My Lords, the seriousness of the issues addressed by the G7 are such that, from the welcome Statement that the House of Commons received on Monday, events have changed between then and when it has come to this Chamber with regards to the likely slow movement of President Putin in his talks with President Trump over a ceasefire for Ukraine, the increased concern with regard to the Red Sea, and the strikes from the United States and the repercussions of that—I remind the House that, on Sunday, President Trump’s national security adviser called the previous attacks, which very brave RAF personnel took part in, as “feckless”. The war has restarted in Gaza with more humanitarian concern and more violence on the West Bank, just within three days of that Statement coming to this Chamber.
We are now close to the second round of tariffs from the principal economy within the G7, as part of what the Wall Street Journal—not a liberal newspaper—in America has described as the
“dumbest trade war in history”.
Regardless of its dumbness, there will be effects across the whole of the G7, including the UK. From these Benches, we reiterate our desire to have ever-closer relations with the European Union and Canada in particular, so that there is a co-ordinated response. It is regrettable that there should need be that within the G7, but this is the world which we have to address.
On the Statement itself, I welcome the Foreign Secretary stating that they discussed using frozen Russian assets. The Minister will know that these Benches have asked for accelerated work on the seizure of the assets. Can the Minister update us on that, and tell us what the prospect of an announcement is from the G7 Heads of Government meetings? At the very least, we think there is a justified case for draft UK legislation to be released, so that we can understand what we would be required to do to move fast on that. I would be grateful if the Minister could outline where we are on the seizing of assets.
The Minister knows that we have supported the increase in defence expenditure across the UK, as the Foreign Secretary referred to in the Statement. Can the Minister give a bit more clarity as to what proportion of the increased defence expenditure is likely to be spent within the UK and what proportion is likely to be spent within the US? What is the Government’s position on the reports that we have seen about the UK’s difficulty in taking a full role within the common defence procurement approach in the European Union? Are we seeking to move quickly on a defence and security treaty which should facilitate this? There are a number of Members in this House who called for that under the last Government and continue to do so. It is now urgent, and I hope the Minister can update us on it.
The Minister will not be surprised to hear me say that we disagree with the method of the increased funds. We believe that the companies that avoid paying tax in the UK—tech companies—and are operating on underpaid taxes for their profits should contribute more. That is under the Basel 3.1 mechanism. There is agreement within the EU and, as I understand it, the G7. Only one country has argued against it and pulled out of it: the United States. A second G7 country has delayed our implementation because of that first country. We do not believe that that is appropriate; we should move quickly on using the resource from an increase from 2% to 10% on undertaxed profits. That is a better way of funding increased defence expenditure, rather than cutting the ODA budget.
Earlier, the Minister reiterated the Government’s position, which is an ambition to honour the 0.7% legislation. I remind the House that the legislation does not require the Government to have an ambition to meet 0.7%; it requires them to meet it. It is not a “We would like to do it” Act; it is a “We must do it” Act. If the Government are not committed to this then they should state it clearly, with regards to the means by which they would meet the legislative target.
On the fiscal circumstances of meeting the legislative requirement, it seems that the Government’s policy choice is to cut ODA to fund defence expenditure—that is a policy choice, not a fiscal one. What are the fiscal rules now when it comes to the policy choice of funding in an alternative way? There is no mechanism under the 0.7% legislation for alternative policy choices to be used, other than fiscal circumstances, so what is the status?
Finally, I reflected on the Government’s Statement 10 years ago, when we passed this legislation, on the 2015 G7. Granted, that was not a meeting of Foreign Ministers but of Prime Ministers, and the Prime Minister said this to the House of Commons:
“For the first time in a number of G7s and G8s, we actually got the 0.7% commitment back into the text, so it is clear and there for all to see. I would argue that it is not just right for Britain from a moral standpoint, but that it actually increases our standing in the world that we can point out that we have kept our promises and were able to use that money to enhance not only the economic standing of those countries, but our own security as well.”—[Official Report, Commons, 10/6/15; col.1203.]
I agree with the then Prime Minister.