Commonwealth

Lord Selsdon Excerpts

Thursday 16th March 2017 Lords Chamber

[Lord Selsdon (Con)]

My Lords, in many ways, the situation confronting the Government of the United Kingdom today is similar to that confronting the Government in 1621 with the formation of the Council for Trade and Plantations. The mandate given then was:

“To take into their consideration the true causes of the decay of trade and scarcity of coyne and to consult the means for the removing of these inconveniences”.


Now, there has been a growing tendency to dismiss the growth of trade and the balance of trade as matters of reduced importance to the British economy. The great Board of Trade exists in name only and the Department of Trade and Industry had the word “trade” ignominiously expunged from its title and was replaced by the Department for Business, Innovation and Skills—a most confusing title. The Secretary of State for Trade and Industry also held the historic title of President of the Board of Trade, and those Cabinet Ministers who have held this important job have usually been replaced within a year. These and other constant changes in the structure have led to a lack of continuity. This in turn has led to ignorance and a lack of understanding of the vital role that international trade has played and must play in the creation of economic growth and prosperity.

British international trade was historically described as “exports and imports” and concerned mainly the export and import of manufactures and materials. These were later known as “visible exports” and are now described as “trade in goods”. In the 1970s the importance of the growth of the service industry sector emerged as a part-replacement for the decline of the United Kingdom as a manufacturing nation. This sector became known as “invisible exports” and now is called “trade in services”.

I am not sure why I am standing here today. I think it is something to do with Australia. My great-grandfather was the first Lord Mayor of Melbourne. It all happened when, as Scots, we ran out of money and we could not find enough sheep to knock off and flog in the market. Someone said, “These sheep are available somewhere with a much better climate, where the wool grows better. We cannot remember the name of the place but it is a big blob at the bottom right of the map”. So we set up a shipping line and found that with chilling machinery, instead of just taking immigrants out to Australia we could bring back sheep, frozen. That worked extraordinarily well for a while, until we were stuck off South Africa. The ship would not work and there were all these frozen sheep beginning to melt. With the intelligence of those of a different religion, we realised that certain religions liked lamb and mutton much better. So we took them ashore and allowed them to melt a bit and rather pretended, but did not say anything, that they had just been slaughtered because no one would have believed that they had come from Australia—first of all, no one knew where Australia was. This went on and we then found that instead of sheep we were taking workers back.

I had a little moment before I knew that our family had lost its shipping line in the Tasman Sea when out of the blue I got a letter from a bishop who had sent me a little parcel of three stone jars. The letter said, “At 92, my diving days are over. This was the last bit of kit I could find from the wreck of the ‘Brahmin’, which belonged to your family”—I did not know we had owned a ship. But I kept them and this gives me some sort of good feeling.

When we come down to the practical moment of dealing with the balance of trade, exports and imports, and the value of sterling, in many ways the situation is the same as that which confronted the Government in 1621, as I said.

I wonder why we do not teach geography in schools any more—it seems there is a shortage—and why people cannot read a map or a chart. I suffer from one really great disadvantage. I love charts. When I joined your Lordships’ House I knew I was unimportant and did not realise quite how unimportant I was until I was summoned during the nationalisation of the shipbuilding industry and asked—because my family was associated with ships and I must know something about it—if I would please speak. I did, rather nervously, and some people from the Department of Transport very kindly came to see me afterwards and said, “We would like to invite you for a drink and to give you a little donation”. I went to see them and they pulled out a long box, and in it was a rolled-up chart, with lots of red on it all over the place, and little black dots, too. These little black dots, I was told, were British ships at sea or in harbour. The red on it was British and this was where we were, right the way around the world. It was amazing at that time but we forgot our shipping.

If we bother to say, “What can we all do to help?”, first of all, the relationships with the Commonwealth are pretty good. As I mentioned, the same situation confronted the Government in 1621. I am a great fan of the Commonwealth. I always wanted to be a good cricketer but I was not; I was a wicket-keeper. I found that that pays you back pretty hard 25 years later when you find you cannot really walk because your joints have gone. Then of course a bright Australian surgeon comes and says, “We’ll give you a new knee, mate. It’s not very difficult these days”. So I am in the difficult position of wondering whether I should sit down now—which I will—and think about my knee.

Brexit: UK International Relations

Lord Selsdon Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Selsdon (Con)]

I am grateful for the opportunity to speak for a very short time. I begin by looking at Britain’s maritime role in the world. When I first joined your Lordships’ House, I did not know what to do, and I was grabbed by the then Leader of the House and Leader of the Opposition and told to go and sort something out with the maritime sector as I had just come out of the Navy. Effectively, shipbuilding was being shut down, and so I did a bit that helped. What was nice was that although I did not do very much, the industry was kind enough to send me a chart, which I have on my wall. It was of British Empire shipping in 1937, the year of my birth, and it showed a little dot where every British ship was at sea around the world, followed by, should I so wish to know, a list of their trade. I still have that on my wall, and it moves me quite considerably. I realised that we are a maritime nation, which we have not mentioned much today, with global relationships and a global role. There are other countries that are also maritime nations, with which we used to fight.

I am looking at the continent of Europe and saying, “What can we do in the Mediterranean?”. It seems that an awful lot of the rows going on at the moment are water-related, due to illegal migration and things of this sort, and a lack of capability to do anything about it. It is migration that is causing the problem, although it was there historically.

If rather than looking at just the economic exclusion zones around—which EEZs, and we were not sure what they were—we looked at which of the maritime countries we could co-operate with, we would see that the most logical one is France. I have to declare an interest in that I have produced some quite good rosé in Provence, but the wild boar attacked us rather severely this year and they won. There are an awful lot of wild boar around in the world and life is not too easy, but if we could look at the ganging-up between certain countries on specific projects, we would see that it is logical that France, with her links to Africa and to her own territories, could be quite a good partner.

For example, if we look at the square kilometres of economic exclusion zone interests of the United Kingdom and the overseas territories, together with the Commonwealth, we see that it comes to 60% of the world. If you add in the French, that comes to 76%. I just raise this as a little issue: that maybe we should look at the maritime sector and see what we could do. I declare my interest as secretary and treasurer of the House of Lords Yacht Club, and we are solvent.

Brexit: UK-EU Relationship

Lord Selsdon Excerpts

Thursday 1st December 2016 Lords Chamber

[Lord Selsdon (Con)]

My Lords, when I first joined your Lordships’ House, I think 50 years ago, I was grabbed by the Leader of the House, Lord Jellicoe, who said, “My dear chap, there’s going to be a lot of development in Europe and this European lark is going to take a long time to come about. We’d like you to think—would you be willing to serve on the Council of Europe?”. I had a full-time job and I was not highly paid. I assumed that if I went and did this, my pay would be deducted. But then I found myself on the Council of Europe, and everyone was rather kind to me. Shortly after that, Lord Shackleton came up to me and said, “I wonder if you’d join the EETC?”—he was chairman of the East European Trade Council. I said yes, and before long I found that I had been absorbed by other people far more intelligent than me, and that my job was that of a pen-pusher. When we had the original referendum, I was secretary and treasurer of the Conservative Group for Europe, and we introduced the slogan: “Britain in Europe: it’s our business to be there”. We were thinking about trade—exports and imports. Now, suddenly, we find that from a relatively weak economy, we are in a rather strong position globally and able to trade globally. I wonder where we go next.

In simple ways I suffer a bit because, legally, I am a French peasant farmer. I have a vineyard in Provence, where I produce rosé, although the grapes are generally eaten by foreign wild boar—I have a permit to shoot the wild boar but no gun with which to do so—so, with all the local ingredients, I suffer from that. However, I also produce olives. Wild boar will eat the olives when they drop off the trees but have not yet worked out that if they shake the trees hard enough, they will fall down. There is always an element of history in these relationships. In the second century BC the first wines from Provence were shipped to the United Kingdom. They went to Hengistbury Head—I am not quite sure how to spell it—which leads to Stonehenge. You therefore realise that in trade matters there are historic relationships between countries. At the moment we have a good relationship with France—we heard an excellent contribution from my noble friend. We have to decide what we do next, and with whom.

In the whole concept of Europe we obviously have to look at economies, which are in general more privatised than they were before, and at defence. We look here, too, to France, with its ownership of Airbus and the relationships it has. I have a love of the sea, having served in the Navy in the Mediterranean; afterwards I followed in a private boat the travels of St Paul. I nearly drowned everybody, but it must have been the same for him in those early days. That taught me about the business of immigration. I had not realised how many migrants there were—I am going back 10 years or more—moving from one country to the other. I made a point about taking people into slavery. One day a pirate decided that for the slave market in the Mediterranean islands they could do with some white slaves instead of black ones, and then raided one of the churches in Penzance or around there and took away the entire population of the church, which was then pushed into slavery in the Mediterranean. All these are little stories you get told and do not necessarily believe.

We have a close relationship with France, and they are becoming less French and more willing to co-operate internationally. Here, I look at this debate and think: it has come at the right time, but what do we do next? Trade is the key issue, but what do we trade in? When I was secretary of the Conservative Group for Europe we had that phrase, “Britain in Europe: it’s our business to be there”—it was meant to be about business. But we trade successfully with most of the countries of the EU and with France in particular. When you look at the co-operation with Airbus, we have some friends and partners. I cannot work out what we do next, but we need to enter into new treaties or alliances with as many people as we possibly can, and we should not try to plough a lonely furrow. When you have the wild boar about, lonely furrows do not work.

EU Foreign and Security Strategy (EUC Report)

Lord Selsdon Excerpts

Tuesday 7th June 2016 Lords Chamber

[Lord Selsdon (Con)]

My Lords, I have on the wall of my office a large chart that was given to me by the Ministry of Transport when I tried single-handedly and with no support to save the shipbuilding industry. It shows the position of His Majesty’s ships and at harbour in the year of my birth. It is quite an amazing chart because we were totally global. I have been brought up always to believe as a Scot, when my family went off and helped to colonise Australia and things of that sort because we earned more money abroad, that we are a global nation. However, other people do not feel that. It is not a question of the Commonwealth.

At the moment, we look at defence and fear. The biggest single fear, I gather, is immigration or migration. This seems to worry people more than it worries me because we have been a nation that built ourselves on immigrants and things worldwide. I play with this chart regularly, I take it out and with the new technology I look first at what is the British Empire. You look not just at the land but at the 200 nautical mile exclusion zone. I have raised this before in your Lordships’ House. You find that the United Kingdom, with the Commonwealth, effectively has approximately 21% of that exclusion zone. You then look at who are the other people with power over the sea. The next one, not surprisingly, is France with its own dependent territories and things. France and the United Kingdom together have some 25% or 26%. Now, this is totally irrelevant information to other people but to me it is a form of hidden power.

Then I found other things from time to time. I did not know that my grandfather when Postmaster-General laid the underground cables from America across the world, or that those are the only secure methods of communication that exist today because everything that goes through the airwaves can be hacked into or picked up. We look at the pattern of our trade. When I came here, I was told that I had better go and learn about things where things were going to happen. Lord Shackleton put me on the East European Trade Council and, with a lot of people, I was dragged off to places where I did not know where I was, and came back. Afterwards, I got to go to Ukraine, Albania where we looked at chrome, and the whole of east Europe. I found it fascinating.

Then I was told that I ought to know something about Africa and read that book, The Scramble for Africa. I took a look again at that and spent time repeating this to your Lordships’ House. Why did we go to Africa in the beginning and what were the resources that they had? Where have those resources that were underground and in other places disappeared to? I did not know that Ghana was about gold. Then I found that my great-uncle was Stafford Cripps and that his daughter—my cousin—Peggy married Joe Appiah, who was known as “Veranda Joe”. I had not realised that when the King of Ghana went to the Middle East to visit Mecca, he took with him so much gold that the price of gold collapsed for 50 years. These are all historical things but our knowledge of other people’s countries these days is very limited.

First, take our great fear. As I mentioned, the fear of the nation is migration or immigration. That must be addressed because, with all the queues of people hanging out waiting to get into the United Kingdom, it may have an impact for some time to come. We must look at where we go ourselves. We must accept that we are and always will be a global nation. By “global”, I mean every single country in the world. We have one of the strongest economies. We do not seem to have any fear; we have a good defence operation—it is pretty good, but sometimes people seem to be frightened of goodness knows what. I live in the very happy hope that having been here for 52 years I may have a few years longer.

However, there needs to be some decision-making as to where, who and how we develop overseas countries to our own benefit. We do not have the resources here now. It is amazing that having been such a great steel country we should rely on individual foreigners to save our manufacturing of iron and steel. I have great hope for the future. I have enjoyed this place. As somebody said, “You’re jolly lucky. You have been drip-fed by geriatrics who know what they are taking about, and now you have become one”.

NATO and the European Union

Lord Selsdon Excerpts

Monday 7th December 2015 Lords Chamber

[Lord Selsdon (Con)]

My Lords, I am most grateful to the noble Lord, Lord Wallace of Saltaire, because it brings to an end a most interesting period I have had of some six months of sitting through presentation after presentation, as a member of the House of Lords defence group, from the various parts of our Armed Forces. Over the years I have seen these presentations, but I have never been so impressed as I have been in the past six months. I believe that we might possibly end up with the best Armed Forces in the world.

The question is: what do we do with them and what is the bureaucracy that keeps us at bay? We have 22 member states of the EU and 22 members of NATO. It is quite interesting, however, that members of NATO are also members of the EU, so there is an interrelationship that I find quite interesting. The position that we are facing now is that we are a global nation, and perhaps one of the most global in the world, without actually realising it. We have had historic co-operation with our neighbours, but not within the Armed Forces area until recently.

I would like to draw your Lordships’ attention to the interesting position in which we find ourselves under the UN Convention on the Law of the Sea. The territorial land area belonging to the United Kingdom extends outwards to 200 nautical miles and is known as the economic exclusion zone—the EEZ—and this also applies to overseas territories. Just for fun, I looked at the world’s EEZs of some 45 million square kilometres, and found that 60% of this area, or 26 million square kilometres, is represented by the EEZs of the United Kingdom together with those of the Commonwealth and the British Overseas Territories. Some 16% of the EEZ area is represented by France and its overseas territories. Thus, together with France, we have an interesting control of the waters of the world. These zones account for the area almost from heaven above to hell beneath. On the other side, 15% of the EEZ area belongs to the United States, and a further 10% to NATO. In our future thinking on our Armed Forces, therefore, we must look at the maritime sector very closely. The world shipping fleet includes 21,000 Commonwealth vessels. That is about the same as those of Japan, Greece, Germany, China, USA, Russia, Norway and the Netherlands combined. We are therefore, to some extent, a very great maritime nation.

When we come to our trade, one of the fascinating issues when regarding it—and I was on the Trade Board for many years—is that we have always had a deficit on manufactures and a surplus on services that has made up for that. That is because we do not make as many things as we used to, and our raw materials, in general, are sourced from abroad. This deficit on manufactures, therefore, is supplemented by a surplus on services. It means that we have played, and should continue to play, a global role.

This makes me look at the situation with France—and I declare an interest because I am technically a French peasant farmer, as I grow a small amount of wine in France and have been attacked by wild boars, the biggest one of which weighed 300 kilos. There is therefore a certain sensitivity and I have worked closely with French companies over many years. The relationship between the United Kingdom and France is particularly good at this time, and there is much more co-operation and going together in various territories.

I turn, inevitably, to Africa—that vast continent that has many problems—and to the “pays francophone” in Africa, which were very substantial providers of raw materials for France. We cannot look at the defence of the world or of the realm without looking at the requirement to solve the problems in some of these territories, particularly Africa, where migration has occurred, production has fallen and raw materials have been left in the ground. Therefore, if you go back to the past and look at the scramble for Africa and such, there should be a new scramble for these areas, where we, with the protection of our Armed Forces, could help to regenerate much of the production of the past.

In looking at some of the recent migration figures, and trying to determine how accurate they might be—on who came from where to go where for what reason—it seems strange that much of the migration comes from countries that were originally colonised because of their raw materials and the capabilities that they had for produce and products that were required in the western world. That still applies. However dreamy it may be, it would be nice to think that a review of all the production areas of central Africa and others today might be undertaken, and consideration given as to how some of the mines might be reopened or the agricultural production put in place by those immigrants that we have here.

It is a very interesting time for us, and I am very proud of my belief that we have, man for man, the best Armed Forces in the world.

Queen’s Speech

Lord Selsdon Excerpts

Thursday 28th May 2015 Lords Chamber

[Lord Selsdon (Con)]

My Lords, I admit that I have rather enjoyed myself today. It is a sort of day out. I feel in a rather difficult position because I have always believed that the United Kingdom is global but now, suddenly, someone is trying to confine this to Europe.

I will begin with a little quote that I like:

“Roll up that map; it will not be wanted these ten years”.

That was after the Battle of Austerlitz. The first question I ask myself is: are we European or are we solely British—are we global or are we insular? The short answer, as we have heard today, is that we are a global power or a global country and we must proceed as such. That leads us to the question: if we are not European, how are we global? Are we going to be confined by some demand of the public, which we had a few years ago?

As we come to the question of a referendum, I remind your Lordships that back in 1971, when we had a Motion on the,

“decision of principle to join the European Communities on the basis of the arrangements which have been negotiated”,

the Lords gave a majority of 89%; in the Commons it was 60%. That was a fairly strong response. Then in June 1975, when we had the referendum with the question:

“Do you think the United Kingdom should stay in the European Community (the Common Market)”—

as many of us preferred to call it—there was a total electorate of 40 million, a turnout of 64.5%, and 64.5% said yes.

That meant that 66 out of 68 counties had also said yes and that it was only Shetland and the Western Isles which said no. At that time, Alec Home said:

“In this House and out of it, there is widespread recognition that we have reached the time of decision, and that the proper place for that decision to be taken is Parliament”.—[Official Report, Commons, 21/10/1971; col. 912.]

Callaghan also pointed out:

“Tonight is no more than the first skirmish in the struggle, in the course of which we shall, I hope, by debate and discussion between ourselves, establish what is Britain’s correct relationship with Europe and what is our rôle in the world … ahead”.—[Official Report, Commons, 28/10/1971; col. 2202.]

This great country of ours is, and has to be, global and one therefore almost has to ask, “Are we European or are we global and worldwide?”. When we look at our trade, we have always had something of a deficit in our balance of trade in manufacturing. That is partly because we do not manufacture enough at home and have then been required over the years to import more and more. But when we look at invisibles and the service industries, we are far and away the most influential and dominant in the world. Again, I have been asked, “What happened to the British Empire?”. It did not suddenly dissolve. If I am asked, “Are we all British or European?”, the feeling I have is that we are not European but global. As my noble friend Lord Howell has made clear from time to time, surely we can count the Commonwealth and our relationships there as part of our network. To say that we are just a European country rather downgrades us, in a way. Where does Europe start and the Middle East begin? Where do things end?

I have found over time, as I have explained before in your Lordships’ House, that wise men used to choose young Peers who came in rather reluctantly and put them on to difficult little jobs. I was given the Middle East and told by Lord Jellicoe and Lord Shackleton, “My dear chap, get involved in the Middle East. It is going to take a long time to come alive but we would like someone to be alive at the time when that happens”. It was the same again with Lord Shackleton and eastern Europe. He took me with his team over to Moscow, where I had never been. We had to speak in the basement and then found that it had been bugged but he said, “Remember this: the Russians are no fools”. Today we look at Russia and ask, “Are we dealing with Russians or dictators? Is Russia a cultured country, or what?”. After that time, I had the privilege of going round most of it and I went to Ukraine. I sat next to Ukraine at a conference because UK and Ukraine went together, and the Ukrainian said, “We must do some things together. Why don’t you come and see what we can do?”. I went out and found that it was an extraordinarily interesting country. I have raised the point in the House before that when we went round the missile factories, we realised that they were in a very profitable and successful country but one dominated by a neighbour whom they did not wish to retain.

I will now sit down but I have a simple question. I believe that we are and should be global. I am very grateful to my noble friends here who have spoken in the past but they tend to be a little parochial, so in that belief, may I recommend strongly that we become a global nation?

EU and Russia (EUC Report)

Lord Selsdon Excerpts

Tuesday 24th March 2015 Lords Chamber

[Lord Selsdon (Con)]

My Lords, my interest in Ukraine first began when I became secretary to the Parliamentary Space Committee, when I had no real idea of the strength of Ukraine in the space sector. Before that, I had been brought up with a Russian governess and knew that there was food all over the Soviet Union. I remind your Lordships that 25% of the total agricultural output of the former Soviet Union came from Ukraine, and 70% of the sugar from sugar beet. It was the fifth largest exporter of wheat and the third largest exporter of cotton, and had 25% of the workers in the agricultural sector. This information is historical but has become quite important to modern-day Russia.

Ukraine had a state company called Yuzhmash, which used to produce 6,700 tractors a year. It then went into the space business, first by employing German prisoners of war to construct a large military equipment factory at Dnipropetrovsk, which was Ukraine’s fourth largest city, and then developing into a major centre for nuclear arms production and space and ballistic missile design that employed 50,000 people. This interested me as secretary to the Parliamentary Space Committee, and I wanted to look at the missiles. They kindly arranged for me to go down there. I arrived at Kiev and was told that I would have to wait until the next day for a plane. I said, “Can’t I go down now?”. A chap came up—a pilot—and said, “Well, I’m on the way back with my plane. Would you like to come with me? You won’t mind the dog and the puppies”. So that is how I first got to Ukraine.

As I say, Yuzhmash was employing 70,000 people, but the main Soviet missile activity was in Hrunecheva in Russia, where they are now launching or preparing six new rockets, including one proton rocket. As well as that, Ukraine was a great shipbuilder. Being secretary of the House of Lords Yacht Club, that interested me as well, so I asked if I could have a look at the ships. My bank then set up a team to buy ships from Ukraine. The thought was that we would buy product tankers, general purpose vessels and reefers, which could be chartered out into the market and fully financed. I had not realised that before its independence Ukraine had supplied 60% to 70% of the Soviet Union’s ships, most of them for Russia. At the end of 1995 some 126 vessels, mainly product tankers, had been built at the Kherson shipyard alone. So Ukraine became a much broader country for me to look at. We asked whether they could build some ships for us. Then I heard about the Know-How Fund, so I wrote to it— I did a packet about how you build a ship and so on. The fund gave me £100,000 so we set out to see what we could do to develop demand for ships that the British marine sector could use. It seemed quite simple to build a ship. They built many ships extraordinarily quickly and very easily. We set up a shipbuilding company with them. We took a team of all our experts from the United Kingdom—we did not build ships anymore, which, as my family comes from the Clyde area, has always upset me—and placed an order for some ships, which were surprisingly cheap and economic. At the end of the day, the project failed for reasons of bureaucracy, but their shipbuilding knowledge was valuable.

Given its strength in the agricultural sector, with its 9,000 tractors, I thought that Yuzhmash would still be in business, but it has been closed down. That seems rather strange when it was a very good operation, but it seems effectively to have been alienated by the Soviet Union. My concern, therefore, is: what is going on? Surely Ukraine’s remarkable agricultural capability and ability to increase production has a cash flow value that could help the world and ourselves. If they can build ships—they still have the facilities there—and we could find orders for those ships, which are needed in the international market, there must be some opportunity.

When I have been to Kiev I have usually got into trouble because I ask too many questions. I wanted to know about religion, for example, and before I knew it I was locked up in some archives or some underground thing with a chap with an enormous long beard with weights on the end. I did not know that this was a very senior man of the church, that it is important that you should have a long beard to be respected and that in order to do that you put weights on the end of your beard to make it grow longer. This was some of the technology. I learnt from them all about how they had hibernated in these caverns during the war. Then, when they had nothing else to do with me, although I am completely tone deaf and have no idea about music—I could not even sing middle C at school—they sent me off to the opera for three or four days running, all as part of some propaganda exercise. Finally, they said, “Look, what can we do together?”. I checked with my colleagues from the bank and found that we could willingly finance things in Ukraine, but the politics were beyond my pay grade.

Ukraine is a country that I love. It was intriguing to be able to ask them questions such as, “Did you really send those rockets to Cuba?”—although maybe I should not be saying these sorts of things. I had been to Cuba quite often as well, and I asked the Cubans if Ukraine had sent the missiles. I never really knew the true story. It was said that the missiles had indeed been sent, but they had not necessarily arrived. So the Ukrainians had to send some more but, as there had been no reaction from the Cubans, the Ukrainians sent some photographs of the missiles on the cargo boat. When I went to Cuba, the Cubans said, “Yes of course, we know all about that”.

This lovely world of Ukraine has intrigued me for a long time. To some extent they are European. With those assets and that agriculture production, when we are short of food in the EU, maybe we could invite them to come along. The question is: who do you talk to there now? It seems to me that Putin is gradually concentrating control as much as he can within a small area around Moscow, and countries like Ukraine may be left out in the cold.

Ukraine is a country that I love and respect. If any of your Lordships would like a bit of fun, I would willingly take you down to look at the old missile factory, although it is not producing missiles anymore. The people there are still nice.

Exports: Government Support

Lord Selsdon Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Selsdon (Con)]

My Lords, I am most grateful to my noble friend for giving us this opportunity to look at trade from a wider point of view. I should probably declare my interest although I am always confused by it. I was working happily in the building materials industry when suddenly my father died and I was told immediately that I should go to the House of Lords.

I did not know any Lords. I waited to be invited but no one wrote to me. I then realised that I had to prove who I was, which was quite difficult. My father was called Lord Selsdon and I was Malcolm Mitchell-Thomson. I came to the House and met Lord Jellicoe and Lord Shackleton, who became two of my great heroes. I was then made to give up my job in the manufacturing sector and go into economic consultancy—although I was not good enough—dealing with trade. Then Lord Shackleton grabbed me and said, “I would like you to be involved with my East European Trade Council because things are going to happen over a long period of time and by the time that things do happen that are beneficial for the United Kingdom I will probably be dead, but you will still be alive”. At the same time, Lord Jellicoe said to me, “You are joining an economic consultancy company. I am sure they will let you take time off in the afternoon as long as you work at weekends”. I was to deal with export and trade finance.

Our first clients were the Japanese, who wanted to know about motor cars. Somehow, I did not believe that the Japanese made motor cars or were any good at that. We did a research project for them on opportunities in the United Kingdom automotive market. I did not know that one of the main reasons for this was that they drove on the same side of the road as we did. That led in due course not so much to the marketing of Japanese cars but to looking at what products and services they could sell to the automotive industry. Later, we organised a trade mission to Japan and Bentleys and Rolls-Royces arrived there. I did not believe that the Japanese would drive those cars. The manufacturers sent left-hand drive cars by mistake, so we had to explain to the Japanese that, if you were a gentleman, you could drive your own Bentley as well as having a chauffeur, but that if you had a Rolls-Royce, you must have a chauffeur, and having a left-hand drive car meant that the chauffeur could open the door on to the pavement and help the customer. These were little things but I watched the Japanese logically and seriously develop and expand this area over time. The automotive sector has done extremely well. My own interest in it is that my father spent his life motor racing, but that is another story.

From there I moved on to do trade research. I was put on the East European Trade Council and then one day I met a charming lady called Patience Wheatcroft—now the noble Baroness, Lady Wheatcroft. She interviewed me and more or less took me apart by asking me questions which I had no idea how to answer, but I continued on the trade front. Then Lord Jellicoe said to me, “We are going to put you on to this European lark. We will put you on the Council of Europe”. I was not quite sure what that was. However, he continued, “Ask your employers to let you take some time off and you can go and see what we can do with Claude Chaisson’s money and develop opportunities in Africa using the European Development Fund”. Before I knew it, I was shoved into an aeroplane with His Royal Highness the Duke of Kent, Lord Jellicoe and others, and off we went to explore the French territories. I have to say that I did not know where the French territories were, nor did I know the historic relationship. So we were going down the west coast of France and almost not realising where we were, but it was a great experience.

I found something that worries me today. I received from the Office for National Statistics a release of 23 January exploring the deterioration in the United Kingdom’s current account in recent years. The first lines read:

“The current account deficit widened in Q3 2014, to 6.0% of nominal Gross Domestic Product GDP, representing the joint largest deficit since Office for National Statistics … records began in 1955”.

I am not sure that things are as bad as that makes out. We may indeed have a current account deficit. In general, our biggest trade deficits have been with Germany, China, Norway, the Netherlands, Hong Kong, Italy, Japan, France, Benelux, Canada, Russia and Turkey. Our surpluses, surprisingly, have been with Ireland, the United States and, in general, Middle East countries. It is a difficult thing to look at because one thing that has happened in the internationalisation of the United Kingdom in recent years is that we have had a high level of immigration and of people from overseas countries wanting to work and contribute to the UK economy. We have probably the best international relations of any nation. I refer again to the situation relating to the Commonwealth—a remarkable collection of nations which are coming together, but we do not have any trade surpluses with them.

As I said, our two greatest trade surpluses are with Ireland and the United States. I find that quite interesting. Can we finance a trade deficit? Are we going to have trade surpluses? With which countries should we or could we operate? I return always to a map of the world. Historically, we have no raw materials or resources other than coal. Everything that we got came from overseas countries, where we managed to create added value. At the moment, the deficit that we have on manufactures can perhaps easily be supported by income flows. The Office for National Statistics document stated that there was also a record deficit in 2014 of 2.8% of nominal GDP,

“a figure that can be primarily attributed to a fall in UK residents’ earnings from investment abroad”—

I had forgotten about the earnings from investment abroad that was so significant to our economy—

“and broadly stable foreign resident earnings on their investments in the UK”.

Perhaps the Government can give us some idea of what the foreign residents’ investments are in the United Kingdom at present, and how significant they are to the economy.

Over my years in trade finance, I have never been quite as confident as I am now. I realise that I was completely wrong to feel negative about the balance of payments and trade of this sort. We are, without doubt, the world’s most favoured country—regardless of how, why and when we got there. It seems that interest in the United Kingdom—whether it be for education, training or security—is considerable. I congratulate those who have spoken today and am very grateful if somehow from this debate we can give increased confidence in the United Kingdom.

Middle East and North Africa

Lord Selsdon Excerpts

Thursday 30th October 2014 Lords Chamber

[Lord Selsdon (Con)]

My Lords, I am very privileged to follow the noble Lord, Lord Weidenfeld, and to welcome him back to the House. I have always been in some ways one of his pupils. All that I have known about Israel has come out of his mouth in one form or another.

I suffer from a difficulty here. For many years I was chairman of the Committee for Middle East Trade. I thought that in this great debate we would be talking more about trade. It seems that nobody has mentioned this at all. The Middle East as such is one of our greatest potential markets. As is written in the Koran, it is the duty of every good Muslim to trade. When I was that committee’s chairman, it was long before the Government decided to get rid of the Board of Trade and change the name of everything to a word that I cannot remember—it is called BIS, which is totally inexplicable to many people abroad. We have to look at our balance of payments and our trade with the Middle East, which has been considerable.

We have not really mentioned today oil revenues from the Middle East countries, and their application and use. Turning to Iraq, I have one suggestion that was made to me when I was last there on my own: what could we do to re-establish NIOC, or the equivalent of the National Iranian Oil Company, which could be one of the biggest oil companies and for a brief period was partially owned, I believe, by the United States, BP and others. With the potential production of oil in Iraq, vast funds could be released and applied in an appropriate direction.

The same is true to some extent of the countries of north Africa—even moving right across to Mauritania, which is one of the biggest iron ore-producing countries in the world. We have made no mention today of their oil revenues or purchasing powers. We look too at the co-operation that could exist between Libya, Algeria and, through them, with France.

How can we help develop and finance trade with the Middle East that can produce the revenues that it may need to rebuild various disabled societies? It is not too difficult. With the ability of the ECGD and some of the government grants, there are great opportunities. The difficulty is that when there is fear about personal security, people are reluctant to travel.

The Koran, as I said, says that it is the duty of every good Muslim to trade. Trade therefore is important, but it seems not to be mentioned any more. It is as though trade in this country has gone below the salt. We have organisations that one cannot necessarily understand, such as the one spelt BIS, but for the international world trade becomes more important. It is the lifeblood of the United Kingdom. Our ability to fund things is quite significant. Within the United Kingdom we have resources of finance that are second to none in the world. Our difficulty is how to identify the projects that we need to pursue.

I have one simple example. I got into trouble one day when we had what was called the Salman Rushdie affair. I was asked if I would be willing to go to Iraq. I was chairman of the Committee for Middle East Trade and I assume the Government could not think of anyone who would be allowed to go. I went to see the Iraqi ambassador, who did not want to see me. Still, I pressed the buzzer outside and asked, “Ambassador, if you are listening, I have been asked if I could go to Baghdad—do you think that this is a good time?” I waited a moment and got an answer, which was “Your Excellency, the answer is yes”.

I got on a British Airways plane and went off to Baghdad. Half way through the flight the pilot, who was a New Zealander, came down and sat beside me, and said, “Well, sir, we have a bit of a problem. We have just had a message from headquarters that the Prime Minister in his office in the House of Commons is seeing Salman Rushdie. Is this going to cause you any problems? You are the only British subject on board. If you like we could turn the plane round and go back”.

One can be a coward without having to admit it. The plane got in touch with the Foreign Office, and the Foreign Office said that all was quiet there and we found that the ambassador was at the residence, which is outside Iraq. I supposed that I had better go. The plane said that I would be surrounded with British Airways staff when we get there. I asked, “Are they all British?” The answer was that none of them was.

I went out of the plane, rushed through, and was waved through straightaway. They all seemed to know that I was coming. I then met a hooded lady—I would call her a singing nun—who looked me up and down, and she said: “Hello, Malcolm. How nice to see you. How is your sister Gail?” I never knew who she was, but apparently they had been in the same lacrosse team some time before. The next thing that I knew is that I was sent off up to Isfahan in a private plane to sit with the mayor who wanted to know if we could help with the beautification of the city. It did not have any roses, and roses were important. He then introduced a fining system. This was with British technology from London. People were fined a duck if they exceeded the speed limit, or stood upon a tree or a rose bed.

I found that I had a new vision of Iraq. In looking down at the things that they had done, I believed that it could be one of our great partners; there was a certain pro-British feeling about it. The same is true, even these days, in Sudan and in north Africa. The relationship that we have with so many of these countries is something upon which we can play.

I am grateful that this debate has taken place and I hope that action can be taken by the Government.

Iraq

Lord Selsdon Excerpts

Wednesday 25th June 2014 Lords Chamber

[Lord Selsdon (Con)]

My Lords, this has been a fascinating debate for me as I have a long-standing relationship with Iraq due to my former chairmanship of the Middle East trade committee. I was always given the more difficult countries of the world to deal with. I thought that was because I was disposable.

I first went to Iraq in 1974, I think. When I arrived, I thought that I would visit the British embassy, but the Iraqis said, “No, don’t go near the British at the moment. We’re not quite sure what they are up to”. I replied, “I’m a British citizen”, but they said, “No, you’re Scottish, it’s not quite the same thing”. Over a period of time, I went backwards and forwards and found, working as I did with the Midland Bank, or one of the banks within it, that we were the main bankers to Iraq. We all knew each other. When we said hello and one asked difficult questions, the Iraqi right arm would go over its heart, and your guest or friend would say, “I am not authorised to discuss this at my level”. I would say, “Were you by any chance trained by us at Midland Bank?”. “How did you guess?”, they would say. This was the rule. There were hierarchies and rules. They were trained at Haslemere or another place—I have forgotten where.

Over that period, I would sit with them and discuss what we could do together; but they did not effectively trust the British. One of the last times I was there, I was with Tariq Aziz, who asked me about Sir Hannay, as he called the noble Lord, Lord Hannay—he could not manage “Sir David Hannay”. He said that he rather liked Sir Hannay, that he was trustworthy, and would like to discuss with him that the Iraqis were looking for interlocutors.

In the discussions there, we looked at Iran’s economic potential in the medium and long term, and of course it came down to oil. We had the Matrix Churchill affair, when no one would speak to anyone about anything. However, the banking relationship still went on, and we trained Iraqis, had a great regard for them and they honoured every debt. They were accurate in all their accounting, and I much appreciate them. I thought that it would be a good idea to dig out some of the papers that we wrote about what could happen, the relationship with Iran, and all these things when, in the early banking days, we were determined that politics and economics were one and the same. If you got the politics wrong, you would lose money.

I looked, therefore, at the future and I dug out all my papers from before. When we were out there, it was difficult to have official meetings because you needed that strange instrument called “permission to speak”. I found that rather strange but got that occasionally from the Government, so one had a right to go and talk frankly. If you were their bankers, their children were educated in England or Scotland, and you worked together—you trusted them. I trust that economy. I raised the matter with a few friends the other day and asked why the British were sitting on their whatevers—the phrase was not too polite. The Iraqis are our friends and always have been; we trust them and know where we stand with them. At this point, there is an opportunity to take action. Are we frightened to go there? No, I am not frightened to go there. I would willingly go there again tomorrow; I never have been frightened to. However, the difficulty, once you got caught in the political maelstrom, was that you did not know where you were.

All the Ministers who I got to know at that time have long passed—even the tough ones. However, I remember several instances, once with the Oil Minister. I asked, “How much oil have you got?”. He said, “You in England should roll up that map of Europe. I will unroll our oil map”. We sat and looked and marked on the map how much oil there was. Then he said, “Come and look here”. He opened another curtain, and through a mirror or a window I saw a whole lot of French people who I had met before in the hotel and were negotiating “sanction busting”, I suppose you would call it—oil deals and transactions.

The economy of Iraq, based upon oil, is strong. We have a political situation in which it needs a friend. I genuinely believe that the United Kingdom could and should be its best and most trusted friend. I look back and think of my grandfather who was director of restriction of enemy supplies during the First World War, was in the Navy, and was then responsible to some extent for part of the peace process. He pointed out that in those days trade was important; the world should be based upon trade. The Iraqis are great traders. I have no fear of the situation at the moment but there is an opportunity for this Government—the British—to take an initiative.

I did not realise that Tariq Aziz actually played cricket, had been in Wales and was a wicket-keeper. Because I was a wicket-keeper too, instead of discussing other things we discussed cricket for a long time. Iraq is a great country and I had discussions there before I went to Iran—I was asked if I could help out with that little difficulty called Salman Rushdie, because we were, again, bankers to the Government of Iran, so you could go there unencumbered, without any fear. I feel that we have withdrawn a bit from the Middle East and could take many more initiatives because I really believe that we are trusted. What my noble friend Lord Howell said is absolutely true. Unless an initiative is taken by some country, no one is going to get anywhere. When I went to see some of the people on Chilcot’s team—I thought they might like to look at the papers I had written—they said no, it was not of very much interest.

To me, the future lies in whether we can revitalise INOC, the original Iraq National Oil Company. We found in those days that there were many buyers and, from the latest studies I have done, there are adequate oil supplies. I feel the Government should take the initiative; I hope that they will. I would support it and most of my noble friends who know Iraq would support it. It is not a matter of being afraid but taking some initiative at this particular time.