Amendment 24

Trade Bill - Report (2nd Day) – in the House of Lords at 5:00 pm on 13th March 2019.

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Lord Fox:

Moved by Lord Fox

24: After Clause 5, insert the following new Clause—“Trade agreement with the EU: mobility frameworkIt shall be the objective of the Secretary of State to take all necessary steps to secure an international trade agreement with the European Union which includes a mobility framework that enables all UK and EU citizens to exercise the same reciprocal rights to work, live and study for the purpose of the provision of trade in goods or services.”

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

My Lords, on Report your Lordships have already voted through an amendment that creates a process for Parliament’s involvement in setting a mandate for future trade deals and for helping to approve a final deal. Separately, your Lordships have made clear a strong preference for the UK remaining in a customs union. In part, this amendment is the third part of that and is intended to set the scene for the long-term future relationship between this country and the EU. I am grateful to the noble Baroness, Lady Bull, and the noble Earl, Lord Clancarty, for their support for this amendment.

The amendment sets out an objective for a future EU trade deal: a mandate to include,

“a mobility framework that enables all UK and EU citizens to exercise the same reciprocal rights to work, live and study for the provision of trade in goods or services”.

That reciprocal nature recognises one important fact: not allowing or enabling EU 27 people to work and trade in the United Kingdom will mean no such rights for UK people in the EU. By voting for this amendment, your Lordships would create the best possible chance for talented men and women in the UK to work, and continue to work, and offer their services within the EU 27, and of course it would be a win-win scenario. On the other side of such an arrangement, we would continue to welcome into this country people who contribute positively to our economy and our social fabric. Their skills make a positive difference.

In Committee, I outlined at some length, and according to the Government’s own advisers, the positive role that people from the other 27 EU countries play in this economy. Noble Lords will be relieved to know that I will not replay those arguments today, in part because in no measure were those facts challenged during that debate. There has been a net benefit to the UK from the activities of EU 27 citizens here. My speech also acknowledged that issues were thrown up by migration in some communities and that those issues have not been sufficiently recognised and dealt with by successive UK Governments. The benefits of those EU citizens working in the UK have also been insufficiently recognised publicly by successive Governments.

In Committee, the Opposition Front Bench spokesman, the noble Lord, Lord Stevenson, spoke about the appearance rather than the reality of unbridled immigration, and that refers back to the point that I have just made. Although I recognise that this perception is very important and that Governments have to do something about it, I do not believe that we should be put off from doing the right thing and supporting the amendment. I hope that, by doing so, we will demonstrate the value that we place on mutual agreement and on the mutual opportunities that we can create for our people, our businesses and our communities.

As for the Government, I did not notice a great warming to my argument in Committee, although I always foster hopes. However, I appeal over the heads of the Front Bench to your Lordships to see the value in this amendment. Supporting it would be a major step towards setting out the mandate for UK negotiators. It would signal what sort of country we want to live in and it would reject one of Mrs May’s red lines. Opposing the amendment or sitting on one’s hands would pander to the false picture of the role of immigration in our society and would impair the UK in so many ways, not least in trade. I beg to move.

Photo of Baroness Bull Baroness Bull Crossbench

My Lords, I have added my name to this amendment because I believe that it is vital to preserve mobility rights and, in doing so, protect some of the UK’s most productive sectors.

I have noted before the relative silence on trade in services in the Brexit conversation. Attention has been focused on the at-the-border issues associated with trade, rather than the more complex behind-the-border issues of domestic rules, regulations and qualifications, which are germane to trade in services. As I have said before, this silence is particularly hard to understand, given services’ contribution to the UK. They account for over 40% of total exports, 80% of the UK’s GDP and four in five jobs across the country. The largest single destination for UK services is the EU, worth £90 billion annually.

If services have been treated like the second son, mobility has been the Cinderella of the story, pushed from the start to the wrong side of what some of us see as a wrong-headed red line. There is, of course, an inextricable link between mobility and services. Services provided in this country, such as tourism or higher education, depend on inward mobility. Service packages linked to goods, such as maintenance contracts, depend on outward mobility. Services delivered in the consumer’s country are often provided on a fly-in, fly-out basis, and the scale of this trade is significant. The CBI reports that employees of just one firm undertook 17,000 trips from the UK to the EU and 10,000 in the opposite direction in a single year.

The complex interdependencies between services, goods and people are exemplified in the outputs of the creative and cultural sectors. I make no apologies for mentioning this once again today. The creative industries are responsible for 10% of UK service exports, are creating jobs at four times the rate of the wider economy and contribute a staggering £101 billion in GVA each year. Their success has been achieved off the back of the freedom to move people and kit across borders without visas, carnets or tariffs, and to bring in talent from the EU as and when needed, often at ridiculously short notice. In the most economically productive parts of the sector, domestic skills gaps mean that up to 30% of staff are recruited from the EU. Continued mobility post-Brexit is the creative industries’ number one priority.

I want to mention the 1.5 million low- and medium-skilled jobs in the UK currently filled by EU workers. A vast number of business sectors rely on this supply stream for vital roles in teaching, health and social care. We already have workforce shortages and requirements are only going to increase. It is estimated that we will need an extra 650,000 care workers by 2035 to look after our ageing population. With virtual full employment in the UK at the moment, it is not clear where these workers will come from.

I know there are differing opinions in this Chamber on the public’s views on mobility. Indeed, there are differing public views, as noted already by the noble Lord, Lord Fox. But can we focus for a moment on the facts, as contained in the Migration Advisory Committee’s report? There is no evidence that immigration impacts on employment outcomes or wages. Also, as we have heard, immigrants contribute more to health and social care services than they consume.

Finally, let us not forget that mobility works in two ways. This amendment would not only protect the UK services sector, the jobs it provides and the tax revenues it generates, it would preserve the rights to travel, work, learn and trade across borders—rights which all the research shows are foremost among the concerns of young people today. I urge noble Lords to support this amendment.

Photo of The Earl of Clancarty The Earl of Clancarty Crossbench 5:15 pm, 13th March 2019

My Lords, I have put my name to this important amendment and I will speak briefly about services in relation to free movement.

The recent no-deal impact statement says that free movement of people supports services. It would be more correct to say that free movement is intrinsic to services. This is certainly true of the creative industries but also of many other areas of the services sector. As a British IT worker said, “We freelancers export ourselves”. As the noble Lord, Lord Fox, said in Committee, “Trade is people”. Yet, despite their massive importance—the noble Baroness has given us the figures—the services sector is, as Sir Ivan Rogers said at the University of Liverpool in December,

“the dog that has largely failed to bark”— an observation that the noble Lord, Lord Stevenson, also made in Committee. And services continue not to bark. This is deeply worrying.

Of course, Brexit has not yet happened and may still not do so. But it is happening now for British workers who provide services in Europe. One is tempted to call them the canaries in the mine—except we are talking about the endangering of people’s livelihoods. More reports are coming in of projects put on hold and of individual freelancers being told not to bother applying for a job unless they have a European passport, irrespective of the level of qualifications they possess. It is becoming a precondition. For many European companies it will make no difference what kind of Brexit we end up with if it is a Brexit without free movement.

I urge the Minister to look at a video blog doing the rounds on social media. It was recorded in English by an IT agency based in Rotterdam and makes it clear that neither the agency nor their clients can work with you if you are not in Europe—“Europe” of course meaning the single market. The impact statement says that the effects on services will be mitigated by a reciprocal mobility framework. However, in reality, the mobility of British workers abroad will be restricted by the severity of the immigration policy outlined in the White Paper and coming our way in the Immigration Bill—a policy which completely ignores the effect it will have on our service industries and on British workers in Europe. Sir Ivan Rogers said:

“UK service industries’ needs have been sacrificed to the primary goal of ending free movement”.

The amendment also refers to study. Unless we have free movement, I am pessimistic about our membership of Erasmus+ beyond 2020. Look at what happened to Switzerland, which was thrown out of Erasmus when a referendum voted against free movement. After a new agreement, I believe that Switzerland is now back.

There are many important reasons for supporting this amendment. From the point of view of trade, it should be supported not just to protect our valuable trade in services and the increasingly important servitisation aspect of manufacturing, but, importantly, to protect British workers and British jobs.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

My Lords, I have not participated on this subject before, but I listened to the persuasive explanation by the noble Lord, Lord Fox. I note the phrase “mobility framework”, which sounds incredibly friendly. But I will urge my noble friend to reject this amendment. This is not because I want to build a wall or because I think perceptions of immigration have been wholly erroneous—although he quite rightly drew the House’s attention to that. The noble Baroness, Lady Bull, said that we need to talk about facts. I will share a couple of facts, which will take only a minute. The population of the United Kingdom is going up by 1,200 a day: that is, 400 from natural increase, 600 from immigration from outside the EU and 200 from immigration within the EU. So we are putting a small town or large village on the map of the UK every week. The ONS projections are that the country’s population will go up by 7 million to 9 million between now and 2040. Manchester currently has 2.5 million people living in it—so we will have to find homes for three cities the size of Manchester.

The UK will by that stage have overtaken Germany as the most populous country in Europe and England will have overtaken the Netherlands as the most densely populated. That is against the background of a new industrial revolution that it is believed will cause 7.5 million jobs to be either lost or radically altered. I quite understand the wishes of the noble Lord, Lord Fox, and the other movers of the amendment, but this had to be looked at in the round of our demographic future. It is not about whether you arrived here recently, or about your colour, your race or your creed. It is about what will enable our society to operate cohesively and well as we see that scale of arrivals, and that scale of change to the way we live and work.

Photo of Lord Bilimoria Lord Bilimoria Crossbench

I am sorry to interrupt the noble Lord. How can his argument work when, at the moment, we have unemployment at almost 4% and we need the 3.5 million people from the European Union who are over here now? Given an immigration White Paper that says a minimum salary has to be £30,000, and the remarks of the noble Baroness, Lady Bull, and the noble Earl, Lord Clancarty, how will we manage with a slow-growing economy of just over 1% per year, let alone if it should grow faster? We will have an acute labour shortage.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative

I think the noble Lord is completely wrong. I have explained that it looks as though we will lose 7.5 million jobs because of the fourth industrial revolution; that is the first thing. Secondly, there is drastic underemployment among people aged over 50 who, when they try to get a job, cannot do so. It is seen that they have only a few years left to work and so are not reliable; youth is what people look for. There are plenty of available older people, but jobs will disappear. That is why I could not support this amendment unless we had done a lot more work on what the mobility framework advocated by the noble Lord, Lord Fox, really meant.

Photo of Lord Berkeley of Knighton Lord Berkeley of Knighton Crossbench

My Lords, I will depart for a moment from the beauty of facts to perhaps more abstract philosophy. We have heard about the movement of people with respect to the creative industries; there is an important point to make here. I look back over a career that has taken me from being a chorister at the Royal Academy of Music to working at the BBC and the Royal Opera House, working with orchestras, dancers and singers. In each of those cases a very important contribution was made by the movement of people.

I believe that one of the most important aspects of intellect and civilisation—I am sure many Ministers on the Front Bench would aspire to these things—is curiosity. To experience the best aspects of curiosity, you need freedom of movement, freedom of ideas and the freedom to travel. I am privileged in the way my life has been staggeringly enriched by the movement of people, whether it is my ability to go to a concert in Vienna next month where my music will be played, and another in Budapest, or people coming here to perform. These are people from whom I have learned so much, people such as György Ligeti or Witold Lutosławski, with whom I studied. This movement of ideas and curiosity is vital to the intellectual and cultural health of our nation.

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, I had no intention of entering this debate other than to support the amendment. However, I must make a point to the noble Lord, Lord Hodgson, because he raised it. What we heard from him is all too familiar. When my mother’s family came to this country 120 years ago as Jewish immigrants from Russia, exactly the same charges were being made about a flood of Jewish immigrants arriving in this country and, potentially, destabilising it and making it a more difficult place to live. Does any noble Lord in this House think that that generation of Jewish immigrants did anything other than contribute massively to the wealth and prosperity of this country? This absurd argument is trotted out every 100 years—mostly from his Benches, I am afraid—yet it is always fallacious and, frankly, very upsetting and quite disturbing.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords)

My Lords, at the heart of this amendment is a concern that the necessary steps are taken to support trade involving the use of services, which increasingly spreads across not just performance, art or culture but work in making cars, machinery and so on, of which it is an integral part. The expertise and knowledge that goes with that involves people and we need to accompany the work they are doing in a way which allows it to function properly. If they are prevented from moving, we as a society will suffer. In addition to the well-made points from the Cross Benches on the artistic and cultural level, at a purely practical level, we need arrangements for the new technologies which the noble Lord, Lord Hodgson, referred to, which will be unable to work if we do not have the services to make them do so. I wish him well with his iPad when it collapses and he cannot get the people to service it because they are unable to travel.

More seriously, the fourth pillar of the GATT treaty, of which we are a member through the EU, and would be a member if we come out of the EU, requires countries such as the UK—it we were independent—to make sure that services are delivered in ways which include the ability to provide rights for working, living and studying. Although studying does not necessarily seem to apply to the right to work and live, it is a very important aspect for us in Britain because one of our biggest export earners is our educational services. If we prevent people travelling to provide the facilities which allow studying and the ability to pass on knowledge—as we would be, if we do not have a proper arrangement for that—we will suffer enormously as a result.

Last night, I was at a meeting involving universities, organised by the Industry and Parliament Trust. There was a palpable concern felt by all the academics present about: the inability to engage with Erasmus and Erasmus+; the possibility that the Horizon 2020 funds will not be available; the lack of technical support for research activity, because the salary level grades were too high; and the inability to attract good postgraduate students to provide the intermediate work in research teams, and to teach. They felt that this was going to mean considerable changes in our university systems. This is the implication if we do not have a mobility framework of the type described in this amendment, which I support.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

My Lords, I thank the noble Lord, Lord Fox, for moving this amendment. Before I respond, I should declare an interest, in that my wife came to this country from outside the EU and has contributed over the last 30 years by building a business, and in other ways. Therefore, I have no problem with recognising, as I was invited to do, the tremendous contributions to this country made by people who come to make this place their home. In the same spirit, I recognise the contribution that our European friends have made to this country, in many of the areas referenced already.

The Government are committed to securing the best deal for UK businesses. The White Paper on our future relationship set out a clear proposal for an ambitious future relationship with the European Union, including a reciprocal framework for mobility. The Government recognise the need to ensure we have sufficient mobility provisions with the EU to support our trade agreement, and that we implement an immigration system that works in the national interest, as my noble friend Lord Hodgson sought. The reciprocal framework for mobility that the Government are seeking to agree with the EU will include provisions to support businesses to provide services and move talented people, and to provide visa-free travel for short visits, including for tourists, business travellers and students—the noble Lord, Lord Berkeley, spoke of the value that brings. This was reflected in the political declaration on our future relationship, and the detail of these provisions will be discussed in future negotiations.

The Government will continue to engage extensively with businesses, researchers, trade bodies and universities —as the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bull, referred to—including on elements of a framework for mobility. Following the publication of its White Paper, the Home Office launched an extensive programme of targeted engagement across the UK as it develops the future immigration system. The Government are engaging with sectors and the regions of England and the nations to communicate our proposals and understand their priorities for a future system.

This amendment would restrict the Government’s ability to set the UK’s negotiating position for our future detailed negotiations on our relationship with the EU. In so doing, the amendment risks undermining the Government’s ability to come to the best possible agreement with our European partners as we negotiate our future economic partnership. Moreover, the Trade Bill is not designed or intended to deal with our future relationship with the EU but rather with our future trade agreements with global partners outside the EU.

Turning to the questions of the noble Earl, Lord Clancarty, and the noble Lords, Lord Bilimoria and Lord Stevenson, on what happens with UK participation in Erasmus after Brexit, the UK has committed to participating in Erasmus+ until the end of 2020, when the EU’s current budget framework ends. The political declaration sets out the basis for co-operation in Union programmes, subject to the conditions set out in the corresponding Union instruments, such as on science and innovation, culture, education, development, defence capabilities, civil protection, and space. The UK welcomes the EU’s proposals for the 2021-27 successor scheme to Erasmus+, which was published on 30 May 2018, and would like to discuss the detailed arrangements for third country participation with the EU.

The noble Lord, Lord Fox, asserted that reciprocity is essential, as is mentioned in the amendment itself. The political declaration sets out, in the section on mobility, that the Government are seeking reciprocity between the UK and the EU. Where the UK takes a commitment, the EU will need to do likewise.

The noble Baroness, Lady Bull, asked about the importance of the EU for immigration, particularly of medium-skilled and low-skilled workers. If one refers to the carer example in that rather blunt way—although anyone who has had experience of dealing with a carer would put them among the most highly-skilled people on the planet—one measure that the Migration Advisory Committee uses is earnings. The future immigration system will support the UK economy to access the talent it needs. The skills threshold will be reduced to include medium-skilled workers, too. As a transitional measure, we will introduce a route for temporary short-term workers of all skill levels. This will cater for the seasonal, low-skilled and short-term workers currently coming from across the European Union.

There will of course be other opportunities for the noble Lord, Lord Fox, to press this point. The immigration Bill will come before your Lordships’ House, and there is a White Paper. I appeal to noble Lords to reflect on whether this is the appropriate vehicle and time to press the amendment. With those points, I ask the noble Lord to consider withdrawing the amendment.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 5:30 pm, 13th March 2019

My Lords, I congratulate those Peers who have taken part in the debate. The noble Baroness, Lady Bull, the noble Earl, Lord Clancarty, and the noble Lords, Lord Berkeley and Lord Puttnam, all forcefully put the moral as well as economic case behind the amendment. I thank the noble Lord, Lord Hodgson, for mentioning the industrial revolution. If we are to build a significant place in that industry in the world, as the Government’s industrial strategy seeks to achieve, it will not be by closing the borders and stopping people coming in to give us the value of their services, their knowledge and their ability to build it. This will be a global exercise. If we want to lead in it, we have to fling open our doors and let those people into this country.

The Minister of course put a persuasive case on the proposed regime. In essence, we are taking the regime that has been applied to non-EU migrants and putting it on to EU migrants. I have worked in companies that have sought to bring people into this country to do important jobs, and I have to tell the Minister that it is an extremely difficult process. Making it harder for our closest allies and biggest market to bring people in is not the solution to this problem.

The Minister is right to say that there might be other opportunities to put this point, but I am someone who likes to seize the day. I beg to seek the opinion of the House.

Ayes 254, Noes 187.

Division number 2 Trade Bill - Report (2nd Day)

Aye: 252 Members of the House of Lords

No: 185 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 24 agreed.