Foreign Affairs: Global Role, Emerging Powers and New Markets

Lord Spicer Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Liddle]

My Lords, in speaking for the Opposition in response to the debate, it is a pleasure to welcome the noble Lord, Lord Green of Hurstpierpoint, to the Dispatch Box for one of his relatively rare appearances here. I do not say that in any spirit of criticism; all sides of the House appreciate the huge amount of work that the noble Lord does on behalf of UK trade promotion around the world. He brings to mind a conversation I had with Chris Patten, as he was then, when he was in Brussels. I asked him what life was like as a European Commissioner and he said, “I spend all my life expensively circulating the globe”. I am sure that the noble Lord, Lord Green, does a lot of circulating but I hope that, in the age of austerity, he does not do it too expensively, although I am confident that he does it productively. It is good to welcome him to the debate.

I also thank the noble Lord, Lord Howell, for introducing the debate. I will not join in the obituaries because there is plenty of life left in the noble Lord yet. However, I regret that he is no longer on the Front Bench. As a new boy to this place, I found him one of the most reflective of our Ministers, who always tried to deal very conscientiously and carefully with points made to him. In that sense, he is a loss.

I agreed with the vast majority of what the noble Lord said in his introduction. He told us about the great transformation in the world, which the noble Lord, Lord Bates, illustrated very well in his speech when he spoke about China and its huge pace of transformation, which is something that we all neglect. I agree with the noble Lord that we should make the most of our networks. I am rather more with the noble Lord, Lord Howell, than I am with the noble Lord, Lord Hannay; I think that networks matter in this world, and the UK is fortunate and well positioned in that. I only wish that the Government paid more attention to the higher education network, about which the noble Baroness, Lady Warwick, spoke, because it is key to our future. I also agree with him about the chambers of commerce, as recommended in the excellent Heseltine review. I agree that the Lords should do more in international affairs; I would love the Lords to have a proper foreign affairs or international committee.

The points that he made about the Middle East and energy are very valid. I also agree about the strengthening of Commonwealth ties. I support what my noble friends Lord Judd and Lord Anderson, and the noble Lord, Lord Maclennan, have said. I think that the soft-power ties of the Commonwealth are very important but that it will not act as one as a political and diplomatic force—at least, I do not see that happening very much—still less as a single economic unit. I know that the noble Lord, Lord Bilimoria, was not talking about going back to a world of imperial preference but I see very little prospect of a kind of free trade arrangement within the Commonwealth. The interesting thing about the Commonwealth is the way in which its economic interests have moved away from those of the United Kingdom. One of the most striking things about the emerging world is the growth of south/south trade, as opposed to south/north, between Commonwealth countries.

The fundamentals of what the noble Lord, Lord Howell, said, were right. Trade with the emerging world is crucial to our success in what the Prime Minister and Chancellor rather irritatingly refer to as the “global race”. However, the danger in such talk is that we convince ourselves that there is some great choice to be made between the rest of the world and Europe. As my noble friend Lord Anderson said, it is not a case of either/or—and as the noble Lord, Lord Kerr, said, it is not a case of a blue-water strategy or a continental one. There was a lot of hullabaloo recently about the fact that for the first time we were trading more with the rest of the world than with the European single market. That is a perfectly natural development, given the pace of growth in the rest of the world. It should not become a political point.

Membership of the single market remains crucial to our ability to compete with the rest of the world because of its size, its proximity and its relative stability. It is highly integrated. The noble Lord, Lord Alderdice, and I were at a dinner last night where a Foreign Office official made the very good point on the subject of exports to China that France includes Airbus exports in its figures but 17% of each Airbus is made in the UK. We benefit from our partners’ success as well as our own.

Size matters. Being part of the EU single market gives us clout. On trade with China we worry about intellectual property challenges or the dumping of solar panels, but we try to secure fair competition and open up markets. Having that clout behind us is much better than being the United Kingdom on our own because—I think that I am right in saying this—the UK is smaller than the smallest Chinese province.

Europe matters a lot—and it matters in another sense. When the rest of the world thinks about us, it thinks about us not as Britain but as part of Europe. It thinks of Europe as an entity in the world. Britain has great strengths of its own—many noble Lords talked about them—such as the BBC, the World Service and the British Council. However, Europe, too, has strengths in this emerging world. It is regarded highly for its culture, civilisation, science and engineering. The European model is greatly respected as one in which we have achieved democracy and the rule of law, and a model of capitalism that combines innovation and dynamism with social justice. The European model is a strength for us, and in this multipolar world it will matter even more.

[Lord Spicer]

How long can we go on trading at a loss with Europe?

[Lord Liddle]

The question about our competitiveness applies not just to Europe but to the whole world. The House will debate later the excellent report of the noble Lord, Lord Heseltine, which addresses these issues. The problem is not with Europe but with UK competitiveness.

In the new world, Europe matters more, not less. Trade policy matters. There is a very ambitious EU trade agenda, as well as a transatlantic agenda and an agenda for trade with the Mercosur countries, with India and now with Japan. I would like to hear from the Minister about these possibilities. There seems to be a tremendous route to opening up more growth potential.

If we want to be an effective force, we have to put more emphasis on our European commitment. We should look at how the Chinese are buying up Africa; at how Europe has been ineffective in dealing with Russia on energy questions; at how as a continent we do not seem to be taking advantage of the opportunities of the Arab spring. Together, the European Union could do so much in these areas that it is not doing.

The biggest risk that this country faces is that we give in to the pressures for a pared-down Europe—the kind of pressures that Boris Johnson talked about this week—and end up sleepwalking towards our exit from the European Union when it is our membership of the EU that will be our strength in this emerging world.