Trade Bill

Lord Berkeley Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, I am grateful for the opportunity to introduce the House in this debate to the Luxembourg Rail Protocol, which needs a minor amendment to the Trade Bill. It would enable the Government to move forward with ratification, which would help rail operators and manufacturers encourage foreign investment into the UK and support UK exports of rail equipment. It mirrors something which has existed for some years in the air sector, and it is caused by a problem of getting finance for things that move and can be taken away.

To introduce it very quickly, the Luxembourg Rail Protocol to the Cape Town convention is an international treaty which will make it easier and cheaper for the private sector to finance all types of railway rolling stock, from locomotives to passenger and freight wagons, metro trains and trams, and so on. I believe from earlier discussions that it has government and cross-party support, and it needs a statutory instrument, as long as that is authorised by primary legislation. The protocol to the Cape Town convention creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. This includes a facility to register security interests in an international registry, and it is the first common global system for uniquely identifying rail equipment. As noble Lords will know, rail equipment, like aircraft, has a habit of being moved if it is in the owner’s interest to do so.

It reduces creditor risk, the legal cost of financing and the cost of capital, and will relieve central and local government of the burden of financing or underwriting the procurement of new rail equipment. It will also provide the opportunity for government to refinance cost-effectively existing equipment. Of course, for exporters of rail equipment, which we hope will continue and grow after Brexit, the treaty will make manufacturers more competitive, particularly by levelling the playing field against Chinese competition, which many industries fear quite a lot. It will create valuable new markets and facilitate lower risks.

As I said, the UK has already adopted the Cape Town convention’s protocol applying to aircraft. It has signed but not ratified the rail protocol. Post Covid, this is all very important, so I propose to put down a few small amendments to Clause 2 to allow this convention to be ratified within the wider definition of the implementation of international trade agreements.

Trade Bill

Lord Berkeley Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

Moved by

[Lord Berkeley]

8: Clause 2, page 2, line 14, at end insert—
“( ) an international treaty or private international law convention (including any amendment or protocol thereto) which facilitates trade or the financing of trade.”Member’s explanatory statement
This amendment, along with another amendment in the name of Lord Berkeley, is intended to enable the Government to ratify the Luxembourg Rail Protocol to the Cape Town Convention to make it easier for the private sector to finance trade in railway rolling stock, from locomotives to passenger and freight wagons to metro trains and trams.

[Lord Berkeley (Lab)]

My Lords, I am grateful for the opportunity to move Amendment 8. I will also speak to Amendment 19 to save the Committee time. This is a small issue compared with many of the ones the Committee will discuss today and in future days, but it is important for the rail sector and the financial sector that is linked to it. The amendment, which is a small addition to Clause 2(2), would enable the Luxembourg Rail Protocol to the Cape Town convention to be ratified.

I will try to explain what this is as quickly as I can. The Cape Town convention is a global treaty which, with the Luxembourg Rail Protocol, will make it easier and cheaper for the private sector to finance all types of railway rolling stock—locomotives, passenger and freight wagons, metro trains and trams, et cetera. It creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. It includes a facility to register security interests in an international registry. It is the first common worldwide system for uniquely identifying rail equipment.

This is nothing particularly new because it has been around in the air sector for many years and there is already a protocol in the Cape Town convention to benefit aircraft. The rail sector protocol has been signed but not yet ratified. I will give the Committee some examples. Aeroplanes obviously move around the globe. Occasionally, they get stolen or people take them to places where creditors cannot get at them. Members may wonder what this has got to do with the railways. When I was first chairman of the Rail Freight Group, about 20 years ago, and getting interested in international rail freight across to the continent through the Channel Tunnel, we came across a number of examples where rail freight wagons went to Italy and but did not come back. Nobody could seem to find them. Italy was different in those days. I do not think it is the case today at all. It was a worry because the people who had financed those wagons lost their assets. I am sure this can happen today in other parts of the world, but I am not going to start giving examples. This protocol is designed to prevent that happening without creditors knowing what has gone on.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, I have received no requests to speak after the Minister, so I call the noble Lord, Lord Berkeley.

[Lord Berkeley (Lab)]

My Lords, I am very grateful to all noble Lords who contributed to this short debate and for the support they have shown. They all have expertise in this field and it is heartening that we have cross-party support, if I can put it that way. I am also grateful to the Minister for his helpful comments. If it is the Government’s view that they do not want to widen the scope of this Trade Bill, I fully understand that, especially as the Minister appears to have found another solution to take this forward. Clearly we have further work to do when the other Bill comes to your Lordships, assuming there will be some ping-pong involved. We will have to try to convince various legal experts in this House that this is a particularly important thing to allow through in whatever state the Government are proposing when it comes from the other place. I am grateful to all noble Lords who have spoken and to the Minister for his very helpful reply. On that basis, I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Trade Bill

Lord Berkeley Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I speak to offer the Green group’s support for Amendment 46 and closely associate myself with the remarks of the noble Lords presenting it, particularly the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bull.

I was going to be brief but I really want to respond to what the noble Baroness, Lady Noakes, said. She suggested that the amendment seeks to recreate what was lost. No, it is trying to save what is threatened: the businesses, livelihoods and professional lives of people who have, as the noble Baroness, Lady McIntosh of Pickering, alluded to, spent many years studying—and invested their time, energy and finances—to develop lives that are now under serious threat.

The noble Baroness, Lady Bull, in her useful setting out of the different ways in which the exchange has happened, spoke about where services are an integral component of a good being sold. We think of companies that have offered long-term service contracts for goods sold into the EU and EEA and the difficulties that they might experience in continuing those service contracts unless we have the kind of mobility framework offered here. We are now on a rescue mission.

I do not think anyone else has referred to this in detail but we have to go back to what we will be missing if we do not have the opportunity for EU/EEA citizens to come into the UK under this kind of mobility framework. There is the important area of language studies. Sadly, we have seen some documentation since the vote in 2016 showing that interest in language study, at least in our schools, has actually fallen. If we are to continue to operate in this world, where we are going to have much more complex relationships with other countries in Europe than we do now, we will desperately need those language skills. The reciprocal side of this is of course that Britons have the very valuable skill of being native English speakers that they can take around the continent and beyond.

We need to have quality of language teaching and development of language skills in the UK. Most of the teaching assistants in our schools are native speakers from other parts of Europe. These are crucial issues, so I commend the amendment to the House.

[Lord Berkeley (Lab) [V]]

My Lords, I too support the amendment. It is very important, and noble Lords who have spoken have made some very good arguments in favour of it. As we all know, free movement within the EU has been very important for education, services and other businesses as well as for people getting to know each other. It could easily and should still happen after Brexit, but that needs the Government to support the idea positively and proactively even after we have left.

Transport is of course part of mobility. It must be cheap, reliable and accessible. Although Covid-19 has caused a massive reduction in demand, it is still there and it still needs to be there. However, the situation regarding the Government’s support is still very confusing and uncertain for services and their users. I have been trying to get answers from the Government for several months on how much in loans, guarantees or grants they have given to each of the international transport sectors, by which I mean air, sea, road and rail. I have had two Written Answers saying that that information per sector is commercially confidential. Surprisingly, maybe, I got a letter from the noble Baroness, Lady Vere, this morning saying that providers have many options as to how to find money, but with no comparators.

I can see why the noble Baroness could not see tell me about comparators. If one digs a little deeper, one finds that in the maritime sector—ferries—the Public Accounts Committee recently reported that the Government had written off £85 million for cancelled ferry contracts, which included a settlement with Eurotunnel of £33 million because apparently the Government had forgotten that Eurotunnel took the same kind of traffic that the ferries do. Noble Lords will remember that the Government spent £14 million on a company called Seaborne Freight, which owned a non-existent ferry and whose terms and conditions of carriage on its website appeared to have been copied from an online takeaway.

In the air sector, airlines have had soft loans to keep them alive. The noble Baroness said in a Written Answer that the Government were

“working closely with the aviation sector to support it to ensure there is sufficient capacity”.

They have spent £3 billion on keeping the franchise railways going, and that is good, but for cross-channel rail there is not a penny to ensure sufficient capacity. According to a presentation by the High Speed 1 chief executive Dyan Crowther to the all-party rail group last week, Eurostar has received no government guarantees or support and is likely to reduce the number of trains a day that it operates, possibly to between three and five or even fewer in order to survive. These are of course low-emission services, and I remind Ministers that, according to Eurostar, if all the passengers who took Eurostar in the last few years were to transfer to air, the increase in emissions would be equivalent to 40 new Luton Airports. We love Luton Airport but the emissions from 40 of them is hard to imagine.

Is there a solution? I suggest there are many that the Government ought to adopt. The European Union Council has adopted emergency measures to give member states the opportunity to reduce infrastructure charges to zero for trains. Italy and France are thinking about it, Austria has done it and the UK could do the same; it would be nothing to do with Europe but they could do it for HS1 to reduce the track access charges to just the direct costs. That might cost HS1 about £100 million but let us not forget that the Government made about £2 billion selling HS1 to the private sector, so they could afford to do this through HS1. It would mean that all train operators got the same benefit on that loan.

I hope the Minister can provide some comfort that Eurostar services can survive, providing the availability of a cost-effective and environmentally friendly transport service for those who want to work, live or study for the purpose of trade and goods. It would be a disaster if it were forced to close.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we all owe a great deal of thanks to the noble Lord, Lord Fox, for his amendment and for the very good speech that he made in support of his arguments. We have read them before but they have not gone away since we discussed them in 2019, and I look forward to seeing how the Minister responds to them. There were also some other very good speeches, particularly—although it is invidious to choose—those of the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bull, who put the case for the creative industries extraordinarily well, with a devastating analysis of the problems that they face.

This issue is primarily about how services are going to be dealt with after the transition period ends. As the noble Baroness, Lady Bull, put it, the issues that we face affect all trade but these days most trade in goods is also wrapped into a service that is provided; she quoted the figures for Rolls-Royce, which I think are instrumental. We need to be sure that the arrangements that are made post transition for this area are well founded and will continue. I assume that that means GATT, which will be applying, and its four pillars, which she talked about: the ability to operate in support of trade in-country, in another country, in support of the provision of services to that country and living and working there in order to provide such services as are required for that. These are important issues and we hope that they will get a full response from the Minister.

However, at the heart of the debate, in more ways than one, are the creative industries. We had an impassioned plea for more attention to be paid to the particular needs of the creative industries regarding mobility. That is not inappropriate in itself but it is also quite important to recognise that the creative industries are not having a good time at the moment, not least because of what appears to be a rather standoffish approach being taken by the Government, who question whether jobs in the creative industries are really “viable”. There is the extraordinary advert about looking for your next job when you are a ballet dancer and there is no reason why you should change, suggesting that the right thing to do is to move into cyber.

This is a bad time to raise this issue but it is one that needs to be raised. At the end of the day the creative industries, particularly the performing and visual arts, are about the personal and the sharing of personal experiences. Without people’s movement and engagement, it is difficult to see how those industries can survive, but it is important that they should. The question I want to leave with the Minister is this: will GATT be sufficient to ensure that the creative industries will thrive after the transition period comes to an end?

Trade Bill

Lord Berkeley Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

Moved by

[Lord Berkeley]

1: Clause 2, page 2, line 14, at end insert—
“(c) an international treaty or private law convention (including any amendment or protocol thereto) that facilitates trade or the financing thereof.”Member’s explanatory statement
This amendment, and the amendments in the name of Lord Berkeley to page 2, line 23 and page 2, line 33, will enable the ratification of international treaties which have the UK as a signatory and enable trade or the financing thereof.

[Lord Berkeley (Lab) [V]]

My Lords, in moving Amendment 1 I shall also speak to Amendments 4 and 5. The purpose of these amendments is to provide a legal basis for the Government to bring forward a statutory instrument to ratify the Luxembourg Rail Protocol. Noble Lords will probably remember that I spoke about and explained the purpose of this protocol in Committee. Very briefly, I remind the House that the Luxembourg Rail Protocol is a protocol to the Cape Town convention to reduce the risk for creditors, which in turn will reduce the cost of financing for new and current rolling stock.

An Oxera study published this week showed, I think, a saving to the rail sector of about £130 million per year. However, it is particularly important for the British rolling stock manufacturing community looking to develop new markets outside the UK, which I believe is one of the purposes of the Trade Bill. This rail protocol follows an older protocol on aircraft leasing and financing, which I think most people believe has been very successful in financing aircraft.

In Committee, the Minister replied that the Government support the ratification of the protocol. I am very grateful for the support of the noble Lord, Lord Grimstone, and the noble Viscount, Lord Younger, on this. Since they felt it was more appropriate to get the necessary legal basis through the private international law Bill, I agreed that I would not move my amendment. We had discussions with Ministers on the private international law Bill. I am once again grateful to Alex Chalk MP, the Justice Minister, and to the noble and learned Lord, Lord Stewart, for their help in drafting the new amendment to the PIL Bill when it came back to your Lordships’ House for ping-pong. I am grateful to the Ministers for their discussion.

During the debate the noble and learned Lord, Lord Stewart of Dirleton, agreed how important the rail protocol is to the industry but suggested that the application of the protocol was narrower than I might have thought, saying:

“The Government consider this to be an important issue and are thinking about how best to implement the protocol in the United Kingdom. As we discussed last week, we consider that the power in this Bill”—


that is, the PIL Bill—

“is too narrow to fully implement the protocol, although the provisions in applicable law would be within its scope.”—[Official Report, 19/11/20; col. 1574.]

That is very good but all it did was allow half the protocol to be implemented, which noble Lords will probably agree is not a good situation.

The Government appear to support the ratification of this protocol and to consider it important for the rail industry. However, I feel that I have been sent round the houses, from the Trade Bill to the PIL Bill, and now the Ministers have discovered that it will allow only half the protocol to be ratified. I was grateful for further discussions with the noble Lord, Lord Grimstone, by email recently, in which he suggested that

“the Trade Bill should not be expanded beyond essential readiness for trading as an independent country outside the EU.”

I would argue that this protocol would allow the rail sector to do just that. I think it would be very useful if it could be included.

The Minister again suggests that the Trade Bill is not an appropriate vehicle for matters relating to finance and transport, which should be considered elsewhere. If it were a matter of motor manufacture or printing-press manufacture, surely those would be trade issues as well. For motor manufacture, is the Department of Transport involved or is it a trade matter? That question must be resolved. Government lawyers from probably three different departments are dancing around a pinhead. This merry-go-round must stop because it is wasting a lot of government time, as well as Parliament’s.

I have been sent around the houses: transport, trade and justice, and now we are back in trade. I am very pleased to be back in trade this afternoon. Ministers say that they support the protocol to help achieve better trade in railway equipment, so in order to stop this merry-go-round, will the Minister urgently arrange a meeting with myself, the Department of Transport, the Department for International Trade and the Ministry of Justice if necessary? Will he then bring forward an amendment at Third Reading, which I assume and hope would be agreed across government, to enable the Luxembourg Rail Protocol to be ratified? Surely the Government can get their lawyers to agree.

If the Minister could commit to arranging such a meeting with me to resolve these issues and bringing forward an amendment at Third Reading, I would be very content. If not—and I hope it does not go that way—I am minded to seek the opinion of the House, if only to demonstrate the strength of internecine warfare in this Government on an issue that they all support but cannot work out how to deal with. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise primarily to support the noble Lord, Lord Berkeley, as I did in Committee, in his efforts to get the Luxembourg Rail Protocol to the Cape Town Convention implemented in the UK. As we have heard, some steps have been taken, thanks to the good offices of the Minister and of Alex Chalk in the other place, but sadly they have not quite done the trick. I refer to my business interests in the register, including the UK-ASEAN Business Council, and a new role as chair of Crown Agents, which curiously, I find, did a great deal of work on rail and rolling stock during its long history.

I see two advantages to the protocol that was signed by the UK as long ago as 26 February 2016—obviously a very different world then. First, it will reduce the risk to creditors, which in turn will reduce the cost of financing new and current rolling stock—everything from engines to equipment and parts, data and manuals. Whether these are for a new line that is being built or for existing lines, by lowering creditor risk the protocol will assist in lowering the cost of new, more efficient, locomotives and wagons for freight and passenger transport. As the noble Lord, Lord Berkeley, has just said, an Oxera study to be published this week suggests a saving to the rail sector of about £130 million a year. This is quite significant when rail funding is under pressure, and particularly desirable as part of a move to net zero as we seek to combat climate change.

Secondly, it would help British rolling stock manufacturers seeking to develop new markets outside of the UK. There is an urgent need, for example in Africa, for more railway equipment both for urban transport—light rail, metro and trams—and for intercity rolling stock. The markets are there for British exporters, but the Governments and their operating agencies do not have the resources. I am talking about countries such as Namibia, Egypt, Ethiopia, Kenya, Uganda, Zambia and South Africa. The lack of resources has been a major constraint, and in a number of cases, operators have bought Chinese rolling stock instead, even when it is less suitable, because it comes with Chinese state-backed financing.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

My Lords, I turn to Amendments 1, 4 and 5, tabled by the noble Lord, Lord Berkeley. I acknowledge without reservation how much this topic means to him; no one could have worked more assiduously than he has on it.

The amendments before us would expand the scope of the Clause 2 power, creating a power to make regulations implementing private international law conventions as well as agreements that facilitate trade or trade financing. I thank the noble Lord, Lord Berkeley, for his engagement on this matter with DIT, the Department for Transport and the Ministry of Justice in relation to the private international law Bill.

In Committee, the noble Lord outlined that this amendment would allow the UK to implement the provisions of the Luxembourg Rail Protocol; for those who were not present, this protocol relates to the financing of railway rolling stock. Noble Lords will be pleased to know that the Government recognise the competitive advantages of ratifying the Luxembourg Rail Protocol. We have identified the benefits that this could bring to both the UK rail sector and UK financial services. Thus the Government support the ratification of this protocol; the challenge has always been finding an appropriate parliamentary time and a suitable vehicle to implement it, given the very significant pressures on parliamentary time—as your Lordships will be all too aware.

Turning to the appropriateness of this amendment, as we argued in Committee, we believe that the scope of the Trade Bill

“should not expand beyond essential readiness”—[Official Report, 29/9/20; col. GC 40.]

for trading as an independent country outside the European Union. I am afraid that the Trade Bill is not a suitable vehicle to provide powers for the implementation of this agreement. As previously explained, the powers granted by this Bill are limited but vital for the delivery of the UK’s independent trade policy.

In Committee, we argued that technical matters relating to finance and transport should be considered outside the Trade Bill in a way that is suitable to matters related explicitly to finance and transport. I was pleased to see Peers support amendments to the private international law Bill that will help to support the implementation of the Luxembourg Rail Protocol, but it is obviously disappointing that this is not a final solution. I assure your Lordships that the Department for Transport will continue to explore all available options and vehicles to implement the protocol fully.

As I have made clear, the Government fully support the implementation of the Luxembourg Rail Protocol. However, I repeat: we do not believe that this Bill is the appropriate place to achieve this. We will therefore oppose this amendment on this occasion, but I would be happy to work with colleagues across government and facilitate further conversations between the noble Lord, Lord Berkeley, and the Department for Transport to discuss our policy in this sector at greater length and see whether a plan can be put together.

Again, to be clear, we do not believe that this is the appropriate legislation for this amendment and we will not bring forward an amendment to the Trade Bill on this topic at Third Reading. I therefore ask the noble Lord to withdraw his amendment.

[Lord Berkeley (Lab) [V]]

My Lords, I am very grateful to all noble Lords who spoke and to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and my noble friend Lord Stevenson for their support. I am grateful to the Minister for his response, courtesy and offer of further support.

We have not moved very far from where we were in Committee and the Minister did not really answer the question about why it is inappropriate for a Trade Bill that is designed to encourage trading when we become a completely independent country at the end of the year to include a text that allows a trade in railway equipment to be ratified. As I said in my earlier remarks, if this had been the motor or printing trades, I am sure that the Department for International Trade would have been only too keen to do it.

The Minister is pushing me in the direction of the Department for Transport. The most useful way of achieving this would be to have an early meeting with Ministers there and the noble Lord, Lord Grimstone—I hope that he would be happy to join us—to see what we can do. It would be good, and it is important, to have this done before the end of the year for the same reason that so much other legislation is needed. I am doubtful about whether the Department for Transport will have a slot in its parliamentary programme, but we will have to see.

As my noble friend Lord Stevenson said, there is no point in dividing the House on this because it will not help to achieve the objective that I think we all want; on that basis, I look forward to further meetings but, in the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.