Draft Double Taxation Relief and International Tax Enforcement (Belarus) Order 2018 Draft Double Taxation Relief and International Tax Enforcement (Ukraine) Order 2018

John Whittingdale Excerpts

Monday 4th June 2018 General Committees

[Mr John Whittingdale (Maldon) (Con)]

I apologise to colleagues for delaying our proceedings, but I promise not to do so for too long. As the Minister pointed out, I am honoured to be chair of the all-party parliamentary groups on Belarus and on Ukraine, so I wanted to say a brief word about both those countries.

Last week, as it happens, I led a cross-party delegation to Minsk, in Belarus. I thank the Government of Belarus for their invitation and their hospitality during that time. Belarus is of course close to Russia. It is a member of the Eurasian customs union, and we should be under no illusion that it is likely to continue to be a close ally of Russia’s. Nevertheless, there are signs that it wishes to improve its relationship with the west, and one of the areas in which it can certainly do so is trade.

In 2015, according to the Foreign Office, the value of UK trade to Belarus was $214 million. The value of Belarusian exports to the UK was $3.2 million, making the UK the country’s second largest export market after Russia. Belarus has considerable potential, though both Belarus and Ukraine have considerable challenges as countries. Both offer us potential as trading partners. Politically, Belarus has a long way to go—in essence, it is a one-party state still—but it enjoys considerable growth and has major economic opportunities for us.

I shall not go through the list of all the various enterprises that my colleagues and I visited, but I shall highlight two. We visited Belaz, the biggest dump truck manufacturer in the world—the biggest in terms of not just numbers, but the size of the trucks, which were about the size of a house. The hon. Member for Oxford East talked about most—indeed, almost all—of the major enterprises being state owned. That is correct, but it was interesting to discover that the Belaz plant is considering an initial public offering to sell about 25% of the shares in the near future. A privatisation programme is under way.

The other enterprises that we visited were in the Hi Tech Park, which is the home of Viber, which many Members will know but may not realise is a Belarusian invention, and World of Tanks, which is one of the biggest electronic games in the world. Furthermore, by coincidence, I have a constituent in the IT industry who employs software engineers from Belarus to develop his products, so there are considerable opportunities for us in that country. I therefore welcome the agreement as a small measure that will, as the explanatory memorandum states, strengthen and

“promote international trade and investment.”

I shall say a few words about Ukraine too. Ukraine is different from Belarus; Ukraine is much more westward-looking. It has signed the association agreement with the European Union, and a deep and comprehensive free trade agreement. Plainly, therefore, it has a considerable wish to develop economic relations with the west and particularly with the UK.

Ukraine is beset with different problems. Part of the country is under Russian occupation, and that includes the major industrial areas in Donbass, which I visited last year with three of my parliamentary colleagues. Corruption is also is endemic from top to bottom. However, Ukraine is making progress towards reform. The anti-corruption court will—I hope—be established soon, and if we can gain greater confidence in the justice and enforcement system in that country, that, too, should promote economic opportunity.

The great potential in Ukraine is agriculture. The west of Ukraine has something like a third of the world’s black soil reserves. It used to be known as the breadbasket of the Soviet Union and, if it receives the support it needs in terms of modern technology and farming practices, it could become the breadbasket for most of Europe. Again, I hope that these arrangements to counter double taxation will provide businesses with greater confidence to invest in Ukraine and indeed Belarus.

The only other point I will leave the Minister with is not for his Department, but perhaps he can pass it on. The Department for International Trade is rightly looking to develop our trade with countries outside the European Union, and as a supporter of Brexit I strongly believe in the opportunities that exist. However, we seem to be devoting a lot of effort to signing trade agreements with small Commonwealth islands. Important as they may be, they are small in potential compared with two big countries such as Ukraine and Belarus, and very little attention is being given to those two countries. I have talked to the ambassadors in both countries, and there is a view that we could be doing much more to develop trade relations. I certainly intend to take that thought up with the Minister’s colleagues in the Department for International Trade. He is playing his part through these international agreements on taxation, but we could be doing much more now to assist those countries to reform and develop their economies, and also to benefit our own businesses. On that note, I shall say no more.