International Trade

Lord Liddle Excerpts

Thursday 23rd January 2014 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I thank my noble friend Lord Harrison for taking the initiative in organising this debate and for his very thoughtful speech. We have had many excellent contributions, notably from my noble friend Lady Symons who is experienced in the practice of trade promotion. Earlier we heard from the noble Lord, Lord Marland, and various sectors have been discussed, ranging from the challenge of UK wine by the noble Baroness, Lady Miller, to the reputation of Scotch whisky by the noble Lord, Lord Purvis, and my noble friend Lord O’Neill. The complexities of financial services were considered by the noble Lord, Lord Carrington, while my noble friend Lady Thornton talked about the potential of social enterprise.

It is a great pleasure to welcome to his first debate the Minister, the noble Lord, Lord Livingston of Parkhead. I think he has answered Questions before but this is his first debate. He probably does not remember but I first met him when he was part of a group of businesspeople whom my noble friend Lord Mandelson, of Hartlepool and Foy, sought advice from when he was Business Secretary. We all welcome him to the Front Bench and his new role, and wish him every success in what is a vital national interest.

I start with the central point that one or two noble Lords have mentioned: improving our trade is essential to the rebalancing of the economy which the Chancellor set out as one of his key objectives in 2010. I will focus on trade policy rather than trade promotion, because I think that the Minister has an important role in trade policy. Of course, this all takes place in the context of globalisation. The noble Lord, Lord Davies, pointed out the extraordinary change in economic openness in the past 20 years. The figures I saw were that from 1960 until the end of the Cold War only one in five of the world’s population lived in an economically open society. Now, on some calculations, it is as high as 90%. That is a huge transformation.

Of course, for advocates of openness, this leads to a major political challenge because people, particularly in the developed world, worry about where their jobs are going to come from if we face all this low-wage competition. The Government talk about a global race. I would like to know how the Minister interprets this. Clearly, there are causes for optimism in Britain’s economic and trade position, as the noble Baroness, Lady Wheatcroft, said, but among the general public many people feel that the rewards of globalisation are being appropriated by the few, not the many, and worry that instead of a race to the top, we are actually seeing a race to the bottom.

One of the key political challenges for all the political parties in Britain is how to build public support for economic openness. Of course, we do not help that if we get into a political race to see who can be the toughest against immigration. When we talk about trade, we have to be prepared to make the argument that it is not just our exporters who benefit from more open trade, it is our poorest families—for instance, in buying children’s shoes and clothes—who have greatly benefited from the opening up of the world economy in the past 20 years.

What is the Government’s strategy for trade? How does the current emphasis on regional agreements fit in with sustaining the multilateral trade system? The noble Lord, Lord Davies, asked a lot of very relevant questions about the transatlantic trade initiative. I am not going to repeat them; it is vital and a great opportunity but it also raises lots of difficulties. The noble Lord, Lord Sharkey, talked about people’s fears about how trade arbitration can overcome laws that we have agreed either in the UK or at EU level. That is a legitimate concern. The points made by the noble Lord, Lord Harrison, about parliamentary accountability at both EU and national level are of great importance.

Another question is: does the Minister recognise the key importance of services to Britain’s trade prospects? I am sure he does. But once we say that we recognise the key importance of services, we get straight into the question of migration. For instance, as I know from when I was in the Commission, in the negotiations between the EU and India, a key demand of the Indians was for a more liberal visa regime for their IT companies. How do we handle these questions?

A key economic strength of Britain is in our higher education—I declare an interest as pro chancellor of Lancaster University—medicine, culture and sport. The Minister is a former director of Celtic. In all these areas, British success depends on an open policy towards people from the rest of the world. Where do the Government stand on this?

The key question for trade is that of Britain and the European Union. I know that this is a familiar theme, which I have spoken about many times in this House and we will be debating again tomorrow, but does the Minister accept the point made by several noble Lords around the Chamber that Britain outside the European Union would be in a much weaker position to make representations to China on intellectual property, to countries that are marketing counterfeit Border textiles, which the noble Lord, Lord Purvis, talked about, or to people marketing whiskies that are not genuine Scotch whiskies? I know there has been a problem with that in India. What strength would we have if we were outside the EU? The Government have to come clean on this question. How would we be able to participate in a transatlantic agreement if we were not members of the EU? What would be our prospects for attracting inward investment into this country if we were not members of the EU?

Since we have such an interest in the EU trade agenda, it is vital that Britain maximises its influence in Brussels. I know from when I worked in my noble friend Lord Mandelson’s cabinet that a large part of what the EU member states do on trade is actually to negotiate with each other on what the EU policy in negotiations with the outside world is going to be. But we all know that as a member state, we cannot negotiate with other member states if, as Herman Van Rompuy once put it in a very good speech, it always seems as though we have one hand on the door handle and are about to rush outside. This question of Britain’s relations with the EU is not some fanciful political question; it is a very real question for the Minister’s responsibilities and we greatly look forward to his reply.