UK Trade Performance

Lord Lamont of Lerwick Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord Lamont of Lerwick (Con)]

My Lords, I thank my noble friend the Minister for his very robust reply. The main attack from the opposition spokesman last Wednesday was to criticise the Secretary of State because the figures she quoted for exports—£862 billion—were not adjusted to inflation. That is, they were not volume figures but value figures. I put it to my noble friend that that point is a completely false one. It is entirely appropriate to quote value figures rather than volume figures for an economy that is overwhelmingly services, because it is very difficult to measure services and services exports in terms of volume.

Secondly, it is appropriate to measure exports in terms of value because that is what matters to the person who is employed and getting paid. They get paid in pounds, shillings and pence, so measuring them in value terms is perfectly legitimate. Thirdly, everybody laughs as though it were a superficial matter, but this has been disputed. The opposition spokesman was quoting Mr Conway, whose figures have been attacked publicly in the press and by many other commentators. In any case, is his argument very profound, given that the Secretary of State gave figures for exports by volume as well? She gave both—so I do not see how she can be accused of being misleading in any way.

Does my noble friend agree that it is profoundly depressing that, near to an election, hoping to form the next Government and believing that they will, all they can do is talk the economy down? They are determined that everything should be bad news. This is not the proper basis on which a party serious about being in government should be talking about our economy.

I have one question for my noble friend about the motor vehicle industry. I very much applauded the decision to delay the date for battery vehicles being compulsory, but could the Government go further and accord with the request by Stellantis that they should not fine companies that produce good petrol cars before people are ready to buy electric cars? As he will know, there is a lot of sensitivity in the motor industry about this position and quite a lot of motor companies have changed their view, so I would be very grateful if he could comment on that.

[Lord Offord of Garvel (Con)]

I thank my noble friend for that contribution on a subject that he knows well. I will come to his specific question on auto in a moment. I will say that we are in a strong position here, but of course there is more that we can do. One of the focuses of DBT and my portfolio is to try to increase the number of companies that export. At the moment, we have 300,000 companies exporting. My personal ambition is to try to get that up to 500,000, which would be 20% of the 2.5 million registered companies.

The reason why we want these companies to be exporting is that we discover that they share some very interesting characteristics. First, they are well managed; they have ambitious management teams and are quite often owner managed. Secondly, if they are selling goods and services around the world, it is because they are world class and will get high margins for those products and services, so they will be more profitable. And here is the silver bullet—they pay higher wages. If 70% of them are based outside London and the south-east, that is real levelling up. So of course there is more that we can do, but there is a strong recovery going on in our economy right now.

On the specific issue of automotive, obviously we have had a discussion with Stellantis and have talked about Nissan et cetera. Sometimes these discussions are described as U-turns, but I see them as part of a practical journey to net zero. We have to move in a practical way and take the public with us. Right now, we have a direction of travel but we have to be flexible, as we have been with heat pumps and indeed cars, to make sure that we take the public with us. The market itself has not yet landed and has to decide exactly how this will be fulfilled.

I do not see this as in any way reneging on our net-zero commitments. Right now, 75% of our economy is powered by petrochemicals and 25% by renewables. The 2050 target is to flip that on its head and make it 25% hydrocarbons, which would be green and clean hydrocarbons, and 75% renewables. How we get there is to be done over a generation. We have a direction of travel, but we will be flexible about it as we go, as we already demonstrated with heat pumps and cars. I am very clear that we will get there and in a way that continues to make sure that our industries are profitable and that our workers are well paid.

Regulatory Approval for New Products and Services

Lord Lamont of Lerwick Excerpts

Monday 22nd January 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful for that comment; of course, I would contact the Treasury about it, since that is its specific focus. I totally agree that we need to have trust in financial markets for them to function properly. That also entails significant responsibilities towards the consumer.

[Lord Lamont of Lerwick (Con)]

My Lords, what my noble friend the Minister has said is extremely encouraging and very much to be welcomed, particularly on the strong track record on investment into this country and small tech start-ups. However, I draw his attention to large tech companies, where the picture is slightly more mixed. Is he aware that the London Stock Exchange and the FTSE 100 are having great difficulty in attracting internationally mobile big tech companies for listing and, indeed, have recently lost a number of listings to New York? Is this not something that the Government ought urgently to have a look at?

[Lord Johnson of Lainston (Con)]

It is always intimidating for a junior Minister to receive questions from someone as significant as my noble friend. He is absolutely right: over the past year, the Government have been working extremely hard, through the Edinburgh reforms and the Mansion House compact, to ensure that domestic pension fund money flows back into the markets. My noble friend is also completely right that we need to look extremely closely at how the LSE functions in order to attract the new type of modern company that lists in a different way. Work is ongoing at the moment; it is a complete priority. On venture capital and private equity, I am glad to say that, at the new start-up level, the funding is doing extremely well. We are having a very strong year—perhaps one of the best years we have ever had—in those new start-up and investment areas in this country. We should celebrate that. We are too down on ourselves; it is time that we start rejoicing in our position as one of the key venture capital hubs not just in Europe but in the whole world.

UK Car Production Since 2016

Lord Lamont of Lerwick Excerpts

Tuesday 14th March 2023 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords—

[Lord Lamont of Lerwick (Con)]

My Lords—

[Baroness Williams of Trafford (Con)]

My Lords, it is the turn of the noble Baroness from the Green Party, followed by my noble friend Lord Lamont.

[Lord Johnson of Lainston (Con)]

I am grateful, as always, for the prompting on the importance of achieving net zero and sustainability over the next so many years. I draw this House’s attention to the broadness of our attempts to build a sustainable automotive sector in this country, with Johnson Matthey announcing in July an £80 million hydrogen gigafactory at its existing site in Royston. So this is not simply about EVs; it is important that we want to have a diversified strategy to ensure that we are sustainable for the future. That requires effort, finance and the businesses themselves to be successful, and we are supporting all those three.

[Lord Lamont of Lerwick (Con)]

My Lords, is the European-wide nature of the problems facing the car industry not illustrated by the fact that Germany in 2021 produced fewer car passenger vehicles than it did 30 years ago? The German Ministry for Economic Affairs has prophesised that there will be loss of 100,000 jobs in the car industry because of the transition. Has my noble friend the Minister noted the intention announced by both the German and Italian industry Ministers that they may veto the previous decision of the EU to phase out CO₂-emitting cars by 2035? If that were to happen, what would the impact be on Britain, with its different target?

[Lord Johnson of Lainston (Con)]

I appreciate my noble friend’s point on this subject. We are committed to our targets, and it is absolutely right to achieve net zero by the date we have set. I am glad that he mentioned the other European car manufacturers, because this past week alone the Prime Minister travelled to Paris for a summit with President Macron to work on the very important task of rebuilding our links with Europe, to ensure we can have sensible conversations with our European partners. I call that Project Grand Amour, and it has been enormously successful. If we look ahead at some of the problems facing us, particularly in our automotive industry—and at the importance of ensuring we have strong trading relationships with our European neighbours, which is the essence of this point—we should be extremely grateful for, and indeed celebrate, the Prime Minister’s wonderful and marvellous actions last week in the new Belle Alliance.

Subsidy Control Bill

Lord Lamont of Lerwick Excerpts

2nd reading
Wednesday 19th January 2022 Lords Chamber

[Lord Lamont of Lerwick (Con)]

My Lords, this Bill is highly unusual. It may be unique in the world because I do not think any other country has a national system of subsidy control. The United States does not; the EU does, but of course it is a collection of countries. I think this is the only national system of subsidy control. Of course, we had to have a national system because it was part of the negotiation with the EU on the TCA. The EU, understandably, had fears that Britain, having been subject to the EU system of subsidy control, was going to be free of all control. There therefore had to be a negotiated settlement, the seven principles of which are what is in the Bill.

I read the speech of the Secretary of State in the House of Commons very carefully and listened to the Minister’s speech today. It seems that the Government have, if they will forgive me saying so, something of a Janus-like stance on the Bill. On the one hand, it is a Brexit dividend: there are going to be hints of largesse and more spending, while the money will come more quickly and flexibly. On the other hand, this is also going to control subsidies. Well, which is it? There is an obvious conflict between the two.

It has been said several times, although I think Ministers in the Commons said it more than my noble friend did, that our system will be very much preferable to the slow, inflexible and obstructive system that they had in the EU. I am bound to say, as a Minister who dealt a lot with the EU—admittedly, a very long time ago—that that was not my experience of the EU system. It was a system, incidentally, largely designed by the UK and often operated by UK officials. Most of the applications for subsidies went through the EU through the block exemption. Most of them were approved, and relatively quickly.

There were, however, difficult negotiations over very large state aid projects, such as the motor industry in this country in the 1980s or the steel industry, but it was quite right that the EU took a long time to consider those. Let me put it this way: the EU acted as a discipline upon us, and we have to view a system of subsidy control as not just something permissive but something that imposes a discipline on Governments. That is the point of it but, of course, it poses questions as to how effective this will be compared with the EU system.

I put it to the House that the key difference between what is proposed now and the previous system is that, under the EU, no subsidy was legal until it was approved. Under this system, it is legal until it is struck down after legal proceedings in front of the Competition Appeal Tribunal. What worries me about this system—I say this as someone who, like my noble friend Lord Forsyth, believes profoundly in the merits of competition and market forces—is that there is no enforcer of the regime. The subsidy advice unit is really weak. It has no power to block and, instead of an enforcer, we have to rely on citizens to police this system and take legal proceedings. There is a degree of self-assessment. The question is whether that is enough to discipline and control the Government.

My noble friend may think I am being rather unfair to the Government, but this Government have made some curious subsidy decisions in their life. I never thought I would quote John McDonnell, the former shadow Chancellor, but he said the other day that this Government were the biggest nationaliser since Harold Wilson. That may be a slight exaggeration, but we have had the curious investment in the bankrupt satellite company OneWeb—how would that be dealt with under the Bill?—the bailing out of Bulb and the nationalisation of part of the steel industry. Then we have the Chancellor’s future fund, which subsidises everything from manufacturers of cannabis to dating agencies. There are serious questions to be asked about the Bill and whether it really will be the self-discipline that the Government say it will.

There are also a number of detailed points. I agree with what was said about thresholds—why should they be higher than in the EU? I shall wait with interest to find out the difference between a “subsidy of interest” and a “subsidy of particular interest”. It is a disgrace that these points are not made clear.

Subsidies distort, misallocate resources and often slow down inevitable and necessary change. However, provided that the Government stick to their principles of a competitive, market forces driven economy, I shall give the Bill at least two cheers.