Trade (Australia and New Zealand) Bill

Lord Howell of Guildford Excerpts

Committee stage
Monday 23rd January 2023 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will make one brief observation. It seems a deficiency in our processes for negotiating important agreements of this kind that there is no mechanism, as in so much else, for ensuring that we remain a united country. The Government of the United Kingdom also represent the views of the devolved nations. Although it is very important for the United Kingdom that it is seen to be an honourable state that carries through what it negotiates, and although I support this amendment, I also support what was said by the noble Lord, Lord Lennie—that this has been designed after the horse has bolted. Hopefully, we can do something before the horse bolts next time.

[Lord Howell of Guildford (Con)]

To follow that intervention, we seem to be crawling along the edge of the quagmire, which arises all the time, between reserved powers and devolved powers: whether reserved powers have implications for devolved powers and whether some devolved powers and the actions following from them have implications for the whole of the United Kingdom.

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[Lord Johnson of Lainston (Con)]

I always thank the noble Lord, Lord Purvis, for his academic approach to these debates, and I am grateful to him for those points. The former Secretary of State was right when she said that we were seeking consent; the Government have sought consent, and we have consulted. Regarding the relationship between this Bill and the Procurement Bill, I am not sure what the relevance of consultation is in relation to Scotland. A number of the actions in this Bill will continue, since they are not being cancelled by the Procurement Bill. I understand that the Procurement Bill will retain the other parts of this legislation. Certainly, we have committed very clearly to making sure we seek consent and consult.

Without prolonging this debate, I think it is essential—I have said this before—that we engage with everyone in this country and all the devolved nations to ensure that we create trade deals that benefit them. I am sure the noble Lord will be aware of and celebrate the opportunities that his own food and drink industry will have under these new agreements. We are reducing tariffs on a great variety of spirits so that industry can sell more at lower prices or use that additional income to market its goods. All the manufacturers I have spoken to were extremely positive about those measures, which will, I am pleased to say, directly benefit Scotland. The intention here is to create powerful free trade agreements that work for the entirety of the United Kingdom. As a result of that, it makes absolute sense—not just in the specific legislative format but in a fundamental negotiating sense—that these are reserved powers for the United Kingdom, and that we have the opportunity to implement them.

[Lord Howell of Guildford (Con)]

I do not want to be academic, but I am still not entirely clear on what basis the consent is being withheld from the Scottish or Welsh Governments, even though I gather that it is not necessary—in the end, it will just go ahead anyway. What can be done to overcome some of the inevitable additional ill feeling that seems to wander generally over the division between reserved and devolved powers, in order to make this Bill sweeter than it will otherwise be? Otherwise, we will just be left with a bad feeling in the air and a sense that things are being steamrollered through because the precise letter of the law of the devolution agreements, devolution law and all the preceding legislation of preceding centuries says so. I am not sure that this is good enough if we are going to build a good relationship in the future between the two nations of England and Scotland, and the Principality as well.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for his comments. Consent is either given or not given. For the reasons why, he must make inquiries of the various Assemblies that have not given their consent and ask them why they are not supporting this free trade agreement, which I think will bring them enormous benefits. We remain committed to the consultation process in all our activities. Frankly, it would probably be impractical not to do so in any event.

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[Lord Howell of Guildford (Con)]

My Lords, I am going to focus on Amendment 5 as well, regarding the impact issue. I agree very much with the conclusion of the noble Lord, Lord Kerr, who has just spoken, but—I hope this does not sound too contrary—for the opposite reasons to those that he gave as to why we should not put too much faith in impact assessments. My opposite reason is that, far from this being a tiny issue that will not lead to very much, I think this opens a gateway into the gigantic trade expansion that is now going on throughout Asia, in which we simply have to be more deeply involved. I know we are trying to get into the CPTPP and other trade arrangements. We have to do so, and this is part of the gateway. I think this is a very big issue, not a very small issue.

At the same time, one’s faith in impact assessments in this House is pretty limited. Your Lordships will all have seen the report from a Select Committee, about a year ago, saying that impact assessments left a lot to be desired. They are particularly difficult when dealing with speculation and suppositions about how trade may develop in a very fast-changing world, and that has been recognised for some time. If we are now moving on, as Amendment 5 suggests, to impact assessments not only for the devolved nations but for the entire packet of English regions, the chances of getting anything in these assessments even faintly right in relation to the different regions in this country, with all their variety, is very slim indeed. The need for this huge exercise, which would take a great deal of work and a great deal of speculation, is not the point at all; we just want to get on with the purposes of the Bill.

I must apologise to noble Lords: I should have said when I spoke earlier that I have a sort of interest in all this, in that I am a member—just about coming to the end of my membership—of the excellent Constitution Committee, which produced a very interesting report on the proceedings in which we are involved now. It really is worth reading, and worth reiterating that that committee said that your Lordships should call on the Government and the Minister

“to explain during the progress of the Bill, rather than at third reading, what efforts it has made to secure consent and the reasons why, in its view, this has so far proven impossible.”

It does not say so but I think that is referring to Scotland. I do not know what kind of informal or other kind of consent has been achieved in the differental discussions with the regions, and with people outside England, that the Minister has already mentioned, or what prospects there are of getting those turned into good support and consent.

The Constitution Committee report also concluded that we ought to

“encourage the Interministerial Group for Trade to endeavour to ensure that, where devolved matters are affected, the making of any statutory instruments designed to implement these agreements, and any future free trade agreements”—

that is very relevant to what my noble friend Lord Lansley has just referred to—

“adhere to the principles of intergovernmental relations set out by the review.”

These are important matters and they ought to enter into our discussions at an early date, because if we do not get these things right this time then we certainly will not get them right on future occasions either.

[Baroness Humphreys (LD)]

My Lords, I apologise for not having spoken at Second Reading on this Bill. I am afraid that, like many others including my noble friend, I failed to dodge a couple of viruses and their aftermath recently.

I am grateful for the opportunity to speak briefly on this group, and in particular to support Amendment 15 in the names of my noble friends Lord Purvis of Tweed and Lady Bakewell of Hardington Mandeville. This amendment reflects the concerns of UK farmers and has a particular relevance to Welsh farmers. It seeks to ensure that the Secretary of State reports on the impact of the procurement chapters on different types of farmers and farms. Here, for the first time in my nine years in this House, I find myself slightly at odds with the noble Lord, Lord Kerr.

With the trade deal set to provide a mere 0.08% boost to the UK economy, it appears that both New Zealand and Australia, with economies many times smaller than ours, are set to benefit. New Zealand, for example, will have access to a UK market of some 67 million people if it chooses to, whereas our farmers will find New Zealand, with its market of some 5 million people, a much less attractive prospect. Both New Zealand and Australia will have almost unfettered access to UK markets. This places UK and Welsh farmers at significant risk, with apparently almost nothing gained in return.

For those of us who live in Wales, there is an additional impact that will not appear in the list contained in this amendment but is nevertheless important to us—the impact on the Welsh language. Some 42% of our farmers speak Welsh, as opposed to 19% of the general population. They are the guardians of our language, traditions and culture. Anything that impacts on the viability of our farming communities will eventually impact on our language.

Our farmers are concerned about their futures and, as a recent edition of Farmers Weekly reported, this concern has resulted in a large reduction in the level of support for the Conservatives among UK farmers. Where 72% of farmers in 2020 said that they would vote Tory, now only 42% would do so. One supposes this result reflects the reality of “getting Brexit done” on our farming communities and fears for the future of farming. However, this is an opinion poll; what we need is hard evidence.

The Minister can perhaps suppose that this trade deal will be a great success; I can suppose that it poses a significant threat to our farming communities. Only a comprehensive impact assessment, such as the one called for in Amendment 15, can provide us, as legislators, with the evidence we need to justify our positions and decisions. Like my noble friend, I hope the Minister will agree to this amendment.

While I have the Minister’s attention, could I ask him to further comment on his assertion that eating New Zealand lamb is better for the environment than eating lamb from around the UK? Imported lamb from New Zealand can be produced to lower standards than our own foods, using methods that are unacceptable here. This is why my preference has always been for the taste and quality of Welsh lamb over New Zealand lamb. I fail to see how importing lamb from half way around the world makes that lamb better for the environment than locally produced and sourced lamb. Welsh lamb is among the most sustainable in the world, produced using non-intensive farming methods and high standards of husbandry. When the Minister responds to this group, would he care to take the opportunity to offer Welsh and UK farmers a few words of support in recognition of the work they do to produce such high-quality produce?

Trade (Australia and New Zealand) Bill

Lord Howell of Guildford Excerpts

2nd reading
Monday 9th January 2023 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I am delighted to follow my noble friend Lord Swire’s excellent maiden speech. He was my second successor—or was it the third?—in the job of Commonwealth Minister in recent times, and he made a great fist of it and a great success. He continues to do so in working with my noble friend Lord Marland, whom he mentioned, in the highly successful Commonwealth Enterprise and Investment Council. Together, they and their brilliant team have opened Whitehall eyes—although not nearly wide enough yet—to the vast trade and other advantageous linkages that the modern Commonwealth offers. My noble friend Lord Swire’s wisdom and experience will be hugely valuable here. Whatever he may have done on the parade ground, I do not think he will lead us the wrong way; on the contrary, he will lead us the right way, to a better understanding of what is happening in world trade.

I come to the Bill. Although the impact assessment tries to do so, it is difficult to predict how this agreement will affect trade flows, because it depends on whether or not opportunities are seized and on a range of technological developments, some of which we cannot even foresee, which will affect the pattern of trade as they have done for the last two or three decades. Despite the challenges and difficulties for our farmers, which I recognise, we should see the Bill in a very positive light.

The Bill is welcome too because it is part of the new jigsaw of an utterly transformed world trade system and, as the excellent report from the International Agreements Committee observes, it gives us a glimpse into the Government’s longer-term vision for trade expansion. This inevitably means not just trade but, inseparably, political and security expansion. All these matters are intertwined and involved. It may also tell us something about the Government’s policies to develop their role in the Commonwealth, which embraces about a third of the human race and is the biggest network on the planet by far. The modern expanding Commonwealth is, in the late Queen’s words, “an entirely new conception”, and Australia is key to that new and fast-growing Commonwealth world. Whether Australia’s status is as a realm or a republic does not matter at all; it does not affect things. This is good on both fronts, because we do not hear nearly as much as we should in this House or in Parliament about either of these major areas of policy, despite their outcomes being central to our security and future prosperity, and to the welfare of the world.

On my first point, about our involvement in new trade patterns that are booming, with countless new networks in Asia, with this Bill and these agreements we are obviously stepping further into a world dominated by the Chinese giant—far too dominated, many feel, especially in Australia but here as well. I find the consultants Dezan Shira, which has offices all over Asia and Africa, to be one of the best pan-Asian interpreters of what is really happening in the region. It estimates that the total current value of belt and road projects put forward by China is $4 trillion. Of course, there is in fact a whole spread of belts and roads winding through the developing world.

The belt and road initiative is not just loans and eye-catching projects; it is creating a major value chain for services, engineering consultancy, legal and advisory services, all professional services, and of course much more investment opportunities. It is very good that the Bill covers the same sort of ground and opens the door to better professional services access both ways—although of course that is just a small start on one front in countering China’s remorseless BRI advance. I am very glad that the Minister, who I welcome to his job, mentioned that when he introduced the Bill.

Incidentally, when it comes to bilateral investment treaties, which are just as important and are the key to more trade, China is miles ahead of the United Kingdom, with 145 treaties with developing countries against 20 UK treaties, mostly with Commonwealth countries. In effect, through past inattention we have let the Chinese take the lead in financing and getting the benefits from Commonwealth countries, which ought to be our asset, not theirs.

It could be that this Chinese ascendancy is now being checked, as Australia in particular finds its export routes to China closed down and rightly seeks other outlets for its burgeoning modern economy, which is based still largely on raw materials and food products but increasingly on very advanced technology and services. That is a far cry from the image of the past trade pattern.

London’s own past neglect has let the Chinese in too far. Our financial sector is supposed to be the kingpin area of worldwide development finance. It is incredible that we have let this aspect slide and allowed the Chinese to make the running. Admittedly, during Liz Truss’s short-lived premiership a new British International Investment body was announced, intended to mobilise £9 billion of funds as a counter to strings-attached Chinese loans, but frankly this is small beer compared with the size of the BRI advance.

At the G7 summit last summer, President Biden revived his Build Back Better World plan from 2017, which had not gone too well, and his Blue Dot Network initiative with Australia and Japan, all hopefully designed to counter the BRI juggernaut. But what remains is an enormous cat’s-cradle of trade expansion and criss-cross deals throughout Asia, all steaming ahead under a Chinese aegis and generating enormous potential world growth, from Australia to Japan, from the UAE to Russia, and through the so-called middle corridor that links the Caucasus to the Chinese sphere.

So here we are just putting a toe into the world of high-technology trade expansion. I am frankly amazed that our policymakers have not made infinitely more of the modern Commonwealth network in getting deep into this new world. Important though it is to get on and build the best possible relations with all our European neighbours, it may surprise some that the Commonwealth has been outstripping the EU in three aspects: population size, economy size, and economic growth rate.

It is good that this UK-Australia agreement gives major access for UK professionals—lawyers, auditors, scientists, architects and so on—to the Australian and New Zealand markets and allows us to join freely in procurement bids for Australian and New Zealand government contracts and, I presume, vice versa. Will the Minister say whether that we are completely released from having to consider bids from EU suppliers first as a priority, as we used to?

Then there is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—a clumsy name—which we are trying to enter and which has already been mentioned. I am glad that we are getting strong support from Japan, but again I have no idea what use we have made of our Commonwealth ties. I hope we will hear more about that. The unhappy appearance, which I hope the Minister will dispel, is that we do not really have a policy for steady development of our relations with the rest of the gigantic Commonwealth network. What we need is a patiently executed plan to keep pace with Commonwealth and Asian expansion and new alliances growing up, which I hope that the provisions in the Bill will allow, at least for Australia and New Zealand as a start. Many people today feel acutely this lack of purpose and unifying narrative in Britain’s world direction, and therefore in what should be the focus of their loyalties.

As has just been observed, the Commonwealth may not be treaty-based, may not be a trade bloc or an alliance, and may have members back-sliding from its central commitment to liberal values and the ways of freedom, yet is clearly a major asset for us—or ought to be, as we struggle to compete in a hypercompetitive world, as my noble friend Lord Swire reminded us. What is more—this is widely missed—the new Commonwealth tableau opening out and growing meshes thoroughly with the entirely new pattern of international relations in which the UK is still working hard to find a place. Beyond all economic considerations, the security dimension of the Commonwealth has swollen dramatically in significance. Our military links with individual Commonwealth countries are growing daily—with Australia through the latest AUKUS submarine project, with India through cyber co-operation, and with African allies through military training links and weapons—and we are at last beginning to perceive what the Chinese have long seen and we have not: that many of the small island states in the Commonwealth, especially in the South Seas around Australia, have a major strategic significance in the new high-technology patterns of warfare and maritime security.

From the British point of view, the modern Commonwealth has evolved from a liability into a series of major trading, investment and market opportunities, as well as an ideally tailored transmission channel for the projection of British soft and smart power, and into a vital part of the UK’s safety and security. The entire enormous network needs to be brought much nearer to the heart of British foreign policy and strategy considerations. Please will the Minister assure us at the end of this debate that this is beginning to happen, and that this trade agreement and its provisions are all part of a bigger and more determined and focused UK strategy for access to the great new markets of the future and for our national safety and security?

UK Export Finance: Expenditure

Lord Howell of Guildford Excerpts

Wednesday 27th March 2019 Lords Chamber

[Baroness Fairhead]

I can confirm that we reply to demand from these sectors and that we focus on renewables. We have hired renewables experts. We are trying to move towards cleaner forms of fossil fuels, for example, in the $400 million project in Ghana to reduce the dependency on oil. That is a key part of achieving those objectives.

[Lord Howell of Guildford (Con)]

Given the unwelcome fact of the continuing preponderance of coal burning for electricity throughout Asia, with new coal plants being built all the time, should not the most useful export finance support go to encouraging clean coal technology and carbon capture and storage if we are really serious about reducing emissions rather than just feeling good?

[Baroness Fairhead]

I agree with my noble friend. We have taken the lead on coal-fired power stations. As the House will be aware, we have agreed, on a multilateral basis, only the most extreme exceptional circumstances for any new coal-fired power stations. We have taken the lead on that. We have asked UKEF to be part of the Steering Committee of the Equator Principles. The last time we supported a new coal-fired power station overseas was in 2002.

Yemen: UK Arms Sales to Saudi Arabia

Lord Howell of Guildford Excerpts

Wednesday 20th February 2019 Lords Chamber

[Baroness Fairhead]

My Lords, I agree with the noble Lord that this is a very finely balanced decision; there are respectable arguments on both sides. The Government remain confident that we are compliant with our obligations under the Arms Trade Treaty. The key criterion here, of course, is that there has to be a clear risk that the items might be used for serious violations of international humanitarian law in the future. In terms of the sources that we use, in a recent judicial review the court was very clear that there were significant qualitative differences between the risk analysis that the Government could undertake—the information that we got—and the information supplied to NGOs.

[Lord Howell of Guildford (Con)]

My Lords, I am grateful to the noble Lord, Lord Tunnicliffe, for referring to the report of your Lordships’ Committee on International Relations, and to my noble friend for her reply, but will she undertake, given that this is probably one of the largest and most horrific humanitarian disasters of recent times and given our involvement because of our export supplies, to use all leverage, including possible suspension of arms export licences, to put pressure on all parties—I emphasise, all parties—to the Stockholm agreement to hold the ceasefire, get the food sitting on the docks of Hodeidah to the starving millions and discourage further outbreaks of violence and bloodshed in this appalling situation, which all of us have a responsibility to do everything we can to halt?

[Baroness Fairhead]

I thank my noble friend for that question and for chairing the committee. It is, as the Secretary-General of the UN has said, one of the worst humanitarian crises. We keep export licences under close and continual review, and we undertake to continue to do that. In terms of the peace process, we are doing all we can to find an end. Our Foreign Secretary and US Secretary of State Pompeo co-hosted a meeting of the Yemeni quad. Our commitment to a peace process, which is at a critical juncture, is absolute, and we are putting our full weight behind the UN peace process, including additional contributions to support the facility. We have also been active in lobbying the international community on rapid, safe, unhindered humanitarian access to the ports, as my noble friend asks.

Exports: Africa and the Commonwealth

Lord Howell of Guildford Excerpts

Monday 27th November 2017 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I thank my noble friend Lord Popat for promoting this debate and for his excellent opening speech. I look forward to the maiden speech of my noble friend Lady Fairhead. She will not only be making her maiden speech but speaking for the Government, and no doubt will tell us all the things the Government will be doing in this area—which is quite a lot.

It is a lot more than in the past because, as my noble friend Lord Popat, has reminded us, next spring, in the middle of April, Her Majesty’s Government will be holding an enormous conference of the 52 nations of the Commonwealth—there may be more by then—and arranging a gathering, to which the Queen will give her welcome at Buckingham Palace and Windsor Castle, on a scale that has not been replicated for many years. There has been a vast change in the emphasis and interest of Whitehall, the Government and policy-making circles about the Commonwealth recently. To give a statistic: the Foreign and Commonwealth Office used to have a brave unit of about six to seven people looking after the Commonwealth, struggling over the years and not getting much interest, and now there are more than 60 officials working in the Cabinet Office and a special unit directly under the Prime Minister, in preparation not only for the summit but for a vast expansion of bilateral links with the Commonwealth network throughout the world.

This has all taken a long time. Twenty-two years ago some of us put forward a report in the House of Commons saying that the Commonwealth was going to be the new thing; that the general view that it was of the past was wrong; that it was full of potential; that the great new markets of the world would link up with the Commonwealth; and that we should put it at forefront of our thinking. No one took the slightest notice in those days—it fell on completely fallow ground—and the media were deeply uninterested. The late 1990s was a low point in interest in the Commonwealth.

Why has it changed, as it has, in the past year or two? Obviously the Brexit story has wakened a lot of minds to the potential of the Commonwealth and the realisation that it is where the great new markets will lie. Also, the simple fact is that trade with the Commonwealth over the past 20 or 30 years, particularly with Africa, has been rather small. It was falling from the much higher levels of the post-war years to very low levels—and small trade means small interest. The statistics are rather minimal: 9% or 10% of our total trade was with the Commonwealth, and considerably less with Africa.

My message this evening is simply: do not look at the trade statistics, look at the trends. The trends are moving very fast indeed and unless we keep up with them, we will find ourselves badly wrong-footed. The trends point strongly all the way to the Government’s correctness in being more interested by the day in the Commonwealth network and in seeing the Commonwealth as part of our UK policy in the future rather than as a sideshow.

Why? There are six reasons. First, the Commonwealth turns out to be, in this age of connectivity, a gigantic transmission engine of our soft power—which is considerable, which we have not applied nearly effectively enough and which we can now deploy much more effectively.

Secondly, there is the Commonwealth network—and it is a network. It is not a matter of bilateral links between Britain and 52 countries but a network between 52 countries, which adds up to about 1,376 different network connections. It is a gateway to the new markets of Asia and Africa and to the supply chains that have now developed in the digital age. These are completely different from the trade patterns of even 20 years ago. They wind through Africa, Latin America and Asia; we are a part of them and Africa is increasingly becoming a part.

Thirdly, the trend is towards services. We live in a gigantic service economy. Knowledge and data transmission products dominate world trade, earning, according to McKinsey, more resources and returns than physical trade by containers, railways and so on. There is a huge change there. What is the best transmission mechanism for services? The English language is a wonderful incentive and a fertile ground for expansion of services, and that is what we will see not only in Africa but in other parts of the Commonwealth as well. That is where our service trade will prosper most.

Fourthly, there is its connectivity. Contrary to the mythology of Africa—that it is backward, moving slowly and so on—it is alive with developments in mobile technology. Kenya is one of the most advanced countries in the world in that, as is South Africa. The mobile telephone, the iPad and the world wide web have brought about a total transformation of the African economies. Our supplies of equipment, knowledge, communication and technology are very important and growing more so in that area. We will do increasingly well the more we concentrate on it.

Fifthly, there is the China factor. This does not much feature in a lot of the briefing I have seen for this debate, but everyone is interested in trade with China. China is deeply involved in almost every economy in Africa and we have to work alongside China and, in many cases, have a triangular relationship with it when developing joint projects in a way that we would never have dreamed of doing in the past. This is the new pattern of the future. China and to some extent India are both deeply involved in Africa, so we have to be involved with China and India to be effectively involved in Africa.

Sixthly, the simple fact is that Africa is expanding. It is heading for a population of 400 million people by 2025 or 2030, so it is a colossal new market and one in which we would be very foolish to be running behind; we have to run ahead. We have this marvellous instrument of the Commonwealth network, which, although neglected for years, we can now pick up and use to connect with the 19 African countries that are members of the Commonwealth and, of course, their neighbours, two or three of which are looking over the wall into Rwanda and other successful economies and saying, “Why can we not join the club as well?”.

I shall say a final word in my eight minutes on the scene in Zimbabwe. It is a gigantic country that is miserably run down and has been misruled over the years. Nevertheless, the nation has maintained real educational excellence. How the Zimbabweans have done it amid all that deprivation I do not know, but it is an amazing achievement. The Zimbabweans are the best educated people in Africa, and that is where we can help. In due course, when things settle down, and if they go the right way with democracy developing in the country, I should like to see Zimbabwe apply to rejoin the Commonwealth, of which it was once a member. I hope that it does so when the time is ripe. In the meantime, if we really want to help—not to interfere but to help—it will be through educational support, technology, research and the soft power developments, on which we can do an enormous amount. In that way we can help this great country to return to the prosperity it deserves and which it can certainly achieve. This is a fascinating scene and it is one more area where we need to be ahead of the curve, rather than behind it. We should not look at the statistics of the past, which are miserable, but at the trends of the future, which are extremely exciting.

Brexit: World Trade Organization Rules

Lord Howell of Guildford Excerpts

Monday 19th December 2016 Lords Chamber

[Lord Price]

I agree with the noble Lord that our ambition should be to increase our exports. At the moment the UK, regrettably, bats below where it should. We are sixth in the league table, below France and Germany, and we hope to rise above that through a number of initiatives. Pursuing all trade options with all countries should be the Government’s approach, to make it easy and straightforward for businesses to export and to make sure that we are equally open to other businesses, both in the EU and elsewhere, which want to export into the United Kingdom.

[Lord Howell of Guildford (Con)]

My Lords, further to my noble friend Lord Spicer’s question, as we are now told that more than half the total earnings of world exports come from services, intellectual property, information products, digital transfer and shared processes and not from traditional goods transfer, are we not reaching the point where the WTO rules—let alone the more outdated rules of the former single market and the customs union, which belong to past trade patterns—are of decreasing relevance to our trade prospects?

[Lord Price]

The noble Lord is certainly right that services are an increasingly important part of the UK economy, representing 80% of our GDP and 40% of our exports to the EU. However, I would not want to diminish the importance of goods transfer. The north-east of England is the second largest exporter of cars in the EU—it exports more cars than Italy. It is important for us to hold on to the fact that we produce goods in the UK and export goods from the UK. That must not be diminished as we pursue our agenda to increase our services around the world.