G7 Summit

Viscount Trenchard Excerpts

Thursday 26th November 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, today it is increasingly the Indo-Pacific that holds the keys to global stability and prosperity. An international commission established by Policy Exchange has put forward the idea of an Indo-Pacific charter, modelled on the Atlantic Charter. Does the Minister agree that Britain should seek G7 backing for an Indo-Pacific charter, as already endorsed by Stephen Harper, Shinzō Abe and Scott Morrison? Does he also agree that our playing a leading role in that would fit well with our intended accession to CPTPP, signalling our repositioning as “global Britain”?

[Lord True (Con)]

Again, my noble friend touches on very important aspects of international relations for this country and within the G7. But, as I must repeat to the House, the detailed policy agenda is being discussed with G7 partners and will be announced by the Prime Minister in due course.

EU: Future Relationship

Viscount Trenchard Excerpts

Wednesday 23rd September 2020 Grand Committee

[Viscount Trenchard (Con)]

My Lords, I thank my noble friend the Minister for giving your Lordships a chance to discuss the Government’s approach to the negotiations with the EU, of which the eighth round has recently completed. Like my noble friend Lord Wei, I believe that the House should offer its strong support to the Government at this delicate stage in negotiations. In spite of the hype and noise made by certain newspapers, especially those of a remain disposition, I believe that the negotiations are being conducted in a more constructive mode than some would have us believe.

My noble friend Lord Frost stated after the last round of negotiations that he and his team have been consistently clear that they want to find a modern free trade agreement between sovereign and autonomous equals that provides for open and fair competition. This does not mean, as Monsieur Barnier still insists, that we must commit to EU standards on social, environmental, labour and climate regulations. He complains that there are too many uncertainties about the UK’s SPS regime, which we debated yesterday in your Lordships’ House. It is unfortunate that noble Lords opposite decided to reinstate amendments previously rejected in another place to commit to retain our existing rules on animal welfare and food production standards. Your Lordships also approved another amendment which, as my noble friend Lord Taylor of Holbeach, who speaks with enormous experience in these matters, said, would make it impossible for farmers to control noxious and persistent weeds and fungal infections on his farm.

Monsieur Barnier wants us to commit to maintain the EU ban on the import of hormone-treated beef. To read the Daily Mail, you would not know that the reason the WTO found that the EU ban on this violates its SPS rules is that it is not based on sound science and that levels of hormones as a result of the treatment are inconsequential. A 3 gram serving of hormone-treated beef produced 0.85 units of oestradiol, whereas the same serving of eggs produced 0.94 units.

During my banking career, I established many relationships with Japanese companies, including a life sciences company that is a major investor in this country and in several EU states. The chief executive of that company told me that he was not best pleased when Brexit came along because he had to spend $7 million on duplicating licences and strengthening his network of companies in Europe. He has now told me that he expects an upside of Brexit: that we should abandon the very prescriptive and cumbersome style of EU regulation and revert to a style which we used to apply, and which is still applied in common-law countries such as the United States and Australia. If we do that, he thinks that the United Kingdom will remain the best country in the world in which a life sciences company like his can research, innovate and develop new products.

That inevitably means that we should diverge from EU regulation, as we must no longer allow the precautionary principle to be applied to a disproportionate extent. Its effects are counterproductive and, over time, increase the risks to people’s health and the environment by delaying or preventing the development and use of beneficial new products. Can my noble friend the Minister confirm that the statements often made by government spokesmen that we will retain our high standards in agricultural and environmental matters do not mean that we will maintain EU-style cumbersome rules in doing so?

I was surprised to hear the noble Lord, Lord Liddle, argue that we are more like our European friends than our American cousins—I do in fact have American cousins. Our strength has been, and is, that we understand both well.

We will soon be debating the internal market Bill in your Lordships’ House. I welcome the Government’s agreement to provide a parliamentary lock on the use of powers which are held to conflict with the Irish protocol to the withdrawal agreement. However, there are ambiguities in the withdrawal agreement that need clarification. The EU’s interpretation would also be in breach of the treaty of union between Great Britain and Ireland of 1800. The Irish protocol also sets out the clear principle that Northern Ireland is part of the customs territory of the UK, so goods should be allowed to flow from Great Britain to Northern Ireland without tariffs. Joint agreement with the EU on goods that are at risk of crossing the Irish border is clearly necessary. It was unhelpful of Mr Šefčovič to react so strongly. How can he argue that the proposal has damaged the Belfast or Good Friday agreement? The introduction of border formalities such as the EU wants to see would clearly cause huge damage to the agreement, and it is disingenuous of the EU to fail to recognise that.

Further, does my noble friend the Minister know why the EU did not punish Germany over its dispute over the legality of the European Central Bank’s bond-buying programme? In fact, the EU has been quite silent over this issue, which contrasts with its feigned outrage over the internal market Bill. Everybody knows that we are negotiating to leave the EU and enter into a free trade agreement as a sovereign nation. The Prime Minister has been consistent from the time he signed the withdrawal agreement that we will not have a substantive border in the Irish Sea, so who could be surprised at this? I do not believe that this matter will lead our present and prospective trading partners to consider the UK to be a dishonest and unreliable partner.

Of course, it may have been a mistake to agree to the EU’s insistence that we should negotiate the terms of withdrawal before our future relationship. Does my noble friend not agree that this was also a breach of international law, because Article 50 of the Lisbon treaty clearly states that the terms of withdrawal shall be negotiated against the background of the future relationship? It is now so clear that it was quite wrong not to agree both the terms of withdrawal and our future relationship at the same time. Perhaps we might not have needed to agree to give to the EU the whole of our share of the retained earnings of the European Investment Bank, to mention but one of the several points where we have yielded to unreasonable EU requests.

I look forward to the Minister’s winding-up speech.

Office for Veterans’ Affairs

Viscount Trenchard Excerpts

Wednesday 9th September 2020 Lords Chamber

[Lord True (Con)]

My Lords, the position of Commonwealth veterans is of great importance. The Government highly value the service of all our veterans, including Commonwealth nationals and non-UK personnel. For example, Ministers are continuing to discuss visa fees with the Home Office, and I am confident we will find a positive outcome.

[Viscount Trenchard (Con)]

My Lords, I declare my interests as deputy chairman of the Royal Air Force Benevolent Fund, which in 2019 distributed £28 million in support of 70,000 members of the RAF family. To what extent will future funding become available to enable the Armed Forces charity sector to continue to deliver the emotional, practical and financial support that our Armed Forces veterans have come to rely on, especially as charitable income has been affected so significantly by the impact of Covid-19?

[Lord True (Con)]

My Lords, the work done by charities such as that my noble friend is associated with is vital. As a supporter of some of those charities, I know what good work they do. In June we announced that 100 UK Armed Forces charities would benefit from nearly £6 million of extra funding to support serving personnel veterans and their families during the Covid pandemic. I hope that is a sign of the importance the Government attach to this work.

Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020

Viscount Trenchard Excerpts

Wednesday 2nd September 2020 Grand Committee

[Viscount Trenchard (Con)]

My Lords, I thank my noble friend the Minister for introducing the debate today. It is good news to know that the Government are taking the necessary steps to ensure that a coherent and functioning financial services equivalence framework continues in the UK after the end of the transition period.

The position is complicated by the fact that the EU’s single market in financial services is only partly developed. It is therefore necessary for the Treasury to determine whether or not each member state has an equivalent regulatory regime for a particular firm or product to that which applies in the UK.

There are several problems with this approach. First, does it mean that arrangements similar to the EU passport system for particular individual firms are to be continued? Secondly, the products referred to in the SI seem to conform to the categories of products—or, rather, services—covered in individual European regulations. Would it not be simpler for the UK to set out its own regulatory regime based on equivalence of outcomes, and to allow all regulated service providers in a particular category to operate in the UK subject to satisfactory co-operation arrangements being established between the relevant member state or EEA country regulator and the FCA or the Bank of England?

Presumably, ESMA also needs to be involved, because it has taken over many powers from the member state regulators and will doubtless continue to expand its area of control. It may not be just ESMA: perhaps the EBA or EIOPA is the relevant European regulator for the firm or product concerned.

The SI does its job in avoiding a cliff edge and providing stability and continuity for financial companies and markets in the UK after the end of the implementation period. However, is it sensible to continue to grant equivalence on the basis of single European regulations? Going forward, do we want a regulatory system that is a clone of the EU system? How are we going to make equivalence decisions in respect of financial firms from third countries such as the United States, Japan and Australia, and others whose regulatory systems are not based on prescriptive EU-style legislation?

Many smaller British firms have been forced out of business or to merge by the cumbersome rules and excessive costs forced on them by European directives such as the AIFMD and MiFID II. To ensure that the City of London will preserve and further consolidate its position as the world’s leading and most competitive financial centre, does it not need to move away from the cumbersome European system and adopt a simpler, rules-based proportionate system which would allow innovative new products and markets to develop?

Does my noble friend the Minister not agree that the Government cannot legislate only for continuity EU-UK arrangements but must do more to set out their stall and attract financial services companies from third countries as we again take responsibility for our own regulatory policy and framework, and as we start to play a bigger part, commensurate with the size of our markets and the skills of our practitioners, in the development of common international regulations through IOSCO and other bodies?

Parliamentary Constituencies Bill

Viscount Trenchard Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Monday 27th July 2020 Lords Chamber

[Viscount Trenchard (Con) [V]]

My Lords, I thank my noble friend the Minister for introducing this Second Reading debate. In general, I welcome the Bill and it is well overdue.

I am not sure that the reasons given to overturn the decision to reduce the number of MPs from 650 to 600 are very convincing. There are many parliamentary democracies with larger populations but smaller numbers of elected representatives than is the case with our House of Commons here at Westminster.

A better reason for retaining 650 seats is that it should allow more existing constituencies to continue with their current boundaries, or with relatively minor changes. The continuing coherence of our parliamentary constituencies is more important than it is given credit for in most commentary on the Bill that I have read. The previous proposals under the Boundary Commission’s report of 2018 would have resulted in the boundaries of a large number of constituencies no longer corresponding precisely to local authorities’ boundaries. This would have been regrettable.

I have been president of the North East Hertfordshire Conservative Association for many years. Our members were not at all happy that the constituency was to be renamed Letchworth and Royston, because it was expected to incorporate small parts of both Bedfordshire and Cambridgeshire. There are other towns in the constituency with their own characteristics, and very many electors did not identify with either Letchworth or Royston.

Most people still identify with their county. It was a pity that, under the 2018 plan, many constituencies would have had to drop the reference to their county from their new name. My Member of Parliament, my right honourable friend Sir Oliver Heald, at present has to deal with only Hertfordshire County Council and two district councils, North Hertfordshire and East Hertfordshire. Under the 2018 plans, he would also have had to deal with councils in both Bedfordshire and Cambridgeshire.

I have some sympathy with those who believe that there should be slightly more flexibility than the maximum 5% deviation from the average electorate to ensure that there is a smaller number of incoherent constituencies crossing local authority boundaries. Indeed, one of the strongest arguments for the first past the post system, which I support, is that there is one Member representing all electors in one coherent single-Member constituency.

I ask my noble friend to confirm that, at present, the high sheriff of a county is the returning officer for all parliamentary constituencies in his or her county. Where a constituency will in future straddle two counties, who will decide which of the two high sheriffs will discharge this duty?

I am generally happy and agree with the Bill’s other provisions.

EU: Customs Arrangements

Viscount Trenchard Excerpts

Wednesday 8th July 2020 Lords Chamber

[Lord True]

My Lords, again, that is slightly wide of the Question. The treaty to which the noble Lord refers is one under which arrangements subsist between the Governments of the United Kingdom and France. That is the position. I hope we will be as well prepared as any nation.

[Viscount Trenchard (Con)]

My Lords, I have heard that the United Kingdom is to introduce border checks in three phases over the first six months of next year. Can my noble friend the Minister tell the House if the phased approach will definitely be complete by July, and whether the Government have taken legal advice as to whether their approach is compatible with WTO rules?

[Lord True]

My Lords, the Government are convinced that the arrangements are both deliverable and defensible. The Government’s intention is to be pragmatic. The phased arrangements have been widely welcomed by business and industry, but we intend to operate to those dates and phases.

Covid-19: Public Wealth Investment Fund

Viscount Trenchard Excerpts

Tuesday 9th June 2020 Lords Chamber

[Lord Agnew of Oulton [V]]

I will have to write to the noble Lord to provide specific information on that.

[Viscount Trenchard (Con)]

My Lords, if the Government were to establish a sovereign wealth fund, might one of its objectives be to invest in major infrastructure projects, such as the currently suspended Horizon Nuclear Power project at Wylfa, Ynys Môn?

[Lord Agnew of Oulton [V]]

Infrastructure is a vital part of rebuilding from this crisis. I am unsure at this stage whether it will be done through the mechanism of a sovereign wealth fund. At the moment, we have the opportunity as a national Government to borrow cheaply, which, if invested well in infrastructure, could be a simpler approach than a sovereign wealth fund.

Beyond Brexit (European Union Committee Report)

Viscount Trenchard Excerpts

Tuesday 12th May 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I am grateful to the noble Lord, Lord Boswell, for introducing this debate, even if his committee’s interesting report was published 14 months ago. Much has changed since then. We have a new Prime Minister who has successfully negotiated a new withdrawal agreement, and the country has left the EU, at last delivering on the decision of the British people and fulfilling the promise made by the Government led by David Cameron.

Nevertheless, much of the report remains valid, and the committee has served your Lordships’ House well. The report deals extensively with the need to deploy whatever influence we can on our erstwhile EU partners during the implementation period. It recognises that our direct influence on the framing of EU laws and regulations has diminished because we are no longer in the room with the EU institutions. Does the Minister agree that the report should perhaps have recognised that this loss of influence at the EU level will be compensated for by the increase in influence at the global level where we will, just as soon as the implementation period is over, be in the room in our own right as a sovereign independent nation?

In many areas, rules and regulations are increasingly set at the global level, and we now have an opportunity to play our part in ensuring that the development of the global trading system continues to be based on rules-based competitive free trade and mutual recognition of equivalence of regulatory outcomes. We can be a strong advocate for the adoption of proportionate regulation which gives less weight to the precautionary principle and encourages innovation. In this endeavour, our natural allies will be the United States and Japan, as well as our Commonwealth partners, including Australia, New Zealand, Canada and Singapore and the other members of the CPTPP, and I trust the Minister will confirm that we will seek early accession to it.

Budget: Economic and Fiscal Outlook

Viscount Trenchard Excerpts

Tuesday 5th May 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I am grateful to my noble friend Lord True for introducing this rather odd debate today. It is indeed strange that the UK is still required to submit information on its medium-term economic and fiscal position to the EU, although we left the EU more than three months ago and the implementation period will end on 31 December this year, as the Prime Minister has made clear on many occasions. It is of course also strange that the Treasury has said that it will produce a convergence programme based on the spring 2020 Budget and on the OBR’s economic and fiscal reports. As noted by other noble Lords, all these economic plans are out of date in that they do not take account, or take only limited account, of the economic impact of the coronavirus pandemic.

I have spoken in this debate many times in the past, especially during the period when my noble friend Lady Noakes was a shadow Treasury Minister. I wanted therefore to participate in this debate for the last time.

To those who argue that the coronavirus pandemic provides a reason why the Government should move to amend the withdrawal agreement Act so as to make possible an extension to the implementation period beyond the end of this year, I say that the reverse is true. The additional challenges faced by the economy as a result of the pandemic make it all the more essential that we bring to an early end the present highly undesirable situation where we have left the EU formally but remain bound by all its laws and regulations, even though we no longer have any representatives in EU bodies and have no influence whatever on which regulations are adopted.

Can the Minister please explain why, just because we are currently operating virtually, we are now subject to extremely restrictive speaking time limits? This debate has never been time-limited before. Without wishing to belabour your Lordships, I would have liked a little more time to explain the reasons why I believe that our new independent trade policy will provide a much better platform for us to rebuild the economy and create a prosperous future for all our people. We will be a strong advocate for competitive free trade and a proportionate regulatory policy at the WTO, and an equally strong advocate for open, innovative financial markets such as IOSCO playing a greater part in building the right regulatory framework for our global marketplace, within which I believe the City of London will surely maintain and build further on its leading position.

European Union: Negotiations (European Union Committee Report)

Viscount Trenchard Excerpts

Monday 16th March 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Falkner. She made some very interesting new points to inform your Lordships’ debate. I thank the noble Earl, Lord Kinnoull, for introducing this debate. His committee rightly concludes that the recent Council decision raises matters of vital national interest.

I believe that the matters that the committee raises are not exactly new, because we have been debating them since before the referendum of 2016 and, indeed, before that. Indeed, a majority of the electorate voted to leave because they considered that remaining in the EU raised matters of vital national interest. They thought that reclaiming our right to have our laws made in this Parliament by MPs accountable to the British people was one of these matters.

I am sure that your Lordships are grateful to the noble Earl’s committee for its report and for promoting debate on our EU negotiations, which will, whatever their outcome, profoundly and permanently change the United Kingdom. However, even if we had not left the EU, the continuing incremental transfer of competences to the European institutions would have continued to profoundly and permanently change the country.

I regret that the negotiations leading to the withdrawal agreement were conducted ahead of and separately from the current negotiations on our future relationship with the EU. As your Lordships know very well, Article 50 states that the negotiations on the withdrawal of a member state shall take account

“of the framework for its future relationship with the Union.”

My understanding is that it was expected that the framework for the future relationship would be agreed at the same time as the withdrawal agreement. Article 50 does not suggest or imply that there should be two separate sets of negotiations or agreements. The EU insisted that we should agree the terms of withdrawal first, dealing with the future framework in the separate and non-binding political declaration.

The political declaration, as your Lordships are well aware, provided for a number of possible outcomes, ranging from continued close alignment with EU laws and regulations, to a clean break with full restoration of national sovereignty but also starting from a point where our legal and regulatory systems are identical.

The Conservative Party manifesto—on which the new House of Commons was elected—made it very clear that the Government would seek a future relationship with the EU based on a free trade agreement similar to that enjoyed by Canada; leave the single market and the customs union; and not agree to the continuing jurisdiction of the ECJ in this country. The Prime Minister made it clear in his Greenwich speech that if the EU would not agree to an FTA similar to that which it has with Canada, the UK would seek trading arrangements similar to those which the EU has with Australia.

I am opposed to the amendment of the noble Baroness, Lady Hayter, which seeks to exercise control over the actual process of our negotiations, or even debate the terms of emerging agreements. This would detract from our negotiator’s ability to obtain the best possible result for the UK and make it more likely that we will not be able to reach agreement with Mr Barnier and his team. I therefore urge your Lordships to reject this amendment, which, if agreed, would send the wrong message to the EU, and damage the authority of Mr Frost and our negotiating team.

One area where the Government’s Command Paper differs significantly from the EU’s decision is state aid. Indeed, the amended text of the decision adopted on 25 February implies not only that the EU will require the UK to continue to apply existing state aid legislation, but that it will be expected to adopt new or amended EU state aid rules in future. But the UK is very far from being the worst culprit of the excessive use of state aid. As the Prime Minister pointed out, and as the noble Baroness, Lady Falkner has just reiterated, the EU has enforced state aid rules against the UK only four times in the last 21 years, compared with 29 enforcement actions against France, and 67 against Germany. The recent hardening of the EU’s position on state aid will make it very difficult to reach agreement on a satisfactory FTA within the time available.

I would like to say a few words about services, especially financial services, based on more than 40 years’ experience as an investment banker. The political declaration suggested that the EU and UK should seek close and structured co-operation on regulatory and supervisory measures, including by working together in international bodies. As a member of the committee’s Financial Affairs Sub-Committee, formerly chaired by the noble Baroness, Lady Falkner, and now chaired by the noble Lord, Lord Sharkey, I can confirm that we have discussed this matter to a considerable extent. Our witnesses have included the present Governor and the Governor-designate of the Bank of England. Both have expressed the view that we should not be a rule-taker from the EU and should in future adopt a regulatory regime which recognises London’s connections with other important financial markets, such as New York and Tokyo.

I regret that the EU did not match our decision to grant temporary equivalence to EU clearing houses for two years, but was willing to grant this only for one year. Does the Minister concur that, in agreeing the basis of granting and withdrawing the recognition of equivalence in financial regulation, we should not establish a cumbersome and bureaucratic bilateral structure for assessing divergence with the EU which would, in effect, tie our rule-making more closely to Brussels than to other important financial markets, such as those of the US and Japan? Does he also agree that in future the UK should seek to maximise its influence in establishing best practice and designing proportionate regulation at the global level, through bodies such as the International Organisation of Securities Commissions, IOSCO? There are several EU financial rules, such as AIFMD, Solvency 2 and MiFID 2 which contain elements which we tried to resist and from which we may wish to diverge. If the structures we agree with the EU unduly restrict us from divergence, it will complicate our freedom to reach agreements on regulatory equivalence with third countries such as the US and Japan.

I agree with the former Chancellor who called for a durable equivalence relationship, whereas the EU has stated that its equivalence decisions can be withdrawn at 30 days’ notice unilaterally, as it has done in the case of Switzerland. This has increased the cost of trading in Swiss stocks, especially in the case of smaller companies.

On defence, the Government’s Written Ministerial Statement contains no specific reference to defence but states that foreign policy alignment, which is likely to be substantial, does not in itself require a joint institutional framework. However, the EU’s decision reflects the political declaration in agreeing that the UK may co-operate in certain projects under the European Defence Fund and PESCO. Our Armed Forces enjoy a close collaborative bilateral relationship with those of France. Does the decision mean that UK-France defence co-operation will be possible only under the framework of the EDF or PESCO in future? Does that mean that in order to co-operate, British forces could work with French forces only under the command of a European general?

[Lord Hannay of Chiswick]

Perhaps I can give the noble Viscount an answer to his question. The answer is no, it does not mean that. It could only mean that if the French agreed to make it mean that, and they will not.

[Viscount Trenchard]

I thank the noble Lord for his assurance.

As noted in paragraphs 34 to 40 of the report, the decision envisages an overall institutional framework, which suggests the EU wishes to enter into an association agreement. Does the Minister agree that such an arrangement would be inconsistent with the Written Ministerial Statement, which proposes a suite of agreements appropriate to a relationship of sovereign equals? Will he confirm that the Government have made it clear to the EU negotiators that the UK will not entertain such a semi-detached continuing relationship with the EU which would make it impossible for this country to respond positively and flexibly to the opportunities that our new freedoms to pursue an independent trade and regulatory policy will provide?

I much look forward to other noble Lords’ contributions and especially to my noble friend’s winding-up speech.