Trade Negotiations

Lord Purvis of Tweed Excerpts

Tuesday 13th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, we on these Benches welcome free trade. It is a cornerstone of a prosperous and competitive economy. It benefits everyone, from workers to businesses and from consumers to industry sectors. Trade allows us to access a broader market, to promote innovation and to create jobs. When done right, it provides opportunities for the UK to grow and to succeed on the global stage. This deal is a reminder of one of the key benefits of Brexit. No longer bound by the limitations of collective EU decision-making, we now have the freedom to forge our own trade agreements, tailored to the strengths of our economy and aligned with our national interest. That sovereignty over trade policy is a fundamental asset and one that, used wisely, can bring real and lasting prosperity. I confess that I am at a loss to understand why the Government have repeatedly said that this is a matter of opinion and not fact.

However, while we acknowledge the importance of trade agreements and the positive elements of this UK-US deal, we must approach it with a critical eye and an understanding of the broader context. Trade deals are not simply about negotiating numbers or quotas; they must also be about fairness, sustainability and long-term growth. In this case, I am concerned that the deal, while a step in the right direction, does not go far enough in delivering the kind of comprehensive, ambitious agreement we need.

The agreement announced with the United States contains some very welcome steps—for example, tariff reductions on cars, access for UK beef producers, and the removal of punitive levies on British steel and aluminium, to name but a few. The Government are right to highlight the thousands of jobs that will benefit from these provisions. However, take, for example, the automotive sector: there are more questions that need answers. Reducing tariffs from 27.5% to 10% is undoubtedly welcome, but this deal covers only a relatively small quota of 100,000 cars, a figure that represents just a fraction of total UK car exports. What happens when that quota is reached? Are we going to see tariffs increase again? Where are the long-term assurances for our manufacturers and workers? A more strategic and forward-thinking approach is needed.

This cannot be the end of the road. If we are to make the most of our new trading freedoms, we must push for a comprehensive free trade agreement, one that goes beyond quotas and partial tariff relief and that delivers true long-term certainty for British businesses, across every sector. The 10% reciprocal tariff on a range of UK exports remains in place, affecting sectors that are critical to our industrial base and our export strength. The Government must be clear. When will negotiations begin to eliminate these tariffs, or have they already started? We urge Ministers to move beyond vague commitments that work will continue and to set out a clear timetable and a strategy for achieving a more ambitious deal.

There is particular disappointment in the pharmaceutical sector, for example, where the UK has not yet secured a carve-out from remaining tariffs. This is an industry where Britain leads the world. We are talking about jobs, innovation and the secure delivery of life-saving medicines. We must see more urgency from the Government on this front. What of the creative industries, specifically film and television? The failure to secure any protection for this sector is alarming. The threat of 100% levies on UK-made films exported to the US remains a serious concern. This is a world-leading industry with the potential to deliver billions to our economy and to showcase British culture on the global stage. It deserves far greater attention from the Government.

We on these Benches are not here to oppose free trade; we champion it. However, we want to see trade deals that are ambitious, balanced and comprehensive, and that reflect the best of Britain and support all our key sectors, from farmers to filmmakers and from scientists to steelworkers.

The Minister was somewhat vague in answer to the question from the noble Lord, Lord Purvis of Tweed, yesterday on parliamentary scrutiny of the deal. In an effort to save her from writing many letters, perhaps she can update us on this now.

This deal is a good start, and that deserves to be recognised, but the Government must now finish the job. We call for greater transparency, clear timelines and firm commitments to extend this agreement into a full and fair free trade deal that truly reflects the potential of post-Brexit Britain.

[Lord Purvis of Tweed (LD)]

My Lords, I look forward to the Minister answering my question from yesterday, as referenced by the noble Lord.

I wish to refer exclusively to the India agreement. We have debated in this House on a number of occasions UK-India trade, and on those occasions I have rehearsed the long-standing position on these Benches that free trade is part of our party’s DNA as a political movement. We believe fundamentally that free trade benefits consumers and businesses alike, and, combined with the means by which it is fair trade and inclusive, that it can be beneficial for wider policy ambitions on climate, sustainability, social justice and the reduction of poverty. These are the parameters by which we will judge any agreement that this Government sign with other Governments, as they were for the previous Administration, and specifically on the agreement with India.

We start from the position that we wish this agreement and the Government well in ensuring that it is the basis upon which India trade can develop. This is a complex time in international trade, as it is buffeted by policies and chaotic uncertainty from the United States. The fact that India has now signed an agreement with the UK, and that on Monday the second round of negotiations on an FTA between India and the European Union began, shows those of us who believe in widening free trade around the world that we need to redouble our efforts to reinforce the global trading environment and the rules upon which it is based.

The India agreement has been launched with a high degree of boosterism, last seen under the Boris Johnson Administration, and of course we would be a world leader in trade if press release assertion was a commodity. The Government say that we have a series of anticipated benefits as a result of this agreement. No doubt the Minister will rehearse some of those in her reply. However, looking carefully at the Government’s technical papers and not the press release, we can see that the cash figures of potential GDP growth, which she may quote in a moment, are purely a mathematical extrapolation of potential global trade in 2040, which the Government have then converted into pounds sterling, taking a starting point of 2023. This does not take into account the Trump Administration’s disruption of global trade. Therefore, all the cash figures that are presented are purely illustrative.

The technical papers also helpfully suggest that the Government made a policy decision to round up to 0.1% for the growth figures. Rounding up to 0.1% highlights that there will probably be modest results. Furthermore, very deep in the Government’s papers is that, to get their very ambitious figures on UK trade growth, the Government have taken the starting point as the baseline of 2019, which does not take into consideration the pandemic, the Ukraine war and the Trump supply chain issues. So they start at a high point in order to get higher. We do not necessarily oppose the agreement in principle, but we look at it from perhaps a more realistic and sober perspective. The issue then becomes how we will support our businesses to take advantage of the new market access arrangements.

According to the United Nations data figures, India has seen its exports rise over the last 10 years by 13.2%. This is an export market which the UK consumer wishes to benefit from. UK exports over the same time have expanded by only 5.1%. This is marginal growth over a decade, so it is right that we want to be part of a growing market. However, the European Union export growth has expanded by over 9.5% over the same period, nearly double the UK rate. We now have barriers erected, additional costs and more bureaucracy with the European Union, and we are trying to reduce them for India. So the fundamental issue is not that we have a tariff agreement but how British businesses will see the Indian market as barrier-free, open and accessible across all states, and reliable under the rule of law, with less corruption, more transparency—so that we trade more—and businesses supported more to access the market, which this agreement theoretically facilitates. What are the practical steps of actively supporting businesses that will take advantage of this agreement?

Because there is little reference so far in what the Government have said, can the Minister confirm that the agreement will include a human rights chapter, with clearly articulated mechanisms to address human rights supply chain concerns that have been raised in this House on a number of occasions, including by myself—for example, on broadcasting and civil liberties. If there is to be market access on digital, media and broadcasting, are we ensuring that it is reciprocated and that the restrictions that have been put in place for media have been lifted? Can the Minister confirm that there will be a climate chapter in the agreement that demonstrates that this agreement reduces emissions rather than contributes? On Monday, India and the EU announced their intent for an agreement by the end of the fourth quarter this year. Whether this happens is out of the Government’s hands—I completely understand that—but any comparative advantage that we are likely to have as a result of this agreement is likely to be impacted if there is an agreement between India and the European Union. On rules of origin and other areas of standards, how will we triangulate between India and EU trade?

Finally, I will ask the Minister about potential trade diversion and preference erosion as a result of this agreement. The House is well aware that I look for all the juicy details of these agreements in annexes, and typically on every page after page 200. In the previous Government’s scoping document, annex 9 of the technical paper showed that, with all the likely potential trade benefits for the UK of over £5 billion, which is very similar to this Government’s estimate, it is likely that there will be trade preference and trade erosion of over £3.25 billion.

What does that mean? It means that we must discount all of the benefits from the India agreement with the diversion of trade and the preference erosion from other countries—primarily Bangladesh, Pakistan, Kenya, Senegal, Ghana, Indonesia, the Philippines and Jamaica. For Bangladesh alone, the previous Government estimated that the trade erosion would be £1.5 billion less trade with the UK. So I hope the Government will have an impact assessment clearly articulating the likely trade erosion and trade preference. Will there be primary legislation as a result of this, what will be the extent of it and when are we likely to see it?

[The Minister of State, Department for Business and Trade and HM Treasury (Baroness Gustafsson) (Lab)]

My Lords, I thank the noble Lords for their questions and responses to the Minister of Trade’s policy Statement. It is lovely to see the full support for trade that we all share. I am happy to answer the questions, but, before I do, I will take a step back and quickly consider the agreement that we are due to discuss in context.

Fundamentally, as the noble Lord, Lord Purvis, said, the UK is a trading nation. The reality is deeply rooted in our DNA and that remains true to this day. Stronger trade ties with our partners around the world and championing free, fair and open trade delivers back here at home, generating growth, boosting wages and supporting jobs in every corner of the UK. It is this attitude and openness to trade that has helped cement the UK’s global reputation as being open for business and a home to iconic brands that are sought after all over the world. That is why we have always been clear-eyed in pursuing a deal with India, one of the fastest-growing economies in the world. Despite the strong ties connecting our two nations, not least through our people-to-people connections, there has always been room to strengthen our economic connections.

The deal we have does just that. This is a modern and comprehensive agreement that will increase UK GDP by £4.8 billion in the long run. Our bilateral trade, which is already £43 billion, will increase by £25.5 billion, £15.7 billion of which is expected to be UK exports. India has agreed that, from the first day this deal enters into force, it will cut tariffs worth £400 million on UK goods, a number that will jump to £900 million after 10 years. We have unlocked unprecedented access to India’s procurement market, giving UK companies access to 40,000 tenders worth £38 billion. New commitments of customs and digital trade will make it quicker, cheaper and easier to trade with India than ever before.

I hear the challenge about how those spreadsheets work and the models that sit behind them, and whether we are being optimistic. These are very realistic and measured, but ultimately an approximation of the benefit that this opportunity will bring us. It is also not a limit. We do still have the opportunity to benefit above and beyond the numbers that we have stated. I assure your Lordships that this is based on the modelling of worldwide standards but, at the signing of that trade deal, a full impact assessment will also be published to give noble Lords a little bit more small print to crawl through as well, which I know they will enjoy.

We have locked in access for our service companies, promoted stronger ties in a variety of areas—from innovation to gender to anti-corruption—and, most crucially, we have provided businesses with a certainty in a time when it is dearly lacking. I welcome the support that this deal has already had from across the House and from those who have recognised this for what it is, a landmark agreement with one of the most exciting and dynamic economies in the world.

I have also been warmed by the support from the businesses that will be using this deal, including the British Chambers of Commerce, the Institute of Directors, the Confederation of British Industry, the Scotch Whisky Association, the National Farmers’ Union, the Food & Drink Federation, techUK, Small Business Britain, the Premier League, Standard Chartered, Smith & Nephew, Coltraco and more.

I want to address the double contributions convention, which we have agreed to negotiate and implement in parallel with this free trade agreement. There has been much speculation, and indeed misinformation, regarding this element of the agreement. To set the record straight, this is a reciprocal agreement which is designed to prevent the double payment of social security contributions for a specific group of workers known as “detached workers”, who are sent by their employers on a temporary basis and whose long-term jobs are based in their original country. These agreements are for the benefit of both countries. The UK has agreed numerous DCCs over recent years, including with Iceland, Norway and Liechtenstein in 2023, Switzerland in 2021, the EU in 2020 and Chile in 2012.

There has been speculation this will make it cheaper for UK employers to hire temporary Indian workers than it is to hire British workers. This is not true. This applies only to Indian workers who are sent by their employers based in India to work temporarily in the UK for up to three years. There have also been claims that this agreement undercuts UK workers. In fact, the double contributions convention supports UK workers, particularly those in our world-class service sector. As a whole, this agreement will boost wages in the UK by £2.2 billion, putting money into the pockets of working people right across the country.

I am well aware that many in this House will rightly be keen to understand the intricacies of this agreement and have a keen eye for detail. We have already published the summary document, which includes a brief overview of every chapter within the agreement. My officials are working at pace to prepare the legal treaty, which will be available once the agreement is ready to be signed. As with any free trade agreement, parliamentarians will have ample opportunity to scrutinise the deal, which is subject to the usual ratification procedures under the Constitutional Reform and Governance Act 2010. The double contributions convention will also be scrutinised by Parliament via the standard processes outlined in the CRaG Act. Any legislative changes required will be scrutinised and passed by Parliament in the usual ways before ratification.

I hear the challenge about the human rights record. The UK is a leading advocate for human rights around the world, and we remain committed to the promotion of universal human rights. Where we have concerns, they are raised directly with the Government of India, including at ministerial level. This has been undertaken separately to these trade negotiations, although they are part of building open and trusting relationships with important partners. The avenue to communal trade supports our ability to influence in these matters far more greatly.

There was also a question about whether we are eroding trade and how that will be received. We set out further information on the trade diversion impacts of this agreement in our impact assessment. This free trade agreement will include India’s first ever trade and development chapter in an FTA. Both the UK and India will monitor the effects of the agreement on developing countries. To facilitate effective dialogue in this space, we will aim to share our research and understanding, and this will in turn help inform future development programmes and policies.

To conclude, as my colleague the Trade Minister rightfully outlined in the other place, this deal affords UK businesses certainty and stability during a time of global uncertainty and instability. It is a deal that will give British businesses access to one of our biggest markets abroad while raising wages and driving growth here at home.

UK-US Trade

Lord Purvis of Tweed Excerpts

Monday 12th May 2025 Lords Chamber

[Baroness Gustafsson (Lab)]

I agree with my noble friend that our trading relationship with the EU is incredibly important. I do not believe in the premise of false dichotomies or that we are picking between one and the other. This is a continuing relationship and dialogue. I note that there is a very important EU summit coming up in May, which should really endorse and build on our relationship with the EU.

[Lord Purvis of Tweed (LD)]

My Lords, if this is a first step, was the Minister not as confused as I was yesterday to hear our ambassador to the US say on CBS’s “Face the Nation” that this was a finalised agreement? There is no impact assessment that we have been presented with in Parliament, so when is that impact assessment going to be laid before Parliament? He also said that film and technology were included, but there is no reference to that within the text of the announcement last week of the framework to start negotiations. Is it the Government’s intent that this will not be laid as a treaty that would then be ratified by Parliament? If it is not, and it is not a preferential trade agreement, does the Minister agree that we will have to apply all the terms in this framework to all other countries under WTO rules?

[Baroness Gustafsson (Lab)]

To clarify, a lot of key sectors are covered in this framework, and this framework is a final decision on how those key sectors will be treated when it comes to trading between the UK and the US. Those sectors are things such as automotive, steel and pharmaceuticals, but also beef and ethanol, which we have heard so much about. But they are not all the sectors where trade is a part of the UK-US relationship; it could be areas such as technology and how we think about the relationship with that. So yes, this is a final agreement for the sectors that have been covered, but it does not necessarily cover all the sectors. There is still work to be done to understand what those future trading relationships look like with respect to those other sectors.

With regard to how this will be treated within Parliament and whether it will be ratified as a treaty, forgive me—I could not comment on that specifically. I would very quickly run shallow of my parliamentary journey of knowledge, which is still at its earliest stages, but I will be sure to write to the noble Lord on the specifics.

Basel 3.1

Lord Purvis of Tweed Excerpts

Thursday 3rd April 2025 Lords Chamber

[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?

[Lord Livermore (Lab)]

Quite simply, we are not.

UK-US Trade and Tariffs

Lord Purvis of Tweed Excerpts

Thursday 3rd April 2025 Lords Chamber

[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

Lord Purvis of Tweed Excerpts

Thursday 27th March 2025 Lords Chamber

[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

Tuesday 25th March 2025 Lords Chamber

[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 Excerpts

2nd reading & Committee negatived & 3rd reading
Wednesday 15th January 2025 Lords Chamber

[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.