Basel 3.1
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Lord Livermore (Lab)
We very much support small businesses, and we will do all that we can to support them in this economy. We will come forward soon with a small businesses strategy that will set out this Government’s approach. I do not think that the delay to Basel 3.1 is directly relevant to that issue. It is about ensuring that we have a level playing field and that we maintain the competitiveness and growth objectives that we have set out.
Lord Purvis of Tweed (LD)
My Lords, further to my noble friend’s question, this will apply to businesses that are making more than €20 billion in profits, operating within the United Kingdom and not paying their fair share of tax here. Why are the Government asking another country—under the Trump Administration—to have a veto over how we tax businesses that are operating in the UK for our benefit?
UK-US Trade and Tariffs
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Lord Hunt of Wirral (Con)
My Lords, I regret to tell the Minister that the Statement that we heard in the other place, which she has just repeated, has only increased the level of uncertainty that British businesses, workers and families are feeling at this critical time. The announcement of new tariffs is a blow to our economy, making goods more expensive, weakening demand and devaluing the pound in people’s pockets. Tariffs make us all poorer. Free trade, not protectionism, has driven Britain’s prosperity for generations and lifted billions of people worldwide out of poverty.
At a time when our economy is already fragile, I agree with the noble Baroness and her ministerial colleagues that we need cool heads. While I welcome the Government’s stated commitment to securing a trade deal with our closest ally and largest single-country trading partner, we must surely now be honest about what has actually happened. The truth is that the Government have not secured any special treatment from the White House. The Secretary of State and the Minister speak of success, but surely there is little to celebrate. Britain now finds itself in the same tariff band as countries such as Kosovo, Costa Rica and the Congo.
The impact of these tariffs on our industries will be severe. The automotive sector remains burdened by a 25% tariff on £8 billion-worth of car and auto parts exports. Our steel and aluminium industries continue to face 25% on exports, including over £2 billion of derivative products containing high steel and aluminium content. On a volume-weighted basis, our total £60 billion in UK exports will have an effective tax of what I calculate to be 13%.
This is not a moment of triumph for the Government. It is, I suppose, a moment that vindicates those who argued for Britain to have control over its own trade policy, but let us be clear: having control over trade policy means something only if that control is used effectively and, thus far, the Government have failed to do so.
Last week, the Office for Budget Responsibility warned that tariffs such as these could knock up to 1% off GDP. This comes at a time when the UK is already in a per-capita recession and when market confidence is shaky. Our businesses, which should be driving economic recovery, are instead facing increasing headwinds caused by this Government’s decisions.
Instead of supporting businesses, this Government are placing additional burdens upon them. Business taxes have risen, business rates have more than doubled for many, the so-called family business death tax has been introduced, and flawed recycling charges are adding yet another layer of unnecessary cost and bureaucracy. With these challenges mounting, it is no surprise at all that business confidence remains at rock bottom.
Then there is the issue of energy costs, which we have just been discussing. A manufacturer in Birmingham, UK now faces energy bills four times higher than a competitor in Birmingham, Alabama. The Government should be addressing this cost disparity, which has a far greater impact than tariffs; instead, businesses are being left to struggle on their own.
Only last week, we debated the Second Reading of what I termed the unemployment Bill. Overseen by the Secretary of State, it looms large: the OBR has not even been able to quantify how damaging the Bill will be for the economy. We do not need more uncertainty, more costs or more bureaucracy imposed on businesses. I suppose the Government felt obliged to rush that Bill through in their first 100 days and are now panicking and trying to push the Bill through by secondary legislation. Well, I leave that to the Committees of this House to deliver their verdict on.
Labour will, no doubt, claim that these tariffs are beyond its control. But let us remember that the previous Government had already made significant progress towards a US-UK trade deal. When President Trump was last in office, negotiations had reached an advanced stage. However, when the Democrat Party and President Biden were elected, his Administration ended all free trade negotiations. The unfortunate reality is that we could not implement a US trade deal until we finally left the EU, which coincided with the end of President Trump’s first term.
Well, the ball is now in the Government’s court. What have they done? I would contend from these Benches that, instead of securing a deal, they have wasted months; instead of acting swiftly to engage with the US Administration, they delayed; instead of protecting British businesses, they have let them down.
Their failure means that British businesses will now lose out and British jobs will be put at risk. The burden of these tariffs will not be borne by Ministers sitting comfortably in Whitehall but by the small manufacturers, the steelworkers, the automotive engineers and the entrepreneurs who drive our economy forward.
There is another issue that the Government must address: retaliatory tariffs. The Government must recognise the harm that a retaliatory trade war would inflict on British businesses and consumers. Escalating this dispute will not help our exporters; it will only drive up costs, disrupt supply chains and make it even harder for British firms to compete globally.
Will the Minister give this House a clear, binding guarantee that Britain will not escalate the situation by imposing retaliatory tariffs on US goods? The last thing businesses need is yet another wave of uncertainty. The Government must take the responsible path, de-escalate tensions, negotiate a fair outcome and avoid worsening an already dire situation. In her Statement, she referred to the fact that the Government are now launching a consultation period on the dangers of retaliatory action. Why on earth are we embarking on such an exercise? Can we please be brought up to date with the website that has been opened specially today? Indeed, the Statement warned us that more input would be published today. Can she please bring us up to date with what has happened?
May I mention the Windsor Framework? We have to consider the effect on Northern Ireland of what has happened today. Under that framework, there is a duty reimbursement scheme available to assist businesses affected by these tariffs. However, many businesses are still unaware of that support. The Government must do more than just acknowledge its existence. They have to take proactive steps to raise awareness for businesses in Northern Ireland and ensure that the scheme is as streamlined and accessible as possible for businesses trying to navigate these challenging conditions.
Finally, has the Minister read the comments made today by the chief executive of Make UK, the director-general of the BCC, the advisers at the IoD and many other trade bodies, who say what a black day this is for British business. What help can the Government give to lift the veil of uncertainty that they have created today by this Statement?
Lord Purvis of Tweed (LD)
My Lords, this is my first opportunity to ask the Minister questions. I give her my belated welcome to the portfolio. She is in a new world when it comes to the unjustified and aggressive trade war that the United States has been launching. My party was forged out of a campaign for free trade. We broke with others when they introduced protectionism. Our principled position on Brexit was based on a rejection of new barriers, new costs and more bureaucracy for businesses and uncertainty for consumers. These same principles apply to our revulsion at the unwarranted and unjustified applications of the new tariffs.
They are, of course, on top of the pre-announced automotive, steel and aluminium tariffs. We should also recall the existing tariffs on UK exports to the United States. It means that, to take one example that is very close to my heart as I represented a textile-producing constituency in Scotland, the cashmere industry, the highest-quality sustainable product in the world now has a 35% tax tariff on exporting to the United States. What support are the Government intending to provide to some of our key exporting sectors now, rather than waiting until after a consultation? These Benches believe that we should have been consulting in advance of the announcement, as Canada did, not after it, so that we had a prepared proposal for a clear statement of intent, rather than a hope for the best in any agreement.
Part of the Statement today that surprised and disappointed me was the news that only if we have not secured an economic agreement with the US will we propose corrective measures. This means that the timetable of UK actions is in the hands of the Trump Administration, not in the hands of our Government, and that surely is not acceptable. It is our duty to represent the interests of British industry and consumers, not the United States.
Can I also ask for clear language? It now seems that we are simply seeking an economic agreement rather than a free trade agreement. What are we seeking from the Trump Administration? There is a world of difference between a comprehensive free trade agreement and cobbling together a number of bilateral agreements on services and goods simply to make a show of reaching some form of agreement. If the Minister could be clear in the language, I would be grateful.
Furthermore, I sincerely believe that we have showed too much of our market offer to the United States, so it can see clearly the areas where we are willing to cede decision-making: closing tax avoidance for UK companies with profits over €20 billion that are not paying their fair share of tax within the United Kingdom; aligning our AI and data regulations to what the Trump Administration want rather than what this Parliament has legislated for; and reducing agricultural and food standards. Every other country with which we may seek an FTA now knows the areas where this Government are open to ceding ground. That, surely, is regrettable.
Two responses today require more scrutiny: one from the Government and one from the Conservatives. The Statement says that the wholly unjustified tariff rate “vindicates” the Government’s “pragmatic approach”, but we know that, as far as the Trump Administration are concerned, the United Kingdom is in the same category as El Salvador, Guatemala and Uruguay—none of which even flourished a cringeworthy letter from a King in the Oval Office. The worst element of the Trump Administration applying the 10% tariffs is that we are now in the same category as Russia, for goodness’ sake. How is it a vindication of our pragmatic approach if Trump sees trading with the United Kingdom as the same as trading with Russia?
The second argument we have heard today, including a bit that we got from the noble Lord, is that we may have fared better because we are out of the EU rather than in it—but that is only if we are starting from a higher base than what the reality is, with the biggest barriers that we have erected for our near trading neighbours. But the critical point is that the United Kingdom, for goods in particular but for services too, is one of the most interconnected trading economies in the world. Nearly 70% of our exports to the EU are intermediate input to the production of other goods and services, and the majority of UK goods manufactured in the UK are intermediate. Therefore, the majority of the goods that we make source parts and components from the EU, so we are impacted by the 20%. Will the Government’s assessment of the impact be not just a sectoral analysis but a full trade analysis, including all the impacts of what will be applied to our biggest trading market?
Even the former Conservative Trade Minister Greg Hands said today that, as a result of Brexit, we now have a more complex means by which we are steering a path in the US-EU trade war. It is even harder, because the more concessions we give to the United States, the further we move away from the TCA. What is the Government’s assessment of trying to triangulate between the EU and the US? We on these Benches believe that the response has to be deeper co-ordination with the European Union.
Before I close, an element that has not been mentioned today, which is particularly close to my heart, having co-chaired the All-Party Parliamentary Group on Trade out of Poverty for so long, is that this Parliament has debated long and hard about our relationship with developing economies, many of which are being hit very hard by the Trump Administration, and the response of this Government is to cut official development assistance and technical support for trade facilitation for developing economies. Our response is to be silent to the Trump Administration but to cut trade facilitation for emerging economies. This cannot be right for the United Kingdom as a free-trading nation.
As I close, my appeal to the Minister is that we need urgent full co-ordination with Canada and the European Union, not necessarily just on the potential corrective mechanisms that may well be necessary and we believe will be justified, but to ensure that there are fully co-ordinated anti-coercion measures. These are not trade measures being introduced by the Trump Administration; they are economic coercion measures, and it was a tragedy that the previous Government dropped the anti-coercion instrument that we could have continued as a result of Brexit. We need urgent clarification on that.
Finally, we need a European Union-UK-Canada co-ordinated response—I will call it Eureka. In response to the Trump Administration, we need a Eureka moment, not just a wait-and-see approach.
Baroness Gustafsson (Lab)
I thank the noble Lords, Lord Hunt and Lord Purvis, for their contributions. I feel that what I hear is a genuine, shared passion for supporting our businesses here in the UK, but also a sadness at barriers to the open trade that so many of us have valued for so long.
There is a shared desire to avoid escalating retaliatory tariffs. The UK and the US have shared a fair and balanced relationship, one that has benefited both sides for many decades. We will both benefit as we strengthen this relationship further. Of course, we are disappointed by the US announcement last night of the 10% reciprocal tariff on UK exports and by the 25% global tariff on cars that has been imposed today. This follows tariffs of 25% on US imports of steel, aluminium and derivative products that were announced on 12 March.
I understand the desire for clarity and urgency, and for a simple answer that can allay the many fears that are rightly troubling businesses at the moment, but this is a complicated environment and a complicated problem. Unfortunately, complicated problems rarely have simple answers. The reality is that it is going to be a co-ordinated effort, where we work out, together with our businesses and industries, a solution that is thoughtful, pragmatic and calm, informed by the data and not by the emotions that many of us may be feeling.
The Secretary of State has been clear that we will always act in the best interests of UK businesses and consumers. As your Lordships know, throughout the last few weeks the Government have been fully focused on discussions on an economic deal with the US. We remain committed to doing this deal, which we hope will mitigate some of the impact that has been announced. I hope that, as the noble Lord, Lord Hunt, referred to, the House is not reading that there is cause for celebration in any of the news that we have announced. I hear the temptation to turn to the other names on the list of tariffs and draw comparisons, but that temptation is to turn inwards and point fingers. I urge all of us to avoid that temptation and instead think about how we work together with that wider community to support all our domestic economies.
We reserve the right to take action if a deal is ultimately not secured. That is a key part of why we are today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step, necessary for us to keep all options on the table, but also to form our understanding of how those key areas will be influenced. This exercise will also give businesses the chance to have their say and influence the design of any possible UK response. After all, we are acting on behalf of those UK businesses. I hear the call by the noble Lord, Lord Hunt, that the ball is now in our court. The Government’s preference is to resolve these tariffs through a mutually beneficial deal. They have also been clear that they will always stand up for that national interest. This is why that request for input is so important: to inform the Government’s preparation of their options.
We know that it is a concerning time for both businesses and consumers, but it is important to note that this Government have made plenty of decisions which will have a positive impact on the economy in the weeks and months ahead. We are putting more pounds in people’s pockets by freezing fuel duty; boosting the minimum wage by up to £1,400 a year; and protecting working people, with no rise in their national insurance, income tax or VAT. Living standards are growing at their fastest rate in two years and the Spring Statement showed that each person will be £500 better off by the end of the Parliament. The OBR has said that the economy will grow every year from 2026 and that our planning reforms will lead to a 0.2% increase of GDP, worth £6.8 billion.
The UK remains an open, outward-looking nation and one of the world’s leading advocates for free trade. We have also joined the CPTPP trading bloc, and we continue to pursue export-boosting trade deals with the Gulf Co-operation Council and industrial giants such as India. Our number one priority is growing the UK economy. A positive trading relationship with all our trading partners, including the US, the EU and all these others, will help us deliver that. I hear the call for a full trade analysis and understanding of when future export opportunities will be available to us.
As we think about the impact on the automotive industry, we think about our key industries in the UK. We have used our industrial strategy to strengthen the UK’s automotive competitiveness. The Budget committed over £2 billion of capital and R&D funding to 2030 for zero-emission vehicle manufacturing and its supply chains. This long-term commitment is a vote of confidence in our automotive industry, supporting investment in its transformation as we accelerate to zero-emission vehicles. There was also over £300 million announced in the Budget to drive uptake of electric vehicles.
Our industrial strategy will continue to be unreservedly pro-business, engaging on complex issues that are barriers to investment, such as energy prices and access to finance and skills—all through the lens of promoting investment. Getting the transition right and supporting the growth of the electric vehicle market in the UK could unlock a multibillion-pound industry and deliver high-paid jobs for decades to come.
How will this impact our neighbours? I am thinking about the Windsor Framework in particular, and the opportunities for businesses to protect themselves through the Windsor Framework duty reimbursement scheme that has been referred to. This scheme is there to support businesses, ensuring that they can use it to mitigate any costs that may come from possible tariffs. Businesses should be able to contact HMRC for any information about the scheme. It will of course be a formative part of the advice to businesses we are giving through the great.gov website.
I understand that working closely with businesses to make sure they have all the information they need is really important. The request for input has been opened and that information is already becoming available. It came online today, and we have already seen a significant number of requests and input coming through that process.
This Government were elected to bring security back to working people’s lives. Businesses and workers alike are looking to this Government to act in the national interest and navigate Britain through this period. We will continue to progress on securing a deal that secures our industries while keeping all our options on the table.
Spring Statement
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Lord Livermore (Lab)
I am grateful to the noble Lord for his question. I hate to correct him, but I did not say that the £1 billion is not included in the OBR’s forecast. I said that it is not included in the OBR’s impact assessment; that is something different. The £1 billion is included in its forecast, and he is right to say that the Employment Rights Bill is not. The OBR gives a commentary on it, which he quotes from, but the Employment Rights Bill is not included in the forecast because it is still working its way through Parliament—it has its Second Reading today. We are confident that the Bill will result in ordinary working people having more money in their pockets and the security to spend that money by not having to worry, from week to week, whether they will be in work or how many hours they will get.
Lord Purvis of Tweed (LD)
My Lords, last week, the Development Minister told this Chamber that it was government policy to return ODA to the legally required 0.7% when the fiscal circumstances allowed—meaning when the Government’s fiscal tests are met. However, yesterday, the Green Book showed a pound-for-pound cut in ODA, linked with another policy expenditure. Can the Treasury Minister be very specific that, if the Government’s fiscal tests are met within this Parliament, we will return ODA to 0.7% in this Parliament?
Lord Livermore (Lab)
I am grateful to the noble Lord. The two statements that he makes are perfectly consistent with each other. We are absolutely committed to returning ODA to 0.7% when the fiscal conditions allow and we are currently switching ODA spending into defence spending. Those two things are perfectly consistent.
Strategic Priorities Statement: Defence
Lord Purvis of Tweed Excerpts(1 week, 4 days ago)
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Lord Livermore (Lab)
I am very happy to agree with my noble friend’s assessment of the damage that Brexit has done to our economy.
Lord Purvis of Tweed (LD)
My Lords, many of our European partners, particularly Poland, are seeking to diversify satellite technology to overcome the reliance on certain technologies in the context of increased defence expenditure. Surely that would also be the United Kingdom’s ambition. Can the Minister confirm that, as we increase our defence expenditure—which I welcome—there is now the opportunity to work much closer with our European allies, rather than using part of that increased expenditure on Starlink, which is owned by Elon Musk?
Financial Assistance to Ukraine Bill
Lord Purvis of Tweed ExcerptsWednesday 15th January 2025
(2 months, 3 weeks ago)
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Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Lord with his very considered remarks, most which I agree with entirely. His points reflected the three words that I thought could sum up this debate—the need for urgency and clarity, and at scale. These are the priority areas where we would wish to see the Government continue to move. Notwithstanding, as my noble friend Lady Smith said, that we support the Government’s work on this entirely, those aspects, the next steps on how we are going to be moving at pace, will be of fundamental importance.
We are still technically debating the regret amendment from the noble Lord, Lord Blencathra. As a long-standing former Minister and Chief Whip, he knows that this is a Budget Bill and that he cannot amend it in this place, but, as anybody who has seen the speakers’ list will know, he also knows how to get the last word. I commend him for that, because these Benches agree with the thrust of his argument. If there is anything that we can do to help him persuade his noble friends on the Front Bench to support our positions on seizure, he can count on our support.
The debate also had the outstanding maiden speech by the noble Baroness, Lady Batters. My former constituency was on the north side of the border, so I used to deal with NFU Scotland rather than the NFU. I recall that at my first meeting with NFU Scotland as a brand-new Member of the Scottish Parliament, I thought that I had listened attentively, but it was rather complicated, with lots of very difficult, technical words. I jotted them down, but at the end, I went home and had to ring up the then president of NFU Scotland, who was the noble Baroness’s counterpart. I said, “I’m really sorry. I’ve looked at my notes and can’t now remember what the animal disease or the animal medicine is, because the words are so complicated”. He said, “Jeremy, you don’t need to understand what we say; you just need to understand that you do what we say”. With the clarity of the noble Baroness’s contribution, I hope that Ministers will do what she says in this House, and she is most welcome.
The sober element of this debate was the recognition that the toll on the Ukrainian economy and country has been enormous. We often try to get a picture of what the toll is on the Russian economy; sometimes we get information showing that there is a significant toll on it from our sanctions and from external actions. The news, which I think was from just last week, that one rouble is now worth less than one US cent is one illustration that a toll is being taken, but as my noble friend indicated, there is still too much sanction circumvention and there are still too many areas where the Russian economy is gaining—whether it is the shadow fleet, which we are still seeking to pursue, or other elements of avoiding sanctions. Constant work is of fundamental importance in this area.
I have previously raised something with regard to British Overseas Territories which I hope the Minister will be able to clarify. How are we ensuring that all the actions and all the work that we are doing are consistent across all parts, including the overseas territories?
With regard to the impact on Ukraine, it is now estimated that there has been well beyond £500 billion of war damage. That is just a modest estimate by the World Bank. It is inconceivable that Russia will voluntarily pay compensation, so any thought that if it retrieves assets, they will voluntarily be used for some form of reconstruction in a ceasefire agreement is for the birds. A fundamental question therefore needs to be asked: why would we not use the entirety of the assets for the reconstruction purposes which we know Russia will deny in the future? Given that Ukraine is suffering a budget deficit of well over £10 billion and that, in context, it allocates more than £40 billion—about half of its entire budget—to the defence sector, which shows the scale of what Ukraine is having to do, timing is of fundamental importance, as well as scale.
It is welcome, of course, that there is the G7 consensus on this, but it was agreed in June last year to use the profits on immobilised assets. It was in January last year, when we were in Grand Committee on the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations, that I called on behalf of these Benches for the equivalent of what the Bill is now. The timing is of importance, but it is also not just about the cost of recovery and contributing to Ukraine now; it is also an argument about accountability.
Our friends in Canada have passed legislation. Given the other debates that we have secured, including in the other place on 6 January this year, as the noble Lord, Lord Browne, and my noble friend indicated, and given the points that my honourable friends in the Commons made in Committee of the whole House on the Bill, the argument is not simply about funding Ukraine’s efforts now for its economy and the war. It is also about ensuring that there is Russian accountability. If part of the argument is that the Putin regime should be held to account for what it is doing, why would it then be able to profit and, in effect, have assets back and be able to use them?
We probably know—the noble Lord, Lord Kempsell, perhaps alluded to this—that there is a distinct incentive for Putin to have some form of ceasefire: to pause, recoup and then string this on. There is therefore no long-term security, and if part of the funds are simply being immobilised so that the profits from them can be used rather than the asset value itself, then unfortunately there is an incentive for Putin not to have a long-term solution. I suspect that that is why there is a last-ditch attempt in the last days of the Biden Administration, as CNN reported yesterday, for them to move towards the seizure aspect. I hope that the Minister might have an opportunity to respond to that.
To help us understand the position—this is where clarity comes in—I hope that the Minister will be able to look kindly on what my honourable friend James MacCleary put forward as an amendment to the Bill. It was to seek government reports: an immediate report but also, for clarity, a report regarding our
“share of the principal loan amount”
and what is able to be seized, if we had the intent to do that. There are ways in which the Government could demonstrate more clarity—as the United States has done, having been asked by Congress, and as Canada has done—as to what the scale of the opportunity is.
Perhaps the Minister could clarify another question for me. How much of what has been committed so far under the G7 programme has been disbursed? My understanding is that, as reported, the US committed £20 billion as a portion to the World Bank in December but that only £1 billion has been disbursed. I wonder what the status is likely to be for when the disbursements will be in place, especially the UK contribution. If the intent of this fund is for the purchase of munitions on a very urgent military operation, it goes without saying that any delay to the disbursement is not to the advantage of our Ukrainian friends and allies.
Let me close by reiterating what my noble friend Lady Smith said at the outset. We believe that it should be the UK’s intent that we move on this, as far as seizure is concerned, and that it is unjustifiable that these assets should be utilisable by Russia in the future. Russia’s actions should not be forgiven by it being able to recoup assets which we have found justifiably should be frozen. Those assets should be seized at pace and at scale and be used for the defence of Ukraine and as part of its reconstruction. That would also show accountability for those terrible crimes that Russia has inflicted on Ukraine.
Lord Livermore (Lab)
My Lords, it is a privilege to respond to this Second Reading of the Financial Assistance to Ukraine Bill, and to the regret amendment tabled by the noble Lord, Lord Blencathra. I join others in congratulating the noble Baroness, Lady Batters, on her incredibly powerful maiden speech. She brings a wealth of experience to your Lordships’ House, particularly on agricultural and rural issues, and is widely respected for her stewardship of the National Farmers’ Union. We might not always agree, but I very much look forward to her further contributions in debates such as this.
I am grateful to all noble Lords for their contributions and for the unity the House has shown in supporting Ukraine. I am very grateful in particular to the noble Baronesses, Lady Neville-Rolfe and Lady Smith of Newnham, for their support for the Bill. Many noble Lords have spoken movingly about the ongoing plight of the Ukrainian people in the face of Russia’s illegal invasion. It is important that we keep them in our minds today as Ukraine endures a third winter at war. The consequences of Putin’s war are profound: thousands dead and wounded, families torn apart, and enormous damage wrought to Ukraine’s infrastructure and economy that will take many years to rebuild. Despite the carnage that the Russian war machine has wreaked, including scores of innocent civilians killed and thousands of communities devastated right across the front line, the spirit of the Ukrainian people endures, and their resolve to defeat Putin’s army remains undiminished.
In case it needs saying, I profoundly disagree with the contribution from the noble Lord, Lord Balfe. I am heartened by the fact that there has otherwise been near uniform support across your Lordships’ House. The Government’s position remains resolute: Putin must fail, and we must stand with Ukraine for however long it takes, including by working with our G7 allies as part of this scheme. The Government will continue to stand with Ukraine as it wages this fight for freedom. That is why, to date, the Government have provided £12.8 billion in combined military, humanitarian and economic support to Ukraine. The UK has also introduced the most wide-ranging sanctions regime ever imposed on a major economy, depriving Putin of vital finance for his war machine.
My noble friend Lord Beamish asked about circumvention of sanctions, which the noble Lord, Lord Purvis of Tweed, also mentioned. The Government are assessing and enhancing the UK’s sanctions enforcement. This includes working with international partners to build capacity and technical expertise within our own systems and to improve sanctions compliance in their private sectors, as well as deploying increased UK sanctions resources across our overseas network. This is a fight not only for Ukraine’s territorial integrity and the safety of its people but for the future of Europe’s collective security and prosperity. That is why the Prime Minister has committed to providing £3 billion annually to support Ukraine for as long as it takes.
Maintaining international pressure on Putin also requires working in close partnership with G7 allies. The Bill before your Lordships’ House does just that. It would unlock £2.26 billion of new funding for Ukraine, backed by profits generated from immobilised Russian assets as part of the G7’s extraordinary revenue acceleration loans to Ukraine scheme. The scheme demonstrates our shared commitment and solidarity in the face of Russian aggression and will provide approximately $50 billion of additional funding overall to Ukraine, taking account of the combined contributions of our G7 allies.
The noble Baroness, Lady Smith of Newnham, asked whether the Chancellor of the Exchequer raised Ukraine with her counterparts during her recent visit to China. In China last week the Chancellor was clear that, although we must co-operate in areas of mutual interest, we will confidently raise concerns where we disagree. She expressed her real economic and trade concerns with the Chinese, including on economic security. We have secured China’s commitment to improving existing channels so that we can openly discuss sensitive issues and our economy. If we do not engage with China, we cannot express our very real concerns.
The noble Lord, Lord Banner, suggested that we are not meeting or matching our words with actions, a sentiment echoed by the noble Baroness, Lady Wheatcroft. The UK has already provided £12.8 billion of military, humanitarian and economic support to Ukraine since the war began. We are committed to providing a further £3 billion of military aid each year for as long as it takes. This is a significant investment. The new spending the Government are committing as part of the G7 scheme is in addition to these existing commitments and is proportionate to our GDP share within the G7 and the EU.
The noble Baronesses, Lady Smith of Newnham and Lady Wheatcroft, and the noble Lords, Lord Banner, Lord Purvis of Tweed and Lord Kempsell, asked why the Government have not gone further by seizing Russian sovereign assets in the UK. This is also the focus of the regret amendment tabled by the noble Lord, Lord Blencathra. I fully understand that strong views exist on this issue, and I assure noble Lords that we will continue to actively consider all possible lawful avenues by which Russia can be made to meet its obligations to Ukraine under international law. I of course agree that Russia must pay for the damage it has caused in Ukraine. However, the Government believe that any action taken should only be in tandem with the G7. It is in this spirit of collaboration that we have agreed the extraordinary revenue acceleration loans to Ukraine scheme, and we continue to work closely with our G7 partners. Our focus now is on delivering this scheme rapidly to provide the immediate support that Ukraine requires.
The noble Baroness, Lady Anelay of St Johns, asked whether I am instinctively in favour of going further. I can only say that I am in favour of considering all legal routes. She also asked about those legal routes that we have taken. Due to Euroclear’s unique business model as an international central securities depository, it is able to generate extraordinary profits on the holdings of these assets, which legally accrue to Euroclear rather than to Russia. We do not believe the specific circumstances that provide profits generated in this way can be emulated in the UK as we do not believe that any UK-based financial institutions employ this business model. The UK is not required by the Ukraine loan co-operation mechanism to provide any extraordinary profits made from assets held in the UK; we are simply providing a financial contribution to that scheme.
The noble Baroness, Lady Neville-Rolfe, asked whether the UK’s contribution to this scheme will count towards the NATO target of spending 2.5% of GDP on defence. The UK’s contribution will be provided to the Government of Ukraine as a loan from the UK Government to spend on military procurement; it is not direct UK defence spending. The £2.26 billion loan will therefore not count as NATO-qualifying UK defence spending; it will be in addition to current NATO- qualifying UK defence spending. The noble Baroness also asked when the Government will meet this target, as did the noble Baroness, Lady Smith of Newnham. The Government have made a clear commitment to spend 2.5% of our GDP on defence, and this commitment has not changed. We will set out the pathway to 2.5% at a future fiscal event.
I will touch briefly on the nature of the UK’s contribution to this G7 scheme. The funding we are providing will be used for budgetary support earmarked for military procurement, bolstering Ukraine’s capacity for self-defence and providing vital equipment and support to the front line. As my noble friend Lord Beamish said, this funding is additional to the £3 billion of bilateral military support which the Government have committed to providing for as long as it takes. The Bill’s sole purpose is to provide the Government with the spending authority to deliver our contribution to this scheme, or any subsequent arrangements that supplement or modify it. It is not designed to facilitate any other spending on Ukraine or spending for any other purpose. The Bill enables the Government to sign the loan agreement with Ukraine and begin disbursing funds to it.
The noble Baroness, Lady Neville-Rolfe, asked specific questions about how disbursals from the fund will work—a point also raised by noble Lord, Lord Kempsell. The Government intend to begin disbursals early this year to ensure the funding supports our Ukrainian allies as soon as possible. We intend to disburse the UK’s £2.26 billion loan in three equal tranches over three financial years, starting in 2024-25. The G7 has agreed that all funds from this scheme will be disbursed by the end of 2027, although we plan to begin disbursals much sooner.
To further address the points raised by the noble Baroness, Lady Neville-Rolfe, this is a bilateral loan whose parties are His Majesty’s Treasury and the Ministry of Finance of Ukraine. The Government have begun talks with their Ukrainian allies to agree the terms of the provision of this funding. We do not intend for there to be geographical restrictions on where funds may be spent, and are instead ensuring that the purchase of much-needed vital military equipment is prioritised. There will be opportunities for the UK defence industry to benefit where this provides good value for money for the UK and for Ukraine. The Government are aware of the corruption risk in Ukraine and we are taking steps in our loan negotiations to mitigate it. I cannot comment on these negotiations in detail as they are still ongoing.
On the UK being repaid for this loan, as my noble friend Lady Goudie said, under the terms of the scheme the UK will be repaid by the extraordinary profits generated from immobilised Russian sovereign assets in the EU on a six-monthly basis as they accrue. The EU has already enacted the necessary regulation, known as the Ukraine loan co-operation mechanism, which will distribute the profits. This came into effect on 29 October 2024.
My noble friend Lord Browne of Ladyton spoke about international support for Ukraine, and the noble Baroness, Lady Neville-Rolfe, asked about the United States’s contribution to the scheme and the approach that will be taken by the incoming Administration. Although it would be wrong to speculate on any policy decisions that the incoming Administration may make, the UK Government have welcomed sustained bipartisan US support for Ukraine, which has been key in the international effort.
In answer to the noble Lords, Lord Balfe and Lord Purvis of Tweed, the US has already dispersed its $20 billion contribution to our financial intermediary fund at the World Bank. The EU has already passed and implemented its legislation, which covers all the European countries listed by the noble Lord, Lord Balfe.
Lord Purvis of Tweed (LD)
My point was less about the US providing $20 billion to the World Bank; my question related to how much Ukraine has actually received.
Lord Livermore (Lab)
I do not have that information to hand, but I will happily check for the noble Lord.
The noble Baroness, Lady Neville-Rolfe, asked whether the UK’s contribution to the scheme would increase if the United States or another participant chose to withdraw. I can confirm to noble Lords that this would not affect the UK’s contribution, which will remain at £2.26 billion. We are clear that that is the right and balanced approach, reflecting our fiscal pressures and Ukraine’s needs. The £2.26 billion figure is also proportionate to our GDP share within the G7 and the EU. We will of course continue to co-ordinate with G7 partners on the scheme going forward.
The noble Baroness, Lady Anelay of St Johns, asked for an update on the proceeds from the sale of Chelsea Football Club. The Government are working hard to ensure the proceeds from the sale reach humanitarian causes in Ukraine as quickly as possible. The proceeds are currently frozen in a UK bank account while a new independent foundation is established to manage and distribute the money. Creating an organisation of this scale is complex and officials continue to hold discussions with relevant parties to reach a resolution. As you would expect, we must review the details of any such arrangement to maintain the integrity of our sanctions regime.
In conclusion, we must ensure that Putin has no path to military victory in Ukraine. That means continuing to provide military and economic support to enable Ukraine to defeat Putin’s war machine. The combined $50 billion of new funding, delivered together with our allies in the G7 and backed by profits from immobilised Russian assets, will provide a crucial boost to Ukraine as it continues its third winter at war. It represents an investment not only in Ukraine’s future but in the security and prosperity of Europe more widely, and it demonstrates the shared resolve of the international community in the face of ongoing Russian aggression. I welcome the fact that noble Lords from all sides of the House have been united in saying that we must stand with Ukraine for as long as it takes. This Bill will allow us to honour that commitment.
Home Office: ODA-funded Support
Lord Purvis of Tweed Excerpts(1 year, 7 months ago)
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Baroness Penn (Con)
I acknowledge some of the points that my noble friend has made. There has been disruption to the FCDO’s ODA budget. In addition to the additional £2.5 billion that was allocated to help to manage those, the publication of the FCDO’s provisional ODA allocations for 2024-25 demonstrates our commitment to openness and transparency, and enables FCDO teams and their partners across the world to forward-plan.
Lord Purvis of Tweed (LD)
The Minister referred to the Illegal Migration Act. The Home Office assumed that it would be able to score on ODA all the costs of the that Act, but it cannot. I asked for clarification of the consequences for the taxpayer of having to fill that gap for the cost of the Act from the noble and learned Lord, Lord Stewart of Dirleton, on 12 July. He did not reply on that day, so I wrote to him through the noble Lord, Lord Murray, on 14 July. I confirmed with his office just this afternoon that the letter had been received but I have not received a reply. I am glad that the Leader is in his place because he speaks passionately and sincerely about this House being able to do our constitutional duty and ask questions of the Government and hold them to account. The Home Office simply does not wish to reply to letters when it does not like the questions that are in them.
Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2023
Lord Purvis of Tweed Excerpts(1 year, 8 months ago)
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Lord Vaux of Harrowden (CB)
My Lords, I thank the Minister for introducing and explaining the regulations. I realise that all they do is follow the recommendations of the Financial Action Task Force, FATF, to change the list of countries designated as high risk and therefore subject to enhanced due diligence requirements in relation to anti-money laundering, counterterrorism financing and counterproliferation financing. In that respect, so far so uncontroversial.
It has to be said, however, that the list is somewhat surprising—both for those on it and, in particular, those not on it. The changes made by these regulations are also somewhat surprising: they remove Morocco and Cambodia from the high-risk list. It seems rather odd that Cambodia, which is generally regarded as among the most corrupt countries in Asia, is no longer treated as high risk. I am very fond of Cambodia and have spent a lot of time in that country, but that does not change the fact that it is extremely corrupt.
According to Transparency International’s Corruption Perceptions Index, Cambodia is ranked 150 out of 180 countries on the index. This is a slight improvement on previous years, but still considerably lower than many countries that remain on the high-risk list, such as Albania at 101, Panama at 101, the Philippines at 116, Barbados at 65, Burkina Faso at 77, Iran—which is on the blacklist—at 147, Jamaica at 69, Jordan at 61 and Mali at 137. I could go on. In fact, Cambodia has a worse corruption score than all but seven of the 27 countries that remain on the FATF high-risk list. It is not only Transparency International that ranks Cambodia badly. With perhaps more relevance to this regulation, the Basel AML Index ranks Cambodia as having globally the seventh worst money laundering and terrorism financing score. Despite that, we are reducing the level of due diligence that the regulated sector will have to apply to it. Seriously, is there anybody in this Room who believes that Cambodia should be treated better than, say, Gibraltar, Barbados or even the Philippines? I should like the Minister to look me in the eye and state that she really believes Cambodia is not a high-risk country for corruption.
This starts to beg the question about the value and legitimacy of the FATF high-risk assessment process, known as the mutual evaluation assessment. That value is called into even greater question when we look at the countries not included in the high-risk designation. I will give a high-profile example: until February of this year, Russia was a member of the FATF. In February, the FATF suspended its membership because of the war against Ukraine—somewhat belatedly, one could say. I emphasise “suspended”; Russia has not been expelled. It is evidently a paragon of virtue when it comes to money laundering and terrorism financing because, unlike the British territory of Gibraltar, Russia is not designated as high risk and therefore not subject to enhanced due diligence. It is odd, then, that we have spent so much time passing Bills in this House specifically to deal with the stolen laundered money coming from Russia. Almost unbelievably, in its last review of Russia in 2019, the FATF praised Russia’s efforts to prosecute terrorist financiers and suggested that AML/CFT is afforded the highest priority by the Russian Government. This is a country that finances and supports organisations such as the Wagner Group, while Putin’s Government is generally regarded as a kleptocracy. Other countries not on the list, and therefore not subject to enhanced due diligence, include such famously uncorrupt ones such as Somalia, Venezuela, Libya, Turkmenistan, Nicaragua and Zimbabwe, to name but a few. All score worse than Cambodia in the corruption index; all are apparently low risk, according to the FATF. The Explanatory Memorandum refers to the FATF’s “robust assessment processes”; frankly, those do not stand up terribly well to scrutiny, if this list is anything to go by.
It is worth quoting the recently departed FATF CEO, David Lewis, who was very highly regarded. He said the agency structure of “mid-level bureaucrats” means that it does not have the scale to take on the big global financial crime issues. He said that they are
“very comfortable dealing with the finest minutiae of technical detail, but aren’t comfortable or able to have big picture discussions and are often only in their jobs for one of two years”.
He stated that genuine reform of the FATF is difficult to achieve, with typically two to four countries blocking consensus, meaning it is rare that you can get any meaningful change, which probably explains the list we are looking at.
Concerns are often raised about the FATF’s lack of transparency. The minutes of plenary sessions that make these risk designations are not published and it is clear that political horse-trading plays a significant role in the decision-making process. To be fair, there is no doubt that the FATF has had a positive impact on global financial crime since its inception in 1989, but there are growing doubts about its ability to cope with the challenging global situation we currently face. In an article for RUSI, Tom Keatinge of the Centre for Financial Crime and Security Studies makes some helpful suggestions about how the FATF could be improved. He suggests, first, greater transparency: it should provide greater assurance of independence and oversight. Its activities should be overseen by an independent board and its evaluation should be independently reviewed, not subject to the evidently politicised horse-trading that occurs currently. The minutes of the plenaries should be published, or the plenaries themselves could be livestreamed. Secondly, it needs to create a dedicated technical-assistance capability to ensure that unintended negative consequences, such as financial exclusion and the use of the FATF recommendations by autocratic regimes against civil society organisations, are addressed.
Thirdly, he suggests that the FATF needs to show greater ambition. Ultimately, the question is whether it is addressing financial crime effectively. It currently evaluates how effectively its recommendations are implemented, but not the extent to which financial crime is addressed as a result. He suggests an independent review of the FATF’s effectiveness, which seems a simple and sensible suggestion 45 years after it was founded.
Fatima Alsancak, also of the Centre for Financial Crime and Security Studies, suggests that Russia is a good
“case study in the deficiencies of the … FATF mutual evaluation process, which allows countries with high levels of institutionalised corruption to complete their evaluations despite the lack of integrity in their AML systems”.
She goes on to say:
“It is essential for the watchdog to revisit its standards”,
and again highlights the need for greater transparency in the decision-making and listing process.
I was going to ask why South Africa, Nigeria, Croatia, Cameroon and Vietnam are not the list, but the Minister answered that in her opening statement. I mentioned earlier that Gibraltar, a British Overseas Territory, is on the high-risk list. Will she please comment on that, too?
There are important questions to answer about the value of the FATF evaluation process. We should not rely passively on what are, frankly, flawed recommendations. Do the Government agree that FATF’s procedures and the high-risk list itself appear to have important deficiencies and, if so, what are they doing about it? Do they agree with the recommendations that I referred to earlier?
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Vaux, who made a probing and persuasive argument about the deficiencies in some of the process. I have two questions for the Minister.
In a debate on a previous instrument, in which I spoke, the Government made the case that, with the new freedom as a result of Brexit, they would immediately make the decision to remove British sovereignty by having an automatic updated list of the Financial Action Task Force. I thought that rather inconsistent with the argument that we had left the European Union to gain freedom: the very first act was to give that freedom away.
The noble Lord highlighted the inconsistencies, and I will add another. The Minister has heard me talk about the Wagner Group and its lack of proscription, and the fact that it operates almost with impunity in many countries. One of the countries in which it has been operating, which is not on the list, is Sudan. It is beyond me that the UK, having done excellent work through our diplomats, development and security operations in that conflict-afflicted country, would not want the ability to act immediately in putting Sudan on the list, whose two warring parties, the Sudanese Armed Forces and the Rapid Support Forces, are operating across organised crime, including conflict. Why would that not be a high-risk third country? If the Minister is saying that we have made the decision simply to adopt an external organisation for making determinations of what would be high-risk third countries, what was the point of seeking the sovereignty to make decisions ourselves?
My second question relates to the United Arab Emirates, which maintains its position on the list. I have asked for the text of the UK-UAE investment agreement, but it has not been forthcoming. Why not? If there is an investment agreement that binds the UK into certain preferential market treatment for financial vehicles within the UAE, and the UAE is on a UK list of high-risk third countries, we should, as a matter of good governance, be able to see the text of the UK-UAE investment agreement and to consider what elements in it ensure that we comply with all the elements that would be required of our financial relationship with the UAE. This is even more important given that, in Grand Committee debates on the sanctions regime for Russia, we have raised the joint ventures that operate between the UAE, Russia, the Wagner Group and countries such as Sudan. I hope the Minister will be able to respond by saying that new regulations will be brought forward at pace to ensure that these loopholes are now closed.
Lord Purvis of Tweed (LD)
I look forward to the Minister writing to me, because I was a little alarmed to hear her say—if I heard her correctly—that the UK would work with Sudan on this. There is no one to work with in Sudan at the moment and, if a case cannot be made for the UK not to act on Sudan, which has a civil war, with two warring partners and with considerable financial interests on each side—SAF and RSF—then I cannot see a case that would be stronger.
Baroness Penn (Con)
I will write on Sudan to the noble Lord, Lord Purvis, as I committed to do, and I will copy in the Members in this debate.
The UAE is making swift progress on its FATF action plan. It has several actions still to complete, focused on money laundering investigations, transparency of beneficial ownership and the investigation of money laundering cases. We hope to see further progress on those areas, as it looks to deliver on its action plan.
I have not managed to cover in detail all the points raised by noble Lords. They have gone slightly wider than the countries in question on the listing today, but I understand noble Lords’ interest in the process that we use to update these lists, adhering to international standards. I will read Hansard and ensure that I write to noble Lords if I have not addressed any questions.
Postal Packets (Miscellaneous Amendments) Regulations 2023
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Lord Berkeley (Lab)
I shall be quick, my Lords, because we have been at this for some time.
I was just saying that the Post Office has been continuing to prosecute innocent people. Suddenly, it has found 4,767 new documents, which will of course have to go into the inquiry, delaying it further. I suggest that it is not co-operating at all fully with the inquiry. Nevertheless, its chief executive got a bonus of £455,000 last year, so he must be all right. Fifty executives also got bonuses relating to the inquiry. I ask the Minister this, very gently: can the Government finally get a grip of this organisation? Most importantly, will they read the start of Wyn Williams’s report, which was published yesterday and says that the compensation schemes are running late? It also states:
“Under the legislation now in force all payments of compensation … must be made by 7 August 2024. My current view is that this will not be achieved”.
That is a terrible reflection on Ministers over the years—it is not just the present lot but many other people—but I hope that the Minister can give us some comfort that, once and for all, the Government will get a grip of this horrible project.
Lord Purvis of Tweed (LD)
My Lords, it will spare the blushes of the noble Lords, Lord Dodds and Lord Weir, for them not yet to be in their places to hear me say that I agree with everything that they said. The debate that we have had, while more respectful and with more decorum than the extraordinary scenes in the committee of the House of Commons on Monday, does not undermine the seriousness of the measures that we are being asked to approve. “Yes Minister” could probably have had an episode on how to bring forward regulations with considerable impact and long-term consequences, but with an innocuous title, by taking powers very early, before they are necessary, without consulting those who have to implement them and without giving any data on their likely impact and, as a security measure, removing members of a committee which is asked to approve the regulations because you know that they will be significantly concerned about them.
I hope that this is not a trend. As the Minister said, this is not about implementing the Windsor Framework, but I hope that it does not start a precedent for how the Windsor Framework will be implemented. We were told, notwithstanding noble Lords’ concerns in a debate that we had on the Windsor Framework and the view of the noble Baroness, Lady Ritchie, on the wider issue with the framework, that it was starting a new chapter. I hoped that that new chapter would be about transparency, openness, consultation, trying to build consensus, notwithstanding how difficult it would be, and bringing people with the Government on implementation, but this is in stark contrast to the way forward.
Stephen Farry MP intervened on the Minister on Monday calling for support for the business community in GB trading with Northern Ireland. I reiterate that call. It is necessary to carry on the support that is being provided to businesses to overcome some of the difficulties in the Government’s initial protocol so that they can overcome the difficulties that they will face with the implementation of the Windsor Framework. The Road Haulage Association said very clearly that this measure will bring new burdens on business and add to bureaucracy. That is not unfettering. The noble Lord, Lord Dodds, was absolutely correct: this is fettering internal UK trade.
The Minister in the House of Commons said that this SI was the result of “a hard compromise”. That language was not used by the Minister here. It is, to some extent, more honest to say that it results from a hard compromise but when the Government have made that compromise, they then have to own it and act honestly and openly.
Let me give one example of where there is still confusion. I commend the Secondary Legislation Scrutiny Committee’s report. I hope the Minister will have clear responses to its strong recommendations and concerns. They were not made lightly, as the noble Baroness, Lady Ritchie, indicated, but followed proper consideration from a balanced perspective. That should be taken into consideration.
The Government used the example of a granny in GB sending a birthday parcel to her granddaughter in Northern Ireland. That would not be affected by this SI, but if the granny used online purchasing from a company that then used another company to dispatch the parcel to the granddaughter, it would be covered by the SI. We do not live in the 19th century as far as how people send parcels. The Government need to be clear about the estimated number of parcels that are likely to fall under each of the lanes, the percentage that will now be opened for checks and the likely impact on the businesses that would be dispatching and receiving them. The Minister in the House of Commons said that the Government could provide only estimates at this stage, and there is no impact assessment, as there should have been.
On a previous occasion in Committee the noble Lord, Lord Dodds, raised the issue of measures. The Minister said that this is not about implementing the framework agreement but, conveniently, it is about implementing it in order to get out of having an impact assessment. The Government have said that an impact assessment is not needed because, as the Minister said, this is so limited in scope. When it affects all parcels being sent from GB to NI, it is not limited in scope; and when the definition of those will now have to be inserted after “foreign postal packets”, that is not limited in scope either. When will the Government provide the detailed information about the impact of all that is likely to be covered by these regulations?
Baroness Penn (Con)
The Windsor Framework is a bilateral agreement. To the noble Lord’s point, there are detailed governance arrangements around the Windsor Framework. Either side can raise issues through those mechanisms. It is not the case that the EU could just impose new requirements without consultation. Of course, the Stormont brake will be available to the Northern Ireland Assembly, when it is sitting.
With regards to the lack of an impact assessment, that point takes me back to what this statutory instrument itself does. It does not impose any requirements on businesses; it is solely about the powers for HMRC and Border Force. The Government are dealing with the resources available to those agencies in the normal way. I cannot remember who asked about this—it was the noble Baroness, Lady Ritchie of Downpatrick, I think—but we will of course ensure that resources are available, in particular to HMRC, to ensure that these agencies can engage with businesses in order to ensure that the process is as smooth as possible.
Lord Purvis of Tweed (LD)
I understand the Minister’s point with regards to the powers for HMRC under these regulations, but it assumes that HMRC will not then use those powers to ask businesses to carry out certain procedures. If that is the case, there will be an impact on businesses. Secondly, my reading of Regulation 3 is that, for the first time, a postal packet going from GB to Northern Ireland will now be categorised alongside a foreign postal packet. That is what the regulation says.
Baroness Penn (Con)
Again, that takes me back to what these regulations do versus the wider process around how parcels will move under the Windsor Framework. These powers do not and cannot do anything to impose anything on businesses.
I come to a few of the points made by the noble Lord, Lord Purvis, about understanding and beginning to quantify how the new process will work. It is not possible to give precise numbers on volumes of parcels and how they will fall into the different lanes, because volumes are not consistent year on year. However, based on estimates and commercial information provided by the parcel industry, we understand that about 5% of parcels are sent from business to business, with 90% moving from businesses to consumers and 5% from individuals to individuals. Based on those figures, for 95% of movements no difference will be felt in how customs operate now, under the easement that we have to the protocol. Compared to the protocol itself, they will face significantly fewer burdens.
There will be no routine checks or controls applied to consignments, with interventions made only on a risk-based, intelligence-led approach. This is decided by HMRC and Border Force. We expect a very small proportion of parcels to be checked or opened, only when there is reason to suspect circumvention of the rules.
The 5% of business-to-business goods will be treated the same, as if they were moving in freight. They can access the UK internal market scheme and the green lane, and they will benefit from radically reduced checks and data requirements compared to those under the protocol. Businesses can apply to HMRC to become a trusted trader and access the green lane. It is a simple process. Tens of thousands of traders are already in the scheme, and the Windsor Framework extends eligibility to it further. New arrangements under the framework are being phased in over nearly two and a half years. We will continue to use that time to undertake extensive engagement with stakeholders, including businesses in Northern Ireland and Great Britain, trader support services and parcel operators, to provide support and ensure that everyone is ready.
Wagner Group: Sanctions Regime
Lord Purvis of Tweed Excerpts(2 years, 2 months ago)
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The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, to try to take the noble Lord’s questions on directly, the Government condemn the use of strategic lawsuits against public participation, commonly known as SLAPPs. The Prigozhin case can be characterised as a SLAPP, which is an abuse of the UK legal system. We are committed to introducing targeted anti-SLAPP legislation to stop Russian oligarchs corrupting our legal system. The reforms will include a statutory definition of SLAPPs, an early dismissal mechanism and costs protection for SLAPPs cases.
When it comes to the sanctions and licensing regimes, where there are derogations set out in the sanctions regime and the conditions of those derogations have been met, licences may be authorised. There is a specific derogation for legal expenses which is judged on the cost of those expenses, not the merits of any legal case. None the less, I agree with the point that the noble Lord has made: we need to take action in these cases, and the Government are committed to doing so.
On other licences for legal fees, this is a derogation that applies across the sanctions regime so there will be multiple licences issued. There is a general licence available for legal fees and that decision is, on the whole, taken by officials rather than Ministers.
Lord Purvis of Tweed (LD)
My Lords, I have seen Wagner operatives with my own eyes in Sudan. I was the first in Parliament to call for that group’s proscription. I did so to Ministers in this Chamber on 25 April; I did so again on 23 May, 9 June, 7 July, 15 November and, most recently, 21 December. It is an outrage that a licence from the Treasury has allowed this group to launder money through the English legal system on palpably malicious legal activities. As the Minister has just said, it is an abuse of the system. Why are the Government procrastinating on national security grounds? This group is a threat to our security and our safety, to British nationals abroad and to our allies. Why is this group not being proscribed?
Baroness Penn (Con)
My Lords, it is worth clarifying a number of points. In this case, we are talking about a designated person and the derogations under the sanctions regime allow for legal fees. That is clearly provided for within the sanctions regime. I understand that the Wagner Group is subject to sanctions under the Russia sanctions. On the question of proscription, I will have to write to the noble Lord.
Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2016
Lord Purvis of Tweed Excerpts(9 years ago)
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Lord Purvis of Tweed (LD)
I have listened to the whole debate. I hope the Minister will clarify the matter further as he referred to other areas where the £935 million reduction in expenditure could be implemented—the city deals and employability and housing. However, I was under the impression that this measure aimed to achieve deficit reduction savings. Page 3 of the Red Book states that this is part of deficit reduction savings. So will he be clear: is this for hypothecated other expenditure or is it for deficit reduction?