Future UK-EU Relationship on Professional and Business Services (EU Committee Report)

Baroness Henig Excerpts

Thursday 22nd July 2021 Lords Chamber

[Lord Liddle (Lab) [V]]

My Lords, I join others in congratulating the noble Baroness, Lady Donaghy, and her committee on the quality of this report. It is about a crucial sector of the British economy that has been sorely neglected in the EU negotiations. I find it extraordinary, and I hope that the noble Lord, Lord Callanan, will try to explain why it is so, that so much attention was paid to the British fishing industry, where the gain in catch as a result of Brexit is something like £25 million a year, when the needs of the business services sector, worth £224 billion to our economy, were so neglected in negotiations. Did the Government simply get their priorities wrong?

When we are looking to the future, as I think the noble and learned Lord, Lord Thomas, is right to suggest we have to, on some issues we may be able to make progress. We might be able to make progress on short-term mobility, which is particularly important for the creative sector, our musicians and all the rest; but we will have to recognise that such progress will require reciprocal action on our part. If we take an ideological approach, as I believe the Government do, to ending freedom of movement, they will find an agreement on this difficult to negotiate. If we set aside the ideology, we might get somewhere on mobility.

On mutual recognition of qualifications, it is going to be a very hard grind. As the noble and learned Lord, Lord Thomas, says, we have to demonstrate that we have something to offer. We have a trade surplus with the EU on services. It has always been difficult within the EU to get progress on services liberalisation and, to the extent that there has been progress, it is because we were in a single market where the Commission drove member states to open up with the backing of the ECJ. We have lost that by not being in the single market, and it is a very big loss for us indeed. In future years, if the gains of Brexit are as minimal as they appear at the moment, we will have to reconsider this question of single-market membership.

[The Deputy Speaker (Baroness Henig) (Lab)]

We seem not to be getting the noble Lord, Lord Bilimoria, so perhaps we should move on and come back if we can.

[Baroness Bottomley of Nettlestone (Con)]

My Lords, I add my admiration for the noble Baroness and her excellent report. I am beginning to feel left out, having not been a member of the committee, since it is evident that it was an excellent process with some really important results. I am delighted that there has been such a tremendous rush to join this debate, even if not all noble Lords have shown up, because it is a demonstration of the really important part that businesses and professional services play in the United Kingdom.

When I was young, many years ago, I was told—the noble Lord, Lord McNally, will know more about it than me—that the trade unions for miners and steelworkers would go into No. 10 for beer and sandwiches. My aim and aspiration, when I was responsible for leisure and hospitality, was that there should be a CBI debate on leisure and hospitality—the industry and jobs of the future. But it is business and professional services that are now involved in so many jobs and businesses, and so many small businesses; two-thirds are not in London and the south-east but really across the economy.

I pay tribute to the many trade bodies that have worked so hard for business and professional services, but particularly to the Business Services Association and Mark Fox, who for 13 years has worked so hard with his small team to ensure that these aspects are fully considered. In business services, they include ICT, business process outsourcing, facilities management, construction and infrastructure services and managed public services. They point out that in today’s economy, many contracts span more than one category; they are together in the real economy, even if they are not always linked by statisticians. Of the services and projects provided by businesses large and small, 70% is business to business, with the remainder being provided in the public sector—that is before we get to the professional services that support them, which are equally vital to our economy and often dominate the debate.

The UK business services industry is globally acknowledged as being at the cutting edge of service transformation and technological creativity. For some parts of business services, such as business process outsourcing, exports are integral. To quote the committee’s report:

“The EU is the UK’s largest market for exports in professional and business services, accounting for 37% of professional and business services exports.”


The UK

“ran a trade surplus of £12.4 billion with the”

EU’s professional business services. It is a highly lucrative and important market, and one we have, rightly, to nurture.

I pay tribute to the Ministers, my noble friends Lord Grimstone and Lord Callanan, and the many officials in the Department for International Trade and BEIS who have worked so hard to work with industry and acted as a go-between. Although much progress has taken place, we appreciate that there are still some outstanding and tricky issues. We have talked about the creative industries and the recognition of qualifications.

What does the Minister see as the critical and exciting role of business and professional services in the green economy as we move towards COP 26? I believe that this will provide further jobs, opportunities and wealth creation.

[The Deputy Speaker (Baroness Henig) (Lab)]

The noble Lord, Lord Bilimoria, has withdrawn from this debate, so I call the noble Lord, Lord Bhatia.