G7

Lord Callanan Excerpts

Thursday 20th March 2025 Lords Chamber

[Lord Callanan (Con)]

My Lords, the turbulence of the global situation that we face was reflected in the breadth of the subjects covered in the joint statement of the G7 Foreign Ministers’ meeting: Ukraine, Gaza, China, Sudan, the DRC, Latin America and Iran were all covered. We are faced with a world of growing uncertainty and instability, and we welcome the commitment shown at the G7 to face those global challenges together.

The importance of co-operation and alliance with those countries that share our values in facing these threats is, in my view, crucial. Over the weekend, and in the other place this week, we have heard that the proposed peacekeeping initiative for Ukraine is now moving into an operational phase, which we welcome. However, the Foreign Secretary did not expand on what that means in practical terms, or what our European and Atlantic allies have committed to in supporting it. Can the Minister provide the House with an update on these issues?

Across both Houses of Parliament, there is overwhelming support, I am delighted to say, for our Ukrainian allies, and we on these Benches continue to support Ukraine in its fight to defend its freedom, democracy and the rule of law. The Government have taken admirable steps to co-ordinate our allies, which we welcome, although the House would welcome an update on what this means for us and our country in practice. What are the effects of this initiative on our Armed Forces? What planning is currently under way as part of this operational shift? Which allies in the so-called coalition of the willing have expressed interest in this initiative, and what are they willing to offer? What discussions have the Government held with the United States to advance clarity on this plan? Facing Putin and ensuring the security and sovereignty of Ukraine can be achieved only alongside our allies, and I think that the House would welcome further clarity from the Government to explain what they are doing to shift this coalition of the willing to a coalition of the committed.

The G7’s joint statement also made clear the growing and very serious concerns among allies about China’s activities aimed at

“undermining the security and safety of our communities and the integrity of our democratic institutions”.

This comes alongside many other concerns raised at the G7, including China’s non-market policies and practices that are leading to harmful overcapacity and market distortions; China’s military build-up, and the continued, rapid increase in China’s nuclear weapons arsenal; and increasing efforts to restrict freedom of navigation and overflight through militarisation and coercion in countries bordering the South China Sea, in clear violation of international law.

Given these clear and blatant risks to our domestic security, and the threat that China poses to the rule of international law, will the Government now take steps to place China on the enhanced tiers list of the foreign influence registration scheme? In my view, this would further strengthen the resilience of the UK political system against covert influence and provide greater assurance around the activities of China that are deemed a national security risk.

Proceeding from the concerns expressed at the G7, the country now needs to see further concrete responses from the Government to address the threat posed by China. I therefore close by asking the Minister: what other measures are being considered by the Government to compel China to engage in strategic risk reduction discussions, and what steps are the Government taking to deter China’s non-market policies and practices?

[Lord Purvis of Tweed (LD)]

My Lords, the seriousness of the issues addressed by the G7 are such that, from the welcome Statement that the House of Commons received on Monday, events have changed between then and when it has come to this Chamber with regards to the likely slow movement of President Putin in his talks with President Trump over a ceasefire for Ukraine, the increased concern with regard to the Red Sea, and the strikes from the United States and the repercussions of that—I remind the House that, on Sunday, President Trump’s national security adviser called the previous attacks, which very brave RAF personnel took part in, as “feckless”. The war has restarted in Gaza with more humanitarian concern and more violence on the West Bank, just within three days of that Statement coming to this Chamber.

We are now close to the second round of tariffs from the principal economy within the G7, as part of what the Wall Street Journal—not a liberal newspaper—in America has described as the

“dumbest trade war in history”.

Regardless of its dumbness, there will be effects across the whole of the G7, including the UK. From these Benches, we reiterate our desire to have ever-closer relations with the European Union and Canada in particular, so that there is a co-ordinated response. It is regrettable that there should need be that within the G7, but this is the world which we have to address.

On the Statement itself, I welcome the Foreign Secretary stating that they discussed using frozen Russian assets. The Minister will know that these Benches have asked for accelerated work on the seizure of the assets. Can the Minister update us on that, and tell us what the prospect of an announcement is from the G7 Heads of Government meetings? At the very least, we think there is a justified case for draft UK legislation to be released, so that we can understand what we would be required to do to move fast on that. I would be grateful if the Minister could outline where we are on the seizing of assets.

The Minister knows that we have supported the increase in defence expenditure across the UK, as the Foreign Secretary referred to in the Statement. Can the Minister give a bit more clarity as to what proportion of the increased defence expenditure is likely to be spent within the UK and what proportion is likely to be spent within the US? What is the Government’s position on the reports that we have seen about the UK’s difficulty in taking a full role within the common defence procurement approach in the European Union? Are we seeking to move quickly on a defence and security treaty which should facilitate this? There are a number of Members in this House who called for that under the last Government and continue to do so. It is now urgent, and I hope the Minister can update us on it.

The Minister will not be surprised to hear me say that we disagree with the method of the increased funds. We believe that the companies that avoid paying tax in the UK—tech companies—and are operating on underpaid taxes for their profits should contribute more. That is under the Basel 3.1 mechanism. There is agreement within the EU and, as I understand it, the G7. Only one country has argued against it and pulled out of it: the United States. A second G7 country has delayed our implementation because of that first country. We do not believe that that is appropriate; we should move quickly on using the resource from an increase from 2% to 10% on undertaxed profits. That is a better way of funding increased defence expenditure, rather than cutting the ODA budget.

Earlier, the Minister reiterated the Government’s position, which is an ambition to honour the 0.7% legislation. I remind the House that the legislation does not require the Government to have an ambition to meet 0.7%; it requires them to meet it. It is not a “We would like to do it” Act; it is a “We must do it” Act. If the Government are not committed to this then they should state it clearly, with regards to the means by which they would meet the legislative target.

On the fiscal circumstances of meeting the legislative requirement, it seems that the Government’s policy choice is to cut ODA to fund defence expenditure—that is a policy choice, not a fiscal one. What are the fiscal rules now when it comes to the policy choice of funding in an alternative way? There is no mechanism under the 0.7% legislation for alternative policy choices to be used, other than fiscal circumstances, so what is the status?

Finally, I reflected on the Government’s Statement 10 years ago, when we passed this legislation, on the 2015 G7. Granted, that was not a meeting of Foreign Ministers but of Prime Ministers, and the Prime Minister said this to the House of Commons:

“For the first time in a number of G7s and G8s, we actually got the 0.7% commitment back into the text, so it is clear and there for all to see. I would argue that it is not just right for Britain from a moral standpoint, but that it actually increases our standing in the world that we can point out that we have kept our promises and were able to use that money to enhance not only the economic standing of those countries, but our own security as well.”—[Official Report, Commons, 10/6/15; col.1203.]


I agree with the then Prime Minister.