Ukrainian Holodomor

Lord Stoneham of Droxford Excerpts

Thursday 23rd November 2023 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, I thank the noble Lord, Lord Risby, for initiating this debate and for a brilliant, concise and clear statement of the case. It is always slightly difficult to follow the noble Lord, Lord Alton: as noble Lords know, he prepares extremely well, so you are always worried that he has used most of the arguments that could be thought of in a debate such as this. But I am very pleased to join him.

I carry with me the apologies of my noble friend Lord Purvis, who would have been here but is on a parliamentary delegation to the Falklands. I very much hope that he comes back with the rest of the delegation and that they are not the first line of defence against the new Argentinian President. I am not simply standing in for my noble friend: I have had a long-term interest in Russian economic history, which was one of the formative studies of my life that made me a social democrat—even before being a Liberal Democrat.

As we start this debate, it pays us all to think of the families in our country who have done so much over the last year to look after families from Ukraine. I know a number in Winchester and where I live. It is a remarkable tribute to those families that they have done that, and, if I may say so, to the Government for the firm support that they have given, consistently with the rest of the country, to the people of Ukraine.

The war has revived the names of Kyiv, Kharkiv and Odesa, which all featured so closely in the story of the famine of the 1930s. It is a fact that so much of the current situation in Ukraine stems from that experience of the 1930s and of Soviet colonialism. The noble Lord has already mentioned Anne Applebaum’s writing. She talked in her 2018 book about the consequences of that experience in Ukraine. It allowed or encouraged a tolerance of corruption; it caused a great wariness of state institutions, even democratic ones; and she even talked, slightly surprisingly, about what she called the “political passivity” of Ukraine as a result of that experience. If she were writing now, I would hope that she might have a slightly different view about that since February 2022.

The other quite interesting aspect of recent history is obviously Russia’s attempt to systematically eliminate diversity, language and culture in Ukraine in the 1930s. It is a sequitur of that that Russians still see Ukraine not as a separate state but as part of their own nation.

We have not mentioned this, but the inventor of the word genocide comes from the Polish-Jewish Ukrainian city of Lviv—Raphael Lemkin. I will have a little bit more to say about him in a moment, because I think it is relevant to the story.

First, I will make a few points about the famine. There is no doubt that it was the breakdown in the system of the mixed economy that the Soviet Union was experimenting with in the 1920s that led to the full state industrial policy of the late 1920s and the need for wheat exports to feed the growing urban population in the Soviet Union and also to provide revenue from exports for its industrialisation. Ukraine was probably the most advanced agricultural area in the Soviet Union at that time, but it was also the most difficult for Stalin. Modernisation and collectivism would stimulate, inevitably, resistance from peasant communities and stir national sentiments—which is exactly what happened. The remarkable thing is that, and I think this was mentioned in an earlier speech, there were sufficient exports of grain going out of the Soviet Union that could have fed 5 million—the noble Lord talked about 12 million—and would have been enough to stop the starvation of the 4 million or so people who are said to have died.

We must remember that the 1930s was not a world of mechanised, computerised combine harvesters and even fertilisers. Land was largely manually farmed. Livestock was important for providing transport and movement. The central planners in Moscow had little appreciation of the importance of climate for individual harvests, or that crop yields did not necessarily rise year on year. The skills, motivation and knowledge of the kulaks were not replicated, as they were deported and extinguished by the Communist Party purges. Once the rural rhythm of rotation of crops, providing fodder for livestock and fertilising the ground with animal manure was upset, poor harvests followed and famine was a result. Soviet planners became more frustrated and, with the peasantry alienated from the collectivisation system, the result was that the Soviet authorities sought to impose their will through unrealistic quotas, deportation, resettlement, travel restrictions and purges on farms and villages.

Paralleling this were the purges not just of rural areas but of party officials in Ukraine and of the energetic cultural leaders of the country who were questioning the policy of the Soviet state and were likely to cause trouble to Stalin. The crackdown on the so-called hoarding of grain by the peasantry diminished stocks for the human population and for the animals needed to provide movement, traction and transport. One of the saddest stories is the 200,000 registered arrests—there were probably more—for gleaning grain from the harvests in the fields. It is like the miners going through the coal tips in the General Strike.

The forcible removal of food from people’s homes followed the ill-fated decree by Molotov and Stalin in 1932. Those very names send a chill through one’s back. In the next 12 months, millions died. Some died even when the spring crops came—people starved because their bodies were overwhelmed by the availability of this food, just like the inmates initially experienced in the concentration camps at the end of the war.

Was it genocide? Here I return to Raphael Lemkin, because, by the narrow definition of genocide agreed by the UN after the war, under the Soviet influence, it is not strictly genocide. This is one of our problems. However, Lemkin himself, who coined the term genocide, said in an essay in 1953, Soviet Genocide in Ukraine, that the USSR attacked Ukrainian elites precisely because they were

“small and therefore easily eliminated, and so it is upon these groups particularly that the full force of the Soviet axe has fallen, with its familiar tools of mass murder, deportation and forced labour, exile and starvation”.

We know that, after the war, the Soviets wanted to have a narrow definition of genocide because of their own culpability. This came to mean the physical elimination of an entire ethnic group in a manner similar to the Holocaust. The definition that is used legally for genocide is quite narrow, and the Holodomor does not actually meet this interpretation: it did not eliminate every Ukrainian. Sadly, we also have to accept that some Ukrainians were complicit in the Soviet actions. It is not surprising that the Soviets stopped the wider definition that could have applied.

Anne Applebaum notes that, during this part of the century, since the opening up of Ukraine and Russia, there had been quite a push to get people to recognise the famine in Ukraine in the 1930s as genocide. In 2018, she said that she thought it had probably had its moment and that the attempts had not got very far. She would almost certainly think very differently now. The current war has revived the concept that we should refer to this as genocide. As speakers have already said, it is important to the Ukrainian narrative, and to avoid its assimilation back into Russia, that we revive this concept. Russia’s complicity at the end of the Second World War in its defining of the word genocide makes an even stronger case for us to look at this definition again. I ask the Minister: can the British Government provide a lead now? If they cannot recognise it immediately, can they start discussions so that we can look again at whether the term genocide can apply to the Ukraine famine, as so many other countries have started to do?

There are two other conclusions to draw from this history and the relevance of today. One is that state power has to be subject to democratic checks and balances. A democracy is very complex and it is not always a straight line, but it is incredibly important where state power can create these sorts of tragedies. Ukraine will need a huge amount of help, both economically and politically, to strengthen these checks and balances. That is one of the problems of its history. However, when we look back on that history I hope we will challenge ourselves to ensure that it never happens again.

I have one final thought. The incredible realisation from going through the story is the question of how Putin ever thought he could easily overcome Ukraine and then rule it. He might have been successful in the short term but in the long term it would have been impossible. With Ukraine’s history, culture, language and resilience, which it is now showing, it would have resisted, as it did in the 1930s and as it will in the future. We wish Ukraine well. I hope we can give an encouraging sign by seeking to move this debate onwards.

Ukraine

Lord Stoneham of Droxford Excerpts

Thursday 16th June 2022 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I thank the Minister for repeating the Statement. As Putin’s war of attrition against the people of Ukraine continues, we must stand firm with our NATO allies in providing military, economic, diplomatic and humanitarian assistance. We are at one with the Government on their support for Ukraine.

The people of Ukraine continue to show extraordinary heroism in defending their country against unprovoked and unjustifiable attacks that are having ramifications around the world, as the Minister put it in the Statement. Putin’s blockade of Ukraine’s Black Sea ports is now driving a global humanitarian catastrophe, leading to a rise of 41% in global food prices. As a result, the International Rescue Committee projects that almost 50 million people will face acute hunger this year. The World Food Programme puts the estimate at 47 million.

The Minister will recall that last week I asked him about the Government’s response to the EU President’s strong backing at the Security Council for UN Secretary-General Guterres’s efforts to get a package agreement that would allow grain exports from Ukraine and ensure that Russian food and fertilisers have unrestricted access to global markets. In his response, the Minister referred to the Prime Minister’s conversation with President Zelensky that week but was not able to give a precise read-out of their discussion, only to say that this issue was a key focus of it. Is he in a position to respond more fully today? What precisely are we doing to work in concert with the EU on this important area?

Also, what progress has been made in identifying alternative sources of food supplies to tackle the global food crisis? Will the Government deliver on Labour’s call for the UK to convene an emergency global food summit with the UN?

This is an international crisis, but we must also remember that the people of Ukraine are paying the highest price. Unfortunately, the recently published international development strategy weakened and cut UK support for the multilateral system, which has been crucial to the delivery of humanitarian support to the people of Ukraine. Can the Minister confirm how much of the humanitarian support pledged to Ukraine to date will be delivered through the multilateral agencies?

Even in Russia, Putin’s invasion is now having disastrous consequences. In recent days, we have read how Alexei Navalny has been removed from a prison, his whereabouts now unknown. Can the Minister tell us what the FCDO has been doing to raise Mr Navalny’s case with Russian counterparts and to seek assurances for his safety and security?

As much as we must recognise that many in Russia are suffering as a result of Putin’s illegal invasion, there is also a ruling elite that must be held to account, as the Minister highlighted in the Statement. The Government claimed some time ago that they were looking into the possibility of confiscating and repurposing frozen Russian assets to provide compensation to victims of war in Ukraine. Since then, we have seen the US, Canada and the EU all developing proposals in this area. Is the Minister able to confirm whether the Government are still pursuing this course of action? If so, what resources have they committed to seeking a solution?

We must also continue to ask what we can do to bolster the security of other democratic states in the region, which will be less safe and secure as a result of the invasion. We should stand in full support of Finland and Sweden’s applications to join NATO, which we hope can be completed as quickly as possible. On that point, exactly what efforts is the FCDO making to persuade counterparts in Turkey to ensure that avoiding delays on these applications is paramount?

I welcome the Minister’s assurance in the Statement that the UK will continue to stand with Ukraine at this difficult and incredibly harmful period in its history. We stand with the Government in support of Ukraine.

[Lord Stoneham of Droxford (LD)]

My Lords, I also welcome the actions that the British Government have taken to support the Ukrainian nation and its people, including welcoming the provision of multiple launch rocket systems. However, sometimes I get the impression—and the flavour of this Statement indicates this—that the Government think they are the only leading supporter of Ukraine. Actually, we as a nation should be more interested in partnerships being strengthened through this action with other nations, particularly through NATO and with the EU, because that is the organisation that is right on the doorstep of Ukraine.

We know that Russia is using hunger as a weapon of war, with the continued Russian blockade on Ukrainian Black Sea ports, where 98% of Ukrainian grain and wheat exports are harboured. We know that this is a deliberate tactic of war that will have catastrophic global reverberations. Is the UK involved in plans to release those grain stocks, particularly over land? Who are we working with to secure vital future food supplies from these sources?

The war in Ukraine and the global fallout that it has caused are a crisis of epic proportions, which makes the Government’s actions on international aid even more bewildering. Does the Minister really believe it is still appropriate to cut the international aid budget by 35%, as laid out in the Foreign Secretary’s international development strategy? How much of the £220 million pledged to Ukraine has already been delivered, and what impact has it had on the war and the humanitarian crisis? Is that money being kept quite separate from our normal overseas aid plans?

The Liberal Democrats campaigned hard to put pressure on this Government for the golden visa scandal to be ended. It saw thousands of visas granted to Putin’s associates, who laundered their dirty money and reputations in our country—the very same people whom the Government have now sanctioned. For months now the Government have told us that the review into the scandal will be published in due course, but little clarity has been forthcoming. Why are they delaying the publication of that report? Will the Minister confirm a timetable for publication?

We welcome the concept of a Marshall aid plan, but, to be effective, that requires the wholehearted support not just of this country but principally of the USA and the EU. What discussions are taking place with the EU so that there is a genuine partnership to make best use of the limited available resources? Obviously Ukraine is likely to be the principal beneficiary of this aid but, given the migration, the problems in Ukraine’s economy and the impact in Europe, partnership in Europe is very important to the success of any Marshall aid programme. Will the Government please comment?

[Lord Cromwell (CB)]

My Lords—oh, I am sorry. Forgive me.

Evacuations from Afghanistan

Lord Stoneham of Droxford Excerpts

Thursday 26th May 2022 Lords Chamber

[Lord Ahmad of Wimbledon (Con)]

My Lords, I first acknowledge all the work that the noble Baroness engaged in both during the crisis and subsequently. She and I have worked on the important issue of vulnerable communities in Afghanistan, particularly the cohort of judges that she refers to. On the specifics of the number of vulnerable identified women, I can certainly write to her after consulting my colleagues at the Home Office. I have quoted an overall figure of 4,600 who have settled here in the UK since the evacuation, but I will write to her on the specific break- down after I have got the detail from the Home Office.

[Lord Stoneham of Droxford (LD)]

I pay tribute to the Minister’s role in this incident last year, but the report is pretty scathing about the Government’s mismanagement. It says that there were no necessary preparations for the withdrawal and no proper plan. There was mismanagement—indeed there seems to be a cycle of mismanagement in the Government—and I want to know precisely how the Foreign Office and the Government plan to stop this sort of action happening again.

[Lord Ahmad of Wimbledon (Con)]

My Lords, as I have always acknowledged, there are always improvements that can be made—the same is true in the current crisis in Ukraine. You cannot say that any Government have a perfect response in every crisis; you do not know, because every crisis is different. We had made plans. I remember myself, after heavy diplomatic engagement with near-neighbours, that I returned via Dubai deliberately on the day that we handed the keys back to the Emiratis. There was no panic in Dubai; there was a massive operation there and we are grateful to the Emirati authorities for the strong co-operation that we saw then. That would not have happened if it had not been planned.

On the issue of lessons learned, I lived through the Covid crisis when we were repatriating, and one challenge that we faced then was chartering flights. In Afghanistan, not only did we have chartered flights ready but we had a reserve option, and indeed a second reserve option with other large carriers. Previous crises fed into the planning. Of course there are improvements to be made, and they are being implemented. We have seen that in the strong cross-government co-operation in the response to Ukraine and in the leadership that we have been able to show within the international community on the Ukraine crisis and more.

Social Security (Up-rating of Benefits) Bill

Lord Stoneham of Droxford Excerpts

Consideration of Commons amendments
Tuesday 16th November 2021 Lords Chamber

So some approximations are possible. Why are the Government not willing to accept these numbers? They are there, so any Government with good will and who cared for our senior citizens would have ensured that it was possible to adopt some of these numbers, modify them or even commission research from the Bank of England and the ONS to that effect. However, I sense that the political will to improve the living standards of our senior citizens is not there. That is a fundamental problem.

[Lord Stoneham of Droxford (LD)]

My Lords, I will be brief and speak on behalf of my noble friend Lady Janke, our Front-Bench spokesman on this Bill. Unfortunately, she cannot be here today.

First, I will say that we are glad that the Government have reconfirmed their commitment to the triple lock in the long term throughout all these discussions. We are disappointed that the Commons have rejected these amendments. The Government had an excellent opportunity to maintain their manifesto commitment while taking into account the special circumstances of the pandemic. We will not be pursuing this amendment —we accept that this has to be accepted—but we thank the noble Baroness, Lady Altmann, for the work that she has done.

We are concerned that pensioners will not be protected from the effects of the economic pressures now coming from inflation. The Governor of the Bank of England is very uneasy about the situation and we want to know whether the Government are prepared to keep an open mind and look particularly at the case of the poorest pensioners as time goes on in the next few months, when these pressures will come to a head. More importantly, we are extremely supportive of the maintenance of the triple lock in the longer term.

[Lord Desai (Non-Afl)]

My Lords, we have been hearing lately that the House of Lords is a rather useless body and that the other place is better—but twice recently your Lordships’ House has asserted that it cares more for the people than the other place. The noble Duke, the Duke of Wellington, stood up for the right of the citizen to clean water, asserting that against what the Commons had said. We also stood up for the triple lock and had that rejected.

I have a very simple suggestion for the Government. Since they have no intention of helping pensioners, why can they not be honest and say that the triple lock simply means that we will raise pensions by the lowest number of the three which are here, unless it is higher than the Bank of England target of 2% inflation? The 2% inflation that the Bank of England has chosen as its target is not a statistic. It is not disputable because they have made it up. It will always stay at 2%. So the Government could at least guarantee to be honest; they could just give 2% and run away. They should not give false promises and then not fulfil them.

Social Security (Up-rating of Benefits) Bill

Lord Stoneham of Droxford Excerpts

3rd reading
Monday 8th November 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her remarks and thank all noble Lords who participated in the debate on the Bill. For a short Bill, its impact is quite wide, affecting millions of people. Our debates have raised some crucial issues around approaches to uprating and the government strategy for retirement saving, and especially around the position of pensioners on lower incomes as we enter a season of spiralling prices. Not for the first time, it is possible that our deliberations may have a broader impact in parts of Westminster and Whitehall than perhaps we realise or will ever know—at least until the autobiographies of the future come to be written.

On the matter of memoirs, these proceedings have also been notable for the return to the fray of the former Minister for Welfare Reform, the noble Lord, Lord Freud, whose frank demolition of the Government’s case for social security cuts and policies such as the benefits cap will, I predict, turn out to have a half-life somewhere around that of uranium.

I thank the Minister for her concession on Report, in response to my amendment on pensioner poverty, that an impact assessment should be published. That happened on Friday. I look forward to having the opportunity, if we can, to discuss that with her and her officials in due course. Most importantly, we have amended the Bill to require the Government to find a way to adjust pension uprating and to maintain the earnings link, while making allowance for the pandemic. I urge the Government to take that seriously and to use the time they now have to find a better solution than that offered by the Bill.

Public trust in politics has taken a bit of a hit in recent times. If there were a way of pursuing this objective without dumping a manifesto commitment, we would all want that. In the meantime, I thank the Minister and her officials, colleagues across the House for their thoughtful contributions, and Dan Harris of our staff team for his marvellous support. We send the Bill back to the Commons with our best wishes, hoping that it will embrace it and hold on to it as it is.

[Lord Stoneham of Droxford (LD)]

My Lords, the noble Baroness, Lady Janke, apologises for not being able to be here today. She has asked me to say a few words on behalf of our group. We very much welcome that noble Lords have agreed with the amendment from the noble Baroness, Lady Altmann. We hope that it will enable MPs in the other place to think again about the need to protect pensioners from the worsening economic circumstances. In the time since the Bill’s passage through the other place, significant changes have taken place, with economic indicators leaving little doubt that pressures will grow in the months ahead. I thank all noble Lords for their contributions. I particularly welcome the cross-party working made possible by the noble Baronesses, Lady Altmann and Lady Sherlock. We have much appreciated the Minister’s helpful approach. We thank her for her openness and willingness to share information on the Bill. We extend sincere thanks and appreciation to the Bill team, who have provided us with expert professional advice at all stages.

[Baroness Altmann (Con)]

My Lords, I also thank my noble friend the Minister and the Bill team for all their work, and for the courtesy they have shown in meeting us many times to listen to the concerns we have expressed. I too am extremely grateful for the work across the House that was encompassed by this Bill. It has shown the House of Lords at its best. This is an issue of significant social importance where this House has shown that it believes that the other place took a decision based, perhaps, on incorrect information and has asked it to reconsider. I am particularly grateful to the noble Baronesses, Lady Sherlock and Lady Janke, my noble friend Lady Wheatcroft and others including the noble Lords, Lord Hain, Lord Davies and Lord Sikka, and the noble Baroness, Lady Drake, for their hard work. As the noble Baroness, Lady Sherlock, has said, I hope the Government will find a way to retain this amendment in the Bill and uprate state pensions by more than the 3.1%, which is clearly inadequate to protect against cost of living increases.

The Situation in the Gulf

Lord Stoneham of Droxford Excerpts

Monday 22nd July 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

I agree with my noble friend. I reassure him that we have reached out to our Indian counterparts as part of wider engagement on this issue. We wish to ensure that anyone who can help de-escalate the current tensions is fully engaged. I agree with my noble friend also on the strength of our relationship with India, historically, currently and into the future, and on the importance of its presence in the region given its bilateral relationship with Iran. For all those reasons, India has an important role to play in de-escalating not just the current crisis but further tensions in that region.

[Lord Stoneham of Droxford (LD)]

My Lords, there is an issue that the Minister has not addressed: incompetence. Everybody in this Chamber thought, when the Iranian tanker was seized, that it was inevitable that Iran would respond in the way it has. It seems to me that the Government were completely distracted and are weak at this moment because of the various negotiations going on over Brexit. It was good to see the good support coming from Germany and France this weekend, but the Government have been incompetent in allowing this to happen with one naval vessel available. What was the action; what discussions took place in COBRA anticipating this would happen? Why did the Government not act to deal with it?

[Lord Ahmad of Wimbledon]

I am sorry, but I disagree with the noble Lord. The fact is that the Government did act. As I have already said quite succinctly, the fact that we did engage early on, in terms of assets in the region, prevented the impeding of the passage of a British-flagged commercial vessel, “British Heritage”, on 10 July. If the noble Lord feels that keeping diplomatic channels open is not a valid way of ensuring that we bring tensions down, then I again disagree with him. We have had a dual-track approach on this, ensuring that we can bring tensions down. The deployment of a large number of military assets into the Gulf, particularly around the Strait of Hormuz, which is a very small shipping channel, without fully exhausting diplomatic channels, would have been the wrong way to go about this.

Despite the political backdrop of Brexit, the Government continue to operate. The noble Lord shakes his head: perhaps he is casting doubt on my own efforts. I assure him that as a Minister of State at the Foreign Office, I and many other Ministers from the Ministry of Defence and other colleagues continue to ensure that we represent British interests to the best of our abilities. We will continue to work with Iran to ensure that tensions are decreased, to engage through diplomatic channels and to exercise our right to ensure that any vessel, British flag carrier or otherwise, is provided the protection it needs to ensure it can navigate the Strait of Hormuz. To say that we took our eye off the ball is inaccurate and I do not agree with the noble Lord.

Trade and Investment

Lord Stoneham of Droxford Excerpts

Monday 15th June 2015 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, it is my pleasure and role this afternoon to welcome the noble Lord, Lord Maude of Horsham, and to congratulate him on his wide-ranging and very informative maiden speech on international trade. As the noble Lord has told us, he is part of a remarkable political dynasty, his father having been a Member of this House between 1983 and 1992. As he also told us, he spent 27 years as an MP in two places, North Warwickshire and Horsham. I think he was very unlucky to miss promotion to the Cabinet after the 1992 election, when he lost that marginal seat of North Warwickshire. However, patience finally had its reward; 18 years later, he played a major role in the coalition Government. Again, he was probably slightly disappointed that it was Liberal Democrats who blocked him from full membership of the Cabinet, but he did attend the Cabinet and of course played a key role as Paymaster-General and Minister for the Cabinet Office.

The noble Lord, Lord Maude, was at the heart of the Government’s modernisation plans. Whether you think that he achieved £10 billion or £20 billion of savings through the government service, it was a remarkable achievement. He also oversaw the Government’s transparency agenda and created the Government Digital Service. I notice that a number of very senior Members of this House were somewhat stirred up by his remarks on Cabinet reform, and I should warn him that whenever we discuss change in this House it arouses very strong feelings. His experience in Parliament, government and business will be very valuable to us in this House, and I am sure that, with those experiences, his contribution in his current post as Minister of State for Trade and Investment will be of great interest to us in the coming months.

In the week celebrating the national historic events of Magna Carta and Waterloo, it may seem odd to link those events to this debate on international trade and investment. Magna Carta dabbled in matters of trade as well as in its more well-known subjects of taxation and curbing absolute power. Lord Howe of Aberavon, who is sadly no longer a Member of this House, often reminded us that Magna Carta called for one system of weights and measures to ensure fair trade and that we have never actually achieved it. There is little point now in considering legislation on trade, or even on industry, unless it has an international dimension and takes full account of what is happening in the global marketplace.

Waterloo is often seen these days not simply as a defeat of the French but as an event underlining the importance of co-operation with the Germans. Angela Merkel is often portrayed as the Marshal Blücher of her age, coming to rescue our Prime Minister in the EU negotiations, inevitably at the last moment. In fact, the origins of the Napoleonic Wars were in the trade blockade imposed by Napoleon on the UK: the famous, or infamous, continental system. Nelson’s Navy had to gain control of the seas so that Wellington could conduct the land war and free up our trade. These days, we have to play our full part as a member of the EU to make sure that we achieve free trade.

Today, my proposition is that national law alone, or national initiatives on their own, cannot begin to influence international trade. We cannot raise our taxation without having regard to international competitiveness, and still as a major trading nation we have a major interest in free trade and the elimination of all forms of trade protection. We might have once sent the gunboats to free up our trade, but today, with not enough naval ships to defend in a flotilla even our one aircraft carrier—let alone the two that we are going to have—we have to find other ways of wielding the big stick in international trade negotiations.

We have to rely on our competitive advantage in the Diplomatic Service and in entrepreneurialism. The growth of jobs that has been achieved in the last few years in the UK says much for that entrepreneurial talent, the expertise of our inventors, the expertise of our universities and the skills therein. These are all forms of our competitive advantage in international trade going forward. As a small country, we have to fight above our weight, which internationally and historically we always have. We have to use that influence today, particularly in the EU.

Among the items in the government agenda, the first thing that the Government rightly have to achieve, having made the commitment, is to see through the European referendum as quickly and speedily as we can. Personally, I think complex decisions like that should be made by Parliament, but the electorate has decided. The referendum will not resolve matters. Referendums rarely do, as Scotland showed last year, and indeed as the referendum showed in 1975. Nor will it help the government party, as it did not in the 1970s. They do not resolve difficulties but often exacerbate divisions within political parties. However, while this is not resolved, it will deter investment by our industry in trading markets throughout the world.

Of course Europe needs reform, but it has to make sure that it makes its own industries and countries more competitive and that they work better in international markets. Not least, we have to complete the single market, particularly in digital and service trades, which could benefit the competitive advantage of those sectors in this country. Could the Minister tell us in his closing remarks the sort of timetable he now thinks we will be pursuing in the EU to achieve these important reforms and developments?

We have to use our influence in the EU to enact the Transatlantic Trade and Investment Partnership, which will set global standards for products and regulations. I cannot see the American Congress responding simply to the UK on its own, and I think that many join me in that. Other successful trade negotiations will require our membership of the EU; that is where the clout is. The alternatives to the EU do not stack up: outside Europe we would have little influence and we would follow the rules of trade that were being imposed from within the EU but without having any influence on them. We would still, like Norway and Switzerland, have to foot the bill for the EU, but with no say.

Our ultimate objective at this time, as well as negotiating the referendum proposals, is to achieve a greater balance in our economy and complete the work of the five years of the coalition Government. The trade deficit has to become as much a concern as the overall spending deficit, so that trade and investment contribute more to growth than consumer demand fed by credit and encouraged by high house prices. We know where that route leads, which is why we have to have greater balance in our economy. Our world position has to be enhanced by economic strength, building on the job creation and the entrepreneurial talent displayed in the past few years. As the UK understood in 1815, our future economic prosperity and security lie at the heart of Europe.

[Lord Pearson of Rannoch (UKIP)]

My Lords, could the noble Lord tell your Lordships, in view of his peroration, how countries that are not in the European Union—the USA, China, Japan, South Korea and others—manage to trade very successfully with the European Union without actually being in it?

[Lord Stoneham of Droxford]

They trade successfully because they started almost from scratch. We have had to deal with an economy that was not completely destroyed in the war. They have had the competitive advantage. For many years we stayed outside Europe when we could have had it as a major market on our doorstep, and we did not make the most of it by joining in the first place.

Exports: Government Support

Lord Stoneham of Droxford Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, I am very pleased to speak in this debate, initiated by my friend and colleague, the noble Baroness, Lady Wheatcroft. She has initiated several debates on business subjects in the past couple of years while we have been in the House together, and I have been pleased to speak in a number of them.

The coalition Government are committed to rebalancing the economy. The aim is threefold: it is about reducing the deficit; ending our dependence on short-term, consumer-led growth based on excessive household credit; and, fundamentally, it is about strengthening our role as a trading nation and widening and diversifying our export base.

We have a lot to do. Looking back over the past decade, we see a situation in which import growth has outstripped export growth, so net trade has acted as a drag on UK growth. UK share of world goods and services has actually been declining. We have been underperforming in emerging markets and 50% of our trade is still based in the EU, which has been stagnant for most of the past five years. This perhaps emphasises why we have such a strong interest in getting that economy moving again alongside the British economy’s movement.

The coalition has provided continuity in its industrial strategy. I was impressed when we had a debate on the industrial strategy a few months ago, by the agreement across all parties on the work that Vince Cable has been doing, based on the foundations left by his predecessors in the Labour Government. He has led a ministerial team that has largely been in place for five years. I pay particular tribute to David Willetts, who did so much in the university sector and on our skills-based economy. We have had a focus of support for exporters through improvements in the Foreign Office and UK Trade & Investment. Although I agree fundamentally that the leadership, intelligence and support that they give is essential, we must also realise that we are talking about only 2,000 people in those organisations who are specialising in this work. They cannot possibly do the scale of work that we need to improve our exports and our trade.

The coalition has also concentrated on providing extra finance and credit guarantees for exporters. We have the British Business Bank starting up and we are trying to make the UK a really good place to do business, through a competitive tax regime, protection for patents, improving infrastructure and skills, and encouraging inward investment—all things that a Government must do. I believe that there has been a strong partnership between industry and the public sector as well, which has helped improve relationships and improve work on the industrial strategy. However, to get successful export-based strategies we have to build fundamentally on solid competitive advantage and it takes time to show results.

In my career, I have been involved in transforming companies. In my view, one could improve the figures in one to two years, but to get genuine transformation took five to seven years as a minimum and to do this across an economy, as we have to do in our export sector, will take 10 to 20 years. We can learn the lessons of some of our success stories. The noble Lord, Lord Lang, talked about the automobile industry. I worked on the fringes of that sector in the 1970s and I would not have touched it with a barge-pole as a career in management. It was a complete nightmare. However, we went through the 1980s and 1990s and it has been transformed, largely because of foreign investment, through Nissan, Toyota and Honda, with foreign management techniques, and now with Range Rover and Jaguar, under foreign ownership, agreed, but building on the skills of the Midlands economy.

To sustain that competitive advantage has required huge investment in R&D and skills as technologies in that sector are being transformed. Fortunately, we also have the entrepreneurial base of the Formula 1 competitors, all based in this country, as an example to spur us on. The combination of university knowledge, the catapult centres and inherent engineering skills, combining manufacturing with knowledge of computerised systems, which is the future of motor technology, are all important now for the future of that industry. A major part of that recovery has been based on the fact that we are a member of the European Union.

Moving on to the aerospace manufacturing sector, in 1995 20% of passenger aircraft were made by European manufacturers. The rest were made in the USA. Today 50% are made in Europe, principally by Airbus, and we have 10,000 direct employees of Airbus in the UK, with 100,000 employed by suppliers. That has happened because we have concentrated on a high-skilled, high value-added, huge R&D, with government financing and support to make that happen through the Airbus company and the suppliers in the UK that are part of that very successful operation.

What do the Government have to do to help exports? They might just start on import substitution because if we can improve the supply content in some of those manufacturing and services sectors that are already successful in the export sector, we will reduce our import content. There is a big initiative in the car industry where, until recently, 60% to 70% of the components came from abroad. We have to improve on that.

We could do more in public procurement and we are beginning to get on to that. It takes time but we have seen the problem we had earlier in the Government with the rolling stock in the railway industry and the missed opportunity to improve domestic manufacture. We are now beginning to get on top of that.

We must also give huge encouragement to R&D. I mentioned earlier that where we have been successful is where we have concentrated on competitive advantage. We have to exploit that, particularly in the knowledge economy. R&D as a percentage of GDP in this country is half that of the USA, Germany or France. R&D is too concentrated in too few sectors. Six out of 33 business sectors provide the majority of our R&D in this country; 25% of that is in pharmaceuticals and 50% is done by foreign-owned companies. The best performers—and this is the secret to it—are pharmaceuticals, aerospace and automobile manufacture. Interestingly, these are the places where we are most successful in exports. A very prominent scientist told me recently that R&D expenditure in Volkswagen was more than the whole UK science budget. That probably is the underlying reason that it is so successful in that market.

We have to maintain an international trading outlook. We have to have stability in our exchange rate. We have advantages of geography and language but sometimes we are too complacent. We must resist the island mentality in our economy. Future membership of the EU is tremendously important. By all means, let us seek reform but we must end the uncertainty and retain a firm commitment to our place in Europe in the years ahead.

Trade Balance

Lord Stoneham of Droxford Excerpts

Thursday 11th December 2014 Lords Chamber

[Baroness Armstrong of Hill Top (Lab)]

My Lords—

[Lord Stoneham of Droxford (LD)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, it is the turn of the Labour Benches and then it will be right if we come back over to the Liberal Democrats.

[Lord Livingston of Parkhead]

The north-east, indeed, is one of our manufacturing powerhouses and is part of the UK that actually has a trade surplus with the rest of the world. The Nissan factory is producing more cars than the whole of Italy. I recognise that a number of exporters wish to remain in the EU but I also recognise that they wish to remain in a reformed EU—and that is what we on this side of the House are fighting for.

[Lord Stoneham of Droxford]

At the start of this Government, only 30% of components in our successful car manufacturing sector were sourced in the UK. Can the Minister tell us how the Government’s industrial strategy has been seeking to improve this performance?

[Lord Livingston of Parkhead]

The Government’s industrial strategy brings together academia, the Government and also businesses in producing a long-term commitment to the next generation of technologies and industries. I know that the motor vehicle industry in particular welcomes this. I mentioned earlier the Reshore UK proposal. These things together are helping significantly, both with companies coming back to the UK and, for instance, companies such as Gestamp, a Spanish company that recently announced a significant investment in the UK.

Queen’s Speech

Lord Stoneham of Droxford Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, in 2010 the Governor of the Bank of England warned the negotiators of the coalition Government that anybody who was going to be in government for the next five years was likely not to be in government for another generation. Anybody coming into government in that situation knew it was very serious. I am too modest to predict now what this will mean for my party, but at least I can take comfort from my noble friend Lord Ashcroft’s poll today, which shows the Conservatives and Labour neck and neck, fighting for 60% of the electorate. That suggests that the governor’s prediction was too pessimistic and that, in reality, hope springs eternal for everyone.

It is easy to forget just how severe the problems were in 2010. I think that some of the solutions for the future put forward by the preceding speaker should be put in the context of the crisis in business confidence and the shattered financial economy that we found in 2010. The coalition has provided—and provided at the time—much needed stability and certainty. It is important that we recognise that it has retained its determination to get the deficit under control. It has also provided a fixed-term Parliament, which means that we have five years to do the job. It is worth recalling how things were at a similar stage four years ago. We spent most of the last year of the preceding Parliament trying to anticipate when the general election would come. Now, if we did not have a fixed-term Parliament, we would undoubtedly be trying to predict whether the election would be in the autumn or next May. At least we now have the certainty of knowing that we will not have an election until a year’s time, which is good for the economy.

We have also had continuity in ministerial appointments. I note that the Business Secretary has now served for the second longest time in that position since the war. He has just beaten the three years and 11 months of Patricia Hewitt but has yet to beat the record of Peter Thorneycroft, the longest-serving DTI Minister in the 1950s, who served for five years and three months. In 13 years, Labour had eight appointees. In the previous Conservative Government of 18 years, there were 11 appointees, averaging 1.6 years for each appointment to the equivalent Business Secretary position. At least longer, more stable appointments and better experience provide for consistency, determination and the time to bring about real achievements in office.

Today, I cannot talk about the whole range of matters covered by the debate. I should like to talk about this Government’s radical proposals for pensions under the leadership of my honourable friend Steve Webb, the Minister for Pensions. However, in the short time available to me, I want to concentrate on the business area. When we look back on the coalition, there have been two real achievements in that area. The first has been predominantly in apprenticeships, of which we have created 1.6 million. We built on the foundations left by the Labour Government and have doubled the number of apprenticeships being created each year throughout the coalition Government. Certainly, we hope that by the end of this Government we will have created more than 2 million apprenticeships. These have been linked to a renewed interest in the whole area of technical education to perhaps counter- balance an overemphasis in the recent past on academic success and investing in universities.

The second area where there has been great achievement is jobs and the role played by business in creating jobs. Back in 2010, everybody thought that unemployment was going to go through the roof. That is what the Governor of the Bank of England almost certainly expected as the economy restructured and public spending had to be cut. After four years, we are now seeing the lowest level of unemployment since 2009 at 6.8%, or 2.2 million, plus a reduction in youth unemployment. It has to be said—I say this to the opposition Benches—that all recessions are painful: unemployment hits disproportionately the less skilled, the more vulnerable and the poor in the labour market. If the predictions had been forthcoming in actuality, I am sure that there would have been a threat to social cohesion in this country. What we have done in the employment field has at least relieved some of the pressures on the poorest in society, who would have suffered if the real ravages of the recession had taken hold.

One of the outstanding contributors to jobs growth has been the role of small businesses, and I will say something in a moment about how they are going to be very important to the ongoing recovery of the economy. However, although there are encouraging signs that good economic growth will come, in the final year of this coalition we have to ensure that it becomes sustainable growth which lasts and that it does not just lead to an overheated economy and a return to the renowned stop-go situation.

Two indicators need to pick up in the economy. The first is business investment and the second is labour productivity, which has performed poorly. Since 2007 it does not compare well with our competitors: the USA, France and Germany. There are signs of a pick-up in business investment and certainly surveys have shown that bigger companies are now beginning to use their cash reserves to invest as confidence returns.

The Government have put in place a number of welcome schemes to counter the reluctance of banks to lend to small businesses, which I hope will now play a crucial role in stepping up our capacity to innovate and develop new markets, and will support growth in the economy. There are encouraging signs in pharmaceuticals, aerospace and the motor industry, but we have to recognise that although manufacturing has to play a major part in recovery, it is not sufficiently broadly based in this economy now as it is in Germany. Therefore, we have to look for other areas to provide growth and jobs.

There are good opportunities still to strengthen links between universities and small businesses and to build on their research innovation and scientific developments. For a nation that is the second biggest exporter of services in the world—behind the USA—there remains huge potential for export growth. Services exports are still restricted by national regulation and competition imperfections. Stepping up our initiatives on trade liberalisation, not least in the European Union, will open up huge opportunities for service companies.

There are three further important considerations for growth. We must not be satisfied with just making improvements in our education system. We are not just in the business of catching up, which we are trying hard to do; we need to strengthen our technical education and battle hard to do better so that we are ahead of other countries in improving competitive advantage. We have to be vigilant on the supply side of business and we also need a stable outlook for the economy and consistent government policy towards business which strengthens confidence and encourages investment in facilities, jobs and apprenticeships in the UK. That will be the task for the coalition Government in the coming year.