BBC World Service
Lord Stevenson of Balmacara Excerpts(1 year, 11 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, it is a pleasure to follow the noble Baroness, Lady Browning. I am delighted to know about her nocturnal habits; I will not share mine with noble Lords, but I do not have her stamina to carry on as late as she does. However, I have listened to the World Service, particularly when abroad, and found it useful on occasion to pick up and to follow. I will depart a little from her in terms of the concerns she has about new technologies, because I believe that perhaps there are opportunities here that we are not looking at sufficiently. However, the points she makes are very important and we should reflect on them.
I also thank the noble Lord, Lord Alton, for securing this debate and for his comments. He is truly one of the consciences of the House and constantly reminds us of things that we sometimes tuck away and do not think about enough—I am grateful to him for doing it again on this occasion. He is also tireless in pursuit of his pursuits but also gracious with us, which makes him very easy to work with.
I am looking forward to that maiden speech of the noble Lord, Lord Hampton, and I hope that there will be many more of his speeches to come.
This is a debate which perhaps could have laid with the DCMS as the sponsoring department, but we are grateful to have the Minister from the FCDO responding. I am looking forward to his comments, and particularly to his take on the wording, which has carefully been put in front of him, on whether he is able to encourage the importance of the BBC World Service—I hope he will be able to do that—and whether he will reflect on the impact of the cuts, which is much in line with both previous speeches. How does he reconcile the FCDO position on this, and what will he do about that in terms of funding but also, more importantly, with regard to the constitutional issues raised by it?
On the money points, the point has been made, which I want to echo, that the World Service is funded mainly by the UK licence fee. The licence fee is of course a tax on the receipt of telecommunications, not a fund for the BBC. We need to remember that that is the way in which it is framed in the law and how it is actually used in practice—of course, that raises issues about non-payment. What is the Foreign Office’s position on that? We know that the BBC licence fee is under review; does it have a position, has it been made public, and, if so, could he share that with us? If, for example, he is minded towards a subscription view, does not that have quite serious consequences for the way in which the BBC is able to fund its World Service? A subscription will certainly reduce the amount of money available and would play to the points made by the noble Lord, Lord Alton, in his comment about why people who perhaps do not have any direct use for the World Service will be prepared to pay for that as it goes forward.
My second point about the way in which the funding currently operates is the question about grant in aid. The grant in aid from the Foreign Office, welcome though it is, is relatively small relative to the overall cost of the BBC and only a quarter of the current cost of the World Service. There is also a timing and a longevity point—this has been mentioned in relation to inflation, but it is wider than that. Can the Foreign Office do anything to try to align better the funding streams it is able to provide to the BBC and to link those to the licence fee settlement? After a lot of fuss and bother last time round, the Government, slightly unwillingly, agreed to work on a five-year basis for the BBC, so at least it has some longer visibility about where its funding is coming from, pace inflation, because working on a five-year or 10-year basis is a lot different from the rather uncertain way of doing this at each spending review. Spending reviews seem to come even more frequently than snowstorms, and we are not very long-sighted about this if we are going to wait only until the next time, when the next Chancellor or the next crisis curtails the previous plans. These are important matters.
Finally, on governance, it is important to note that the BBC is governed by royal charter. That used to be a very secure way of doing it but is rather less so following recent discussions in the last five years. The royal charter currently says that
“the BBC should provide high-quality news coverage to international audiences”.
So are we saying, if we are changing this, that we want to change the charter in this respect and make it on a fee-based basis? Are we really saying that or do we believe, as others have said, that the World Service is indeed
“perhaps Britain’s greatest gift to the world this century”?
We need to be certain about what it is we look for, and if we are happy with the current arrangements, the consequences of that are different constitutional arrangements and different financing. These are important matters which cannot be ducked.
Does the FCDO agree with the director-general’s changes? If it is merely funding a body that has full responsibility for its own actions, it should not have too much to say, despite what the licence agreement requires in terms of the BBC agreeing with the Foreign Secretary. What happens about going digital—does it have a view on that? These issues need to be taken into account as we go forward. I look forward to hearing the Minister’s response.
Continuity Agreement: Kingdom of Morocco
Lord Stevenson of Balmacara Excerpts(4 years, 8 months ago)
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Lord Stevenson of Balmacara
That this House regrets that, in agreeing a continuity agreement between the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Morocco, laid before the House on 20 December 2019, Her Majesty’s Government failed to consult adequately with the people of Western Sahara; and calls on the Government to ensure a trade agreement conforms to international law in relation to the people of Western Sahara.
Special attention drawn to the treaty by the European Union Committee, 4th Report
Lord Stevenson of Balmacara (Lab)
My Lords, I shall speak about the UK-Morocco association agreement. I also intend to make some remarks about the underlying issue here: Parliament’s continuing inability to scrutinise UK trade deals in a meaningful way. As your Lordships’ House will be aware, although there will be no direct parliamentary involvement in the UK, a UK-EU trade deal needs the approval of some 38 individual EU national parliaments and regional assemblies before it can come into force; and if we are able to negotiate a free trade deal with the USA, it will come into force only if it is approved by Congress—both the House of Representatives and the Senate. The UK-Morocco Association Agreement is a good example of why the current situation is, to my mind, untenable.
The UK-Morocco association agreement was laid before Parliament on 20 December 2019 and, as it is a treaty, it is subject to the Constitutional Reform and Governance Act 2010. However, it is a negative instrument, so the only meaningful debate possible is the “nuclear option” of a vote to strike down the instrument in either of the Houses of Parliament within the statutory period, which has now passed—a piece of Gilbertian nonsense if ever there was one. The UK-Morocco association agreement is one of the Government’s continuity agreements designed to replace EU trade treaties after Brexit. It replaces the EU-Morocco association agreement, as well as the accompanying EU-Morocco dispute settlement mechanism agreement. The Lords European Union Committee drew the agreement to the special attention of the House, with particular reference to Western Sahara as, in the view of the committee, the inclusion of that territory
“raises important questions, especially about how the UK should balance its commitment to Western Sahara’s ‘undetermined’ status.”
Western Sahara is categorised as a non-self-governing territory under chapter XI of the Charter of the United Nations. A 1975 International Court of Justice ruling recognised Western Sahara’s right to self-determination and, in 1991, the UN launched a mission to hold a referendum for the Sahrawi people to decide whether it should be an independent country or become part of Morocco. That referendum has still not been held. The EU signed a trade treaty with Morocco in 2012 which covered Western Sahara. The European Court of Justice has twice ruled, in 2016 and 2018, that Western Sahara is a “separate and distinct” territory from Morocco under international law, and that no agreement with Morocco can be applied to the territory of Western Sahara without the consent of the Sahrawi people.
The internationally recognised legitimate representative of the Sahrawi people has rejected every proposal that the EU’s trade agreement with Morocco should apply to them. A coalition of 93 Sahrawi civil society groups also stated that the people of Western Sahara reject the inclusion of their territory in any agreement concluded by Morocco. The EU amended the wording relating to Western Sahara in its agreement, so that it applies only to products from Western Sahara that are
“subject to controls by customs authorities of Morocco”,
and the UK agreement notably includes this phrase. However, the EU Committee report draws the attention of your Lordships’ House to the fact that the Sahrawi national liberation movement, the Polisario Front, does not consider the consultation which preceded this compromise to have been sufficient. A letter signed by the general secretaries of the major trade unions and NGOs, including the Trade Justice Movement, War on Want, Global Justice Now and Traidcraft Exchange, was sent to the Government in January this year. The Swedish Government have also made a formal objection.
Last year, the High Court ruled that the territory of Western Sahara is separate from Morocco under international law and that the UK Government are therefore acting unlawfully by failing to distinguish between Morocco and Western Sahara. From my argument so far, I hope it is clear that your Lordships’ House owes our EU Committee a considerable debt of gratitude for its work in flagging up this issue. There is, without doubt, a sensitive political decision hidden within this seemingly simple rollover agreement, but the committee’s report raises wider questions of how this House and Parliament should deal with ratification of treaties. If we do nothing, surely we are complicit in undermining UN-led efforts to achieve a political solution that provides for the self-determination of the people of Western Sahara. Yet if we raise this issue, as the committee suggests, we are constitutionally unable to do anything, short of the nuclear option of voting down the treaty as a whole. Am I alone in thinking that this situation is unsatisfactory? If we do feel that, what can we do?
Lord Stevenson of Balmacara
My Lords, I thank all who participated in this wide-ranging debate. I make no apology for that: we will inevitably have to confront the question of how Parliament and the Executive can get closer together and come to a proper arrangement for the review, scrutiny and justification of treaties. But this was never going to be the occasion on which that was settled, and I understand that the Minister was unwilling to get too deeply into the bigger issue. Riding towards us is the relaunched trade Bill, under which we will have the opportunity to do so, so I will hold back any further comments until that time.
A lot of ground was covered in the individual contributions. I am very grateful to my noble friend Lord Davies for his support. The noble Viscount, Lord Waverley, and the noble Lord, Lord Shipley, gave an interesting insight into the detailed politics of the region—not something I know that much about, but I have certainly learned a little in preparing for this debate—and their knowledge and experience have taken us further.
As my noble friend Lord Davies wanted us to say, it is good that there is an outcome to the rolling forward of the agreement. It is good that the Government have done that, and we should recognise that. Having said that, the noble Lord, Lord Patten, made a very good point: there is a much bigger context, including terrorism, of which this is only a part. However, as the Minister mentioned, the relationship we have through the trade agreement will help to cement things in that part of the world, and we should welcome that as well.
Nothing the Minister said led me to think that there will be a change in how the Government are hoping to roll forward other trade agreements. The Executive will rely on the royal prerogative and Parliament will be excluded, even though there will be a lot of consultation. Consultation is good, but it is no substitute—we will come back to that.
We are left with the narrow question of whether, in the words of the noble and learned Lord, Lord Mackay, the Government have drilled down and got to the bottom of the legal niceties of the point. These were raised in paragraph 20 of the document published by the European Union Committee.
I do not expect the Government to respond to this, but it seems to me that the only point the Government are holding on to is that they have rolled forward the existing arrangements made by the EU on Morocco, including on Western Sahara, and recognised in that the issues around the future of the area, support for the United Nations and the need to ensure that there is an eventual settlement to the benefit of the people there. I do not think that this quite does the trick.
The noble and learned Lord asked: are the Government sure that they have got the legal advice right in doing this? The report said that the Government have committed to
“consider carefully the implications of any future ruling from the CJEU.”
I understand that presumably that will not exist beyond 31 December 1920—December 2020; I must get the date right, although the Minister is nodding, so I am sure he has picked me up correctly anyway.
There is rather a strange point that I marked out when I first read the report. It said:
“They also explained that conducting any further consultation on the 2019 EU amendment”—
this was the one that reflected the worries of the Western Sahara region about the treatment of its goods in relation to being part of Morocco when it felt it should not be—
“was deemed inconsistent with the UK’s mandate to ensure only technical replication of EU agreements while still an EU Member State.”
I do not think there is time for further exploration of that but I would be grateful if the Minister might consider writing to us and to those participating in the debate to give us a better understanding of exactly where they get their confidence on this point.
If it is true that there is an emerging jurisprudence that suggests that the Western Sahara area is not part of Morocco and has independent rights and applications, and as no specific consultation was undertaken by the UK Government before achieving this agreement, it seems to me that we are underprepared for the reaction that may come back at us. However, particularly after so many fish, this is not the time of night to discuss that and I look forward to hearing from the noble Lord, if he wishes to write. I beg leave to withdraw the Motion.
Exports: Government Support
Lord Stevenson of Balmacara Excerpts(9 years, 9 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, I thank all speakers for a very interesting and informative debate. It has been very wide-ranging and has drawn on history as well as current practice. That is all thanks to the noble Baroness, Lady Wheatcroft, who tabled the debate. We are very grateful to her for that. As other noble Lords have said, she has spoken in many economic debates in your Lordships’ House. I am sure that I am not alone in enjoying the way that she smiles as she damns with faint praise.
The title of the debate is intriguing. We are asked in this debate to “take note” of the Government’s support for British exports—not to judge it, to praise it or to revile it, just to note it. That is obviously easy to do. I noticed a few criticisms in the noble Baroness’s speech. I thought she gave the Government a bare pass mark on progress so far and particularly enjoyed her little riff on the difficulties that SMEs must have in accessing the UKTI and UKEF websites. We have heard that before from the noble Lord, Lord Leigh of Hurley, who indulged us with the attempts that he has made to try to get down to any sensible source of finance for these areas. We are aware of that. The noble Baroness picked up on it, and I hope it will also be picked up by the Minister in his response. In the last quarter of her speech she was a bit critical about some other areas of activity, including the impenetrable way that we report our trade statistics, which must make this very difficult. Handbags may not be the only issue about which we have to get further and better information before we can understand where that trade is going.
The noble Baroness was right to pick up on the fact that many Governments across the world support exports, including that of the United States of America. Why are our Government not doing more than they currently are doing? Why are they not picking up that special tax deductions and financial incentives are available in some of our competitor countries? Like many noble Lords, she also picked up on the visa problems in India, China and many other countries, and on this absurd proposal to require our overseas students to go home as soon as they graduate, which is doing so much damage across the world.
I also welcome the noble Lord, Lord Livingston, back to the House. He is a rare but very welcome visitor, but that is of course because he is doing such good work outside the House. We pay tribute to that—not only to him but to his team of trade envoys. We have heard a bit about them today, and they are also doing great work.
We on this side of the House of course accept that improving trade will be vital to growing the UK in the coming decade. Boosting exports must be a national mission and we must support the Government in their work. The world is changing faster than we can comprehend, with global economic forces moving south and east. This is creating huge opportunities in a world where, as the noble Baroness, Lady Wheatcroft, said, the global middle class is expected to treble to some 5 billion people in the next two decades, offering huge opportunities.
The 2008-09 crash exposed long-standing structural problems in our economy, which was unbalanced by sector and by region and short-termist in its corporate culture, leading to low levels of business investment and low productivity. It had a dysfunctional finance system at its heart and a stubborn and increasing trade deficit, which many noble Lords have mentioned. Although some growth has finally arrived, which is welcome, it is not the balanced and sustainable growth that we need. Prices are still rising faster than wages and the continuing cost of living crisis for many means that individuals are, on average, £1,600 a year worse off compared with 2010. A “business as usual” recovery is not good enough. To set the foundations for future success, we need to take a different approach.
We on this side have a long-term plan to earn and grow our way to higher living standards. Our goal is a high-productivity, high-skilled, innovation-led economy. To get there, we need more British-based businesses creating good jobs, investing, innovating and, of course, exporting. Our plans include radically reforming vocational education and apprenticeships by putting employers in the driving seat, creating a higher-skilled workforce with greater foreign language skills, driving up productivity and underpinning higher wages. We plan to support lending to businesses by creating a proper, independent British investment bank, and a network of regional banks with a responsibility to boost lending in their areas. We plan to support green growth by backing the 2030 decarbonisation target and giving the Green Investment Bank borrowing powers. We plan to establish a small business administration to champion small business at the heart of government. We plan to devolve powers to cities and regions to boost growth and rebalance the economy, allowing local knowledge to solve local problems, and to encourage a longer-term decision-making culture in business and government, through rules and incentives for business that reward a longer-term focus and an ambitious industrial strategy to support long-term growth. However, this debate is focused on exports. I will concentrate on that for the last part of my speech.
The noble Lord, Lord Lang, in a good speech, warned us about relying on short-term statistics, but the news is not good. The headline news from the Office for National Statistics, in its latest report, is that the value of goods exported is the lowest since October 2010, while the goods deficit—excluding oil and items such as precious stones and aircraft—has widened from £8 billion to £8.5 billion. For these statistics to improve, Britain’s small and, in particular, medium-sized businesses, which are the right focus for this activity, will need to up their game on exports. They will look to government for that support, and key to that is ensuring that they have access to the finance they need to export. That is why the performance of the Government’s two flagship export schemes—the export refinancing scheme and the direct lending scheme—are crucial.
Last month, the ONS said that UK exports have “remained largely flat” in the last four years. Last month, it downgraded the UK’s trade forecast for this year, last year and each of the next four years. Despite what the noble Baroness, Lady Wheatcroft, feared we might say about this, we support the ambition behind the Prime Minister’s suggestion that exports need to go up to perhaps £1 trillion a year—what we complain about is the lack of success in achieving that. I think she might share a little of that. Where are we on these plans? Can the Minister in his response give us a sighting shot of where he thinks the target will be? I think it will be less than £1 trillion—I may bet on that, although I am not a betting person—but it is also important to understand whether we will get the 100,000 new firms involved. I would be grateful for his comments on that. It has also been reported recently that the £5 billion export refinancing facility, launched two years ago, has still not helped a single business. Can the Minister explain where we are on that?
We have fantastic, innovative business groups in our country, and many important advantages on which we can build up our exports. We have a strong British brand; our language, our legal system, and our time zone work in our favour. As was mentioned, we should be drawing on the rich cultural tapestry of Britain, building on the links with our diaspora communities to strengthen trade links with emerging markets and exploiting our potential. To grasp these opportunities, the Government need to act and support them. Governments can help by doing what, left to their own devices, markets cannot. Markets cannot set strategic direction; government can. The automotive industries mentioned earlier are a good example of that.
Early stage, fundamental research is often too risky for businesses. It is important to recognise the role that the US Government played in financing and operating many of the innovations behind the digital economy. Silicon Valley venture capitalists took the plaudits, but they were standing on the shoulders of federal government investment and support over many years.
Taxation has a role to play. The re-emergence of the British film industry was largely due to the tax breaks which the previous Government introduced. To their credit, this Government have continued and extended them, so there is now good support for cultural and creative industries in high-end TV drama, animation and live theatre. We need more, perhaps in the craft, design and related sectors, but this has been a great start.
Government can regulate to improve things. Government can also foster clusters and other institutions that help pre-market co-ordination and support. When all this comes together, the Government can put it into a package. I hope the Minister can reassure us that the Government are on track on some of the issues that have been raised during this debate. These include the Select Committee report, Roads to Success, as mentioned by one noble Lord, and the NAO criticism about the lack of clarity and focus between BIS and HMT. There is also the potential failure of the export funding schemes and the real concern about the way in which UKTI and UK Export Finance are helping small and medium-sized businesses. Perhaps he could make particular reference to the correspondence we have exchanged about the cuts in the support for SME attendance at trade shows. We also heard worries about TTIP, and we need to think about how we are going to gather all this together in a policy. I look forward to hearing what the noble Lord has to say.
Transatlantic Trade and Investment Partnership
Lord Stevenson of Balmacara Excerpts(9 years, 11 months ago)
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Lord Livingston of Parkhead
My Lords, my noble friend is entirely right. The substance of the ISDS clauses is nowhere near as fearful as some of the claims. Although we can improve the transparency of the discussions, and the UK is certainly seeking to do that, the EU should at least be commended on the degree of public consultation that has taken place on these discussions.
Lord Stevenson of Balmacara (Lab)
My Lords, we share the aspirations for TTIP, as long as the benefits flow to consumers and employees. We welcome the Minister’s mention of discussing the ISDS, which has become a lightning conductor for general discontent about the TTIP treaty. Given that we are talking about mature democracies with strong and robust legal structures, why does he not learn from the great example of Canute, drop the problematic ISDS and get on with selling the rest of the treaty to the country?
Free Trade Agreement: US and EU
Lord Stevenson of Balmacara Excerpts(10 years ago)
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Lord Livingston of Parkhead
The EU and the UK have been very clear: standards will not be reduced as a result of TTIP. EU laws will remain EU laws, and the US negotiators have accepted that fact.
Lord Stevenson of Balmacara (Lab)
My Lords, we on this side support TTIP and are reassured by the answer just given by the Minister on public services. However, for many people the proposed preferential arbitration rules for foreign investors represent all that is perceived to be wrong with international trade deals—that they are too secret, too undemocratic and too skewed to the interests of international capital over the interests of our citizens. Indeed, the ISDS clause has become a lightning rod for dissatisfaction with TTIP. Should this issue not be tackled head on by removing the ISDS clause from the deal?
The Bilateral Agreement for the Promotion and Protection of Investments between the United Kingdom and Colombia
Lord Stevenson of Balmacara Excerpts(10 years, 3 months ago)
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Lord Stevenson of Balmacara
That the Grand Committee takes note of the Bilateral Agreement for the Promotion and Protection of Investments between the United Kingdom and Colombia (Cm 8887). 3rd Report from the Secondary Legislation Scrutiny Committee.
Lord Stevenson of Balmacara (Lab)
My Lords, the UK-Colombia bilateral investment treaty, or BIT, is designed to provide important protections to British investments in Colombia. My purpose in raising the issue today is to draw attention to the fact that these protections are controversial. Without putting down this Motion there would have been no chance to discuss these issues, which many people inside and outside Parliament would like to see raised. These concerns include a feeling that the balance of the treaty may be wrong, in that it gives excessive protection to investors while limiting the ability of the host country to regulate the FDI, and a question about whether the treaty deals with business and human rights, in the light of the growing impact of the UN’s generally accepted principles on business and human rights.
However, it is important to note at the start of the debate that UK business does not appear to need this agreement to encourage investment in Colombia. Colombia is one of UKTI’s 20 high-growth markets and the UK is already the second largest foreign investor, much of it in the extractives industry. Between 2009 and 2012, UK exports of goods and services to Colombia rose by 126%, the highest level of any of our major markets. Over the next four years, it has been predicted that Colombia will invest £50 billion in oil and gas and, over the next eight years, around £60 billion in infrastructure.
I am extremely grateful to the noble Lord, Lord Livingston, for providing some background information about the treaty, which has been very helpful to me in preparing for this debate. From this I note also that he has been active in working on various other things. I think that we all got these documents this morning and it is very good to see them, following a discussion where we felt that more could be done to try to proselytise for TTIP and other work in this area. I am glad to see that these documents have come round. However, the background information supplied suggests that the BIT was actually negotiated during 2008-09 but that ratification has been delayed as the treaty of Lisbon, which transferred exclusive competence for FDI to the European Union, entered into force before the agreed text was signed.
In view of this, some people have argued that the text of the treaty is out of date and should instead reflect the direction of travel as envisaged in more recent treaty negotiations, such as TTIP. It is also the case that during the time that has elapsed since the treaty was negotiated, the UK has embraced the UN Guiding Principles on Business and Human Rights and is one of the first countries to produce an action plan, which we certainly welcome. However, we accept that the debate on how future BITs should be structured to ensure a satisfactory balance between protection of investments and the right of local Governments to regulate in the public interest is not new. We also accept that the text of the current treaty departs substantially from previous UK practice, although I suspect that some of the changes made are not necessarily going to be made more acceptable as a result.
It is interesting to note that the BIT was ratified by the current Colombian Government in 2013 and that they have subsequently been pressing the UK Government strongly, at both ministerial and official level, to complete their ratification process at the earliest opportunity. This suggests that the Colombian Government view the entry into force of the BIT as positive, bringing benefits to Colombia through helping attract new foreign investment, and have considered that these benefits outweigh the risks of investor claims and impacts on public policy. But in the unlikely event that anyone thinks that these are hypothetical risks, Colombia’s neighbours Ecuador, Peru and Mexico have been the subject of 14, three and 10 claims respectively. I am told that $81.4 million is the average compensation paid to investors over the 83 known ISDS awards in favour of the investor to July 2013. Indeed, last year’s award of $1.17 billion to Occidental from Ecuador was the equivalent of the country’s entire education budget.
I am sure that the Minister will seek to persuade us, when he comes to respond, that despite the time that has elapsed the Government believe that the signed text reflects the current public debate and is fit for purpose in that context. However, some substantial concerns remain and I hope that the debate will help persuade the Government of the need to reflect carefully on whether the treaty correctly balances providing protection for investors and giving the Colombian Government the space they need to regulate in the wider public interests.
Other noble Lords, I am sure, will raise other points around this topic. I will therefore limit myself to two examples. The first is land reform. The treaty includes a form of investor-state dispute mechanism—narrower, as we are told—which will allow Columbia to be sued in an international arbitration tribunal. These tribunals take place behind closed doors and grant investors the right to sue democratically elected governments. However, neither the host government nor communities affected by such investments have rights to challenge that investment. As the Minister knows, land issues have been at the heart of the Colombian internal conflict, and nearly 6 million people have been forcibly displaced, so many people think land reform is the key to the peace discussions with FARC, which are currently taking place in Havana.
Will the Minister explain why the treaty will not prove challenging to the Colombian Government in pursuing land reform issues? Will he also reassure us that it will not put at risk implementing the land and victims law passed in 2011, under which land is due to be returned to victims of the recent conflict? Will he also comment on the suggestion that the solution to the problems posed by ISDS mechanisms would be to enact proper domestic legislation to protect FTI investors, as is happening in South Africa?
Secondly, on human rights, because of the long period of gestation of this treaty, it was drafted before the emergence of the UN’s Guiding Principles on Business and Human Rights. Rightly, the EU is committed to signing treaties only with countries that meet its values of democracy, the rule of law and respect for human rights. The Colombian Government have made good efforts to strengthen the rule of law, to condemn human rights violations and take action against illegal land appropriation, and there are now significant legislative and public policy initiatives in the field, which we welcome. However, there is more to come and we need to make sure that we support and get behind these initiatives.
Equally, the UK has made significant commitments recently in its action plan to implement the UN’s Guiding Principles on Business and Human Rights. In particular, the UK has undertaken to ensure that,
“agreements facilitating investment overseas … incorporate the business responsibility to respect human rights, and do not undermine the host country’s ability to meet … its international human rights obligations”.
I do not see that wording in the treaty. When the Minister responds, will he point to where the text reflects that sentiment, and explain how the UK will ensure that this treaty does not undermine Colombia’s ability to meet its international human rights obligations?
Will the Government not go further? Given that the situation on the ground is still developing, and bearing in mind our commitment to the UN guiding principles, does the Minister agree that it might be appropriate if he prepared an annual monitoring of the treaty in terms of its human rights impacts, with the results of this monitoring perhaps incorporated into the FCO annual human rights report?
Finally, when this treaty was considered by the Secondary Legislation Scrutiny Committee, the instrument was drawn to the special attention of the House on the grounds of policy interest. The committee had some reservations about the effectiveness of the protection for the investors because of the way the treaty is worded, and picked up on the difficulties these arrangements may create in relation to the human rights of certain groups within Colombia.
The committee’s report goes on:
“We have offered the Government the opportunity to respond and, if received, we will publish the response in our next report”.
I checked the other day and no response had yet been submitted. Will the Minister say whether the Government intend to respond to the Secondary Legislation Scrutiny Committee and if so, when this might be received? I beg to move.
Baroness Hooper (Con)
My Lords, as someone with a strong interest in Latin America and as a member of the European Union Select Committee, it is important to question the Government on this bilateral agreement. I congratulate the noble Lord, Lord Stevenson, on having spotted the need and opportunity for this debate, and on setting out the background so clearly.
There are three main areas of concern, which have already been referred to and no doubt will arise in other contributions. First, the treaty excludes important reforms currently being considered at European Union level in relation to the Transatlantic Trade and Investment Partnership between the European Union and the United States, on which the European Union Select Committee has reported. These are designed to mitigate some of the serious problems associated with investor-state dispute settlements.
Secondly, it does not contain human rights obligations on investors in spite of the Government committing to this in our recent national action plan on the United Nations Guiding Principles on Business and Human Rights. Thirdly, it creates legal uncertainty and could undermine the land reforms referred to by the noble Lord, Lord Stevenson, which are vital to the peace process in Colombia. In that, the treaty is inconsistent with other areas of government policy which seek to support human rights and peace in Colombia.
However, I would go further. Although this is a general point which could affect all trade treaties, it has particular significance for Colombia. If we think that United Kingdom companies operate to high levels and standards in other areas which have not been emphasised, we should seek to replicate those standards and levels in our international trade treaties. For example, corporate social responsibility could and should be encouraged, and referred to in these agreements. A company’s involvement in social issues in its neighbourhood and community are well appreciated and are now the norm in the United Kingdom. UK companies equally should feel obliged to follow similar standards in their operations overseas.
By the same token, environmental interests and concerns should be taken into account. I am interested to see that the department’s leaflet referring to the EU-US trade treaty refers to the fact that the high environmental standards and targets which we now have in place in this country are non-negotiable. I believe that in order to encourage that there should be a system of green points for those companies which commit to action in this area. For example, a project in Colombia with which I have become involved focuses on the Media Magdalena valley, an area which during the difficult terrorist periods was completely closed. People moved away and, therefore, flora and fauna had a wonderful time getting on without human interference.
Now that the peace process is proceeding, people are beginning to go back. Illegal gold mining is already taking place, which introduces mercury into the river and waterways, and into the food chain for animal life. This project is being co-ordinated by Neil Maddison, head of conservation at Bristol Zoo. Its aim is to help to preserve wildlife, flora and fauna in general, and to encourage people who go back to live in the area and companies which intend to invest in the area to observe the highest possible standards. That does not go quite as far as a national park regime—it falls a little short of that—but it would gain those companies green points. I believe that that very much is the way forward.
This is an important issue and it is a very good opportunity to ask the Government to comment on not only this trade treaty and any possible changes that could be made to it but to further push our high standards in our overseas commitments.
The Deputy Chairman of Committees
The Question is that this Motion be agreed to—
Lord Stevenson of Balmacara
I think that we might have made a small technical error in procedure. I want to say a few words in response and draw a few things together. I am sorry if this is confusing. I am new to this as well as everyone else, and I am looking round for somebody with expertise in this area .
If I may, I shall make a short statement. Let us restart: it is like being in the film “Groundhog Day”, when we keep coming back to the same point, except that we have not. I thank all speakers for their contributions. The knowledge and expertise that has been displayed has been very good and appropriate for the debate. I also think that it is important to recognise that we had Conservatives, Labour Members, Cross Benchers and Bishops representing us, so all aspects of the House have been recorded. The unanimity in what was being said was remarkable. I acknowledge that we are in a situation that is slightly perverse in the sense that the treaty has already been enacted and we are not in the position of asking the Government to reconsider it.
However, some points might be taken forward for future debates and I want to come back to that at the end. We are all very concerned about the way in which human rights need to feed into these treaties nowadays. There are reasons why it did not happen at this stage, but I do not see why that should necessarily be the case going forward. It is also the case that the FTA contains a significant proportion of human rights issues, but that was an EU treaty and not an individual country-to-country one. Therefore, the message is there for the Minister to take back that in future this House might expect to see a stronger and tougher section on human rights.
I thought that the point about corporate social responsibility and the need to build on that was very well made by the noble Baroness, Lady Hooper; we should record that as something that should go forward. Specific important issues in relation to this treaty were touched on in terms of reporting and because of the current situation with FARC. The noble Lord, Lord Alton, made a good point when he said that the sentiment and rhetoric on display today should be matched by concrete words. That is an important point. The Government are not quite in the same place as the sentiment in the House in relation to how we reflect concerns about ISDS and human rights.
The noble Lord, Lord Monks, was right in saying that the wording is rather awkward in relation to the situation that we see on the ground, particularly in relation to the number of people who are dispossessed from their historic rights to land. The only response we got from the Minister was that he understood our fears but thought they were overstated. I do not think that that cuts it. If he is going to rely on the fact that ISDS is merely a fall-back, and that the right solution to disputes arising from these treaties is to strengthen the domestic legislative processes, we also need to know what the Government are doing to help that. He did not say that, and it is an important point.
Although, as I have said, human rights issues were not in play in such a position in 2008-09, when this treaty commenced, they certainly are now. It seems a curious logic to say that there will be sufficient other activity going on when the wording already exists in the FTA and could be used in future. I hope the Government will give us a firm commitment at some point in the appropriate way to take this issue forward, so that we have a set of words which mean what they say in relation to our commitments—shared around the House—to human rights in these areas. This is especially where there are particular circumstances that are being discussed with FARC.
Having said that, this Motion was an attempt to get a debate and discussion, which it has succeeded in doing.
Transatlantic Trade and Investment Partnership (EUC Report)
Lord Stevenson of Balmacara Excerpts(10 years, 4 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, I congratulate the chairman, the committee and, indeed, all the staff on a very comprehensive and informative report. Noble Lords may be aware that there has been a bit of a run on it in the Printed Paper Office. You can no longer get first editions; we are now on to second editions, so that proves something. Given that it was published only about a month ago, it is clearly something in which we should all take a great deal of interest. I thank all speakers who have contributed to the debate, including those who were not on the original committee. Again, that shows the wider interest in the topic, even though, as has been said, it will not catch the casual passer-by very easily. That will change, I think. There are things here that will reach out and become important.
We have heard tributes to the chairman, which I am sure were correct. He has become a friend and I am aware of his abilities in this respect. The committee has done its work very diligently by taking a huge amount of evidence, both here and abroad. That evidence is available and I have read quite a lot of it. It is extremely interesting and well marshalled into the report. Again, this sets our committee structure at the very heart of what we do. Something that does not get enough publicity, perhaps, are the efforts that the House makes to do a job properly, efficiently and in a timeous way so that the work is available for people to use as the debates move forward.
It is a pity that the government response has not been made available but I am sure that the Minister will explain what the issues are there. Given that both he and his predecessor gave evidence, perhaps we are not missing too much but it would be nice to get a sense of where the Government are coming from, particularly in relation to the pleas to pick up some of the main points from the report and use them to help get through the rest of the process.
It was said earlier in the debate that this issue had cross-party support. I am happy to confirm that from this side of the House, if it has not been obvious from the speakers who have contributed to the debate today. We take the view that TTIP has huge potential, and we very much support the principles behind the negotiations. We hope that it will lead in turn to job creation, higher wages for employees and a better deal for consumers. Europe and the United States are our most important markets today; indeed, the US is the UK’s biggest export market, and the UK economy attracts a significant level of FTI from across the Atlantic.
Crucially, as I have said, the benefits of the trade deal should filter down to employees and consumers. We would be concerned, having given our support for this, if any deal that emerged from it led to a watering down of workers’ rights, for example, or if in some sense the benefits that flowed did not get passed on to consumers through increased choice and reduced prices. However, as my noble friend Lady Henig said, does the whole experience of this process not rather prove the point that the UK’s national interest lies in remaining at the heart of a reformed EU, using our special links with the United States to achieve something that will be for everyone?
A number of noble Lords have said that the problems that are inherent in the TTIP as it currently stands—its weakness, as it were—is that it is almost too ambitious, and that it is probably the most complex trade and investment package we have ever attempted to put together. People have also argued, though, and I agree with them, that that is also a strength. The agreement’s scale is enormous; Europe and the US together account for nearly half of world trade in terms of GDP, although that will change as new markets develop in China, India and other places. The point has also been made by several noble Lords that the issues in play here relate not just to tariffs but to non-tariff barriers to trade. In some senses, and this is important for the future as well, the deal that might result from TTIP could become a template for a new generation of 21st-century trade and investment agreements, so, as many noble Lords have said, it has a strategic dimension.
As the noble Earl, Lord Sandwich, reminded us, attention needs to be paid to third-world accessions to either this agreement or ones similar to it. TTIP should be not simply a free-trade model but something that works against protectionism wherever it comes across it. It is also possible that in the process of developing this trade agreement, other desirable policy objectives could be obtained. For instance, while I do not think that this is necessarily a negative in terms of the debate, it is important to recognise that the US has still ratified only two of the eight major conventions of the ILO—conventions that we and all our EU partners have ratified. If it is possible to use the process of debate to bring forward desirable policy outcomes such as ratification within the ILO, that is also a plus.
I turn to some of the detail of the report. We are encouraged that the report says that in the committee’s view it should be possible to make progress on UK objectives in relation to TTIP—for example, with regard to the motor industry and geographical indications. That sense of a possibility emerging and a chance that it will come through is important for those who have to carry forward the negotiations. However, it is certainly true that there will be some difficulties in US public procurement, where there will be difficulties in obtaining agreement at the sub-federal level. The noble Lord, Lord Jopling, made an important point when he warned about cherry picking. The noble Lord, Lord Tugendhat, said that he wanted odds—actually he asked what price it was, but I suspect that he was thinking of a betting analogy rather than a straight cash transaction—on whether the sub-federal level would be included. I would be grateful if the Minister could give us his thoughts on that. The noble Lord, Lord Lamont, said that he thought four states were ready and willing to come into this, but I hope that there will be a higher number than that.
The question of whether financial services are included is important. It will be in the interests of the UK, rather than necessarily in the EU’s more general interest, for that to be resolved quickly. I have heard the argument about it being impossible to have negotiations without all cards being on the table, but maybe we should not be too restrictive on that; there may be things that can be done within the overall scheme that will help some way down the line. Confidence and experience need to be built up but, from the UK’s position, financial services are clearly very important and this will be one of the hardest-fought issues.
There are others which must concern us. For example, the audio-visual sector is a global success story in terms of the UK’s involvement, not just because of creativity or the level of investment, which is now very good, but because it delivers public value to domestic audiences as well as global ones. This comes because we have a very vibrant ecology comprising both public and private sector organisations. They are supported in turn by a complex set of policy interventions designed primarily to address market failures and to act increasingly as a counterbalance to the inherent asymmetry between the sizes of the audio-visual markets in the UK and in the US.
I say that because I am aware that there have been concerns about audio-visual activity in other parts of the EU. I will be grateful if the Minister, when he responds, could say where we are with audio-visual and whether that is also to be treated differently from other areas, as financial services may be. I should also like to know whether he recognises that there are some concerns about, for instance, the BBC and public service broadcasting in relation to that, which we would need to have preserved if we were going forward on this.
My noble friends Lord Radice and Lord Giddens mentioned the issues about the living agreement idea, which did not get much discussion elsewhere in the debate. I think it is a rather interesting idea. Clearly, getting to an agreement of such complexity will be hard enough but finding a way of constantly updating it may well be another difficulty. It is not something to which there is an easy answer. When the Minister responds, I would be grateful if he could update us on where he thinks the mechanism for that would exist. It is obviously in everybody’s interest if he can find one. I am just not quite sure if everybody even has the language to describe what it would be—whether it would be continual sessions around the negotiating table in order to update and change it or whether there would be some lock-step or other agreement that would allow us to do it.
My final two points concern the publicity for this issue, as we all, I think, share a sense of worry that the good things that are involved in TTIP do not get picked up, either in the press or in general debate. Who are the proponents of this? How can we convince them that the purposes or the possible gains from TTIP need to be put forward in a compelling way? This task, I think, cannot be left to the officials concerned. It has to be picked up politically. Trade Ministers will do it, I am sure, but a wider conspectus is required if we are to get a real sense of a communications strategy involving Ministers, involving the public and getting support for this.
Finally, a number of noble Lords have mentioned the political window and how difficult it will be to find it. I am certainly encouraged if it is as much as 18 months. My feeling is that it will be rather less than that as the issues that need to be addressed include the requirement of the US Administration to secure a trade-promotion authority. We have to anticipate both the mid-term and the presidential elections in relation to that. With all those out to play, there are obviously some issues. It is certainly difficult for negotiators even to get to the point where they can say that there is an agreement to sign, but if it is done within a very constrained timetable that would be very difficult. When the Minister responds, it would be interesting if he could respond on this particular point.
Queen’s Speech
Lord Stevenson of Balmacara Excerpts(10 years, 4 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, I start by congratulating the two excellent maiden speakers. The noble Lord, Lord Bamford, made some direct and very sensible suggestions about the UK earning its way through engineering and utilising our manufacturing capacity, but also by investing in training. The endorsement from my noble friend Lord Young, who had visited the noble Lord’s training centre, brought that directly into our discussions. I also thank the right reverend Prelate the Bishop of Durham for his fascinating story about his personal journey to his current see, his tour d’horizon of Durham and the north-east and his commitment to represent the north-east in this House. By a curious quirk of fate, I think that I was responsible for responding to the maiden speech of his immediate predecessor, so without having to do much research I happen to know that he was the 73rd in the line and that the third was another Wilfred. We do not get many Wilfreds, as I said at that time, so I am always pleased to be able to reflect on that and make sure that they get the credit they deserve for having such a ridiculous name.
Looking at how the contributions panned out in this discussion, it is interesting that the majority have been on the business, employment and pensions side of the debate. Of course, we also have it in our title to deal with other issues. Despite a late run from those interested in agriculture and the environment, I am afraid that the preponderance of the debate was in the former areas. I will not pre-empt the Minister, who I am sure will want to go through in some detail the individual contributions made by many Members right around the House across the range of issues. However, I hope that when he comes to respond or when he reflects later, he will wish to write to us about some of the points—particularly the interesting points made by the noble Lord, Lord Tugendhat, about the changing foreign policy context and his concern about the lack of an ability to stop takeovers which might be damaging to viable and successful British-based companies. I would be interested to hear the Minister’s comment on those points.
It is difficult to believe that the irrepressible noble Lord, Lord Holmes of Richmond, ever has a sore head but he did go on about his pensions experience, so I hope that we will get some interest on that. I also hope that the Minister, when he responds, will pick up the important points made on taxation by my noble friend Lady Hollis. We heard quite a lot about the dark side of the flexible contracts which are represented mainly by zero-hour contracts, although there are other variations. That was raised by my noble friends Lady Hollis, Lord Monks, Lady Donaghy, Lady Turner and Lord Young. I also thought that some important points were made, particularly by the noble Lord, Lord Aberdare and my noble friend Lord Macdonald, about the new rules for apprenticeship schemes, which need addressing.
The noble Lord, Lord Mitchell, took us into a digital world and I would be interested to know whether the Minister felt that there was anything in his suggestion for a digital Magna Carta. I am sure that is not just a scheme for a rather elaborate and high-tech exhibition during the anniversary year but reflects a deeper concern about the way that the internet can sometimes get out of control and cause problems, and that some code of conduct—some Magna Carta, as my noble friend put it—would be a good way to go.
The noble Lord, Lord Clement-Jones, made a very important point about visa problems in higher education and in particular on the question of post-doc students. Our universities are suffering badly from this and I would be grateful if the Minister could pick up on that. Also, how can we not have a full and well documented response for that innocent pensioner, the noble Lord, Lord Smith of Clifton? His story of wandering in the deeper recesses of BT and the Inland Revenue must have made the Minister sad, so he must respond. We want to know the real story—even if it is £3.17, as the noble Lord said, there could be a lot of them.
The noble Lord, Lord Bourne, said that we should not discount this year’s Queen’s Speech just because it had a small number of Bills. We do not discount it on those grounds but because when we consider it, the key question is: does it help revive the economy, generate good and well remunerated jobs, ensure that good quality and affordable education and training is available and that good affordable housing is accessible? Does it reassure us that nobody will be left behind? The answer to those questions is that it does not. The Bills do not address the severe cost of living crisis in Britain, where food bank use is soaring, even among many working people, where personal debt levels are dangerously high, where wages have fallen in real terms as essentials such as food and energy prices rise, where too many people are trapped in part-time jobs or with low hours or exploitative zero-hours contracts, and where millions cannot afford to buy their home and are trapped into renting low-quality properties at ever rising rents.
Several noble Lords touched on the question of personal debt, which again seems to be financing our recovery. I share the disappointment that there is little in the legislative programme about the problem debts that are facing millions of our fellow citizens. I declare my interest as chair of StepChange Debt Charity, which is the UK’s largest provider of free-to-client debt management plans; we deal with more than 500,000 clients every year who have problems with personal debts. I think that the Minister is aware of our work in this field, and we are looking forward to talking to him about our recent report, Life on the Edge, which shows how a lengthy period of low or no wage growth and rising living costs has left millions of households stretched to their absolute financial limit.
Individuals and families are paying a high price for the high levels of personal debt. The economy suffers too. Debt is a brake on people’s capacity to work or return to work, and on their aspirations and potential. It leads to mental health problems and family and relationship breakdowns, and has an adverse impact on the wider community. Equally, all society benefits if we tackle this problem. Otherwise, such people all too often turn to high-cost credit, and the recent work announced by the Financial Conduct Authority has shown that we still have much to do to drive bad practice from this sector.
I believe that the time has come to have a mature conversation across all parties about a national strategy for personal debt. In particular, I suggest that we need to look north to Scotland to see how its statute-based system operates. We need to build personal financial resilience so that the poorer members of our society are not paying the highest prices for essential goods and services, there are better safety nets and there is a more formal role for creditors in helping those in financial difficulty.
Another source of personal debt is of course the contingent tax liabilities that students are incurring in higher education. As my noble friend Lady Warwick said, there is now a growing consensus that the higher education reforms introduced by the coalition since 2010 are a complete disaster, yet we look in vain to find a higher education Bill. In a country where living standards are under acute pressure and where the deficit still looms so large, I agree with the noble Viscount, Lord Ridley, that innovation is the one sure way out of austerity. That is why our universities are so important. They are the powerhouses of the knowledge economy. They need to be bigger, stronger and more central to our economy in the years to come. Britain needs to put science and innovation at the heart of a strategy for long-term economic growth. Unless we grow smarter, we will grow poorer. What has been created over the past four years is not sustainable in cash terms. It does nothing to boost the science base, to diversify student choice, to bring universities and business together or to deliver effective progress toward better social mobility. This is something that we will definitely need to return to.
The small business, enterprise and employment Bill, which will be reaching the House towards the end of this year, has been covered by a number of people and I do not want to go into it in too much detail. It really is a very weak Bill, and the common theme across this motley collection of measures seems to be that the majority of its proposals were in fact first raised by the Labour Party, often in debates here in your Lordships’ House, although of course they were summarily rejected by Ministers.
The issue of pub companies was raised at the end of our debate. Labour has consistently called for a statutory code to give pubs the protection they need and ensure that landlords get a fair deal. Ministers have dragged their feet on this issue for more than three years, during which time hundreds of publicans have lost their livelihood. We are pleased that the Government have now accepted many of the arguments that they repeatedly vetoed in the House of Commons, but we fear that the watered-down reforms will not address the large increase in pub closures that we have seen. The changes that Ministers have announced do not include a free-of-tie option or the genuinely independent rent reviews that Labour and campaigners have been calling for. Instead, the proposed code includes parallel rent assessments, which will give tenants greater information but not the right to exit the beer tie.
We welcome the measures on late payment. Ministers have repeatedly promised to tackle this scandal, which severely affects the cash flow of small firms. The previous Labour Government legislated so that late payments at least incurred interest; alongside that, they established the prompt payment code. However, we want to see greater transparency to help to prevent late payment, including through reporting requirements on payment performance in companies’ accounts.
On business lending, any scheme that helps small businesses to access finance is welcome, but the record of the Government in getting the banks to lend to small businesses has been one of complete failure. Every scheme, from Project Merlin to Funding for Lending, has completely failed to deliver. Figures published this week show that in the first quarter of this year net lending to SMEs by Funding for Lending participants actually fell by £700 million, and in the past year net lending to SMEs has fallen by £3.2 billion. The press notice says that the main purpose of this Bill is to,
“build a stronger economy by supporting small business as they compete”,
but it is hard to see where the real needs of the majority of small businesses are being addressed.
The world is changing faster than we can comprehend with global economic forces moving south and east. This is creating huge opportunities in a world where the global middle class is expected to treble to 5 billion people in the next two decades. So surely what we needed in this Queen’s Speech was a Bill that would transform our economy and back our businesses to make the most of the new opportunities there so that we can innovate and grow our way to higher standards of living for all our people.
I absolutely accept, and I am sure it is common ground between the parties, that the 2008 crash exposed long-standing structural problems in our economy. The economy was unbalanced by sector and region, short-termism in our corporate culture led to low levels of business investment and low productivity, and a dysfunctional finance system and a stubborn and increasing trade deficit all did their work.
Although some growth has finally arrived, as my noble friend Lord Liddle said, it is not the balanced and sustainable growth we need, so prices are still rising faster than wages and the continuing cost of living crisis for many means that individuals are, on average, £1,600 a year worse off compared to 2010, so business as usual is not good enough. To set the foundations for future success, we need to take a different approach.
The noble Lord, Lord Higgins, challenged us and said that we did not have a strategy for the economy, but Labour has a long-term plan to earn and grow our way to higher living standards. Our goal is a high-productivity, high-skilled, innovation-led economy. To get there, we absolutely accept that we need more British-based businesses creating good jobs, investing, innovating and exporting.
If elected in May 2015, we have already announced that we will take action on immediate pressures that businesses face. We will help 1.5 million businesses by cutting business rates in 2015 and freezing them in 2016. We will reform the energy market to put transparency and competition back into the industry, as well as freezing energy bills until 2017, saving the average business £5,000. We will boost real competition in the banking sector. To lay the foundations for long-term success, Labour’s plans include radically reforming vocational education and apprenticeships putting employers in the driving seat, creating a higher skilled workforce, driving up productivity and underpinning higher wages. We will support lending to businesses by creating a proper, independent British investment bank and a network of regional banks with a responsibility to boost lending in their direct area.
We will support green growth by backing the 2030 decarbonisation target, giving the Green Investment Bank borrowing powers and prioritising investment in science and our innovation system. We will establish a small business administration to champion small business at the heart of government. We will devolve powers to cities and regions to boost growth and rebalance the economy, allowing local knowledge to solve local problems and we will encourage longer-term decision-making in business and government through rules and incentives for business that reward a longer-term focus, and an ambitious industrial strategy to support long-term growth.
It is clear from the recent election results that too many people do not feel a sense of personal or community well-being. They feel insecure and ill equipped to deal with change and harbour a deep sense of unfairness. Like my noble friend Lady Sherlock, I feel that the gracious Speech failed to respond to the needs of the people for security, fairness and stability. What we need is a legislative programme that will tackle the challenges ahead to restore real growth, tackle debt and build an economy that works for all our people, not just for those at the top. With this Queen’s Speech, the Government had an opportunity to respond to some of these challenges, but I fear that that they have failed to do so.
Businesses: Small and Medium-Sized Enterprises
Lord Stevenson of Balmacara Excerpts(10 years, 6 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Lord, Lord Cope, for securing this debate, which has been very interesting. It is obviously just my luck to follow the best speech. I seem to have a habit of finding myself in the list immediately after the noble Lord, Lord Grade of Yarmouth. This time I am going to turn it back on him, as he did not tell us whether the guy got the job, and without that I think that his story lacks a certain amount of credence. Nevertheless, he made a very good and important point which had not been made before—that somehow in our British make-up, we do not yet recognise that salesmanship ethic. I do not believe that this is a political point. We do not really understand what it is that people who trade do, nor do we embrace them. We also have problems with engineers and others who are at the heart of what we can make out of our society in terms of the growth, jobs, employment and prosperity that we hope will flow from that. That is a good context for what we have been listening to today.
I thank the noble Lord, Lord Cope, for getting us into the debate, although I understand that the earlier credit has to go to the noble Lord, Lord Popat, for suggesting this proposal. As my noble friend Lady Cohen said, this seems to be a report that gives and gives—which is nice as we have had a second chance to come back and look at the issues that were raised. They are important and I agree that they are not party political; these are issues that we can all get behind and support. The original report had a government response, and what we are looking at, in a sense, is that response. What have the Government made of the original report and how much has changed since then? We are grateful to the Government for doing that and particularly to the noble Lords, Lord Green and Lord Livingston, whose work in this field we all applaud because they have put a huge amount into it. Having done his stint the noble Lord, Lord Green, is now able to reflect and give us the elder statesman-like view, which was very nice, while I am sure that the noble Lord, Lord Livingston, has much more to give us.
However, one of the themes that comes through is that we do not really focus enough on SMEs—and it is “S” and “MEs”, because there are differences. As my noble friend Lord Haskel said, some of the original recommendations have not really picked up on some of the particularities in the report. In many cases, there is not quite enough detail on what we are doing. We are a trading nation and we cannot survive in the modern world without generating a much greater level of exports than we currently have. It is important, as the report makes clear, that attention is paid to small firms. That is not just because they export less while larger firms export more, which is obvious from both the macroeconomic and microeconomic side, but because of the potential that they have, being smaller, to grow and employ more—and to generate more wealth.
My noble friend Lord Giddens mentioned the different world that we are in: the age where we have the internet of things as well as the internet of ideas. As we know, in that world there are often real opportunities for small to be big without having to go through some of the difficulty with growth and the other difficulties in earlier traditions of the way in which the world of commerce and business works. I think we are agreed that there is a need for strong government intervention, working with partnerships and existing business organisations. As I have said, it is not a party-political point and we support that.
There are perhaps four areas which I would like to pick up because the list that the noble Lord, Lord Livingston, has to respond to is very long and covers a wide range of things. I would not want to particularly burden him but it might help him if I signposted the areas where there is some need to make points.
The noble Lords, Lord Cotter and Lord Green, and my noble friends Lady Cohen and Lord Haskel picked up on the need for more integration at a local level between SMEs, local enterprise partnerships, chambers of commerce, UKTI and UKEF—a point that was picked up originally in the report by the noble Lord, Lord Heseltine, No Stone Unturned—to ensure that the whole group of people who are involved in the process of getting exporting happening has a fructifying base of activity within those groups. It would be interesting if we could understand a little more about that, so perhaps we could have a comment from the Minister on what UKTI has been able to do with UKEF, the chambers of commerce and LEPs in relation to that work.
There is a point related to that which has been touched on only a couple of times but it is important: there has been a growth in the number of international trade advisers. My noble friend Lord Haskel asked for a bit more information about that. I tried to look this up beforehand—I keep bumping into people who say, “I’m off being a trade ambassador these days”, and, as has been said, they are from all parties and none—and it would be useful to have a list of them but I could not find one anywhere. I wonder if in fact it is published and perhaps it is just me who cannot find it. What exactly is the task that those ambassadors have and what performance indicators are they measuring up to? I am sure that they are a good thing but I lack some detail, and this subject was picked up in the report as something about which more information would be available.
The bulk of the comments received today have been on recommendations 5 to 8 about access to appropriate finance. It is a point that reaches way beyond the main focus of the report, which is about export, because it is also about import substitution, which my noble friend Lord Giddens spoke about, as well as general activity within the domestic market. Why are we so bad at financing those who seem to be able to generate wealth, who have full order books and who want to grow, in a way that will allow them to do that? The latest report that I was able to find was the NAO report on the combined Treasury and BIS work in relation to SMEs. It is interesting that that report comments that there have recently been reports about the flow of new bank term lending to SMEs. The latest figures show that it fell by 23% between 2009 and 2012; that 70% of SMEs whose loan applications are rejected can find no alternative finance, and the younger and smaller firms are obviously the worst affected by that; and that—this is quite an important figure—the funding gap, which the NAO defines as the difference between the funding required by SMEs and the funding available, is about £10 billion to £11 billion, and it may reach about £22 billion by 2017. The point being made by the NAO is that there are significant problems in this area. Not surprisingly, it concludes that there are a lot of data on SMEs seeking finance,
“and there has been a renewed focus on research into SME financing. Many of the individual schemes have been delivering against their individual targets. But BIS and HM Treasury have not managed the range of initiatives sufficiently as a unified programme, and have not clearly articulated what the schemes are intended to achieve as a whole, given the resources available. As a result … at present, value for money has not been demonstrated”.
That is a fairly critical point. Time has moved on since that report in 2012, but I would be grateful if the Minister could pick up on that point because I think we need a new fix on some of it.
It is easy to be critical about that, although clearly there is good work going on in UKEF, but maybe we need some new initiatives—perhaps more support for bodies such as the British Growth Fund, which seems to have been doing good work in getting companies from an early stage of development up to the next phase where they are developing greater coverage domestically and exporting. What about, as has been suggested in some areas, a tax break for those who wish to export? We currently have tax breaks in the entertainment industry, for instance, which is a good thing for film, high-end television, animation and now for games, but there is no tax break for exporting. I wonder if that is something that the Government might look at. I am sure that the Minister will say that that is a matter for the Treasury and not something that he could possibly dare comment on, but I hope that it might feed into thoughts in those areas.
The point made in recommendation 14 about language and cultural differences is one that often throws up problems for the relevant bodies. My noble friend Lady Cohen mentioned this and had a solution for how perhaps to get people up to the first stage of this, but there is a point in the original report asking for a language management strategy. I wondered how much progress had been made with that.
The noble Lord, Lord Storey, talked about skills training and particularly about apprenticeships. It is always important to ensure that the training elements that are required to see the current generation supported but also to help future generations to grow are in place, whatever the size of the organisation, so perhaps we could have some comments on that.
The final item in my list—although, of course, there are many others—is intellectual property. It was originally raised by the noble Lord, Lord Cope, and is something that I have had to spend some time on as it falls within my brief in my BIS activities.
There has been a significant number of changes in the way that the Government have approached intellectual property in the UK, and there are limited opportunities to make changes because we are subject to substantial international agreements, particularly European ones. That is not necessarily wrong, but what is wrong is the feeling that there is a lot you can do on this. I suspect that the grounds for movement are very small. However, I worry that the changes that are being brought forward are largely changes for change’s sake rather than part of a coherent approach. Given what has been said about the future of IP and the internet of things as well as of individuals’ thoughts, we need to get intellectual property right. I do not think that it needs a root-and-branch review, because there is limited scope, but it would be helpful to think again about the balance between innovation, the premium that you need in order to get people to innovate, the IP framework that is required to protect that innovation and the reward that comes from it. I wonder whether life plus 70 years is the right tariff for that equation. That is a big question. The original arrangements for design rights, which limited them to a more patent approach, have a lot going for them. It is a pity that we have seen government proposals moving away from that in the past couple of years. This is not an easy area, but we have to get our thinking absolutely right on IP and the way forward if we are to make a success of the new world.
There are a number of points that I am sure the Minister will want to cover in the brief time available to him. If there is not time for him to respond to them all, perhaps he will write to us, because this debate has been so good that it would be helpful to have more detail. I look forward to hearing from him.
Exports
Lord Stevenson of Balmacara Excerpts(10 years, 10 months ago)
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Lord Livingston of Parkhead
There are a number of questions there. At this point, I am probably not looking to rebrand the Queen’s award for exports, as the Queen does seem to be the right person to award it. In terms of UK Export Finance, my noble friend does make a good point; UK Export Finance has predominately supported larger companies. We have, however, doubled the number of regional advisers for UK Export Finance, and we have launched a new product aimed at assisting smaller companies. In fact, I was at the meeting of the all-party parliamentary group on this issue, and I heard a number of small and medium-sized businesses commending the work of UK Export Finance, but there is more work to be done.
Lord Stevenson of Balmacara (Lab)
My Lords, I welcome the noble Lord to his Front-Bench appearance and look forward to working with him in future. He will be aware of the publication of Good Business in September 2013, which is welcome because it puts into effect the Government’s commitment to implement the UN guiding principles on human rights. It is somewhat long on rhetoric, and a bit short on action, but one of the commitments it makes is to adjust government rules to allow human rights-related matters to be reflected in the procurement of public goods, works and services. Will he explain what is happening on this matter?