Skip to main content

EU: Non-financial Services

Volume 805: debated on Wednesday 2 September 2020


Asked by

To ask Her Majesty’s Government what progress they have made on a trade deal between the United Kingdom and the European Union in respect of non-financial services.

My Lords, we have discussed non-financial services in all seven negotiating rounds to date and have identified large areas of common ground. However, in some areas the EU has been unable to match our ambition. In the interests of compromise, we have agreed to use the EU’s services proposal as the starting point for a text-based negotiation, although the Commission’s insistence on parallel progress in other areas is currently impeding our efforts to agree a consolidated text.

My Lords, a no deal for services would be disastrous for a sector already under immense strain from Covid. Does the Minister agree that, out of the range of concerns voiced by industries, including IT and creative services, it is essential that a suitable mobility framework is in place by the end of the year? For the music industry, will the Government negotiate a two-year, multi-entry visa, or ensure that the commitments in mode 4 are extended to include touring under the free trade agreement? An appropriate solution for all services would be beneficial to both the EU and the UK.

My Lords, I fully agree with the noble Earl on the importance of the creative industries, particularly music, for which he is such a doughty champion. Some of the points he raises today have been raised with my colleagues in DCMS, and there are difficulties. Monsieur Barnier has labelled some of our proposals, which I referred to in my Answer, as “freedom of movement for service suppliers”—which I hope shows that we are trying our level best to do the best. We are seeking to lock in, on a reciprocal basis, only arrangements that the UK already has with third countries.

Has my noble friend noticed that over the summer months our trade negotiators have been making excellent progress in trade talks with Japan, the United States and others, yet the EU seems to be the odd one out? Is the confusion in the EU due to the fact that its Trade Commissioner had to resign and it did not get round to appointing a replacement, even at such a crucial time—or might it be because the EU is still trying to cherry-pick the negotiating agenda, insisting that we give it what it wants on fishing rights in British waters and on jurisdiction before it deals with other matters? Why is the EU alone in surrounding itself with despondency and difficulty?

My Lords, I am not quite as adept as my noble friend, but I try never to bring too much despondency to the House. The Government’s position is that we still very much hope that we will get a fruitful and excellent agreement, but my noble friend is right to say that major difficulties remain and that the EU’s insistence on progress on state aid and fisheries is an obstacle to making progress overall.

My Lords, nearly three years ago I chaired an inquiry into non-financial services. As far as I can see, and from what the Minister says, virtually none of the concerns of those sectors has yet resulted in an actual agreement, even in draft. It would of course be helpful if the Minister could undertake to get his department to reply to each of the recommendations in that report but, for today, perhaps he could respond on just two sectors. On the creative industries—music, film, broadcasting and theatre in particular—what progress has been made for reciprocal provisions on intellectual property, free movement, particularly mode 4, and even such basic things as transportation of musical instruments and theatrical scenery, for example? On transport, specifically aviation—I declare my vice-presidency of BALPA in the first sector—and road haulage, aside from any short-term contingency provisions—

Before the Minister replies, I remind Members that we have now gone for four and a half minutes and have had only two questions. If people could keep their questions short, it would be much appreciated by the House.

My Lords, I cannot answer all the questions that the noble Lord has asked, for the reasons discussed, but I will seek out the answer to his question on his report. So far as reciprocal arrangements are concerned, I repeat what I said earlier: namely, that the Government are seeking to make progress but there are technical delays in the negotiations as a result of the EU’s position.

My Lords, historically the UK led in the push for freedom to provide services across the EU, but now the Government’s determination to leave the single market and to privilege regulatory autonomy over market access and, even worse, their cavalier attitude to no deal risk sacrificing our trade in services, which represents over 80% of our economy and 30 million jobs, and nearly half our exports with a trade surplus with the EU. Any action can only mitigate the damage. Lawyers, musicians and other creative artists, IT consultants and truck drivers all depend on the ability to move freely to work. Many services are also bundled into the production of goods. These sectors are already reeling from the Covid shutdown. What real hope can the Government, who are rejoicing in ending free movement, genuinely offer these professionals regarding their ability to continue to earn a living from the mobility of working in the EU?

My Lords, the people of the United Kingdom voted to leave the single market. The Government have tabled proposals in a number of the areas that the noble Baroness referred to, and I have commented on the reasons for some of the current difficulties in making progress.

My Lords, further to the question from my noble friend Lord Whitty, what assessment have the Government made of the concerns raised by the chair of the DCMS Select Committee about the impact on any adequacy agreement on personal data if the mooted free trade agreement with the US includes Section 230 of the US Communications Decency Act?

My Lords, in the interests of time, I will write, if I may, to the noble Lord with a detailed response on that point.

My noble friend will be aware that the withdrawal agreement does not protect the rights of representation of UK trademark and design professionals in the European Union Intellectual Property Office, while it does protect the rights of EEA professionals to work in the UK for an extended period, when there will be a great deal of new work at the UK IPO. What plans do HMG have to make these arrangements reciprocal?

My Lords, the Government are committed to protecting IP to a very high level and are proposing a chapter in the free trade agreement based on precedence to reflect this. Both the EU and the United Kingdom are IP-intensive economies and we need to make progress. My noble friend is right in relation to rights of representation that flow from the single market, and I assure her that these issues are currently very much in the mind of the Government.

My Lords, what revenue does the Treasury receive from non-financial services and, in the event of no deal, how does it propose to replace that revenue?

My Lords, I do not have in my brief the precise figure that the noble Baroness has asked for, so, as I promised earlier in relation to another question, I will write to her with that. The Government’s overall objective is to sustain, develop and increase the viability of our magnificent non-financial services and creative services.

My Lords, information on the Department for International Trade website that I accessed this morning shows that we have made agreements with countries representing only 8% of UK trade in goods and services. If we ended the year on that basis, it would be catastrophic for the British economy, as I am sure the Minister would agree. What is the Government’s target for the amount of trade that we will be doing with the world under free trade agreements—if indeed the Government have a target at all?

My Lords, the Government’s target is to seek friendly agreements with the widest possible range of nations, including the European Union, and I am confident that the figure that the noble Lord cites will be greatly exceeded by the end of the year.

There are 120 days until 31 December. We know what has not been agreed, because that is in the newspapers, and we know what the Government have chosen not to pursue in the agreement—namely, security and defence—but we do not know what has been raised and what has been agreed, subject of course to “Nothing is agreed until everything is agreed”. Will my noble friend undertake to provide a Statement to Parliament setting out exactly what has been agreed, which aspirations we have put forward and which have been completely rejected? This is not interfering with the negotiations; it is informing Parliament and the public.

My Lords, the Government are not giving a running commentary on the negotiations. We remain in close contact with our EU counterparts. There were discussions yesterday and we look forward to the next round of talks in London next week. I can promise my noble friend that we will publish the agenda for that next round towards the end of the week as usual.

My Lords, the time allowed for this Question has elapsed. I apologise to the two Members who have been excluded.