Commonwealth - Motion to Take Note

Part of the debate – in the House of Lords at 2:35 pm on 16th March 2017.

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Photo of The Earl of Sandwich The Earl of Sandwich Crossbench 2:35 pm, 16th March 2017

My Lords, it is a pleasure to hear and to follow the wise words of my old friend the noble Lord, Lord Goodlad.

The Minister has set out the ideals of the Commonwealth with her usual care, attention and deliberation, for which we are grateful. She has chosen an opportune time for this debate as we withdraw from the European Union. It is now fashionable—and we are hearing some of this today—to seize the moment of Brexit and call it an opportunity for all sorts of new trading arrangements, most notably with the Commonwealth, which is seen once again as a golden global alternative to the European Union.

When my father was a prominent anti-Marketeer in the 1960s, he and his “Suez group” used to talk endlessly about Commonwealth preferences and say that our EU membership was selling our oldest Anglo-Saxon cousins and ex-colonies down the river. I was sailing firmly in the opposite direction, studying the EU’s institutions and European languages, determined that we in the UK should stop pretending to be a world power and recognise the realities of our position between Europe and the Atlantic. This is the view that I broadly hold to today.

Now that we have moved on, I want to scrutinise the negotiations very carefully, particularly on trade. I know that by leaving the European Union, which, although it needs radical reform, I still believe to have been a foolish decision, we and our overseas partners are likely to incur enormous losses if we are not careful, as well as finding so-called opportunities, and we have to recognise that. However, as the noble Lord, Lord Howell, said, it is not an either/or situation. I am a tremendous fan of the Commonwealth. I have lived in India and visited many Commonwealth countries. The Secretariat has reminded us of the many aid and technical assistance programmes the Commonwealth already offers to developing countries to improve their trading positions.

I spoke during Second Reading and Committee of the withdrawal Bill on the effects of Brexit on the poorest developing countries. The jury is, of course, still out on the true costs, and will be out for some months to come. However, already the Overseas Development Institute and others have estimated that poor countries will lose hundreds of millions of pounds currently received from Europe under the various treaties and conventions mentioned by my noble friend Lord Waverley. Therefore, I looked eagerly through the Secretariat’s briefing for any signs to the contrary, but according to it, too, Brexit could cost Commonwealth developing countries as much as $800 million if comparable EU preferences are unavailable, and that is a big if.

I received some reassurance in a letter on 9 March from our Brexit Minister, the noble Lord, Lord Bridges of Headley, which states:

“The Government is committed to ensuring developing countries can reduce poverty through trading opportunities”.

He also says:

DIT and DflD are working closely on the UK’s future trade policy”.

I am comforted by this, and I am quite sure that he and his fellow Brexit Ministers genuinely want to ensure that the trade interests of the poorest countries are properly protected.

But how can this best be done? The right reverend Prelate and the noble Lord, Lord McConnell, have already pointed the way. It seems to me a very powerful argument—namely, to place the 17 sustainable development goals and their related 169 targets much higher on the Commonwealth agenda, and the agenda of the next CHOGM in particular. In this way, Commonwealth members can all be aware that poverty reduction is the central focus for any aid or trade arrangements. This applies in particular to smaller and island states—highlighted by the noble Baroness, who has visited some of them—and to countries most affected by civil war, climate change and natural disasters.

This will also imply a much greater use of DflD funds to offset some of the losses in trade which we know will occur. The use of the Commonwealth Development Corporation could be helpful here. If the CDC is genuinely linked to poverty reduction, as it is attempting to be, then the use of the private sector in strengthening infrastructure such as rural roads and in other ways stimulating local economies and small businesses, for both men and women, in the poorer Commonwealth countries will be vital.

Some countries—not just small ones—are still highly dependent on the UK and are likely to remain so. There are three Commonwealth developing countries that send a substantial proportion—over 19%—of their total world exports to the UK: for Botswana, it is over half, or 54.4%; for Belize the figure is 22.7%; and for the Seychelles it is 19.3%. The UK takes more than 70% of the EU exports of two small island states, St Lucia and Tuvalu.

The question of free trade agreements came up in our own EU External Affairs Sub-Committee report, published last December, but the Government’s thinking has moved on since then. The subject cropped up again during the Commons International Trade Select Committee’s first inquiry into the UK’s trade options post-2019, published on 7 March. That committee is quite clear that, although free trade agreements and the new WTO arrangements, mentioned by the noble Lord, Lord Howell, may work for the EU and developed countries, they can actually be to the detriment of some developing countries.

The committee was reminded by the Fairtrade Foundation that economic partnership agreements offered by the EU were resisted by many developing countries, which had to sign them under threat of tariff imposition. A much fairer solution, argued by all the major aid agencies, would be to offer non-reciprocal, tariff-free access to the most vulnerable countries, including the least developed, which currently benefit from everything but arms agreements and the generalised system of preferences—GSP Plus.

Although I know that the Minister can give no guarantees, I am sure that when she winds up she will want to make the connection between aid and trade as one response to the detrimental losses that will be caused by Brexit. She will, I feel, also want to mention the benchmarks set by the SDGs in relation to our trading arrangements with all these countries. I look forward to hearing that that is indeed the case and being told what the Government are working on.

Finally, I want to say a word about Nepal. The noble Baroness, Lady Anelay, has heard this once or perhaps twice before, but I remain firmly of the view that Nepal should be encouraged to apply to join the Commonwealth. I have been in touch with our ambassador in Kathmandu about this over a long period, and he is coming to London next week. I simply urge the FCO to do all it can to persuade the Nepalese that it would be in their best interests to join. It is a very independent nation. It does not want to be seen as a former colony or anything like that, but it needs to be encouraged, quite soon after its own difficulties and civil war, to accept that this would help it move forward.