, including the border between the UK and the EU. It does not apply to the border between Northern Ireland and Ireland.

The current practice, which requires these declarations between the UK and non-EU countries, will continue. This instrument extends those requirements to movements between the UK and EU. It makes the small change that we will require declarations on amounts of £10,000 or more, rather than €10,000.

The final change as a result of this instrument that I should draw to your Lordships’ attention relates to information sharing. Currently, details of the movement of cash are automatically shared between member states. This instrument removes the requirement to share information but permits sharing of information where it is in the UK’s interests so to do.

The third and final instrument we are discussing today is for the Economic Operators Registration and Identification scheme, EORI. An EORI is a unique registration number given to businesses that interact with customs authorities so that HMRC can identify them effectively. EORIs are necessary when applying for customs simplifications or facilitations, when making declarations or in other interactions with the customs authority.

All EORIs issued by the UK, known as UK EORIs, will remain valid for use in UK customs processes in the event of a no-deal EU exit. Following the UK’s departure from the EU, UK individuals and businesses that want to trade with the EU or other territories outside the EU and do not already have a UK EORI will need to obtain one. Persons who are not established in the UK but who wish to lodge a UK declaration will also require a UK EORI. This instrument ensures that the UK has a functioning EORI scheme by replacing references and terminology in retained EU law that will no longer be valid in the event of no deal. Traders whose only international trade is between Northern Ireland and Ireland will not be required to register for a UK EORI.

These instruments will ensure that the UK has independent customs processes that work after we have left the EU and will maintain the security of our borders while ensuring that traders are faced with as little change as possible and are given time to prepare for the new customs requirements after EU exit. I commend—

[Lord Purvis of Tweed (LD)]

My Lords, before the Minister sits down, can he tell the House how many businesses currently have an EORI? The last published information from the Government suggested that only one-sixth of businesses which trade exclusively with the EU and would require an EORI have one. What is the current position?

[Lord Bates]

The current position is that the largest number of businesses affected would be UK businesses. There are an estimated 245,000 traders who will need to register for an EORI. That figure comprises 145,000 VAT-registered businesses and 100,000 businesses below the VAT threshold. Overseas businesses will also require a UK EORI to make customs declarations for goods being imported into the UK after we leave the EU.

[Lord Purvis of Tweed]

I am grateful to the Minister for indicating how many businesses would be required to have one. How many businesses are registered for and have secured an EORI?

[Lord Bates]

The answer is 52,000. I beg to move.

--- Later in debate ---

The same statutory instrument notes the aim to build risk profiles. It is great to do that but what are the Government doing about the existing risk profiles rather than new ones? We are not reinventing the wheel here. I assume that we are dealing with people who already have risk profiles somewhere in the EU. Perhaps the Minister can say something about that.

[Lord Purvis of Tweed]

My Lords, when the Trade Bill first came to this Chamber in September, out of interest I registered with HMRC as a small business trading with the European Union to find out what information the Government would be providing to businesses. One of the core elements was the EORI component. A business that trades either exclusively or predominantly, or indeed at all, with the European Union was told that it would be required to have an EORI number in the event of no deal. The Government have taken that position consistently over a number of months in indicating that preparations for a no-deal Brexit need to be made.

It has been fascinating to observe both the information that the Government have received and how businesses have responded. As I indicated to the Minister, the last time the Government published information about how many businesses were prepared and in a position to trade with their European counterparts the day after a no-deal Brexit, only one-sixth of British businesses were in a position to do so. That meant that five-sixths would not be able to trade legally with their counterparts in the EU 27 countries. Now, a fortnight before the revised exit day if we leave on a no-deal basis, only one-fifth of businesses can do so. Therefore, if we leave with no deal on 12 April, one-fifth of all British businesses that trade with customers in EU 27 countries are in a position to do so legally. In addition, if, as the Minister said, they are in the category of the 145,000 VAT-registered businesses, they are required to be registered with an EU 27-equivalent of HMRC in those countries.

The Government have not published data on that information. It would be very interesting to know whether they are collecting data themselves. Not only do businesses have to be registered with our regulatory body, the HMRC, but for those 145,000 businesses to pay the correct level of VAT, tariffs and customs duties, they have to be registered with the customs or VAT body of the member state concerned. This is the advice that the Government have been giving, so it would be interesting to know how many companies are in that position.

Even if we crash out on a delayed basis in a fortnight’s time, the vast majority of British businesses will not be in a position to trade legally with their European counterparts. Regardless of what the Government have been saying about the need for preparedness for a no-deal Brexit, British businesses are simply not prepared. That may be because they do not believe the Government would be so cavalier with the interests of the British economy or that, in the words of the business Minister who resigned overnight, the Government are,

“playing roulette with the lives and livelihoods of the vast majority of people in this country who are employed by or otherwise depend on businesses for their livelihood”.

Or perhaps they do not believe that the advice provided by the Government has been of a sufficient standard.

I am open-minded about which category they might be in but sympathetic to the latter because, last week, on the day the Government indicated they were open to extending Brexit day, I received an email, as a business, indicating that exit day would still be 29 March. This afternoon, as I listened to the Leader of the House speaking about the statutory instrument for extending Brexit day, I received an HMRC email indicating that the policy of the British Government was still to leave the European Union with a deal; but there was no indication of an exit day at all.

How on earth can British businesses be expected to prepare now with the Government not even indicating a firm basis on which they need to prepare? Given that having an EORI number is only one of a number of requirements on British businesses, the Government—not Parliament—are asking them to make impossible business decisions. They are asking them to take risks to plan for an eventuality that even the Government are not confident will happen. It would be helpful if the Minister, in responding to this short debate, gave an estimate of when the Government expect all British businesses to be in a position of readiness for exiting the European Union. If at the moment, a fortnight out, only a fifth of British businesses that trade with their counterparts in the European Union are prepared, when do the Government estimate that all British businesses will be in that position?

[Lord Tunnicliffe (Lab)]

I too thank the Minister for presenting these SIs. Taking them in the same order as on the Order Paper, the first one concerns customs safety and security procedures. The impact assessment says:

“The main purpose of this regulation is to enable the UK to continue to meet its safety and security obligations under the World Customs Organisation … Framework of Standards by introducing a new UK regime”.


This is the new UK regime. It introduces a safety and security declaration—in a sense, at the UK-EU border—after a six-month transition period. It also introduces an authorised economic operator programme. I could not understand whether this was an asymmetrical situation or a symmetrical one. For the six months while the UK firms do not have to make these declarations, is it possible that EU member states may require declarations from what was to have been this Friday and is now a fortnight on Friday, or do we have a reciprocal deal? The impact assessment gives a feel for the real world. It says:

“In the event of a no deal scenario, the UK will no longer be part of the EU security zone and carriers and operators will need to make safety and security declarations for goods moving between the UK and the EU. Whilst many carriers, specifically large economic operators, are experienced in transporting goods to both the EU and non-EU countries, HMRC anticipates that this will present a significant ongoing administrative burden for them, especially when submitting an ENS as it will be a new legal obligation and an additional cost to submitting a customs declaration for import purposes”.


The intention of this programme is no doubt to smooth the effects of a no-deal scenario but at best it will only reduce the chaos, and chaos there will be—at least, that is what it seems to me. However, let us look at the reason why these instruments are in front of us. Paragraph 3.1 of the Explanatory Memorandum says the reason is that the European Statutory Instruments Committee and the Secondary Legislation Scrutiny Committee both recommended that the instruments should be moved from the negative procedure,

“to the affirmative resolution procedure, as they believe the House may wish to debate the implications the safety and security requirements may have for trade across the Ireland/Northern Ireland border”.

The reference to this in the Explanatory Memorandum is:

“The amendments to the retained EU law contained in this instrument will not have effect in relation to trade in goods between Ireland and Northern Ireland. Further details on the arrangements for trade between Northern Ireland and Ireland will be published as soon as possible”.


I looked at the instrument to see how that retained law was disapplied. Almost hiding in plain sight in regulation 1(3) is this simple statement:

“They do not have effect in relation to the movement of goods between Northern Ireland and the Republic of Ireland or the reverse”.


That has a charming, heroic simplicity about it. In one line it says that a problem that completely destroyed the Prime Minister’s agreement—that is, the backstop—can be ended by that simple statement. What are the plans for the border under these circumstances? The regulation says they will be published “as soon as possible”. One would have assumed that there was a target to publish them before this Friday because it is the 29th, although we now know that exit day is possibly a fortnight later.

The question posed is the question that the best minds of Her Majesty’s Government and the EU have failed to solve: what will actually happen at that border? My understanding is that if we fall back on WTO rules, there is an obligation to impose tariffs and for these sorts of safety and security rules to be enforced. We will in fact end up with a border down the Irish Sea. Are the two parties in Northern Ireland simply going to ignore all their obligations under these various international treaties? If we have here tonight, at this late hour, a solution to the Irish border question, I would be delighted to hear it from the Minister.

--- Later in debate ---

[Lord Bates]

Once they became aware of that situation, if that eventuality occurred, the remedy—to get the registration—is a fairly simple and straightforward process. We would like them to do it before then. That is why we have been encouraging them to do that—but we cannot force them to at this stage.

[Lord Purvis of Tweed]

Businesses cannot do it afterwards if they want to trade on day one of exit if there is no deal. A post-fact situation is irrelevant if they wish to trade without any obstruction on day one of a no-deal exit. Will the Minister confirm this or get information from the Box before he sits down? The information I have received is that HMRC can only process a maximum of 11,000 a day. I hear what the Minister is saying about the Government encouraging businesses to register and that it may take only a short period of time, but that depends on the complexity of the business they do. That is for them to have an EORI. Even if all the businesses wish to register, there is only a certain capacity at HMRC, as I understand. I would be delighted if the Minister can say that that is incorrect and that before exit day—on 12 April if there is no deal—all the businesses that can trade can conceivably be in a position where they can trade. If he is not able to give that reassurance, we are in a very difficult position.

[Lord Bates]

Let me clarify that, because I think we can be more helpful on that point. There is a lighter-touch element to this: businesses can trade but they need to give a name and address. That is the requirement. They need an EORI number when interacting with customers and HMRC. So when they are doing that part of the exercise, rather than the trading element—completing their VAT return et cetera—they will need that number when they interact, but to trade they would need simply to give their name and address. I hope that offers some reassurance.

[Lord Purvis of Tweed]

I am not sure that it offered the clarity we need. Is it the Government’s position that, in the absence of having an economic operator number to trade with others in the EU 27, businesses have only to state that they have a British-registered trading address? That is absolutely not the advice that HMRC has been providing British businesses that trade with those in the European Union.

[Lord Bates]

The reality is that we would prefer them to have an EORI registration number. It is a fairly straightforward process that takes five to 10 minutes. But we are talking about extraordinary circumstances. The advice I am given and that I am presenting is that they need to give just their name and address to be able to continue to do that.

The noble Lord asked about the limit on processing of 11,000 per day and whether HMRC had the capacity. The customs declaration service has the capacity to process significantly higher numbers than that.

The noble Lord, Lord Tunnicliffe, asked whether we would end up with a border down the Irish Sea. These non-fiscal statutory instruments will not create an east-west border between Northern Ireland and Great Britain. This will be a temporary measure until a permanent solution is in place. We will seek to discuss this at the first opportunity with the Irish Government and the European Union. However, until this point, this policy is necessary to avoid a hard border on the island of Ireland and to uphold the Belfast Good Friday agreement.

[Lord Purvis of Tweed]

I am grateful for the Minister’s patience on this. It is important. He said at the Dispatch Box that HMRC has a capacity much greater than for providing 11,000 registrations a day. On GOV.UK on 28 February 2019, HMRC announced:

“HMRC has the capacity to sign up 11,000 businesses per day for EORI numbers”.


What have the Government done since then to provide that extra capacity? Am I wrong in believing the Government on 28 February? What extra capacity is provided to offer this, other than what the Government themselves have said in their own statement?

[Lord Bates]

I am advised that the customs declarations service does have the capacity to process significantly more. I do not have a number. When I write on the other issues, I will include an update.

[Lord Bates]

The noble Lord may not have been present for a rather fascinating debate on Pepper v Hart, which took place on another Bill recently—the Trade Bill, I think—and my noble friend Lady Fairhead is here. I and the noble Lord, Lord Stevenson of Balmacara, are not going to rehearse that argument again, but a degree of clarity came through that. I do not wish to make light of a very serious point which the noble Lord is raising, that this is impacting on real businesses, real lives and real trading opportunities. What I am trying to do is give as much information as I can from the Dispatch Box in a fast-moving situation, and provide more information in writing. I hope that the noble Lord will accept that in good spirit.

The noble Lord raised the point about £10,000. I share his surprise. Like him, I am not used to carrying anywhere near that sum across borders. The Financial Action Task Force, an international government body, has identified this as a key risk. This requirement of declaration is set by each of the members; the EU sets the limit at €10,000; the USA sets it at $10,000. The Government chose their own limit, using a memorable round number. They did not want to use another state’s currency or alter the figure to reflect changes in the exchange rate.

The noble Lord also asked about existing risk profiles. In a no-deal scenario, we will continue to use the current risk profiles, updating them as needed.

The noble Lord, Lord Tunnicliffe, asked if we had asked the EU for a transitional period. After the UK’s exit from the UK, we will seek to negotiate a safety and security agreement with the EU, so that safety and security declarations are not required on imports between EU countries and the UK.

The noble Lord, Lord Purvis, asked for the Government’s estimate of when all businesses would have an EORI number. We are committed to making it easier for businesses to be ready. Information is clearly laid out on GOV.UK. I have said all that.

[Lord Purvis of Tweed]

I am grateful again to the Minister because this is a very important point. My question is a simple one. On 28 February, the Government released the information that 40,973 businesses have registered. On the same day, they said that up to 11,000 businesses a day could be registered because of the capacity. The Minister has said at the Dispatch Box that that capacity is now considerably higher, without explaining what has been done in the meantime to provide that extra capacity. Can he provide something simple? Is there sufficient capacity for all British businesses which trade with the European Union to be in a position, if they so choose, to be registered before 12 April?

[Lord Bates]

I am afraid that I cannot go further than what I have in front of me, but I will happily put an assessment of that question in writing. Of course the situation as it stands today is that, without the statutory instrument which may receive the agreement of your Lordships’ House tomorrow, we would leave on 29 March. This is one element where there is a real sense of urgency and a need for businesses to prepare for that.

I can save writing a bit of a letter here. The answer is yes; we can do that. Let me take the time over the next few days, before April 12, to go into a little more detail and set that out. I will write to all noble Lords who have participated in the debate and, as usual, place a copy in the Library. I hope that will be helpful to noble Lords.

I again thank your Lordships for their contributions and scrutiny. I think we have benefited from that process.

Trade Bill

Lord Purvis of Tweed Excerpts

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, Amendment 45 is in my name and that of the noble Lord, Lord Purvis, for whose support I am very grateful. We are reaching the last quarter of our time on this Bill in Committee, and we have never touched, in any serious way, the question of services, which make up 80% of our GDP; they are an important part of our economy now and will be in the future. That curious absence of services has prompted this amendment; it is a probing amendment in the sense that I do not think there is any issue between the Government and us on this. We both recognise the importance of it and want to make sure that it is successful, but it is an opportunity for the Government to set out clearly what they intend to do in this area and to bring forward any thoughts they have about how the importance of services might continue, as the negotiations, which are currently with the EU and will return to the other place shortly, progress.

We hear a lot, importantly, about manufacturing and the physical goods that this country makes and imports. We do not hear nearly as much about services, and that is curious. It is important to be clear why that is. Direct trading of services across borders by purchasing or selling architecture, legal opinion or forms of insurance is a well-known measure of activity. This area has grown considerably and the UK economy is strong and strengthened by that. Business services, financial services and other aspects such as travel, including the tuition fees of foreign students who study in the UK, transportation and telecommunication information services make up the huge proportion of our activity in this area. Most trading of this type is with the EU. It is over 50% if Switzerland is included in the figures, but we also have considerable trade outside the EU and we should not forget that.

It is also important to recognise that, in some senses, exactly how this takes effect is hidden from plain sight. I should explain: we know a lot about the physical movement of things like car parts, because we are told, time and again, that the issue in modern-day trade is not so much the individual purpose of creating a particular object, machine or type of equipment; it is the assembly of the various parts. In the case of a car, bumpers, injectors and all sorts of things that go into the modern car cross the channel several times before being assembled, either here or elsewhere, in the final product, which is then sold. We are concerned about that and much of the Bill has this as part of its process, but the point is that this is not just about physical material. There is also a question about knowledge, intermediate input, services, financing and having the right people in the right place, which is necessary for this complicated pas de deux to work.

The single market, which underpins all this in the EU, plays a pivotal role in facilitating this process of increasing specialisation, because it includes as its basic point—this is derived from consideration within the GATS treaty under the WTO—the four freedoms for moving goods, services, capital and people. Hence, a focus on manufacturing the individual item sees only part of the story.

Why do services not feature more strongly in our discussion and debate? There are three reasons. First, services agreements are a relatively new form of trade negotiation. There are not that many around. They are difficult, because you have to negotiate and consider individual aspects, often regulatory and non-tariff barriers, to the way the trade happens. They cannot always be done by fiat from government; they have to involve large numbers of other companies and organisations. They are bureaucratic; they are not necessarily all organised from a particular aspect in government, such as BEIS or the Department for International Trade, because regulators and government departments will be involved in legal services and other areas. Finally, because different regulations belong to different bodies, it is more difficult to trade one sector, as it were, against another. There is not really an easy route through this, and that may explain why it is often left to the last.

I welcome the Government’s response on that, but it is a cynical response. We have done so well in services trade in recent years and our performance is one of the strongest in the world. We have more to lose in trade negotiations that focus on individual hardware and machinery parts if they do not also make sure that those trading in legal and other services are considered as well. We are in a quandary. We can argue the easy option of a goods-only agreement, because the rules for that are relatively straightforward: the tariffs are already very low anyway and we are not talking about substantial changes to the way in which we would do it. But if you include services then we are talking about a whole range of new activities, new players and the offering of new types of discretion. I will wait to hear the Government’s response, but it could be argued that we in Britain are not yet ready to engage with that successfully.

In that context, the opportunity is there for the Government to respond positively on how we are going to take forward this issue and how important it is to make sure that we get it right, and to make sure that we in this country do not suffer simply because the dog that did not bark—services—is still not barking. I beg to move.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for moving the amendment, which I happily signed. It will be no surprise that we on these Benches favour, still, the United Kingdom continuing as part of the single market of the European Union. However, in many respects this is a mitigating amendment on the basis that, if we are to leave the European Union, the most significant non-financial services sector for the British economy is, as the noble Lord, Lord Stevenson, said, the services sector. It is right, therefore, that we give proper focus to it in this Bill.

Up until this point, we have discussed the emerging elements of the continuity agreements. We have seen so far only one published, that of Switzerland, and are awaiting others. In the continuity agreement, Switzerland has components on services, and guarantees free movement of people for those providing services. That is beyond the elements in the immigration White Paper and in the withdrawal agreement from the European Union, and it is beyond what the Government have said. There are, however, some indications that the Government recognise that services are critical to the British economy. But it goes beyond that, as do our discussions with Switzerland, which are on the gold market and property.

This affects all parts of the United Kingdom. The UK is more dependent on services, especially non-financial, than perhaps any other country in the world. We export more in absolute terms than any country other than the United States. We have been able to get to that position because we have been doing so within an integrated market of the European Union. In many respects, we in the United Kingdom have been the driving force of the emerging integrated markets in the European Union. It is an irony that, as the architects of this approach to developing the services markets across the European Union to benefit our country, we are going to leave it.

If we are to have a future relationship, it is critical that we focus not only on tariffs and non-tariff barriers but on what is necessary to ensure that we can continue to benefit, at least to some degree, from a services relationship with the European Union. This applies particularly in digital services, as well as in the wider elements of research and development.

Many months ago, your Lordships’ committee reported on this, and in December 2017, in the name of the noble Lord, Lord Whitty, this House had an opportunity to debate the significance of the non-financial services sector to the British economy. Now, we have the Government’s clear position: we will be leaving it. We are choosing to leave an integrated market, which we have led, so how do we focus on some of the component aspects?

In the withdrawal agreement, we have seen some elements of mutual recognition of qualifications and some elements of professional standards being aligned so that those working in the services sector can be part of a wider operation on the continent and with the European Union. However, this is only a very small aspect of the overall need to have a much closer alignment. It requires government honesty: we may well be leaving the single market, but it needs to be clear what very close alignment would look like.

This applies to the discussions taking place this week and next week on the alternative to a backstop. The arrangements for the Northern Ireland backstop were as much to do with the continuity of the services sector for those providing professional and trade services from north to south and south to north as they were with the checking of the origin of goods at a border for tariff purposes. The all-Ireland economy is, by and large, an all-Ireland economy because of services. We are treaty-bound to protect that, so it is very important to have more clarity from the Government on what they expect to see as alternative arrangements to the Northern Ireland protocol if we are to protect the core elements of an all-Ireland services economy.

We know that we cannot rely on a much wider alternative, which is the WTO. In its last set of discussions, it could not even agree on a communiqué about taking forward future services agreements on a WTO basis. We know that the USA and China are in dispute not only on trade in goods, but also on services, and we know, as the noble Lord, Lord Stevenson, said, the complexity of even the European Union introducing services components to third-party trade agreements. If we know that it has been difficult, with the UK as the driving force, to secure agreements with other third countries, why do the Government think that it will be easy for the European Union to do it with us?

This amendment, therefore, is very important. I hope that it will allow the Government to be much clearer, because the services sector of the United Kingdom has, in many respects, been the driving force of growth in the UK, one that we cannot afford to put at risk.

[Lord Hamilton of Epsom (Con)]

My Lords, both the noble Lords, Lord Stevenson and Lord Purvis, have stressed how important the services sector is to the economy of this country and to the exports that we sell. However, anybody involved in the financial services industry would say that they have not been much helped by the single-market provisions of the EU, which have put up many non-tariff barriers, to which the noble Lord, Lord Stevenson, referred. It is probably quite ambitious, if we hope to have a free trade deal with the EU, to think that we are actually going to lower the non-tariff barriers that have been erected during our membership of EU, when the single market was supposed to provide a market for services as well as goods but effectively has not actually done so. I will be very interested to hear what the Minister has to say about this very important sector of the economy. We have not been much blessed by reciprocal agreements with the EU over financial services and very many other services in the past because of the non-tariff barriers that have been erected against them.

--- Later in debate ---

[Lord Bates]

Yes, except that the political declaration was of course part of the withdrawal agreement negotiated with the EU 27, so one hopes that it will form the basis of our future economic partnership.

[Lord Purvis of Tweed]

The noble Lord, Lord Lansley, and I have referred to the WTO. My understanding is that there have been objections to the UK’s submission of services schedules to the WTO and therefore they are unlikely to be certified if we leave at the end of March. We can still trade on them, but they are likely to be uncertified. Can the Minister give a little context about what concessions we might make or what discussions we would have with those countries that have lodged their objections? Clearly, they feel that we will not provide the same kind of market access to UK services as under the existing agreements. We could be starting from a situation that is much worse than simply carrying on with where we are at the moment at the WTO. If the Minister cannot respond at the moment, perhaps he could write.

[Lord Bates]

I am very happy to give further detail on that in the general update between Committee and Report, but, as the noble Lord knows, the schedules were tabled in December followed by a 90-day consultation period. There can be a variety of perspectives on them before they are finally adopted. I will get an update as to where we are on that before Report.

--- Later in debate ---

[Lord Bates]

I may not be able to get a categorical answer on that, but I am happy to undertake to write to the noble Earl ahead of Report to clarify that point.

[Lord Purvis of Tweed]

The Minister said that perhaps this amendment would be better placed elsewhere, but I wondered why, in the sequence of events, the UK did not agree a temporary arrangement with Switzerland on continuity, for example, in the case that I raised earlier in Committee. Instead, the Government have agreed a permanent relationship arrangement with the Swiss for free movement of people for three months a year if they are providing services. Clearly, the Government thought it was not sufficient to wait until we debated the Immigration Bill, when we could have considered that aspect of our relationship with Switzerland and others. But the Government have made a decision. So as my noble friend Lord Fox indicated, it is right that we press the Government much more. Why did the Government make a case for giving Swiss nationals a permanent right of visa-free travel and work for three months a year, but are taking a distinct approach to other countries, including our EU partners?

[Lord Bates]

Obviously, those are discussions that will have to be concluded in the future framework. On the specific point about Switzerland, however, the noble Lord suggested that the services elements were additional to the Government’s policy on immigration as set out in the Immigration Bill. That is not correct; it is not inconsistent with the provisions in that Bill.

On the point made by the noble Earl, Lord Clancarty, on onward movement for EU nationals, the UK pushed strongly for the inclusion of onward movement rights during the first phase of negotiations on citizens’ rights in the withdrawal agreement but the EU was not ready to include them at that time. I made that point about reciprocity earlier. We recognise that onward movement opportunities are an important issue for UK nationals in the EU and we remain committed to raising this during detailed discussions on our future relationship. That is the latest position we have at the present.

--- Later in debate ---

Moved by

[Lord Purvis of Tweed]

67: Clause 6, page 5, line 4, after “in” insert—
“(a)”

[Lord Purvis of Tweed]

My Lords, I shall speak also to Amendment 68. These are probing amendments the purpose of which is to seek clarity not only about the Government’s intentions towards negotiations on the future relationship with the EU, but about the Bill and Clause 6 in particular.

Since Committee started we have seen one tangible example of what leaving the European Union means, because it also means that many European Union institutions are leaving the United Kingdom. When the flags were lowered and folded at the EMA headquarters last week, the director of the Wellcome Trust said that it was:

“A very sad day for the UK, a great day for the Netherlands”,


where the EMA will now have its temporary headquarters. I am fully aware that, in advance of our discussing this amendment today, many decisions have already been made at the EMA. I am also aware that, if we are leaving the European Union, our membership of EU institutions gives rise to significant complexities. However, that does not alter the fact that membership of the EMA is imperative to the United Kingdom’s medicines industry, our patients and consumers of pharmaceuticals.

The EMA is essential to the functioning of the single market for medicines in the EU, and the UK played a pivotal role in that process, not just in hosting the EMA for 23 years but also through the contribution of our scientists and researchers and our regulatory expertise. The agency’s work is vital and will continue to be so, providing EU citizens with effective, safe and high-quality medicines and maintaining a regulatory environment that fosters innovation and development of new medicines. It is vital that the UK continues to have a relationship, and my amendments seek clarity on how the Government see that relationship. We know that we are no longer able to engage as co-rapporteurs for new marketing authorisations applications—this will end regardless of what happens on 29 March 2019, agreement or no agreement. The only way we can stop this is if we continue our membership of the European Union, which is by far the most preferable of all the options, but on the basis that that will not happen, we also know that from March onwards the UK’s position will be considerably weaker.

Last April, the EU 27 completed the redistribution of the UK’s portfolio of more than 370 centrally authorised products to rapporteurs from the EU 27 plus Iceland and Norway. We know that significant damage has already been done. To put this in context, more than 40 million pharmaceutical packages are exported from the UK to the European Union every month, and more than 30 million are imported into the UK from the European Union. The UK pharmaceutical industry is integrated into the regulatory regime of the European Union, and separating this out has been a very painful process. The question remains: what will the relationship be going forward?

Paragraph 24 of the political declaration states—assuming this is still the Government’s position—the following:

“The Parties will also explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECA), and the European Aviation Safety Agency (EASA)”.


What do the Government mean by co-operation? The Bill says—at the moment—that the Government should,

“take all necessary steps … to fully participate … in the European medicines regulatory network”.

It is for the Government to explain the disparity between the two. Why does the political declaration say simply,

“explore the possibility of cooperation”,

when the Bill says that the Government’s objective is full participation in the regulatory network? Why the disparity in language? Was this on the insistence of the European Union, or because the Government did not do what the House of Commons instructed it to do, taking a much stronger position in the Bill, with full participation as their intention?

--- Later in debate ---

[Viscount Younger of Leckie]

I very much take note of what my noble friend has said. I have no doubt that that point, and so many others, will be taken into account when these negotiations commence.

I wanted just to clarify one point that the noble Lord, Lord Purvis, raised on the issue of “all necessary steps”, which is engrained in the clause to which his amendment refers. It is a point that the Government are reflecting on, but I absolutely reaffirm our objective of as close a relationship as possible with the EU in this particular subject. I hope the noble Lord will withdraw his amendment on the basis of those remarks.

[Lord Purvis of Tweed]

I am grateful to the Minister for his characteristically thorough response, except that we still have Clause 6 in limbo to some extent. I am not sure how long the Government can reflect on the language of their Bill, which the Government brought to the House without stating whether they intend to bring forward amendments on Report to change it. I think the noble Lord, Lord Lansley, made a very good point: this is a very significant issue that requires a degree of forewarning on what the Government’s intentions will be. I suspect we may just have to wait; we have pressed the Government enough at this stage with regards to getting some clarity on that point. It is frustrating that we still have some question marks that are being raised over the language of the Government’s legislation.

On the second point, I understand what the Minister says. There will not necessarily be any easy answers to this, but my point was that there can well be a marked difference between co-operation with, and participation in, European institutions—I think this is the point the noble Lord, Lord Lansley, was making, and I share his view. The European Union has been clear on that in the past. Indeed, on the previous day of Committee, my noble friend Lord Foster took part in the debate on communications and the regulatory bodies in the European Union for that. More recently, the European Union has changed its position to make it even harder for third countries to participate in the European agencies. Our bodies co-operate with the Food and Drug Administration in the United States. We have co-operation which is very deep, but when it comes to the key elements of whether medicines or vaccines are licensed, whether the research will be accepted on a reciprocal basis, and whether data is shared and can be legally shared between the two regulatory bodies, there are still issues that need to be identified.

It is reassuring to know that it is the Government’s intent, from the White Paper onwards, that we would have active participation, but at the moment it seems as if the political statement trumps that because it is more recent. However, the Government have reissued their position on active participation and, in advance of waiting to see what they bring forward on Report—if, indeed, they do so—I beg leave to withdraw my amendment.

Amendment 67 withdrawn.

--- Later in debate ---

[Lord Hannay of Chiswick (CB)]

My Lords, I support the amendment in the names of the noble Lords, Lord Stevenson and Lord Purvis, and the noble Lord, Lord Bowness, who asked me to mention that he is unable to be here but that he continues to support the amendments. The noble Lord, Lord Stevenson, introduced the amendments admirably and explained very clearly why those parts of the Taxation (Cross-border Trade) Act which we seek to change are either unnecessary or damaging. He is absolutely right to say that the least important is probably the European Research Group amendment passed at a very late stage in the Commons, which we had no chance to intervene on effectively when it came through this House because it was a money Bill.

However, one part of it makes collection of customs duties possible only if the European Union collects customs duties and gives them to us. The original idea was that we would collect duties on behalf of the European Union; this was an essential part of the—now lost in the mists of time and buried deep under the soil—Chequers plan. The European Research Group amendment, frankly, neutered the Chequers plan, but as the European Union was never going to accept it anyway and made it clear at Salzburg and later that it would not accept it, there seems no point leaving it on the statute book.

The last point made by the noble Lord, Lord Stevenson, relating to Amendment 80 about VAT is actually extremely important. Anyone who seriously believes that preventing the British Government maintaining a VAT union, if you would like to call it that—a system that enables trade across borders between us and the European Union without the need for extremely elaborate VAT calculations, inspections, payments and so on—and doing away with that which exists now and going back to where we were before that existed will not put a huge amount of friction on our trade simply does not understand the realities. The VAT aspect is just as important as the tariff aspect and is separate from it. Unfortunately, the European Research Group—in its usual extraordinarily constructive way—has managed to insert something here that would be really damaging to our interests if it is sustained when we go into negotiations with the European Union about future trade arrangements. The only sensible thing to do—I hope the Government will give careful thought to this—is to get rid of this now and take it out of the Taxation (Cross-border Trade) Act.

We cannot be certain now what the Government and the European Union will do when negotiating our future trade arrangements. The Government are quite right to say they cannot guarantee how that will go. But they can remove this great ball and chain around their ankle, put there by the European Research Group, which would be really damaging to us if it ever came to be a central part of our future trade relationship. To say that relationship will be frictionless if the VAT aspect is not dealt with is just a bad joke, frankly, if you have to have VAT inspections, payments and all that sort of thing on goods that are passing. After all, the VAT levels are different in every member state, and the current system enables us to live with that without slowing down or impeding trade; that would go. So I really hope the Government—if not tonight, at least before Report—could say that they will take out that amendment, which should never have been allowed in. This is the single most important amendment in this group of four.

[Lord Purvis of Tweed]

My Lords, I am very happy to have my name attached to these amendments. It shows the Government there is a degree of cross-party consensus that it is important that these aspects—which, as the noble Lord, Lord Stevenson said, did not get the level of scrutiny they deserved in the Commons—get scrutiny in Parliament. This is after the event, because in effect we are scrutinising legislation, but there is no harm in a bit of post-legislative scrutiny of the taxation Act. In an exchange the Minister and I had during the very brief proceedings in this House on the Taxation (Cross-border Trade) Bill, the Minister said there would be ample opportunities for scrutiny, such as during the upcoming Trade Bill, so we are taking him at his word and offering the Government a chance to give a full-throated defence of the ERG amendments passed in the Commons.

As the noble Lord, Lord Hannay, said, there are perhaps some unintended consequences of these amendments that we now need to properly scrutinise. It is an extraordinary position we find ourselves in where Members of the Government’s party moved amendments to the Government’s Bill that would in effect render the Government’s then policy on the facilitated customs arrangement largely inoperable. Now those same Members are meeting the same Government today to breathe new life into the very systems of a facilitated customs arrangement that they themselves rendered largely inoperable by their amendments. I was struggling for an analogy on the way to the Chamber this afternoon. I could not find one as ridiculous as the position we now find ourselves in. If it is the purpose of the so-called alternative arrangements working group that is now meeting to try to find solutions to the problems that they themselves created, I do not think that any alternative arrangements will come out of this working group.

The ERG amendments now sit most uncomfortably with the process under way, so it is right that we give them proper scrutiny. The Government say one of the amendments they accepted—that there would need to be a stand-alone statute for any customs arrangement agreed with the European Union—is not necessary for any other trade agreements. If I understand it correctly, the positon of the Government is that the free trade agreement with the European Union would undergo a CRaG process, which is an affirmative process to be approved because there is a treaty, but a secondary customs arrangement that would come with that would have to have a stand-alone statute. Why? What is the Government’s rationale for that? In the Commons, the Government simply said they thought it would be appropriate that there would be a stand-alone statute. I do not understand why, so I hope the Government might be able to tell us why that would be the case.

--- Later in debate ---

[Lord Bates]

My Lords, I rise more in hope than expectation of being able to persuade your Lordships. I pick up the sense from the Committee that this is probably something that your Lordships will want to return to in more depth on Report. Perhaps the best service I can offer at this stage is to put on record the Government’s position, respond to some of the precise points and then await further developments as they may unfold between now and Report.

Amendments 77, 78, 79 and 80 relate to changes passed in the other place during the passage of the Taxation (Cross-border Trade) Act 2018. This Act is important legislation as the UK leaves the EU. It enables the Government to create a stand-alone customs regime by ensuring that the UK can charge customs duty on goods, set and vary the rates of custom duty, and suspend or relieve duty in certain circumstances.

I turn now to the substance of the original amendments to the Act, which these amendments seek to remove. Amendment 77 relates to Section 31(5), which requires further parliamentary scrutiny in the event that the power under Section 31(4) is used to implement a customs union with the EU. The Government support the principle of further parliamentary scrutiny in this case. My noble friend Lord Lansley suggested that this was perhaps reflective of the politics of the movement. As a distinguished former Leader of the House in another place, he will be very familiar with how that side of things works. However, as this House is aware, the Government have made it clear that they are not seeking to be in a customs union with the EU as part of our future economic partnership—I say that without wishing to reopen the many debates we have had on “a” and “the”.

It is important to reflect why the Government have taken this view and to consider what leaving the EU means. It means the ability to strike out on our own to forge new trade deals. In order to do this, one important element is to have the ability to set our own tariffs. Being in a customs union would deny the UK this ability and fundamentally undermine our capacity to negotiate new trade deals with old friends and new partners.

The noble Lord kindly outlined, as he saw it, the way in which Amendment 78 arrived, referencing first the Bill and then the amendment. The Government have been clear in their White Paper that the arrangement they are seeking will ensure that both the UK and the EU get their fair share of the revenues from the rest of world trade. Section 54 of the Taxation (Cross-border Trade) Act is in line with the proposals that the Government set out with a view to achieving just that.

Turning to Amendment 79, Section 55 of the Taxation (Cross-border Trade) Act 2018 requires a single UK customs territory. This is a statement of government policy and ensures that the Government will not act incompatibly with the commitments made in the joint report of December 2017, where they committed to protect the constitutional integrity of the UK.

[Lord Purvis of Tweed]

I apologise for interrupting the Minister. I want to add perhaps another degree of lunacy to the several mentioned by the noble Lord, Lord Kerr. New Section 31 of the taxation Act, which Amendment 77 seeks to rectify, contains the following phrase:

“In the case of a customs union between the United Kingdom and the European Union”.


The Government said that that would not apply because the customs territory they are seeking to have will not be a customs union. So even if just to make the legislation neater, it should be taken out.

On defining the scope of the single customs territory, which we are seeking to do, the Government’s Legal Position on the Withdrawal Agreement, command paper 9747, says it is that,

“under which the UK aligns itself with the Union’s external tariff and there can be no tariffs or quantitative restrictions on imports and exports between the UK and the EU. The single customs territory therefore constitutes a customs union for the purposes of GATT19, but it is not the EU’s customs union as defined in Article 28 TFEU”.

It can either be one thing or the other, but the Government’s own document on the legal position says that the customs territory will be a customs union.

[Lord Bates]

I will make some progress, but I will come back to that point—when inspiration arrives.

No UK Government, regardless of their political leanings, could ever accept such a carving up of the United Kingdom—I am referring here of course to the division between Northern Ireland and the Republic of Ireland. Indeed, on 15 October, in another place, the Prime Minister said:

“We have been clear that we cannot agree to anything that threatens the integrity of our United Kingdom, and I am sure that the whole House shares the Government’s view on this. Indeed, the House of Commons set out its view when agreeing unanimously to section 55 in … the Taxation (Cross-border Trade) Act 2018 on a single United Kingdom customs territory, which states: ‘It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain.’ So the message is clear not just from this Government but from the whole House”.—[Official Report, Commons, 15/10/18; col. 410.]


Turning to Amendment 80—before I come to some of the points raised during the debate—the Government’s position is that they will not seek to be in a customs union with the EU. We have debated this issue in this House and in the other place throughout the passage of this Bill—leaving aside the very clear response that is on its way to the noble Lord; he should be prepared for that. As has already been highlighted to the House, at Report stage in the Commons, MPs rejected an amendment seeking to keep the UK in a customs union with the EU.

On the specific points relating to import VAT, it is clear that the Government are highly cognisant of the concerns raised. I will deal with that point now because the noble Lord asked some very good questions on VAT treatment, and it is good to have an opportunity to put the position on the record. Goods from third countries are treated as imports, with VAT due accounted for on import or by the 15th of the following month as duty of customs. This means that, unlike acquisitions, there is a cash-flow impact because traders have to pay the import VAT and potentially recover it later when they submit their VAT returns. It also means that there needs to be an option to pay import VAT on the border, as not all businesses have the necessary guarantee to defer payment until the following month. Generally, import VAT is paid sooner on goods from non-EU countries than on goods from EU countries. This provides a cash-flow benefit to companies importing goods from the EU compared to businesses that import from non-EU countries. Without an UK-EU agreement to retain this treatment, goods entering the UK from the EU would be treated as imports and would be subject to the same rules as businesses moving goods from non-EU countries. This would mean businesses paying VAT on imports from the EU sooner, affecting their cash flow. The Government published a series of technical notices in August 2018 to help businesses prepare for the unlikely event of a no-deal scenario. The VAT technical notice, “VAT for businesses if there’s no Brexit deal”, announced that the Government will introduce postponed accounting for import VAT on goods brought into the UK.

The noble Lord, Lord Stevenson, asked why we accepted Section 54—originally New Clause 36—of the Taxation (Cross-border Trade) Act 2018. The Government did so because it was consistent with our position. It requires the Government to negotiate a reciprocal arrangement for the collection and remittance of VAT, customs and excise duties. The Government have been clear that both the UK and EU should agree a mechanism for the remittance of relevant revenue. The Government set out in their July White Paper that they propose a revenue formula that takes into account goods destined for the UK entering via the EU and goods destined for the EU entering via the UK.

The noble Lord, Lord Purvis, asked whether the customs territory is a customs union under GATT, and he deserves a full answer to his detailed question, so I commit to writing to him. That should be very clear to the noble Lord and all Members of the House—well worth waiting for.

--- Later in debate ---

[Baroness McIntosh of Pickering]

It will be hard, but I do not think we can let the matter go. That is why Amendment 101A should be on the Marshalled List and not consigned to room 101.

[Lord Purvis of Tweed]

My Lords, I wish to make two brief points in this large but important grouping. The first is in response to the point made by the noble Baroness and my noble friend Lord Fox. When the Secretary of State spoke at Second Reading of this Bill in the other place, he indicated that the Government’s position on the anti-dumping remedies regime would be public long before we considered this Bill. We are, to some extent, debating blind in not knowing what the Government’s proposals are. That is regrettable, so if the Minister can give some clarification, that would be very helpful.

The second point is really stimulated by the noble Earl, Lord Kinnoull, and the noble Lord, Lord Lansley: why are the Government continuing with Schedule 4 as it is currently drafted? As the noble Lord, Lord Lansley, said, the proposal would have been that the Secretary of State would appoint the chair of the TRA and then the chair would appoint the chief executive —that is in Schedule 4(2)(1)(a) and Schedule 4(2)(1)(c). If no chair had been appointed, the Secretary of State would appoint. In the Government’s Statement on 26 October, they announced the appointment of both the chair designate and the chief executive designate at the same time. I do not know how that interacts with this legislation, and on what basis the chief executive designate was appointed. I am not questioning those two individuals. If the intention was to have a truly independent body, the fact that the first chair had been the UK Trade & Investment representative raises some questions. I am not questioning the quality of the appointments. However, I am not sure how the fact that the announcement of both appointments was made on the same day interacts with the Bill, and on what basis both the chair and the chief executive were appointed as designate at the same time. As the noble Lord, Lord Lansley, said, either that is not consistent with the Bill, so the Government acted beyond how they said they would act, or perhaps we should just delete this aspect in its entirety for the sake of neatness.

[Baroness Neville-Rolfe]

On Amendment 101A, I agree with proposed new subsection 1(c), where you have,

“a chief executive appointed by the Chair with the approval of the Secretary of State or, if the first Chair has not been appointed, by the Secretary of State”.

The latter has already happened, so, as the noble Lord said, that becomes redundant. However, I am not convinced that all the executive members should be appointed by the chair without reference to Ministers. I have been involved in lots of appointments in different bodies over time, and the fact of the matter is that normally appointments are put forward and are approved ministerially, and this helps make the appointments sensible, enduring and independent.

For the same reason, I do not agree with the suggestion of the noble Baroness, Lady Brown, that we should require representatives of different groups. I can see exactly what she is trying to achieve, which is to have good, sensible people who would care about economics, people and devolved Administrations. However, my own experience is that if you restrain yourself in this way, you find that you are looking for somebody who has to be in a specific category, maybe there is nobody of quality at that time—especially as the pay rates in quangos are quite low compared with other opportunities for these people—and you get yourself into difficulty. I would favour simplicity, and independence achieved by having a separate agency, whatever my views may be on that.

--- Later in debate ---

[Baroness Fairhead]

I am happy to take that back. I have heard the point. I asked whether there was a practice and was advised that this was the view we had arrived at, but I will certainly reflect on what the noble Lord said and take it back for further consideration.

On Amendment 104, tabled by the noble Lord, Lord McNicol, it is important that the Secretary of State has the ability to ensure that the TRA has the right leadership in place. Again, I reassure the noble Lord that the practices and procedures will be followed.

My noble friend Lord Lansley speculated on whether we could use an existing arm’s-length body rather than create a new one. There are two reasons why we believe we need to create a new non-departmental public body. First, no existing NDPB possesses the required pool of talent and expertise, or, secondly, offers the right balance of independence and ministerial oversight, to deliver the trade remedies framework as set out in the TCBT Act. I can confirm that we reached that decision following a thorough review of the arm’s-length bodies landscape.

Amendments 105 and 106 refer to the Secretary of State, rather than the chair, appointing executive members of the TRA board, and would therefore expand the Secretary of State’s appointment powers. We believe that might undermine the TRA’s independence. It would also be undesirable to include a statutory requirement to have regard to this set of criteria, as it might be unnecessarily restrictive. My noble friend Lady Neville-Rolfe has great expertise in this area. As she knows, it is important to have the right skills and the right blend on a board. For example, it may be important for some executive members to have HR or finance experience to ensure the TRA’s smooth operation. This would be a decision for the TRA chair.

Turning to Amendment 107, under paragraphs 9 and 10 of Schedule 4, the TRA chair is able to remove an executive member of the TRA board, and the Secretary of State a non-executive member, if they consider that person,

“unable or unfit to carry out the functions of the office”.

This already allows the TRA chair and the Secretary of State to determine whether to remove board members in the event that they become insolvent, receive a criminal conviction or are otherwise deemed unsuitable. We therefore do not believe that this amendment is necessary. In addition, all members of the TRA will be required to comply with the Cabinet Office’s Code of Conduct for Board Members of Public Bodies, which sets out the seven principles of public life that should govern the behaviour of public officeholders.

Turning to Amendment 108, let me assure noble Lords that the TRA will be required to follow the relevant provisions in Managing Public Money, which sets out that arm’s-length bodies must maintain a register of gifts. We would also expect the TRA to record in its annual report any gifts it receives.

I thank the noble Lord, Lord Stevenson, for tabling Amendment 109. We welcome the devolved Administrations’ interest in the TRA and understand the need to ensure that they are able to engage with it in the right way. I can confirm that the Secretary of State has committed to sharing the TRA’s annual report with the devolved Administrations once he has received it. I can also confirm that we have been in contact with, and will shortly be writing to, the devolved Administrations setting out further commitments.

On Amendment 110, tabled by the noble Lord, Lord McNicol, there are certain situations where the Secretary of State will need to issue guidance to the TRA. That is why it would not be appropriate to set out certain detail in legislation. Issuing guidance instead of legislation would give the TRA the operational flexibility it needs to be able to decide how to deal with matters on a case-by-case basis. However, to protect the TRA’s independence, and to ensure that this power is used only in appropriate circumstances, we have placed clear statutory restrictions on the Secretary of State’s ability to issue that guidance.

I am aware that I possibly have not fully answered the question from the noble Baroness, Lady Brown of Cambridge. We recognise the critical role played by producers and manufacturers: that is exactly why we have put a system in place and engaged extensively. We look forward to continuing to do so.

My noble friend Lady McIntosh suggested that it was not adequate that the Secretary of State was required only to have regard to the independence, impartiality and expertise of the TRA. The imposition of a duty on the Secretary of State is a common approach and can be found in other relevant legislation. For example, the Higher Education and Research Act 2017 requires the Secretary of State to have regard to the need to protect the institutional autonomy of English higher education providers when issuing guidance to the Office for Students. These are statutory requirements and cannot be ignored.

[Lord Purvis of Tweed]

I do not wish to make a glib point, but the Minister has referred to the Office for Students. The episode in relation to that office should remind us why we take seriously these aspects about the recruitment of those who will be the most senior in the TRA office. The Office for Students should be a good example for the Government of how an appointment process, while it might be prescribed in legislation, can be conducted very badly in practice. We are trying to avoid a repeat of what happened with the Office for Students.

[Baroness Fairhead]

I am grateful for that clarification, but that is one example that was just plucked out and it has a clear statutory requirement.

On the basis of the information I have given and my commitment to take some of these points back for reflection, I ask noble Lords not to press their amendments.

--- Later in debate ---

[Lord Stevenson of Balmacara]

By this stage of the proceedings the Minister is usually tearing up her notes and packing her bag while the team are leaving the Box, and the Committee is allowed to descend into a sort of torpidity at the end of a long and heavy day—day four, in this case—while we heave a sigh of relief. However, I have always wanted to table an amendment about the commencement of a Bill because it is something that we always forget to look at.

I was mulling this over a few weeks ago and thinking about what aspects of commencement one could look at. It is all very straightforward, although Clause 7(1) has a strange thing where it says:

“Regulations under section 1(1) or 2(1) may … make transitional, transitory or saving provision”.


I was wondering what on earth they were and thinking about a suitable probing amendment when I happened to run into the noble Lord, Lord Hannay, who said, “I’ve been thinking about commencement and we ought to do something about it”. Out of that we hatched this wonderful amendment, which is the last one that we are going to move tonight, and I hope the Committee will accept it as it stands. It provides a sensible and clear exposition about what position Ministers should be in before they begin to implement these procedures. It is very simple, inserting a new clause further to Clause 15(2), which says that the powers that would otherwise,

“come into force on such day as a Minister of the Crown may by regulations made by statutory instrument appoint; and different days may be appointed for different purposes”,

Those are two quite clear conditions that have to be met. I beg to move.

[Lord Purvis of Tweed]

My Lords, I am happy to contribute to the successful realisation of the noble Lord’s ambition to have an amendment on commencement.

I want to make two final comments because I know the Committee has been working hard in offering scrutiny to the Bill, but before I do so I wish to thank the Ministers, and indeed the whole team, who have tried to answer on what was on some occasions an impossible situation. Earlier the noble Lord, Lord Bates, aptly commented on how fast things have been moving, and I think the Ministers have had a degree of sympathy from the Committee. However, this is serious. As the noble Baroness, Lady Neville-Rolfe, said, businesses need urgency as they operate. They need urgency in their day-to-day practices but also when it comes to knowing what the Government’s position is.

In advance of the next stage, if there is one, it is helpful that all the usual channels are here. I do not think the Committee needs any reminding of the decision of this House, very clearly stated, that greater information is needed on both the Government’s policy and intentions on how it sees trade agreements being put in place, as well as the relationship with the devolved Administrations. If that is not forthcoming, the House has sent a clear signal that there will not be a Report stage. However, on the basis that there will be, the information that is needed on the current position on the intended trade agreements needs to be forthcoming. There also needs to be clarity on—if we are going to be crashing out on WTO rules—the position of operating on non-certified WTO rules.

The relationship with the devolved Administrations, while a little clearer, needs more fleshing out. This is not just about constitutional courtesies with the Scottish and Welsh Parliaments and Northern Ireland authorities. Trade agreements could disproportionately affect parts of the United Kingdom, which will affect livelihoods and public services in those areas. They need to be not just consulted, but involved. Contrary to the Government simply wanting continuity agreements for trading relationships, we also want to see the rolling over of the same amount of parliamentary scrutiny that the European Parliament would afford trade agreements, which this Parliament will be denied unless this Bill is amended.

Finally, we need to be looking forward to the future. The noble Lord, Lord Lansley, and others, have made very constructive contributions. If we are to have a customs arrangement—which, if it covers the majority of our trade with our biggest market, will be a customs union—then the clarity about how that will be conducted will be important. While we are at the end of the Committee stage, I hope that the Minister has received strong signals that there are still questions that need to be answered. Those answers need to be forthcoming before this House will consider the Report stage.

[Lord Hannay of Chiswick]

My Lords, I am not sure that the noble Lord, Lord Stevenson, did me a great favour by alleging that I had partial paternity of this amendment, but I will leave that to one side. It is a very simple amendment, setting in statute the view that has been expressed twice by this House, by massive majorities, and once in the House of Commons last week: that leaving the European Union on 29 March by default without an agreement should be excluded. That is what this amendment proposes to do. It does not prevent this Act, as it would be, coming into effect in the event of the meaningful process being successfully completed in the other place. Nor does it do so if the other place should, in the extraordinarily unlikely circumstances, actually decide that we should leave without a deal. However, it rules out leaving by default as a condition for the entry into force of the provisions in this Act. No more needs to be said, and I have a feeling that we may wish to debate that rather more decisively on Report.

Overseas Aid

Lord Purvis of Tweed Excerpts

Wednesday 30th January 2019 Lords Chamber

[Lord Bates]

Of course, Priti Patel, sadly, resigned as Secretary of State for Development a couple of years ago. However, Penny Mordaunt is absolutely committed to the 0.7%—delivered by his kinsmen in Abercrombie House up in Scotland—which is of crucial importance. We remain committed to it.

[Lord Purvis of Tweed (LD)]

I was the Member who took the Act through the House, and I was able to do so only because of the wide cross-party consensus in this House—including the Minister’s predecessor, my noble friend Lady Northover, the Labour Front Bench and the Minister himself in another capacity. That consensus had a core, which could be a component of British leadership. We are the only developed country in the world to meet this target and to enshrine in law that we will continue to do so. Therefore, language such as “unsustainable” raises questions as to whether other developed economies should seek to meet their obligations. The Minister and I are wearing our SDG badges close to our hearts. We know that under the current expenditure profile, those targets will not be met. British leadership in this area can be critical. Can the Minister say categorically that language such as “unsustainable to meet our obligations” will not be heard from a British Cabinet Minister?

[Lord Bates]

First, I pay tribute to the noble Lord for taking through that legislation, which I was delighted to support myself from the Back Benches; it was crucially important. We need to keep at the forefront of our minds that there is a huge need out there. We need to build on the commitments we have already given and the pledges we have made, but as he rightly points out, we also need to encourage others to step up to the plate. Increasingly, however, we see that Governments cannot do this alone. We need to leverage in trade and private investment to bridge that gap if we are to lift people out of poverty.

Trade Bill

Lord Purvis of Tweed Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 30th January 2019 Lords Chamber

[Lord Bates]

Yes, of course. I will probably miraculously sit down sometime around 10.39 pm. I think that is the convention. Let me go through as much as I can. I apologise to Members of the Committee and to the reporters of our proceedings for the pace at which I am going.

The noble Lord, Lord McNicol, and my noble friend Lord Lansley referred to the common transit area. As my noble friend hinted, this is an area where we have some good news, because the UK has agreed the common transit convention with the secretariat. Letters were received on 19 December 2018. That is taking shape.

The noble Baroness, Lady Kramer, talked about financial services. The Government are seeking a close future relationship on financial services with the EU that reflects our uniquely integrated markets and respects UK and EU autonomy. The political declaration includes commitments to close and structured co-operation on regulatory and supervisory matters, grounded in the future economic partnership. There will be a certain Groundhog Day feeling to the answers to a lot of these questions, because I will simply say that they are a matter for the future economic relationship, which we hope will be deep and extensive across all these headings. Of course, that is for another piece, or other pieces, of legislation.

The noble Baroness, Lady Randerson, spoke to her amendments. On haulage, the Government have been clear that we want to maintain the existing levels of access for UK and EU hauliers. A mutually beneficial road freight agreement with the EU will support the objective of frictionless trade. I very much take the point that the noble Baroness made about us often talking about Dover in the context of roll-on, roll-off, but there is strategic importance, particularly on the island of Ireland, for Holyhead and movements through there. However, we understand that we need the reassurance that we will have in place the arrangements needed to maintain continued access. On that basis, we welcome the contingency proposals being made by the European Commission on the basis that the Government are seeking a very close partnership based on reciprocal and binding agreements that protect the rights of road hauliers to access EU markets and vice versa.

The noble Lord, Lord McNicol, also talked about rail services, which are mentioned in Amendment 40. The Government are carefully considering the potential implications of leaving the EU, including implications for the continuation of cross-border rail. The noble Lord, Lord Fox, also referred to this through the Channel Tunnel and on the island of Ireland. I assure noble Lords that we understand the importance of maintaining the continuity of these important cross-border rail services, and we will continue to negotiate with our European partners to secure the best possible outcome.

In addressing Amendment 43, the noble Lord, Lord Fox, talked about open and fair competition. The Government recognise that commitments to open and fair competition are fundamental to all trading relationships; continuing the control of anti-competitive subsidies and creating a UK-wide subsidy control framework are crucially important. To support the desire for a future relationship, we propose rule alignment on state aid to be enforced by the Competition and Markets Authority, which already has a strong reputation in the UK. We also have strong proposals in other areas, including non-regression provisions for the environment, social issues and employment to ensure that we maintain the highest of standards, as my noble friend Lord Lansley requested.

Turning to Amendment 62, my noble friend Lord Lansley and the noble Lord, Lord Stevenson, said that it raised important issues for the future relationship with the EU, by providing that the patients should not be disadvantaged. We have given commitments that patients should not be disadvantaged; industry should be able to get its products into the UK market as quickly as possible, and we continue to play a leading role in promoting public health. The Government have already set out their aim to secure participation in the European Medicines Agency. The political declaration sets out the mutual commitment of the UK and the EU to explore working together in future medicines regulation and negotiating the UK’s ongoing co-operation.

[Lord Purvis of Tweed (LD)]

Will the Minister clarify what he said about seeking to participate in the European Medicines Agency? The noble Baroness, Lady Fairhead, in an earlier grouping, said it was the intention to remove Clause 6 from the Bill, or at least bring forward different language about what that participation means. It is pertinent to the point my noble friend Lord Fox made. If it is the Government’s intention to participate in many of these institutions, what do they envisage that participation mechanism to be? If the Government are seeking to change Clause 6, they have to be clear about how they intend that participation to operate.

[Lord Bates]

My noble friend Lady Fairhead made very clear our hesitation in the other place when this amendment was proposed, but it is now in the Bill. We see the commitment to all necessary steps in relation to the European Medicines Agency. We have been very clear that we do not wish to see that extended to other agencies, but it is there in the Bill at present.

[Lord Purvis of Tweed]

Just so that we know what might be coming on Report, is it the Government’s intention to bring forward amendments, as the noble Baroness, Lady Fairhead, said, to remove this?

[Lord Bates]

Our position is simply that we are committed to as close a relationship as possible with the European Medicines Agency. We see its value, we are committed to it, and it is in the Bill. We have made our positions clear on that, in terms of how we would view it if similar amendments were proposed for other agencies.

Amendment 39, on mutual recognition of professional qualifications, was spoken to by my noble friends Lady Hooper and Lady McIntosh and by the noble Lords, Lord McNicol and Lord Fox. The Government have clearly set out their objectives for mutual recognition of professional qualifications in the future relationship with the EU. We recognise the importance of mutual recognition for many sectors of our economy and the public sector. It offers all individuals working in regulated professions a means of having their qualifications recognised so that they can continue to provide valuable services. However, Her Majesty’s Government must be in a position to negotiate the best possible outcome. I note the risk that this amendment could undermine that objective and compel Her Majesty’s Government to reject highly beneficial agreements on mutual recognition simply because an agreement delivered its possible outcome in a way that differed from the detailed requirement set out in this amendment.