Central America: Trade and Investment

Viscount Waverley Excerpts

Monday 19th December 2022 Lords Chamber

[Viscount Waverley (CB)]

My Lords, a simple premise for today’s world must surely be that entry into lesser marketplaces by midsized SMEs must be a priority—not just those markets on the beaten track nor those the preserve of big business.

Therefore, the noble Baroness, Lady Hooper, is to be supported in her endeavours in the central American region, which build on the high regard in which she is held in South America. Proponents of natural trade corridors might wish to continue the trajectory on from the Caribbean, in which the Dominican Republic sits—a part of the remit of the noble Baroness, Lady Hooper, who is a trade envoy of the Prime Minister—and continue to central America and include Mexico.

I would be curious to know the rationale behind the selection of the 20 FCDO priority countries and would be grateful if the Minister would write to me on this, along with a sense of whether trade corridors might not be a better way to go. Are the DIT and other government departments aligned, for example?

On the question of human rights, my understanding is that an introduction of human rights has been downgraded as an aspiration. Am I right in that regard?

I do not wish to be unseasonal but the view of some is that the Government have adopted a fragmented approach to trade, with no long-term vision, and are short on intrinsic strategic planning. I venture some innovative thinking and that to think holistically, away from the British trait of silo mentality, would do no harm.

A recent discussion with some clear-sighted professionals arrived at two conclusions: first, that things cannot continue as before; and, secondly, that a clearer whole-of-government vision on trade is needed, together with a fully integrated approach across Whitehall to drive global growth in key sectors.

The APPG for International Trade and Investment, which I happen to co-chair, together with the Future of UK Freight and Logistics APPG, are building on the principle of identifying trade corridors. We will be conducting a review of all aspects of the United Kingdom’s export promotion strategy, looking at the role of government, the chamber of commerce movement and regional promotional bodies, including regional champions such as Midlands Engine and Northern Powerhouse, and LEPs, to name but a few. We need the rationale and criteria for trade envoy selection to be explained as some strategically important countries have none.

For the record, these are in addition to the empowerment of intra-UK trade, including supply chain issues. Through my engagement with the International Trade & Investment Center—ITIC—of Washington DC and the International Trade Council, I am working on making available the provision of information and dissemination of multiple datasets, using overlays for analytics of markets and supply chains. These allow for forecasting and prediction of market behaviour, thus allowing for a deepening of relations with New World countries.

That should greatly assist companies searching out and forecasting new markets and UK entities seeking to validate their supply chains, understand market pricing, monitor competitors and assist in locating priority investment FDI targets. Additionally, many emerging countries welcome issue focus, often in the format of round tables and implementing public/private sector workshops on capacity building, tax policy and fiscal economics, with practical initiatives that can make a real difference. Stakeholder engagement is key when on a course to win friends.

It is about co-ordinating individual local content development programmes that can be adopted by investors and government agencies, combined with utilising tax and customs data and the like, to which I have referred, with skills-based professional development and gap analyses.

In concluding, there is an urgent need for government to promote the provisions and benefits globally of the enabling electronic trade process currently on its legislative journey in the UK. What is being done in that regard?

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[The Minister of State, Department for International Trade (Lord Johnson of Lainston) (Con)]

My Lords, I am extremely pleased to conclude this short debate highlighting the Government’s work to improve trade and investment relations with central American countries. I am grateful for the comments made by the noble Lord, Lord Purvis, about the number of Secretaries of State that he has been engaged with. I think I am not just the fifth Investment Minister, but the sixth as well in the last few months; I hope that position will last a little bit longer. I sense a great sense of urgency about the opportunities that present themselves, and I am very aware of this. In the light of declaring interests, I refer noble Lords to my register of interests, though I do not believe there are any specific interests that cause conflict in this debate today.

I thank my noble friend Lady Hooper for tabling this debate and putting the spotlight on this unique region, and for her dedication to developing our relations with the region and the wider Latin America. As the Prime Minister’s trade envoy to Panama, Costa Rica and the Dominican Republic, she has done huge work—and I have heard this discussed today—not just in terms of trade but in advancing our quest to grow greater cultural ties and more work for civil society. I thank her profusely for that and I will come on a little bit later to talk about some of the specific work that she has been doing. I would also like to be part of her royal party if ever the occasion so arises.

I should point out that, for the purposes of this debate, when I talk about central America, I am referring to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic, and as a result of the DIT’s operations and our trade envoys’ portfolios, but I am very happy to have a broader debate. It is extremely important—and I am going to cover Mexico and Brazil in my closing remarks—but, yes, we should talk about Latin America, the whole of Latin America, from Mexico down to the southern tip of Argentina. The opportunities there for this country are significant, and the DIT is very well aware of that.

Central America is home to just over 62 million people, with a combined GDP of $918 billion. This represents a sizeable opportunity for UK businesses, as we have discussed, and increasing numbers of British firms are realising this potential. The UK’s trading relationship with central America was worth around £2 billion last year. I have heard your Lordships’ views on how we can forecast further the expectations for our trade with central America and I am happy to revert back to noble Lords on that, but the long and the short of it is that we expect it to grow significantly.

UK firms also do quite well in central America: businesses operating in fields from pharmaceuticals to food and drink have accomplished significant exporting and investment achievements across the region. I was about to go on to talk about recent great successes, but the question I am being asked is: what are we doing particularly to help promote exports to central America and, to some extent, investment from there into the United Kingdom?

The fact is that the Department for International Trade, which I have the privilege of serving in, is totally committed to improving the UK’s relationship with these vibrant markets, and we work hard to enable our firms to access them. We have over 150 people in LATAC, under the excellent leadership of Jonathan Knott—I think my noble friend Lady Anelay mentioned that she had recently met the deputy HMTC and was very impressed, I am grateful for that and will make sure that this is passed on. We have 16 people in central America and 25 people in Mexico, and our international markets teams based across Latin America and the Caribbean are the first point of contact for UK businesses looking to engage with trade opportunities in the region. They are also available to support businesses where DIT may not have a physical footprint—not every country has DIT coverage, and I am sure that noble Lords are aware that we have to differentiate the markets, as has been discussed—but they are then covered by other countries. We have developed a network of relationships with local chambers of commerce and other partners to help UK businesses. On top of that, we have nearly 400 international trade advisers based in the UK.

There was a discussion from the noble Lord, Lord Mountevans, about the analysis of markets and the opportunities that we can present through that analysis; I would be very grateful to see more of that. I have not seen the report that the noble Lord was discussing, but as a Minister for Investment I would be extremely keen to see that work if he could share that with us.

There was a discussion about the involvement of ambassadors and the diplomatic element involved in promoting our trade. I am very pleased to say that, as I am sure my colleagues will know themselves, the ambassadorial teams in the FCDO are more focused now on trade than they have ever been. At every embassy I have been to, I have been struck—as I am sure the noble Lord, Lord Mountevans, was as a previous Lord Mayor—by the extraordinary level of support that we get. I very much hope that, if any of your Lordships do play a role as trade envoys or visit any of these countries anywhere in the world, you will call upon the ambassadors; they are literally our trade ambassadors as much as they are our diplomatic ambassadors.

A successful trading relationship is a win-win. AstraZeneca is a great example—not only is it exporting to the region, but it has also opened new offices in Costa Rica, representing an investment of $8 million into that country, which will create many jobs in the market. Rapiscan, another great example, provides security scanners for several airports in the region and has recently won a contract in the new Palmerola airport in Honduras. Diageo is a great example of the expansion in Panama, and I was very interested to hear about Buddi, the tagging system for prisoners and also the call system for pensioners; I am sure that many Members of this House will have call to use its services at some point—although, hopefully, the pensioner elderly alarm system rather than the prison tagging system. I know for a fact that we have supported Buddi in the DIT significantly in expanding its sales.

We work with companies of all sizes. I think there was a mention of what we do with SMEs. We are not just helping the multinationals; we really are helping the SMEs. We published a refreshed export strategy in November 2021 which is designed to focus on the barriers faced by SMEs. This is a 12-point plan to support exporters. It includes supporting business to trade with central America in the UK through our innovative Export Academy, a network of over 400 export champions across the country, giving businesses knowledge and confidence to enter new markets thanks to on the ground exports, as well as our “Made in the UK, Sold to the World” marketing campaign. This is very important. SMEs are vital for us.

I have heard a number of comments about culture and the need to encourage people to export in general. I hear that, as does the DIT, and we work hard on that through our various campaigns, but particularly through export champions, who provide invaluable help from one businessperson to another. UKEF, which came up a number of times in this debate, has 24 export finance managers, known as EFMs, based across the UK. These are regional representatives of UKEF, who can act as a local point of contact for exporters and businesses with export potential.

We have dedicated in-market support for buyers in central America. Our LATAC international market team export support service is the region’s universal entry point for UK businesses. Once companies express interest, our teams on the ground can help explain how to enter the markets, highlight potential distributors, partners and customers, and, where feasible, provide direct introductions to help UK firms win and expand their business in the region. This is important. We have a number of people on the ground, and in the UK, who are paid by the taxpayer to help support our businesses to export to central America. I am always keen to hear further advice and suggestions from any Member of this House on how we can do more and how we can do better, but the support is there; it is extremely welcome and the feedback is very good. I am not sure whether or not they can all speak Spanish, but all those I have met do, so I will confirm their language skills to the noble Baroness, Lady Coussins.

I will say a few more words on UKEF. The Government are determined to ensure that no viable UK export fails for lack of finance or insurance. My department’s partners in UK Export Finance are focused on making sure that nothing prevents British businesses accessing global markets, and central America is no exception. In advance of this debate I met the acting CEO and was hugely impressed with the team—some of them have been there for an incredibly long time—and the indication he gave to me was that, at some point in the relatively near future, the new CEO would be announced, although that is not confirmed. What is important is that we have a risk appetite of up to £4 billion in some of these markets, so clearly it is incredibly important.

We are discovering ever more varied ways of supporting businesses. For instance, last August—this is important, and it was mentioned today—we signed an MoU with CABEI, the Central American Bank for Economic Integration, which is the leading regional development bank in central America. This allows UKEF to support business in all CABEI member countries and to work together to identify joint financing opportunities.

The question of why we have not joined CABEI has been raised. I think my noble friend raised that point. It was a decision taken last year by the Foreign Secretary. However, this does not stop the UK working with CABEI. We have a number of positive engagements ongoing with the bank which I cannot comment publicly on, but we are working very closely with companies in order to joint finance with CABEI in the partnership with UKEF. I take a personal interest in this, so I will come back to your Lordships at a later date, and I will do what I can to support this.

As I have already mentioned, we are fortunate to have my noble friend Lady Hooper as the Prime Minister’s trade envoy for Costa Rica, Panama and the Dominican Republic. Her excellent work has succeeded in increasing the profiles of British businesses in central American markets through a programme of visits and engagements, and I thank her for that.

It is important to note other things we are doing. My noble friend works alongside two other trade envoys who champion the wider Latin America region. The Minister for Americas and the Caribbean, Minister Rutley, has invited the UK’s trade envoys to Latin America to discuss their recent visits to the region—tomorrow morning, I believe. He will meet my noble friend Lady Hooper, Mark Menzies and Marco Longhi. No doubt he will reflect on his own visits to Colombia, Panama and the Dominican Republic last month during that meeting. I was very interested to hear the comments on the Dominican Republic and its free zones, and the enormous quantity of mozzarella it imports from us.

I commend noble Lords on their engagement with Canning House, the UK’s leading forum on all cross-cutting Latin American issues, and congratulate the noble Lord, Lord Mountevans, on his work leading that organisation.

I will touch on two other areas that came up. The first is education. We know that Governments across the region are investing heavily in education. We are supporting UK firms with expertise in English language tuition to seize these opportunities; for example, Pearson is working in Costa Rica with local government to develop a programme, “English for Employability”, helping students achieve the necessary skills to become more employable.

The second is clean growth, raised by the noble Earl, Lord Dundee. Countries in central America are acutely aware of the risk posed by climate change and are developing plans to have greener economies. The UK has the potential to become the partner of choice in central America for activity relating to clean growth and, alongside this, we are doing an enormous amount of work on infrastructure, particularly related to clean water supply. In May, the UK signed a memorandum of understanding with Panama on sustainable growth, looking at areas such as marine pollution, energy transition and water management. I thank my noble friend Lady Hooper again for her involvement in getting the MoU signed, in her capacity as the PM’s trade envoy.

I also mention something that I think the noble Lord, Lord Mountevans, would like to be involved in: the annual Latin America and the Caribbean UK roadshow, which will be returning in March 2023. The teams will be visiting London, Belfast and Bristol to share the commercial opportunities for UK businesses across the region, including in central America and the Dominican Republic. Going back to my point about how we get more companies to export, I ask your Lordships to act as champions, to sing from the rooftops the opportunities that we have as exporters to this region.

We successfully secured trade agreements for central American countries through our continuity programme, which was discussed during the debate, the UK-central America association agreement. We have also signed the CARIFORUM economic partnership agreement, which includes the Dominican Republic. Both provide important continuity and certainty for businesses by maintaining the UK’s access to preferential tariffs and facilitating access to businesses from the region in the UK. I am pleased that the FCDO will host the first central American association council, inviting Ministers to the UK, and that DIT will host the first ministerial joint council, under the CARIFORUM economic partnership agreement. A huge amount is being done in these international fora.

There are two more countries to focus on. Mexico was raised by the noble Baroness, Lady Coussins. We are now in round two of our FTAs. It is very important that we do not rush to a false conclusion. My esteemed Secretary of State, Kemi Badenoch, has already said very clearly that we do not need to set artificial deadlines. As far as I am aware, the entire firing of the negotiating team has had no effect on our plans to come to a conclusion over the next few years. That is a reasonable timeframe in which to conclude this FTA. It was mentioned that in Brazil the political environment allows us to have new discussions with the Government. I am pleased to say that we will be. Officials will engage with Lula’s new team once they are appointed, to understand the new Government’s position on an ETP.

I will finish by talking about the challenges in the region. This is not a region that is completely straightforward. On human rights, I stress that we have not downgraded the Government’s commitment at all. We are clear that more trade does not have to come at the expense of human rights, and we continue regularly to address, support and engage, through support for projects and local partners, public diplomacy and diplomatic dialogue, on a broad range of human rights topics, bilaterally and in the multilateral fora. However, we do not necessarily believe that FTAs and trade agreements are the best mechanisms for aligning our values on human rights. We have been assiduous in working to ensure that individuals whom we believe are particularly culpable have had sanctions taken out against them.

Regarding corruption, the UK takes very seriously allegations of corruption. My noble friend Lady Anelay spoke about businesses finding it difficult to compete in local markets where there is a high degree of corruption. This is often the case in many emerging markets, but we have worked extremely hard; in this instance, to sanction two Venezuelans under the global anti-corruption sanctions regime. We work closely with local Governments to reduce levels of corruption and UKEF complies strictly with anti-bribery and corruption policy.

I will come to a conclusion. As I have set out today, central America is a region bursting with potential. As George Canning famously proclaimed, let us call in the New World,

“to redress the balance of the Old”.

The Government are doing all they can to take their trading relationship with the region to new heights. In turn, this work will enable British companies to share their expertise, enjoy the opportunity presented by these markets, and provide lasting economic and social benefits.

[Viscount Waverley (CB)]

Before the Minister sits down, he made the point that taxpayers’ money is used to compile assessments. It is not for the want of trying over the years. Will the Minister request the Secretary of State to finally release the trade commissioners’ annual reports, which should be public information and would help assess exactly where and what the opportunities are? I have been trying for years to have this achieved, with absolutely zero results.

[Lord Johnson of Lainston (Con)]

I thank the noble Viscount for that request. The Department for International Trade produces a plethora of reports—

[Viscount Waverley (CB)]

From the trade commissioners.

[Lord Johnson of Lainston (Con)]

The trade commissioners contribute to the statistics that we provide as a department. If he has time, I would be perfectly happy to sit down with the noble Viscount and go through the statistics that we produce. If we can find a way to provide more valuable insights, I am sure that we will be delighted to do so.

Iran: Demonstrations

Viscount Waverley Excerpts

Thursday 27th October 2022 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I know Iran. The people of Persia are considered one of the great civilizations, but the world of Iran is a complex world and it is moving into a darker place. The Iranian people and the free world have been taken hostage—hijacked in effect—for over 40 years. My remarks are for the 80 million Iranians who have been directly affected and are being misled. For how much longer is their leadership’s behaviour to be allowed to continue? The corrupt leadership of thugs does not represent its people; it represents an inexcusable form of governance.

In yesteryear, I had been briefed by the appropriate department in Jerusalem and shown evidence of why Iran is a threat. Part of that footage was devoted to the youth. We all know that change can come only from within, and now it is the brave youth who must be supported—how the tables have turned. I suggest that Israel takes note: we know its anxieties and remember that it was not so long ago that Jews and Persians were so close. That world needs to be returned to. Care in doing so, however, must ensure that this is not perceived as pitting Judaism and Christianity against Islam. Nevertheless, it is a form of cowardice not to be supportive of those who are bravely defying this abhorrent regime, believing that it is ostensibly safer for free people not to become directly involved. That is a false illusion.

The leadership in Iran is reliant on the Revolutionary Guard and has consequently become more assertive. But make no mistake that there is one core fundamental: the language of power is all that is understood. When faced with credible condemnation and pressure, the leadership will buckle. The people of Iran need to be given their freedom and to lead their lives in a world free of tyranny. The world will be a safer and better place without the current leadership in Iran. We must support the people of Iran. There is no place in today’s world for the mullahs, and those who support them, who lead for self-serving purposes only. My final words are borrowed from a regional analyst friend: “It is about time Iran had a taste of its own medicine”.

UK-India Free Trade Deal

Viscount Waverley Excerpts

Wednesday 26th October 2022 Lords Chamber

[Lord Johnson of Lainston (Con)]

I greatly appreciate the noble Baroness’s question. I thank her for all support she has given us in the department to ensure that we have a very powerful exchange and that we work very closely with her and her committee. I hope she will feel that I am fully available to her to ensure that she is thoroughly apprised of our activities around all free trade deals.

It is important that we are negotiating a free trade deal with India, and it is important to note, when it comes to the noble Baroness’s question about Russia, that we work with all our international partners, including India, to co-ordinate the international response to Russia’s unlawful invasion of Ukraine. We encourage all our partners to support international efforts to counter Russia’s flagrant aggression and violation of the United Nations charter, and to avoid any actions that might undermine this. It is important that we stress our position in those words.

[Viscount Waverley (CB)]

My Lords, I too pay due regard to and thank all our representatives in India, including those in Bangalore, Hyderabad and Mumbai. I have recently returned from that country, and I left with an undeniable assessment that there is a firm need for this country to have a strategic relationship with India. We need to run to keep up. One area I can identify in particular is the supply chain, given our issues with China. There is a real role for India to fulfil that position not only for the UK but globally, along with Turkey and Brazil, for example, so that supply chain issues can be diversified to the benefit of the world at large.

[Lord Johnson of Lainston (Con)]

I thank the noble Viscount, Lord Waverley, for his point and I completely agree: the opportunities we see there are phenomenal. If we can find a powerful way to access this market, we will astonish ourselves with the wealth that we will create and the additional opportunities that we will have to control our destiny. When I was there last week, I came across a mobile phone company that had 400 million subscribers and a car company that wanted to sell 30,000 cars in one year and instead sold 100,000 in half an hour. As has rightly been said, there are opportunities for this nation. It is a millimetre away from escape velocity to become one of the greatest economies in the world. The state of Tamil Nadu will have an economy bigger than the UK’s, we think, in 10 to 15 years’ time. I appreciate the noble Viscount’s support and this question. We should be continually striving to do free trade agreements with India and other countries. I very much look forward to the support of noble Lords opposite and my noble friends behind me as we embark on this great mission.

Covid-19: Disparate Impact

Viscount Waverley Excerpts

Tuesday 27th October 2020 Lords Chamber

[Baroness Berridge (Con)]

My Lords, I hope that I have been clear that what is glaringly obvious is the disparities. The answer to the next question, which is why there are those disparities, is not so glaringly obvious, and we must be careful not to jump to conclusions. As I said, they are partly explained by comorbidities—pre-existing health conditions—but that does not explain them fully. Some of them are explained by socioeconomic and geographical factors. That is why we have issued guidance on multigenerational households and areas of population density where people cannot socially distance properly. However, that does not fully explain the picture. For instance, a British black African man is 2.5 times more likely to die of Covid, but a British black Caribbean man is only 1.7 times more likely to die of Covid. Therefore, unfortunately, there are still gaps in understanding, not of the fact that there are disparities but of what is causing them. Unless we know that, we cannot address them.

[Viscount Waverley (CB) [V]]

My Lords, I express my compliments to the noble Baroness, Lady Lawrence. She is to be thanked. Healing, respect and reconciliation are needed for a divided kingdom of nations. Will the Government take the initiative and establish a root-and-branch royal commission on an integral strategy fit for a caring nation to address systemic failures of structural discrimination, covering the health service, race and ethnicity, housing, education, skills and training as a starter? Fast-tracking this is a matter of priority and appropriate for consideration to bring forward in the upcoming Queen’s Speech, as it would deliver dividends many times over. On a practical measure, since the wearing of masks is necessary and mandatory, will the Government care to consider distributing masks and hand gel at no charge as a practical gesture in what could become a situation of real need?

[Baroness Berridge (Con)]

My Lords, I am grateful to the noble Viscount. It might not be a royal commission, but the Commission on Race and Ethnic Disparities has been set up by the Government, building on the Race Disparity Unit. It is reviewing inequality in the UK, focusing on areas such as poverty, education, employment, health and the criminal justice system. Again, we know that there are disparities, and we want to know why and what the causes are. If the noble Viscount would like to submit evidence, there is a call for evidence at the moment. I have not read of any government policy on distributing hand gel and so forth, but there has been most impressive work in transport interchanges and so on, and a lot of institutions, including Parliament, have taken it upon themselves to make those kinds of precautionary measures available.

International Women’s Day

Viscount Waverley Excerpts

Tuesday 10th March 2020 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I congratulate the noble Lord, Lord Ranger, on his maiden speech and was reminded while listening to it that, throughout my family, women most certainly rule. I am particularly pleased to follow the noble Earl, Lord Shrewsbury, for reasons that I will expand upon shortly.

Given the small number of male contributors, I intervene to illustrate the point: the numbers speak for themselves. While women uphold their values, it behoves more men to come to the fore in support. These challenges will be resolved only with a change in mindset, with men in particular having the responsibility to step up to ensure that we will all work together to achieve these essential outcomes. Much remains to be done.

Insufficient attention is paid to celebrate women’s roles and achievements. I unreservedly add voice to the further empowerment of women internationally, not forgetting that the day for women coincides with Commonwealth Day. What better example of leadership and thoughtfulness is there than Her Majesty, Head of the Commonwealth?

Many issues emerge in restrictions placed on the role of women in society, including in religious contexts, a point recognised by the institute promoting Islamic learning instigated by King Mohammed in Rabat. With sensitivity, I wonder if the role of women in Islamic society might become more recognised.

The ending of violence against women, the promotion of economic empowerment, the championing of voluntary access to family planning and the breaking of barriers to equal access to education for girls—to these advances, the right of primogeniture must be seen as morally unsustainable in today’s world. To that end, I offer unfettered support to the noble Earl, Lord Shrewsbury, on his request. These are all to name but a few. I would go so far on the issue of primogeniture—and even had it in mind to suggest this but the noble Earl has beaten me to the draw—to suggest testing the opinion of the House on a Private Member’s Bill at the right time, which I am sure many would agree is highly appropriate. It would certainly have my support.

The Boston Consulting Group has called women

“the most underutilized asset in the world”.

In 2019, when more than 50% of graduates are women, making up 80% of all purchasing decisions globally—that is from the OECD and Deloitte—we are still facing few women-led businesses. The barriers of inadequate access to finance and lack of access to managerial training are a major global hindrance. The economic activity of women must be viewed not just as a mechanism for social justice but a tool for reducing global poverty. A stronger role for women contributes to economic growth and reduction of poverty, so making the strengthening of opportunities for women central to sustainable development.

The marking of the short hundred years since the first women in Britain stood for election in Parliament puts this important subject in sharp focus and serves as a stark reminder of how women are shaping the agenda for the future. There is still much to be done.

Agreement Establishing an Economic Partnership Agreement between the Eastern and Southern Africa States and the United Kingdom of Great Britain and Northern Ireland

Viscount Waverley Excerpts

Wednesday 13th March 2019 Lords Chamber

[Viscount Waverley (CB)]

My Lords, the question of FTAs must be taken extremely seriously and we must give them appropriate scrutiny, recognising that they are now very important to the United Kingdom. To borrow the words of the noble Lord, Lord Purvis, this is a brief but important debate.

The Government have long iterated on the importance that they place on parliamentary consultation and scrutiny. This afternoon, no lesser a person than the noble Baroness, Lady Fairhead, informed us of the Government’s vision of engagement with Parliament. We have learned the consequences of not being fully utilised as an experienced resource, so I urge the Minister to embrace these three straightforward Motions. In this regard, the parliamentary ratification processes moving forward should be expedited. The record of government thus far is patchy.

[Baroness Neville-Rolfe (Con)]

My Lords, I commend the noble Lord, Lord Purvis of Tweed, for initiating this debate and agree with many of the points that he made—for example, publishing the agreements and those that they replace together. I also agree that there should be consultation wherever possible—for example, with the Scottish Parliament on the Faroe Islands.

Like my noble friend Lady Verma, I sit on the European Union Select Committee. We have been helping the scrutiny process in this House by reviewing the international agreements laid before Parliament in accordance with Section 20 of the Constitutional Reform and Governance Act 2010. The EU Committee was asked to take on this task rather late in the day, and it has involved a commendable cross-party effort by the committee and its sub-committees. However, as has already been said by previous speakers, the main credit should go to the clerks and our expert advisers, who, frankly, have done a fabulous job, working long hours and diving into the wearying complexities of these agreements. As we have heard, we published our sixth report in this series today—HL Paper 315, for the enthusiastic.

I am not sure that I have the chutzpah to table a Motion on this issue myself when there is so much parliamentary business to progress. However, I take this opportunity to draw attention to our work on treaties and to mention the UK-Swiss trade agreement, on which we reported today. This example is “illustrative”, in the word of the noble Lord, Lord Purvis. I very much understand that my noble friend the Minister may not be able to comment on this agreement, although she is very good at pulling rabbits out of hats. Switzerland is the 10th largest trading partner for the UK. As a committee, we were disappointed that the Government, in bringing forward the UK-Swiss trade agreement for scrutiny, had not provided an explanation of the plans for future UK-Swiss services trade, which accounts for 52% of overall trade between the UK and Switzerland. Services are as important as goods to our economy. Given that they now represent nearly 85% of GDP, you might say that they are even more important to the wealth and success of our islands. I am sorry that the process gives them so little focus.

In the meantime, I support the words of the noble Viscount, Lord Waverley, about the importance of parliamentary scrutiny. I would like to see the three agreements before us passed without delay. I look forward to many further debates on the very important area of future trade agreements, which will potentially have big implications and lead to big changes to our country.

Trade Bill

Viscount Waverley Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 30th January 2019 Lords Chamber

This is a live example of a continuity agreement, on which there is not the transparency that the Government claim that they wish to bring about. We seek, at the very least, to replicate the position that British representatives have in the European Parliament. We also seek to ensure that the role of elected bodies is not diminished in the proper negotiation of these deep and comprehensive trading agreements.

[Viscount Waverley (CB)]

The noble Lord has drawn attention to the issue of scrutiny by the European Parliament. In listening to him, it occurs to me—he may wish to agree—that one of the difficulties is that the UK Parliament is so underresourced. Do we have the resources to carry out the type of scrutiny to which he draws attention?

[Lord Purvis of Tweed]

I believe we do. Not only are we resourced in Parliament, but we are resourced in this House. Our committees do a remarkable job in scrutinising both European legislation and secondary legislation. As we approach the Bill, many noble Lords stand ready to scrutinise proactively and constructively some of the proposals. But we cannot do that if our role is only at the last stage. Indeed, the Government would be much more effective in securing final agreements on such arrangements if Parliament were involved at the early stages. If that principle had been applied to the process of negotiating our withdrawal, we might now be in a different position.

--- Later in debate ---

[Viscount Younger of Leckie]

Again, I listen carefully to what the noble Lord says. The best way to answer him is to say that I will indeed feed back his views. They are somewhat negative—somewhat too negative, I would argue. I have spent a lot of time spelling out the details of processes and procedures, as far as I can. Before I give way to the noble Viscount, I also mention that the noble Lord, Lord Hannay, said that we were going to table amendments on Report. I want to make it absolutely clear that I have pledged to come forward with proposals before Report. I give way to the noble Viscount.

[Viscount Waverley]

I thank the noble Viscount. With the greatest respect, I think it would be fair to describe the Government’s record on bringing ratification processes before Parliament as patchy. When the noble Viscount goes back to his department, I ask him to consider the Government’s record in the ratification timing process, so that that can be included in some way, either in this amendment or the Bill at large.

[Viscount Younger of Leckie]

That is a helpful contribution from the noble Viscount. I think he has some experience in these matters, so I will certainly pass that on. I would like to move on fairly rapidly to talk about impact assessments, but I do not propose to address the aspects of these amendments regarding impact assessments in this speech, as the issue was addressed in earlier Committee debates and I believe the Government’s position is clear. Nor will I revisit the assurances that we have already given on our absolute commitment not to lower standards through trade agreements.

Let me move on to the future relationship with the EU. One amendment in this group—Amendment 59, tabled by the noble Lord, Lord Purvis—is targeted specifically at our future relationship negotiations with the EU. I appreciate what the noble Lord is trying to do here in replicating Section 13 of the European Union (Withdrawal) Act 2018. However, Section 13 was drafted for the very particular context of our withdrawal package under Article 50. It is not an appropriate or necessary mechanism for Parliament to approve our future relationship treaties with the EU. With Section 13, we knew what form of documents were coming to us for approval. We then judged it necessary to create a role for Parliament over and above the existing provisions of the Constitutional Reform and Governance Act 2010, or CRaG, to ensure that the withdrawal agreement treaty and the accompanying political declaration could be considered as one package.

This amendment, however, is grappling with the difficulty of trying to legislate for a treaty or treaties where the number and form of those treaties is not yet known. The amendment attempts to bypass this issue by linking its provisions to any trade agreement that,

“gives effect to any or all of the provisions set out in the framework for the future relationship so far as they relate to trade”.

However, this leaves it unclear which treaties would be caught and whether it would remain active long into the future, beyond the conclusion of our future relationship negotiations. The Committee can be reassured that our future trade agreements with the EU are bound to be subject to the provisions of the Constitutional Reform and Governance Act 2010. Furthermore, those agreements will almost certainly require detailed implementing legislation, which means that the arrangements could not come into force without the authorisation of Parliament. No doubt this is a question to which we will return. I hope this reassures the Committee and that noble Lords will withdraw, or not move, their amendments.

Trade Bill

Viscount Waverley Excerpts

2nd reading (Hansard): House of Lords
Tuesday 11th September 2018 Lords Chamber

[Viscount Waverley (CB)]

My Lords, the breaking news today is that Monsieur Barnier, the EU negotiator, may have blinked. Also, the Governor of the Bank of England, Mark Carney, has agreed to stay on. Being reluctant but optimistic on Brexit, this portends well. In the circumstances, this Trade Bill is a necessary piece in the Brexit jigsaw.

A question to start, however, is this: will this Trade Bill survive the environment in which it must serve or will it require amending once the conditions under which we are leaving the European Union are known? It would appear that the architects of the Brexit vision did not anticipate the complexity of the negotiations in addition to the unfolding contagion in important emerging markets together with trade tariffs distorting globalisation, all of which could become centre-stage challenges. Those are insecure foundations on which to build a secure future.

The noble Lord, Lord Lilley, who is not in his place, did make some substantive points about renegotiating trade agreements; nevertheless, the Government have to shoulder the consequences of their policies and actions. History will judge whether the architects of Brexit made a fundamental error of judgment by looking to the future through blinkered vision, along with a negotiating flaw of not being sensitive to the unsurprising strength of opinion across the Channel that could possibly haunt us further. Time will tell, and shortly at that. At this late stage we must be flexible, opportunistic and respectfully Machiavellian. All that said, we are where we are—but where are we? We must either wrap up what was started or change tack, decisively searching for an assured future. As Cicero said, “Where there’s life, there’s hope”, so in that we may take some comfort.

There are many aspects to this Bill, but I will focus my central remarks on a cornerstone of our economy: financial services. The Bill represents a building block, and it needs to do so. It is inconceivable that the EU 27 would allow as important a sector as financial services to remain fully offshore. Brexit may indeed mean Brexit, but Brexit also means consequences. Post-Brexit pressure will undoubtedly grow on the City of London and other centres around the United Kingdom. The European Central Bank is already implementing its location to the continent in mandatory stages. The combination of principle and the possibility of rich pickings will place further sustained pressure on the financial services sector. The list of annual rankings of international financial centres is published today or tomorrow. Let us keep an eye on how London fares both now and in subsequent years, having mostly maintained its position at number one up to now.

The financial services sector is on the move and we must be diligent and keep abreast of that. The likes of Frankfurt, Paris, Toronto, Tokyo, Seoul, Astana and Moscow along with others are the founding members of the newly established World Alliance of International Financial Centres, to be headquartered in Frankfurt and incorporated under Belgian law. Currently, London has observer status only. The Minister may wish to become acquainted with this alliance.

Then there is China’s increasing influence in Europe and the world at large. As in times past when the pound was superseded by the dollar, so a potential parallel yuan could become a base currency for the changing face of global geo-economics, which the likes of Ankara, Tehran and others might find increasingly appealing. China’s impact is growing. It is delivering west-bound the infrastructure that supports economic growth and the development of the old Silk Road. The UK has experience of and proven ability in supporting and promoting infrastructure development. Together we can advance east-bound, thus increasing trade and connectivity, improving quality of life and reducing the cost of living. In the first five years since the belt and road initiative was announced, 103 countries worldwide have signed 118 agreements with China. China is delivering west-bound the infrastructure that supports economic growth and development along the old Silk Road route and far beyond. The UK’s expertise is considered to be well placed, with useful experience in supporting and promoting that infrastructure development.

But corporate partnership in the spirit of local content is fundamental and I would urge UK players to seek out co-operation agreements with local players of merit, wherever the trillions of dollars are going to be unfolded. Many countries and regions along the belt and road have considered integrating the initiative with their own development programmes—including Mongolia’s Prairie Road, Kazakhstan’s Nurly Zhol, and the Eurasian Economic Union—with Pakistan having high expectations, together with the EU’s Juncker investment plan. The belt and road initiative has been incorporated into the documents of many international mechanisms including the UN, the G20 and the Asia-Pacific Economic Cooperation.

The US-China trade war is not close to being resolved and its impact is already being experienced in Asia, particularly in those countries that have existing good trade relations with China such as South Korea and Singapore. UK trade with these countries has had an upward trend during the last years and is likely to be impacted as these countries get caught in the crossfire. China warned yesterday that it will take countermeasures if the United States escalates the trade war. The United Kingdom needs to take a holistic approach. Technological advancement makes access to any financial centre easy. This is a good time to look to the future and fully understand and respect the importance of partnerships. As Amina Turgulova, head of global markets at the Astana International Financial Centre in Kazakhstan reminded me just this morning, while London will always be an attractive destination with many opportunities, there must be a clear and innovative development plan based on partnership. It follows that it is imperative that we build strategic links with other capital markets. Linkages and partnerships are paramount. The London Stock Exchange Group is working on links with the Shanghai Stock Exchange, and the London Metal Exchange belongs to the Hong Kong exchange.

There is a real necessity for a regulatory framework to adjust to changes; this will distinguish the leading financial centres from the rest. No less a body than TheCityUK is calling for the UK to make the most of the once-in-a-generation opportunity to recalibrate and repurpose its trade and investment policy to benefit the wider economy once it leaves the EU. I commend its thinking to the Government and refer the Minister and her team to its report of January 2017, entitled Future UK Trade and Investment Policy. TheCityUK’s latest report of 30 August 2018, entitled A UK-EU association agreement and future UK free trade agreements, in effect builds on last year’s report by going further into the detail of the issues that will concern financial and related professional services. I share many of its conclusions.

The potential presented by deals that focus on regulatory coherence and co-operation, as well as next-generation international trade and investment agreements, would not only strengthen London’s position as the leading global financial centre but bring new growth opportunities to key financial centres across the country. Trade policy is useful ammunition in the tool box; equally, it serves as a carrot. I absolutely recognise the importance of trade, which is vital to allowing people to work their way out of poverty, supporting job creation, value addition and clean industrialisation. A message to the world at large is that trade is as critical to us as it is to others. The Government should ensure, however, that equivalent levels of market access are accorded. The Minister referred to reciprocal access.

Agreements with implications such as these for consumers, businesses, development and human rights, to which should be added the scourge of corruption, should have maximum scrutiny. As I understand it, it is suggested that the replication of some FTAs and EPAs is the way forward. I can see the benefits, but does this approach merely store up problems for the future and need to be challenged? Scrutiny and approval of all agreements on the overseas front should become mandatory. I anticipated a shake of the Minister’s head. Her opening remarks served as a comfort to a degree. However, although I am broadly supportive of much that is before us, I request that the Government reflect on the benefits of scrutiny and participation by allowing a framework that covers consultation with stakeholders. I was enthused by the reference to public support.

We need a more formal system of accountability, definition of the devolved Administrations’ role, full debate, approval by both Houses—including a dedicated committee—and parliamentary scrutiny in the process proposed. I recognise that this requires a seismic change but our country’s future should centre on change to prepare for tomorrow’s world. The role of Parliament in approval and ratification processes for international trade agreements—enshrining the Ponsonby rule, whereby international treaties have to be laid before Parliament 21 days before ratification—should be embraced unequivocally. The Government’s performance in ratification timelines is, if I may choose my word carefully, precarious. This needs attention.

St Petersburg International Economic Forum

Viscount Waverley Excerpts

Monday 30th April 2018 Lords Chamber

[Baroness Fairhead]

I thank my noble friend. It appears that Prime Minister Abe and President Macron will be attending and there is a whole series of bilateral ministerial levels in Russia. In line with government guidance, there will be no ministerial representation. However, I can confirm that Her Majesty’s ambassador to Russia will be there. He will be present to meet, greet and support our UK businesses. That is part of a calibrated response to signal that we are unhappy about what has happened, while at the same time making sure that we support our businesses. That sort of engagement is critical to making sure that there is engagement between businesses and people.

[Viscount Waverley (CB)]

My Lords, while recognising the sensitivity of the timing, I declare that last week, St Petersburg International Economic Forum organiser, Roscongress, requested that I assess and advise, at no cost, on trade-only related matters to encourage interaction sector to sector in addition to SME co-operation with the UK. Does the Minister agree that restricting all engagement with Russia is probably self-defeating? As the Government push towards a truly global Britain, in which UK private sector corporates must compete in the international marketplace, fully cognisant of bilateral and multilateral sanctions, would it not be circumspect for the Government’s approach to trade policy to be distinct from other tiers of government policy?

[Baroness Fairhead]

I agree that engagement matters and that we need to continue engagement to make sure that ultimately we get a good outcome. It is true that we have suspended all planned high-level bilateral contact with Russia, but we are not restricting all engagement. Indeed, we encourage engagement in areas of common interest such as culture, education, sanctions-compliant business, environmental protection and climate change. The important message is: engage, but beware. It is a calibrated response, but I agree with the noble Lord that engagement matters in these situations because that is how we will get a positive outcome.

Secretary of State for International Trade: Visits

Viscount Waverley Excerpts

Monday 30th April 2018 Lords Chamber

[Baroness Fairhead]

Exports grew overall by more than 10% last year so there has been growth. Regarding how long it will take a free trade agreement to come into effect, we will be able to negotiate future free trade agreements from March next year as part of the implementation period. We will be able to negotiate, sign and ratify without implementing. There are a whole range of free trade agreements that can take anything from a year to multiple years. There are also many other types of cooperation that we are looking at, as noble Lords will be aware, such as joint trade reviews, economic partnerships and mutual recognition agreements. There are a whole series of trade arrangements we can have with other countries and we are looking at those. Our drive will be what is in the best interest overall of the UK and UK business.

[Viscount Waverley (CB)]

My Lords, I understand the Minister’s department is rolling out a programme of trade commissioners. What is their role? Are they going to be masters of their strategy? When will this possibly take effect from, and will they be properly financed?

[Baroness Fairhead]

I thank the noble Viscount for his question. We have announced the creation of nine Her Majesty’s trade commissioners. It is a pretty important role. We are trying to coordinate all the opportunities we have from UK companies exporting to overseas markets. They are very high level trade commissioners. Five of them have already been appointed and generally, they have been recognised as people of extreme competence who will have a real impact. Their role is to make sure that other nations are very aware of the capabilities we have in our country. We are very clear that our export strategy needs to be linked to our industrial strategy, so that the world can benefit from what we can provide in the UK and is made aware of the skills and expertise in this nation.