Trade Bill
Wednesday 20th May 2020
(5 years ago)
Commons ChamberTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts
The House divided: - Ayes: 262 / Noes: 352 - Question accordingly negatived.
The House divided: - Ayes: 355 / Noes: 254 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I must inform the House that Mr Speaker has selected the reasoned amendment in the name of Keir Starmer. I call Secretary Elizabeth Truss to move the Second Reading. The Secretary of State is asked to speak for no more than 15 minutes.
The Secretary of State for International Trade (Elizabeth Truss)
I beg to move, That the Bill be now read a Second time.
Coronavirus is the biggest threat this country has faced in decades. All over the world we see its devastating impact. We will do whatever it takes to support United Kingdom businesses to continue trading, with our network of 350 advisers across the country and trade commissioners across the world.
This crisis highlights just how important it is to keep trade flowing and supply chains open, so that we can all have the essential supplies we need. It is free and open trade that has ensured that we have food on our table and access to vital personal protective equipment and medication. At meetings with my fellow G20 Trade Ministers, I have continually called for a united global response, tariff cuts on key supplies and reform of the World Trade Organisation. Although it is unfortunate that some countries have resorted to protectionism, many have sought to liberalise in the face of this crisis. In particular, I have been working with colleagues such as Australia, New Zealand and Singapore to highlight the importance of keeping trade flowing.
Free trade and resilient supply chains will be crucial to the global economic recovery as the crisis passes. Time after time, history has shown us that free trade makes us more prosperous, while protectionism results only in poverty, especially for the worst off. Britain has a proud history as a global leader and advocate of free trade. The bold and principled decision of Sir Robert Peel to take on the power of the wealthy producers and repeal the corn laws in 1846 ushered in an unprecedented era of free trade that saw ordinary people in Britain benefit from more varied and cheaper food, helping to grow our cities and power forward the world’s first industrial revolution.
I see a real opportunity again for industrial areas across Britain as we become an independent trading nation. By cutting tariffs and reducing export red tape, our great British businesses will be able to sell more goods around the world. British steel, ceramics and textiles are some of the world’s best, but all too often they are subject to high tariffs and barriers. Those industries are already looking forward to the opportunities that future trade deals will bring.
The US imposes tariffs of 25% on steel; removing them would boost our domestic industries. As my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) knows, that will particularly benefit areas such as Yorkshire and the Humber, which account for more than a third of our iron and steel exports to the United States. Indeed, just this week UK Steel said:
“A new UK/US Free Trade Agreement would provide a significant boost to our trade to this high-value market, create a global-competitive advantage for UK steel producers, and open up valuable new market opportunities.”
Our farmers and food producers stand to gain from a trade deal with the US. The US is the world’s second largest importer of lamb, but current restrictions mean that British producers are kept out. We can also grow, for example, our malting barley exports from Scotland and the east of England.
The tech trade will benefit from a US free trade agreement through cutting-edge provisions on digital and data. Telecoms and tech have more than doubled in the past decade, and an ambitious FTA could see those exports grow further.
While free trade provides opportunities, protectionism would harm farmers, tech entrepreneurs and steel manufacturers. We have already seen this before: in 1930, the Smoot-Hawley Act raised US tariffs on more than 20,000 imported goods, resulting in retaliation from other nations and the deepening and prolonging of the depression. As President Reagan said in 1985:
“Protectionism almost always ends up making the protected industry weaker and less able to compete against foreign imports…Instead of protectionism, we should call it destructionism. It destroys jobs, weakens our industries, harms exports, costs billions of dollars to consumers, and damages our overall economy.”
We have a golden opportunity to make sure that our recovery is export led and high value—a recovery that will see our industrial heartlands create more high-quality and high-paying jobs across all sectors. Free trade does not just benefit us here in Britain; it benefits the world. Since the end of the cold war, free trade has lifted a billion people out of extreme poverty. For want of a better word, free trade is good. It is those benefits that underpin our Government’s approach: free and fair trade fit for the modern world.
Let me turn to the contents of the Bill. We can have fair trade only if it is free trade. The Bill will embed market access for British companies by enabling the UK to join the WTO’s Government procurement agreement as an independent member. This will provide businesses with continued access to the extraordinary opportunities of the global procurement market, worth some £1.3 trillion a year. The GPA is an agreement between 20 parties that mutually opens up Government procurement. We have already seen in the UK the way that competition drives up quality while keeping prices low. The GPA keeps suppliers competitive and provides them with opportunities overseas. It is a driver of growth, not a threat to our economy. The idea that we can, or even should, do everything domestically is not desirable or practical in this increasingly interconnected world. Instead, we should be making sure that we have resilient supply chains through a more diverse range of partners. We will be an international champion for free and fair competition in the coming months and years through our discussions at the WTO, the G20 and bilaterally. We will urge other countries not to heed that false, but enticing, call for protectionism.
Let me be clear to the House: the GPA sets out rules for how public procurement covered by the agreement is carried out. As an independent member, we are free to decide what procurement is covered under the agreement. The UK’s GPA coverage does not and will not apply to the procurement of UK health services. Our NHS is not on the table.
We are also committed to continuing our trade with existing partners that have agreements through the EU, such as South Korea and Chile. To date, we have signed 20 such trade agreements representing 48 countries, and others are still under negotiation. This accounts for £110 billion of UK trade in 2018, which represents 74% of continuity trade. People said that we would not be able to roll over these agreements—well, they were wrong, and we will be signing more in the coming months. This work is part of securing the Government’s aim to have 80% of UK trade covered by free trade agreements in the next three years.
We are also looking to new partners. Negotiations with the US and Japan are kicking off. We are prioritising signing FTAs with Australia and New Zealand and accession to the comprehensive and progressive agreement for trans-Pacific partnership, otherwise known as the CPTPP. With the UK global tariff now published, there will be an increased incentive for other countries to come to the table to maintain or improve upon their preferential terms and conditions. Fundamentally, free trade is humanitarian and we will maintain preferential margins for developing countries, helping businesses lift millions out of poverty. As a Government, we have committed to going further than the EU has in terms of trade for development, and we are looking at reducing or removing tariffs where the UK does not produce goods and getting rid of cliff edges in current tariff schedules.
That brings me to the second part of our approach: fair trade. The Bill will help establish the independent trade remedies authority, which will help protect British businesses against injury caused by unfair trading practices such as dumping or subsidy, or unforeseen import surges. I tell the House that while free trade has no stauncher friend than this Government, unfair trading practices that hold back British businesses will have no worse enemy. We will fight against state-owned enterprises that use public money to subsidise their goods and Governments who support the lobbying of these under-priced products into the UK market.
Excellent UK industries such as ceramics and steel—represented ably by my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon), for Stoke-on-Trent North (Jonathan Gullis), for Stoke-on-Trent South (Jack Brereton), for Redcar (Jacob Young) and for Scunthorpe—should not face unfair trade. The TRA will be responsible for investigating claims of unfair trading practices based on the evidence available. It will then make impartial representations to Ministers.
The TRA’s impartiality is vital. Decisions on trade remedies cases can have a material impact on business and financial markets. This Bill will allow us to create an independent body to carry out objective investigations in which businesses can have full confidence. In developing our own trade policy for the first time in almost 50 years, we will use technology to ensure that our trade agreements are fit for the modern world. Therefore, this Bill will give the Government powers to collect and share the trade data that will help our independent trade policy. This will make it easier for our trade policy to reflect the interests of businesses across the UK.
Let me assure the House that this Bill is a continuity Bill. It cannot be used to implement any trade agreement between the UK and the EU itself, nor can it be used to implement an agreement with a country that did not have a trade agreement with the EU before exit day, such as the United States of America. The Bill can be used only to transition the 40 free trade agreements that the EU had signed with third countries by exit day, and these powers are subject to a five-year sunset clause to ensure that we can maintain the operability of transitioned agreements beyond the end of the transition period. Any extension of this five-year period will require explicit consent of both this House and the other place.
We face a period of unprecedented economic challenge. It is vital that we do not just maintain the current global trading system, but make it better. That means diversifying our trade and supporting those businesses that export. Exports, be they software or steel, cars or ceramics, barley or beef, will underpin our recovery. This Bill will ensure continued access to existing markets by letting us implement trade agreements with partner countries that previously applied under the EU. It will secure continued access for UK businesses to the £1.3 trillion global public procurement market. It establishes the independent body in the Trade Remedies Authority to give our great British businesses the protection they need from unfair trade practices. Trade will be fair as well as free. By adopting a cutting-edge digital first approach, we will be able to give businesses the best possible support.
As we recover from the economic shock of the coronavirus crisis, providing certainty and predictability in our trading arrangements will be vital to securing the interests of businesses and consumers. We will unleash the potential and level up every region and nation of our United Kingdom. Now is the time for this House to speak out against protectionism. It is time for us to embrace the opportunities that free trade and an export-led recovery will bring. I commend this Bill to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I now call the shadow Secretary of State, Emily Thornberry, to move her reasoned amendment, and she has 10 minutes in which to speak.
Emily Thornberry (Islington South and Finsbury) (Lab)
I beg to move,
That this House recognises that upon leaving the European Union, the UK will need effective legislation to implement agreements with partner countries corresponding to international trade agreements of the European Union in place before the UK’s exit, to implement procurement obligations arising from the UK becoming a member of the Government Procurement Agreement in its own right, to set out the basis of a Trade Remedies Authority to deliver the new UK trade remedies framework, and to establish the powers for Her Majesty’s Revenue and Customs to collect and disclose data on goods and services exporters; but declines to give a Second Reading to the Trade Bill because it fails to set out proper procedures for Parliamentary consultation, scrutiny, debate and approval of future international trade agreements, fails to protect the principle of Parliamentary sovereignty in respect of the implementation of international trade agreements previously negotiated by the European Union and in respect of changes to existing government procurement regulations arising from the UK’s or other countries’ accession to the Government Procurement Agreement, fails to establish sufficient scrutiny procedures to replace those that have pertained while the UK has been a member of the European Union, fails to guarantee that the UK’s current high standards and rights will be protected in future trade agreements, and fails to render the Trade Remedies Authority answerable to Parliament or representative of the full range of stakeholders who should be included in its membership.
In moving this amendment in the name of the Leader of the Opposition, I am conscious that, for many of us, there will be a strong sense of déjà vu: the personnel may have changed, but we have all been here before, with the same Bill, the same amendment, and the same arguments. For once, the Government are correct when they say that nothing has changed. The inescapable truth remains that this Trade Bill, as it currently stands, is a massive missed opportunity for the Government, for this Parliament and for our country.
For the past five decades, our trade policies have been set at European level. Indeed, there is not a single Member of this House who was in Parliament the last time the UK set its own trade policies, so, like it or not, this Bill carries an historic significance, and that is what I want to address today. Is this Bill, in its current form, fit to rise to its historic challenge? After five decades, in which we have seen tremendous upheaval in our global economy, does the Bill provide the legislative framework and the bold and far-reaching vision that we need to underpin Britain’s trade policies for several years to come? After five decades, does the Bill ensure that issues such as climate change and human rights, which were barely a consideration the last time the UK set its own trade policies, are now at the heart of our decision-making and central to our relationships overseas? And after five decades, does the Bill give a proper voice to the devolved Administrations, who did not even exist back then, and to all other private, public and civic-sector bodies whose ideas and insights constantly improve our policy-making and remind us that Whitehall does not know best? Finally, after five decades, does this Bill restore full sovereignty to Parliament over Britain’s trade policies, especially when it comes to the formulation, scrutiny and approval of new trade agreements? Those are the questions I asked myself. As I will explain, the answer that came back, on every front, was a resounding no—even worse, a warning cry that far from restoring the powers of Parliament when it comes to trade policy, this Bill erodes them to nothing.
Let me begin with the first question, namely whether this Bill gives us a legislative framework and a bold new vision for decades of trade policy to come. Here we find ourselves in the strange position of having Ministers themselves tell us that the answer is no. They say that there is nothing of significance in this legislation, and that it is simply a continuity Bill that is designed to maintain the status quo beyond 31 December. I will come back to whether that is right, especially in respect of new trade agreements, but one thing is for sure: there is no bold, long-term vision in this Bill. There is no great legislative framework for the future, and when it comes to the UK shaping its own trade policy after five long decades, this Bill certainly was not worth the wait.
That brings us to the second question, namely to what extent the Bill reflects the necessary and welcome widening of Britain’s trade policy objectives over five decades, and the extent to which it puts at the heart of our future trade agreements the issues of climate change, environmental protection, human rights, workers’ rights, sustainable development and gender equality. Again, we should all be ashamed to say that the answer is: not at all.
I will take just one of those issues, namely human rights. It is disappointing enough that the Government are failing to make it a key priority in negotiating new trade agreements, but what is truly damaging is the Government’s willingness to omit from their rolled-over trade agreements the human rights clauses that are now mandatory in all deals with the EU. If the Government want to refute that, the Minister of State has a simple task when he closes the debate later. He should guarantee that the rolled-over trade agreements that the Government are still trying to negotiate before 31 December with Cameroon and Egypt will both contain clauses enabling the UK to terminate the agreements if those countries continue their horrendous abuse of human rights. Will he ensure that the same policy applies to Turkey, Singapore, South Sudan and every other country with whom we are in negotiation?
The third question was whether the Bill marks a decisive break with the “Whitehall knows best” attitudes that dominated policy making five decades ago, and instead paves the way for Britain’s new trade policies to be formed in a transparent and inclusive way, for example by consulting the elected representatives of our regions and devolved Administrations, benefiting from the expertise of our development and environmental non-governmental organisations, or listening to the concerns of British businesses and their employees. Again, the answer, sadly, is no.
We see that most starkly when it comes to the Bill’s proposals for the membership of the trade remedies authority. That will be a vital body with a vital task, but it will have no guaranteed representation from the UK’s industry bodies and trade unions—the representatives of the people most affected by the unfair practices that the TRA is supposed to prevent. No wonder there are such concerns and suspicions that the Government’s true agenda for the TRA is not to defend Britain against underpriced imports, but somehow to balance the damage they do to domestic producers against the perceived benefits for domestic consumers. That is not the job of the trade remedies authority. That is why we instead need there to be proper representation on the board for the businesses and workers that it has been set up to defend, and why we need the TRA to be accountable to Parliament rather than Government.
That brings me to the final question, which is of the greatest immediate significance: whether, after five decades, this Bill succeeds in restoring parliamentary sovereignty over our country’s trade policies or whether, in fact, the opposite is true, as Members here and in the other place—all formidably led by my predecessor, my hon. Friend the Member for Brent North (Barry Gardiner)—have consistently said over the past two and a half years.
Let us take an example. The Secretary of State is a fan, it would seem, of the Government procurement agreement. As my colleagues have pointed out in the past, no matter how much we agree with the GPA, it is still incredible that the UK can accede to the GPA and MPs have no practical means to stop it; that the UK’s coverage schedules can be sent to the WTO and MPs have no opportunity to approve them; and that changes can be made in the future to the UK’s commitment under the GPA, and MPs will have less chance to scrutinise them than we did when Brussels was in charge and the European Scrutiny Committee was in place. So in an area such as Government procurement, the Bill does not advance parliamentary sovereignty—it does not even leave us standing still. The Bill takes us backwards.
Let us look at a more contentious area: new trade agreements. The Government have tried to convince us that, because the Bill only seeks to provide the basis to roll over existing agreements, we do not have to worry about the almost complete absence of accompanying parliamentary scrutiny or approval. But the reality is that in many cases there are or will be major differences between the UK’s third country agreement and the EU equivalent it is opposed to replicate.
Let us look at some of the examples we have seen. We have agreements with five countries in a trade bloc where the UK only covers three. We have EU agreements with mandatory clauses on human rights that the UK has agreed to drop. We have an EU agreement with Turkey based on a customs union, which the UK has explicitly rejected. We have an EU agreement with Japan, which both the Secretary of State and her Japanese counterpart have said our bilateral deal should go beyond, and that will doubtless be true of the Canada deal as well.
In short, we will end up with several major new trade deals all significantly different from their EU equivalents, but all subject to the same minimal amount of parliamentary scrutiny and approval, as proposed in the Trade Bill. That is not a restoration of parliamentary sovereignty. That is not anywhere near the gold standard of parliamentary consultation, scrutiny and approval of trade deals that we see in Australia or the United States. That is not therefore what I would call taking back control.
In conclusion, I believe that this Trade Bill offers a historic opportunity, but that opportunity has so far been missed. Instead of a bold, strategic vision for the future of our trade policy, we have a stopgap piece of legislation that even Ministers are trying to talk down. Instead of issues such as climate change and human rights being put at the heart of our trade policy, they have been ignored or consciously dropped. Instead of opening our trade policy to the expertise of others, the Government are denying them even a seat at the table. And instead of restoring Parliament’s sovereignty over trade policy, this Bill leaves MPs even more powerless than before. That is why I urge colleagues on both sides of the House to support the Opposition’s amendment. After five decades, let us spend the time and effort we need to get this historic Bill right.
Dr Liam Fox (North Somerset) (Con)
I will not go over the detailed points in relation to the Bill so eloquently made by my right hon. Friend the Secretary of State—I have to say that I recognised some of the phraseology in her arguments—but I want to deal with the context in which it is being brought forward.
During the long gestation of the Bill, a lot has changed. Not only have we had the covid crisis, which will have a fundamental effect on the global economy, but in 2019 we saw the culmination of many of the predictions that were made by the Department for International Trade. We predicted that we would see first a slowdown in the growth of global trade and then potentially a contraction of global trade itself. We watched through 2019 the WTO make predictions on global trade growth, down from 2.8% to 2.2% and 1.4%. It finally came in at 0.7%. The key element was that it contracted in Q4, which has generally in history presaged a downturn in the global economy.
That happened for a number of reasons. The US-China trade dispute had a general effect on global trade, and in particular we saw the shortening of global supply chains, as people sought to onshore and shorten global supply chains by minimising the import of intermediate goods. We saw the inevitable consequence of the trend over the decade of the G20 countries applying more and more non-tariff barriers to trade—quadrupling them in the first half of this decade—and they all matter. A bit of consumer protection here, a bit of environmental protection there and a bit of producer protection here are all justifiable in themselves, but they all add up. They have all resulted in a silting up of the global trading system, and the skies over the global trading system are now darkening with those chickens coming home to roost.
Why does it matter? It matters because a free and open trading system has been our route to the reduction in global poverty, with more than 1 billion people taken out of abject poverty in just one generation. There is another reason it matters, which is that access to prosperity, political stability and security are part of the same continuum. It is unthinkable that the wealthiest countries in the world should pull up the ladder behind us, stopping developing countries gaining access to the same levels of prosperity. It is absurd to believe that we can do that without seeing disruption in global security. If we deny people access to prosperity, do not be surprised if we see more mass migration and more radicalisation. We need to understand that we cannot separate the concepts. Those who wish to introduce protectionism into the global economy will have to bear the consequences of the actions they are currently embarked upon.
I want to see us, through this Bill and beyond, doing more on global trade liberalisation. Going back to where we were pre-covid will not be enough, because global trade was contracting. I was a proud Brexiteer, but I have never been a little Englander. My objection to the European Union in the era of globalisation was not the absurd notion that it was foreign, but that it was not foreign enough. It did not have global aspirations that were in tune with what we as a country wanted to see. Post covid, all the challenges we face together will be bigger, and we will have to work with all those who believe in free trade to put them right.
The UK exports 30% of our GDP. Germany exports 48% of its GDP, and OECD data shows that the trade slowdown has hit the European Union hardest of all in the global economy, with exports from the EU contracting by 1.8% in the third quarter of 2019, even before global trade itself contracted. That is the scale of the challenge that we face.
The Government’s proposed tariff regime reform is to be hugely welcomed, although it could be even more liberal yet. The new FTAs and the roll-over agreements allowed through the Bill are also to be welcomed. Those who put obstacles, political and otherwise, in the way of both the roll-over agreements and the new FTAs through largely pointless and irrelevant arguments need to understand the consequences to the wider global economy, as well as to our domestic prosperity, of doing so.
My right hon. Friend was right when she talked about the bigger picture and how we must champion World Trade Organisation reform. Without it, we will be unable to maintain the rules-based system, which is already substantially under threat. The alternative to a rules-based system is the survival of the strongest, and that will have the biggest impact on the poorest countries. This is an area where we can give a lead as a country not only economically, but morally.
Madam Deputy Speaker (Dame Rosie Winterton)
I call Stewart Hosie, who has seven minutes.
Stewart Hosie (Dundee East) (SNP) [V]
May I start by agreeing with the Secretary of State that it is absolutely vital that we keep trade open and recognise the importance of the supply chain, and that it is absolutely essential that we stand against protectionism? We need to do that, because right now there are three main threats to trade. The first is self-evidently from the covid crisis, which the World Trade Organisation has suggested might cause a fall in global trade of something in the order of 13% to 32%. That is a substantial reduction, no matter where on the scale one looks. The second is the impact of Brexit. Assessments suggest that the UK could lose a substantial chunk of its global trade. The third is the more systemic problem that the right hon. Member for North Somerset (Dr Fox), the ex-Trade Secretary, was speaking about, which is the continued implementation of new and the continuation of existing trade restriction measures, with tariffs valuing somewhere around $1.6 trillion in force.
I am not confident that those problems will be resolved any time soon, not least because there is as yet no cure for coronavirus and restrictions of one sort or another may well remain in force for some considerable time, because of the highly publicised lack of progress on the Brexit negotiations, and also, sadly, because of the absence of a functioning World Trade Organisation appellate body. This Trade Bill does not address any of those matters, other than perhaps at the margins, by trying to roll over and maintain the trade the UK has with third countries via membership of the EU and thereby minimise the losses from Brexit.
The Bill does do a number of other things, as the Secretary of State set out. It creates procurement obligations arising from membership of the GPA—the agreement on Government procurement; it creates the Trade Remedies Authority; and it gives powers to Her Majesty’s Revenue and Customs to collect and share data. However, it is not without its problems. Let me deal with the powers relating to the devolved Administrations first. The previous Trade Bill, which was under consideration in the previous Parliament, contained provision for regulation-making powers to be available to the UK Government within areas of devolved competence. That Bill also contained a provision that prohibited devolved Administrations from using powers to modify retained direct EU legislation or anything that was retained EU law by virtue of section 4 of the European Union (Withdrawal) 2018 Act in ways that would be inconsistent with any modifications made by the UK Government, even in devolved areas. As a result, the Scottish Government could not consent to that, and that view was shared by the Scottish Parliament Finance and Constitution Committee.
That Trade Bill did not complete its passage and fell, and the good news is that those provisions have been removed from this reintroduced Trade Bill. However, there remains no statutory obligation for the UK Government to consult or seek the consent of Scottish Ministers before exercising the powers they have in devolved areas. However, during the partial passage of the previous Trade Bill, the UK Government made a commitment to avoid using the powers in the Bill in devolved areas without consulting and ideally obtaining the consent of Scottish Ministers. The then Minister of State at the Department for International Trade, the right hon. Member for Bournemouth West (Conor Burns), subsequently restated those commitments in his letter to Ivan McKee, the Scottish Trade Minister, on 18 March, and I hope that the Minister we hear from today will restate these non-legislative commitments.
The Bill is not without its problems, and they do not relate simply to the devolved Administrations. It allows the UK Government to modify retained direct principal EU law, and it appears to me that there are no legislative limits on such modifications. The second problem is the description of an “international trade agreement” in clause 2(2)(b), which states that it may be
“an international agreement that mainly relates to trade, other than a free trade agreement.”
As we know, modern agreements are as much about regulation, standards, conformance, dispute resolution or food safety as they are about quotas and tariffs. Many people will uncomfortable that Ministers can modify existing agreements in the way in which this Bill permits, particularly without scrutiny and consent.
That leads me to the fundamental problem with the Bill. The absence of parliamentary scrutiny and a parliamentary vote on significant changes or modifications, or, indeed, in the future, on new trade deals as may be envisaged by the Government, is a huge problem. Modern democracies need to have full scrutiny of trade agreements, from the scope of the negotiating mandate right through to implementation. That is absent from this Bill, as is any provision for scrutiny other than through the voluntary scrutiny proposed by the Government in the Command Paper published in the previous Parliament, to which I will return briefly at the end of my speech.
These issues also highlight the absence of any formal input into trade deals or significant modification of existing ones by the devolved Administrations—a problem replicated in the membership of the Trade Remedies Authority, where no formal ability exists for the devolved Administrations to propose or nominate a member with expertise in regionally or nationally significant trade.
I shall turn briefly to the Command Paper that was published in 2019 and covered the previous Trade Bill. Does it still apply? Does the commitment to publishing our negotiating objectives and scoping assessments still exist? Even if it does, does the Minister recognise that that still does not give Parliament or the devolved Administrations any role in approving them? Is it still the intention of the UK Government to provide sensitive information to a scrutiny Committee? Would that be the Select Committee on International Trade, which is ably chaired by my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil)? If it is, will any papers provided be publishable, or will they be restricted? If they are restricted, that will still leave Members of Parliament, exporting businesses and other interested third parties none the wiser about the Government’s real intentions. I am conscious of the limited time, Madam Deputy Speaker, so let me end simply by saying—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I ask the hon. Gentleman to bring his remarks to a close. I thank him for his contribution, but we must move on. I am now introducing a time limit of five minutes, and I advise hon. Members who are speaking virtually to have a timing device visible.
Mr Jonathan Djanogly (Huntingdon) (Con) [V]
Now that we have left the EU, it seems that 20 continuity agreements have been signed with some 48 countries and that a further 20 have been negotiated, so will the Minister confirm whether there are any countries that do not wish to deal with us at the current time? It seems that Canada and Japan are refusing to be rolled over, so to speak, and want to start negotiating from scratch, so should we not now treat these unsigned countries as new FTAs, rather than including them in this EU roll-over package? Does not clause 2 in effect represent a moment of time that has now passed? In that regard, I think we should take this opportunity to recognise the friendly and co-operative attitude of those countries, such as Switzerland, Israel and Georgia, that did sign up before Brexit.
I understand the need for statutory instruments to be used to effect these roll-overs, but will the Minister confirm that, for the most part, they will be transcribed into our laws by the withdrawal Act, and that these SIs are effectively intended to deal with deal variations? The problem that we debated on the Trade Bill two years ago was that the statutory instruments’ scope could be so wide that they could be used as a Henry VIII provision for anything to do with the roll-over countries other than tariffs. Indeed, I cannot see how it is possible that they could not be used as part of a deal to issue visas, say, in return for trade access, or indeed to add on military or intelligence provisions. I believe that this could apply to amendments made to these deals for five years, even after they have been initially concluded. For instance, I do not see that there is any level of deviation from the EU deals with such counties that would necessitate a Constitutional Reform and Governance Act 2010 process. This situation led to no little disquiet last time this Bill came around, and the Government eventually came up with amendments that have now only partly been readopted.
When the Bill was debated two years ago, the first change that was made was to make the SIs affirmative. That has been retained, which is welcome. The second change was to have a three-year sunset period, and that has now been changed to five years, which seems unnecessary. The third change was to have reports produced by the Minister before the first SI, setting out all the proposed changes. In practice, this is sensible in that it will assist scrutiny and also provide a framework if there are multiple SIs. The Minister advised me that he was supportive of using reports, but he did not think they needed to be legislated for. Parliament might like to look at that again.
The fourth change was to provide that these reports should be laid 10 sitting days in advance of the first SI. This would allow comment to be made before the SI was laid, which would be more effective from a scrutiny point of view. Ministers have suggested that this procedure will be used to tie up loose ends or legislate for trade-related variations, but they will appreciate that we as legislators need to scrutinise this legislation with an eye on what it could be used for.
When the Trade Bill was debated two years ago, Parliament was promised a new FTA scrutiny regime, yet we have not put that in place, despite trade talks with the US starting. Now that Brexit has happened, the Commons has lost its European standing Committee, which reviewed the EU’s monitoring and negotiation of trade agreements. No equivalent Committee has been formed to replace it, and we have obviously lost the scrutiny previously provided by the EU itself. Keep in mind that the European Parliament’s consent to a new treaty is needed, in a way that does not happen in the UK, where there is no obligation to inform or consult Parliament, no structures for reviewing treaties, and no debate or approval needed prior to signature. There is only the CRAG process to delay ratification, which, in its April 2019 report on scrutiny of treaties, the Lords Constitution Committee described as “anachronistic and inadequate”.
I am not calling for an end to the prerogative power to agree treaties—although we need to appreciate that many pressure groups are—nor am I calling for Parliament to be able to amend draft treaties as the US Senate can, but I am calling for a proper process whereby policy objectives of treaty negotiations are published at the outset and treaty rounds are reported on. If Parliament is not to get a veto, at least CRAG should be reformed. I suggest that should include a new Commons treaty Committee and extending CRAG debates and presentation periods so that they are made more user-friendly. Brexit should involve more UK scrutiny of FTAs, not less.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]
As we all know, this is a reheated Trade Bill. Sometimes a meal can be all the better for the reheating—it can be better the following day—but sadly, despite all the advice and help that was given on the Trade Bill in the last Parliament, that has not come to be this time. It remains much a dog’s breakfast, with great criticism attached to it and much under-delivery on what is required.
The Bill essentially has two strands to it: the roll-over of free trade agreements and the creation of the TRA. Before we go too far on the roll-over, we almost have to take a step back. If we are indeed looking to roll over EU trade agreements that currently affect us, are we not just admitting that the EU has done quite a good job of arranging trade agreements—so much so that we want to copy them to the letter?
In fact, when we go to copy some of the trade agreements, we find we cannot replicate them. I remember raising in Committee the trade agreement with South Korea, which states that, in the automotive sector, if motor vehicles have 55% local content, the tariff can be exported. Alas, the UK alone cannot do that. The EU can do that—it has a 500 million-odd population and consumers, and the parts come from all parts of its manufacturing base—but the UK cannot take advantage of a rolled-over EU-Korea deal the way it is written at the moment. There are many things lacking at that stage.
On the Trade Remedies Authority, again, much advice has been given about what could happen and what is not happening, and it is a shame that the Government are not listening and refuse to listen to many people. There are many concerns, particularly in the ceramics trade. The TRA was set going on a wing and a prayer. We could have had Brexit long ago, and the reality is that the UK was not prepared. It still is not prepared.
We do not have the scrutiny in place. We do not have the scrutiny that my Committee called for in the last Parliament for the devolved Parliaments, but even if we take a Westminster-centric view of this, we do not have the scrutiny for parliamentarians at Westminster either. Again, the Government have missed the opportunity to get this right, and that is a huge pity. It could have been enshrined in the legislation. It is not enshrined. The opportunity has been missed.
There was an opportunity to avoid the pitfalls of the Transatlantic Trade and Investment Partnership. The European Union and many others have learned that trade negotiations conducted in secret do not get very far and that the population will eventually rebel, as was seen with TTIP. People have learned, but sadly it seems that the UK Government have not learned from that or, indeed, from the passage of their own Bill, which fell at the last parliamentary election, back in December.
NHS procurement should be taken care of. Wearing my constituency hat, a lot of constituents have written to me with concerns about the NHS—about making sure that there are NHS-specific carve-outs, that there is no negative listing affecting the NHS, that there are no standstill clauses, that the NHS is immune from the investor-state dispute settlement possibilities, and that there is no Americanisation of our drug situation in the United Kingdom. Particularly at this point, when the NHS is fighting coronavirus, but at all times in fact, it is incumbent on Parliament and the Government to back the NHS and make sure it is safe and protected.
The Secretary of State mentioned the USA trade deal. We have to take a step back and look at exactly what has been achieved, or the Government have tried to achieve. The USA trade deal will add only about 0.2% to the UK’s GDP, compared with the 6% that will probably be lost after Brexit—about one thirtieth of that. Given that America represents a quarter of the world’s GDP, even a trade deal with every country in the world will not make up the huge gap left by Brexit.
Finally, the Secretary of State began by saying she would do whatever it took to keep Britain trading, as she put it. Surely, at this point, “doing whatever it takes” would include staying away from this disastrously ruinous Brexit, or, at the very least, having the humility to postpone it during the pandemic. This hell-for-leather approach of going for the cliff edge this December is not what business needs at this time, or what the population needs. It is not what any of us needs at this time. If the Government are still too proud to realise that Brexit is a mistake, they should at least delay it, perhaps for one or two centuries.
Mark Menzies (Fylde) (Con) [V]
It is my great privilege to follow my friend and Chair of the International Trade Committee in this incredibly important debate. The Leader of the House said earlier that these proceedings sometimes appear stilted and scripted when done remotely. It is my challenge over the next five minutes to prove him wrong.
In my part of Lancashire, international trade is critical for jobs and prosperity. I am host to fabulous, world-class companies, such as BAE Systems and Westinghouse, the nuclear fuels manufacturer, and smaller companies such as Tangerine Holdings. The Bill is very much about the whole nature of international trade—getting that right and building a framework that will stand the test of time—and that is one reason I support its Second Reading today.
It is also my privilege to serve as one of the Government’s trade envoys. Indeed, the Secretary of State, in her opening remarks, referred to Chile as an example of one of the 48 countries with which a continuity agreement has been put in place. I would say to her that some of my other countries, through the Andean trade continuity agreements, such as Peru and Colombia, also have arrangements to ensure a smooth transition when the UK eventually leaves the EU at the end of this year.
T hat has not happened by chance. Those agreements are in place because of the dedication and hard work of people in the Department, not just in London, but especially in post. I take this opportunity to pay tribute to the men and women, many of whom are nationals of the countries they represent, who work tirelessly and understand the nature of their countries in a way that is sometimes difficult to comprehend from London. Their dedication and hard work have got us to where we are today. That sometimes gets missed.
We also have to recognise that the Trade Bill is only part of the picture. Measures such as the many double taxation agreements—there is one in place with one of my countries, Colombia—are really important to ensuring a smooth transition and the financial flows that will come from trade. The Government have been working very hard on that in the last couple of years, but there is still more work to be done in other key markets across the globe.
There has been much fixation in recent years on trade deals, but they are only part of the picture; much of this is about a smooth transition from the EU arrangements to what comes next. If we are unable in this House to demonstrate to our key countries and partners across the globe that we can pass a piece of legislation, why on earth should we be asking our officials and trade envoys to make representations to senators and presidents to get agreements in place so that when we leave we can have that smooth transition? I therefore urge the House to get behind the Bill and to give it a Second Reading unamended.
I would like to take this opportunity, however, to challenge the Government on how we plan to use some of the data-collection powers in the Bill. For example, I would like to see some of the data sharing in HMRC to be used to reshape and rescope bodies such as UK Export Finance, because in all of my key markets we only ever reach a tiny percentage of the credit facilities that we say are available. Given that London is the global capital of fancy credit mechanisms, I urge the Minister—it is great to see him in his rightful place—to use some of the expertise in the City and to challenge whether UK Export Finance needs to be given the opportunity to evolve in order to take advantage of some of the real opportunities that are out there.
Madam Deputy Speaker, I have followed your example and set a timer, so in my closing seconds let me just say that free trade is important, not just as a sign of national prestige, but because it creates jobs and generates the wealth to pay for public services at home and, more importantly, abroad. At a time of rising unemployment, my goodness, we need free trade more than ever, so I will be supporting this Bill in its passage through Parliament.
Darren Jones (Bristol North West) (Lab) [V]
According to research from the Harvard Kennedy School’s Growth Lab, British exports have been declining, concentrating into a smaller number of products and acting as a drag on our economic growth. Remarkably, in the past decade the UK has added only two new export products, and, perhaps embarrassingly, our main new export has been bovine, sheep and goat fat. I declare my interest as an amateur vegan, but I suggest that an economy that is as complex and capable as ours really ought to have done better.
We know that economic growth can be driven by export diversification, but to do that we need an active industrial strategy that works with the market to make clear what we actually want to achieve while investing in workers with the skills to do it. Some colleagues will say, “Ah, but it was the European Union’s job, and now that we are taking back control, it will be much better and the Bill will help us do that.” I would respectfully compare the UK’s record to, for example, that of France, which is, of course, a member of the European Union. During the same timeframe in which the UK majored on bovine, sheep and goat fats, and added around $2 per capita, with a total UK market of $104 million, France has managed to add 10 new projects, creating a new $1.9 billion market and growing GDP per capita by $28. It has therefore been a question of intent and ability, not a question of power.
Based on current capacity, the UK has a pretty good spread of manufacturing capabilities, from chemicals and machinery to automotive, gas turbines and aerospace, but the bulk of our goods-based growth has come from aerospace and automotive, whose capacity relies on European supply chains. Based on current Brexit negotiations, those supply chains are at risk, as well as under added pressure from the pandemic. The Government have largely relied on services-based growth in our economy, which of course is an important part of what we do as a country, but they took their eye off the ball in respect of British manufacturing, resulting in a weaker and more exposed market for goods, exports and economic growth.
That is the context for this Bill, because the questions that we are considering today have been with us in one form or another for the past four years. Most of the provisions in front of us today first came before the House a few months after I was elected in 2017. By any measure, this legislation has taken too long. The priorities given force in the Bill, and which even now run through all the arguments on trade made by those on the Treasury Bench, are the same arguments we have heard over the period of trading inadequacy that I have just set out. The economy is in recession and we are on the cusp of a once-in-a-century collapse in output. The key test is whether the Government are committed to bringing back British manufacturing as a core component of the British economy.
In closing, I would like to ask the Minister to answer a number of questions when summing up the debate. First, will he set out for the House whether Parliament will be given the right to full and transparent scrutiny of the trade negotiations, and confirm whether that will be by a new or existing Committee of this House? As a former member of the European Scrutiny Committee, I note that we had such a function when the European Union was negotiating trade deals, but that does not seem to be replicated in the Bill.
Secondly, local government leaders are in the process of setting out recovery plans post pandemic. What conversations is the Department having with city leaders to ensure that those leaders on the ground have input into decisions made in Whitehall?
Thirdly, Ministers have long said, whether in Brexit or trade debates, that the Government will stand by their commitment to human rights, workers’ rights and environmental protections, but this Bill does not mention climate change or workers’ rights at all. Britain has an opportunity to set the global expectation on these issues. I would like to understand why the Government have not included such provisions. There is a significant opportunity to couple climate diplomacy with export opportunities as we work to help other countries to transition to net zero. I hope the Minister will confirm that these opportunities are also being considered by the Department.
As an anti-modern slavery champion for the Commonwealth Parliamentary Association, I have seen first hand the risks of global supply chains that do not have adequate protections and transparency built in. No work or business in the UK wants to be associated with illegal trafficking and exploitation of some of the most vulnerable people on the planet. I hope the Minister can set out how the Government intend to ensure that these protections are included in all future trade deals.
John Redwood (Wokingham) (Con) [V]
You do not need to pay to trade: I welcome the policy behind this legislation and the Bill itself, which makes it very clear that the United Kingdom wishes to be a positive trade partner with as many countries around the world as would like a free trade agreement with us. This Bill ensures that we can carry across the FTAs that the EU has with a range of countries that naturally fall to transit to us as well as to it. Many of us were told that we were wrong when we argued that during the referendum and afterwards, but the Government have proved us right in that of course those countries wish to roll over those agreements. In one or two cases, they wish to go considerably further than the agreements we already have. I welcome the Government’s positive response to that to see what more can be added so that we can have a better deal as we leave the European Union than we had when we were in it.
We must see the policy background to this Bill as including the most important letter written this week by our trade negotiator to Mr Barnier about the parallel negotiations for a possible UK-EU free trade agreement. It is an admirably lucid letter which makes it very clear that, just as in this Bill, we are not sacrificing our fish, offering special payments or agreeing to accept the laws of other countries in order to create a free trade agreement with them, and neither should we do so in the case of the European Union. We voted very clearly to leave the single market and to leave the customs union. Many of us who voted that way strongly believed then, and believe even more so today, that we want a free trade-based agreement with the European Union if that is also its wish, but we would rather trade with it under WTO rules and the excellent new tariff we have set out for external trade if it wishes instead to claim that we need to be some kind of surrogate member taking its laws, paying its bills and accepting many of its views on matters like our fish resources.
It is more likely that we will get a free trade agreement from a reluctant European Union just before the deadline at the end of the year if we have made great progress in negotiating free trade deals elsewhere. That is why the Government are absolutely right to respond very positively to the United States of America, to Japan, to Australia, to New Zealand and to the Trans-Pacific Partnership. In each of those cases, the counter-party is very willing. In each of those cases, there are precedents for good agreements between other parts of the world and those countries, and we can build on those and our own models for a positive free trade arrangement.
The EU will see how relatively easy it is to make such progress with those countries we have agreements with. When we were in the EU, the EU had not got round to having agreements with some of those countries—big countries such as the United States of America. When we are outside the EU, that will make the EU even keener to want to have a free trade agreement with us. Rather reluctantly, it will have to admit that it has been making a mistake over these past years in trying to make our exit so protracted and so difficult, and claiming that you do need to pay for trade.
I will vote for the Bill as vindication that, of course, many countries wish to trade with us on as free a basis as possible. I will vote for it as part of a much bigger package of a free trade loving United Kingdom driving a free trade agenda around the world. I will vote for it because it sends a clear message to the European Union that it is negotiating in the wrong way and running the danger of ending up without a free trade agreement that is rather more in its interests than ours, given the asymmetry of our trade.
Free trade is a good way to promote prosperity. It is even more vital now we need to recover our economies from the covid-19 crisis. I urge the EU to understand that and to co-operate sensibly, just as I give the Government full support to press ahead in negotiating deals with all those great countries and regions of the world that think Britain is a hugely important future partner, and where we see fast-growing trade that can enrich both sides.
Sir Mark Hendrick (Preston) (Lab/Co-op)
Several of my hon. Friends have made the point that current parliamentary procedure is totally inadequate if we are to scrutinise properly and have proper parliamentary oversight of trade deals negotiated by the Government. We are, of course, supportive of mechanisms that will enable the UK to transition from being a member of the EU so that we can enter into our own trade agreements and into international trade conventions through organisations such as the WTO. This Bill, however, does nothing to promote transparency or that proper scrutiny that this House and the country deserve. Therefore, I, and many of my right hon. and hon. Friends will not support the Bill.
The fact that the Bill is being pushed through in the middle of the coronavirus pandemic means that the importance that would normally be attached to such legislation is being overlooked. The current life-and-death crisis, which has been exacerbated by this Government’s bad management, is totally overshadowing it. The crisis not only overshadows this Bill, but will overshadow much of the legislation that will pass through this House in the coming weeks and months. In addition, the inevitable negative economic impact of a Brexit cliff edge, following the end of the EU exit transition period, can easily be pinned on the coronavirus crisis.
The Bill will lead to trade deals that will have huge implications for our economy and our global alliances well into the future. At the moment, the current and planned continuity trade talks between the UK and the EU are taking place at the same time as preliminary discussions between the UK and United States. The crisis provides perfect cover from view, so those discussions can happen with little scrutiny by this House and little attention from the media to inform the public.
As much as I would like to see a good trade deal with the EU, I am not one of those arguing for an extension of the transitional period. If I thought that the Government wanted anything that looked like a good trade deal with the EU, an extension would probably be a good idea, but I do not think they do. Many Conservative Back Benchers and some of those on the Government Front Bench do not want a deal with the EU and would be quite happy to throw their lot in with any trade deal with the United States—the right hon. Member for Wokingham (John Redwood) is among them.
If the Conservative party wanted a good EU trade deal, it could have had an agreement with the Labour party last year when we were debating our EU exit, and the path would have been set—but the Government did not want that. Now, of course, in the Government’s proposals for a comprehensive free trade agreement with the EU, they are asking for many of the benefits of EU membership without the costs that that membership brings. Having said that, there will still be a large divorce bill running into billions of euros for the UK to cough up, and the clock is still ticking. My bet is that any agreement on trade with the EU will be a fig leaf to hide the embarrassment of the years of discussion and negotiation.
The elephant in the room is, and always was, the United States and what the current President wants for the future. I ask myself, “Why are there two sets of trade discussions—UK-EU and UK-US—going on at the same time?” The Secretary of State for International Trade may claim that the fact that the discussions with the EU are already under way might give the UK some leverage to get better terms from the US in specific areas but, in a likely no-deal outcome or the fig-leaf agreement that I mentioned earlier, any discussions seem extremely unlikely.
In addition, for the moment, the US under President Trump will probably seek only a preliminary agreement that he can wave around for re-election purposes in November. However, if Trump wins again, he will demand that the UK has minimal trading arrangements with the EU and that the UK conforms with US norms through mutual recognition agreements, replacing EU regulations on goods, services and agricultural products, for example. This Bill is leading the UK down the slippery slope of a Government who are becoming less accountable to Parliament and the people of this country, trade relations that are not in the best interests of the people of this country and an economic future over which we have less and less control.
Damian Collins (Folkestone and Hythe) (Con) [V]
I wish to speak in support of the Bill, but also to address the importance of scrutiny by Parliament of digital trade provisions in proposed future UK trading agreements. This is a vital and fast-moving sector that is very important to the British economy. Technology touches almost all aspects of our national life, as indeed these proceedings themselves make clear.
One of the most important new trade agreements being negotiated right now is the one with the United States, but we need to make sure that the digital trade provisions of a deal do not impact on other areas of domestic law, in particular our ability to legislate to create new responsibilities for large social media companies to act against harmful content online. The example of the recently negotiated trade deal between the USA, Canada and Mexico, which I understand is the basis for the start of the American approach to negotiations with the UK, shows how the danger can lie in the detail of these agreements.
The agreement states that the signatories shall not
“adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.”
What that means, in short, is that while a social media platform can be used to disseminate harmful content, and indeed the algorithms of that platform could be used to promote it, the liability lies solely with the person who created that content, and it could be impossible to identify that person, except perhaps through data held by the social media platform they have used. In this context, the harmful content being shared on social media could include a wide range of dangerous material from content that promotes fraud, violent conduct, self-harm, cyber-bullying or unlawful interference in elections. This provision was included in the US-Canada-Mexico trade agreement, despite opposition from prominent members of the United States Congress, including the Speaker, Nancy Pelosi, and Senators Mark Warner and Ted Cruz.
The provision is based on the provisions in US law known as section 230 of the US Communications Decency Act. Section 230 provides broad unconditional immunity to internet platforms from civil liability for unlawful third-party content they distribute. This sweeping immunity gives internet-based entities an unnecessary and unfair commercial advantage over various law-abiding bricks-and-mortar businesses and content creators. Section 230 immunity is unconditional. The platform can even be designed to attract illegal or harmful content, to know about that illegal or harmful content, have a role in generating and editing it, actively increase its reach and refuse to do anything about it, profit from it and help hide the identity of third-party lawbreakers, and still not be civilly liable.
The grant of immunity for online services under section 230 was supposed to be in exchange for the act of voluntary filtering in a proactive and effective way, yet we all know that there are constant complaints about the failure of major tech companies to act as swiftly as we would like to see against content that could cause harm to others. If such a provision were required in the UK-US trade agreement, it would severely limit our ability to tackle online harms, as we would be prevented from creating legal liabilities, or to tackle companies failing in their duty of care to act against harmful content.
This prompts the question whether international trade agreements should be used to fix such important matters of domestic policy. There is growing cross-party consensus on that point in the US Congress as well. In the UK, these should always be matters on which Parliament has the last word. Indeed, in America, those who have advocated the inclusion of section 230 provisions in trade agreements, do so knowing that they will make it harder for them to be removed in US law itself. The Secretary of State for International Trade has assured me that the Government will not accept trade agreements that would limit the scope of Parliament to legislate to create responsibilities to act against harmful content online. I agree with her that that should be our priority, but we need to understand that that will require a different approach to the negotiations on digital trade from that which was followed by Canada with America. We should not include the provisions based on section 230 in a UK-US trade agreement.
Having trade agreements for digital services, data and technology with other major markets around the world is greatly in our national interest, but we need to make sure that they give us the freedom to act against known harms and the freedom to enforce standards designed to protect the public interest, just as we would seek to do in any other industry.
Craig Williams (Montgomeryshire) (Con)
It is a great privilege to take part in this debate. This Bill and this policy area will be one of the most important for my rural constituency of Montgomeryshire. Trade with the outside world and continuing trade with the EU is incredibly important to my agricultural community, as it is to other services and to manufacturing goods.
At the outset, I would like to welcome the 20 continuity trade agreements we have already rolled over. I would very much welcome an update from the Minister on the remaining, with an honest assessment of trade treaties, perhaps with Canada and other countries. I would also like to take this opportunity to pay tribute to David Frost, Sir Tim Barrow and the Parliamentary Office of Science and Technology in Brussels for their continuing work. People talk about a lack of scrutiny, but it took me less than 20 seconds to check the update on that particular treaty, check the draft legal texts that are published on the website and read the most recent correspondence from David Frost to his counterparts. I cannot see a treaty being dealt with in so much light as that one currently is.
I want to focus my contribution on agriculture under the scope of the Bill and on trade policy going forward. We have not done trade policy directly as a Parliament, as a Government or as a country for some 40 years. We devolved or evolved or passed that power over to the European Union. Any Member or person in the United Kingdom who wants to hold up the European Union as a body one would want to replicate in terms of scrutiny obviously has not been participating in public discourse over the past five years.
I welcome much of what is in the Bill, but I seek reassurances on agriculture in particular. We produce high quality produce in this country and we are proud of our exports. We are proud of what our farmers are doing in the current covid-19 crisis to supply our domestic suppliers. I think public discourse on food supply is changing. Public discourse is changing on the robustness and the resilience of our supply networks. We have seen first-hand, through the work of the International Trade Committee, what has happened to some trade deals when national Governments have looked at their domestic supplies of pharmaceuticals and food stuffs during this crisis. We need to be very mindful of that as we put new trade deals in place.
Trade is vital for carcase balancing, the ability to sell cuts that the UK market does not want, and for dealing with demand shocks and seasonal issues. Trade is hugely important to my farmers, but I feel that because this subject has been dealt with in the European Union over the past 40 years there is a lot of misinformation. There is not a great deal of clarity on trade policy or how trade deals are put together. I implore the Minister and the Government to put in place some kind of communication package to explain what it means now that we have these important powers and what it means to be negotiating with the world as UK plc.
Last week there was a conflation of import standards with domestic standards and tariffs. It was hugely complicated and hugely frustrating to deal with that conflation of information. In a domestic Bill dealing with import standards, and sanitary and phytosanitary issues on top of that, we need to be clear with our constituents and our businesses what standards we are talking about and what impact the deals will have on our agricultural communities. I implore the Minister not just to engage with the farming unions—the Farmers’ Union of Wales and the NFU Cymru in my case; and I know the Minister has been on Zoom with them this week—but to build a relationship directly with farming communities, too. The unions of course conduct a great political campaign to promote their members’ views, but we need to engage directly. The unions of course conduct a great political campaign to promote their members’ views, but we need to engage directly.
We must maintain our import standards. I very much welcome the Minister’s public commitments, made at the Dispatch Box, to maintain the bans on chlorine-washed chicken and hormone-injected beef. We must be clear that those import standards are staying and that we have the back of the agricultural community in this country. While we look at the resilience of our supply chains and the great opportunities that new trade deals with the outside world present, we must reassure and earn trust. Minister, I have to report back that, in the agricultural community, mainly because of misinformation and miscommunication, we are looking to you to earn that trust and make us some great deals.
Barry Gardiner (Brent North) (Lab)
The Trade Bill is a bad Bill. It is bad because it fails to establish a proper framework whereby Parliament can scrutinise, ratify and implement all future international trade treaties; because it creates one of the weakest trade remedy authorities in the world, and because it pretends that it is necessary to roll over our existing agreements with third countries through the EU. So necessary is the measure that the Minister will have great difficulty when summing up in explaining how the Government have managed to roll over the majority of them before the Bill has passed into law. This is legislative prestidigitation of the highest order. The Government say that they need the Bill to do what they proudly boast they have already succeeded in doing without it. The truth is that the Bill is about the Government’s abrogating to themselves all future power in relation to trade agreements, freed from the inconvenient scrutiny of Parliament.
The procedure for ratifying international agreements is set out in the Constitutional Reform and Governance Act 2010—CRAGA. It stipulates that any treaty need only be laid before Parliament for 21 sitting days. If there is no vote against it during that period, it passes into law. But the Government decide Parliament’s business and can simply arrange that no vote takes place. When CRAGA was introduced, a huge number of democratic scrutiny processes were in place through the European Union. There was the European Council’s negotiation mandate and formal consultation procedures. The Committee on International Trade—the INTA Committee —scrutinised treaties before passing them to the European Parliament to vote on. Treaties then came to the European Scrutiny Committee in the Commons for further examination before the CRAGA process ratified them. Under the Bill, all that is left is the rubber stamp of CRAGA. All other layers are gone. The Bill should try to replace those layers. It cannot be right that there is no democratic oversight whatsoever of trade agreements.
Members of Parliament may disagree about whether an agreement will benefit jobs or adequately protect standards, but they should have at least the right to debate those matters and hold the Government to account. The Bill denies us that right. This is not Parliament taking back control, but Government snatching it from Parliament. That is why I believe the Bill is dangerous.
Let me remind Conservative Members of what they claimed to be fighting for at the last general election. They said that sovereignty meant not accepting the rulings of supranational courts such as the European Court of Justice. Do they therefore agree with us that the use of investor-state dispute settlement mechanisms in future trade agreements should be ruled out in any form? They give higher rights to foreign investors than to our own domestic companies, allowing them to sue our Government in private courts for policy decisions that have an impact on their potential profits. So much for gaining freedom from a supranational court.
Conservative Members said that Britain had to be free to chart its own future in the world. Do they therefore agree that negative lists of services should be banned? It is impossible to specify in a list a service that has not yet been invented. The negative list process would stop the UK Government making a decision about how such services should be provided in future. So much for making our own way in the world.
Conservative Members said that they would safeguard our domestic environmental protections, food safety regulations and animal welfare laws, but simply keeping our regulations for our farmers here does not protect them in a free trade agreement. Allowing the importation of goods produced elsewhere to lower standards will undermine our producers and lead to a race to the bottom—so much for safeguarding our food and welfare standards.
The Government said they would not sell off the NHS, and of course they cannot. The NHS is not an entity that can be sold, but free trade agreements can contain an innocuous-sounding provision about the restructuring of pharmaceutical pricing models. That is the way to undermine the health service—by downgrading our bulk purchasing power against big pharma companies. So much for the NHS being “safe” in their hands.
Finally, does it follow that if this Bill is enacted, by necessity we will end up with all these measures? No, it does not. It does mean, however, that if they exist in any proposed FDA, Parliament will have no means of stopping that. This debate is about more than trade; it is about the balance of power between Parliament and the Executive. It is about the sovereignty of Parliament—something that every Tory who will vote for this obnoxious Bill swore in their manifesto to defend.
Madam Deputy Speaker (Dame Rosie Winterton)
I am afraid we cannot hear Richard Graham at the moment, so I will now call Robert Courts.
Robert Courts (Witney) (Con) [V]
It is an honour to speak in this debate and to participate in the detail of the Bill with my colleagues from the International Trade Committee. I am pleased that so many of them are taking part in this debate. Free and open trade has created the world in which we live—a world that is open, prosperous, and inventive. One of the greatest prizes to be seized by any Government is the ability to carry out an independent trade policy, which is what we are doing today.
Why does trade matter in the first place? It is pretty straightforward. Exporters and their supply chains are responsible for millions of jobs in the UK. Countries whose economies are open have higher productivity, because of competitive pressures and greater specialisation. Analysis by the Department for International Trade suggests that businesses that export goods are around 21% more productive than their non-exporting counterparts. Those exporters provide a larger proportion of UK manufacturing and labour productivity growth.
However, we can do so much better that we currently do. That same survey data suggests that 250,000 to 350,000 UK businesses have tradeable goods and services, but do not currently trade internationally. When we couple that with the undoubted, unquestionable benefit of the UK brand, which has fans from North America to China and everywhere in between, this is an opportunity for each and every one of us throughout the country. When we consider the potential benefits of a US trade deal alone, and the possibility of bilateral trade increasing by more than £15 billion, increasing wages by £1.8 billion and benefiting every area of the country, we see the extraordinary prize that lies before us. All that is before we even start to consider the exponential growth that is likely to come from the developing world in the next 10 to 20 years.
It is foolish to see trade as some game of numbers that is reduced to statistics. People have traded together since one cave dweller traded food for tools in the dim and distant past, and what trade starts, friendships continue. Whether it was Bastiat, or someone else, who said that when goods do not trek across borders, soldiers will, the essence of that remains true, as is its flipside. Trade helps people to understand each other and get to know something of the way that other societies work. That must be delivered through an independent trade policy—one that applies our priorities to our country, and does not let somebody else’s priorities be applied for us.
Those who say that the Bill does not make provision for high standards must know that this is not the place for that; this Bill sets the framework for the conversations that are to come. In any event, the Government have been crystal clear about our ambitions for the future. As the Prime Minister said in his speech on 3 February,
“we will not accept any diminution in food hygiene or animal welfare standards… We are not leaving the EU to undermine European standards. We will not engage in any kind of dumping, whether commercial, social or environmental.”
However, having high standards is not the same thing as letting others set them for us, or seeking to control the way that others regulate their industries. If, in any event, we want to set trade defences, barriers or tariffs, we will need the Trade Remedies Authority that is set out in the Bill.
It is difficult to avoid the conclusion that those who object to the Bill as it stands are those who object to free trade in general and wish to cling to the old-fashioned protectionist agenda that was defeated in this country more than 100 years ago. Protectionism will always have an appeal for those who wish to protect vested interests, but we should be clear: history makes it clear that protectionism leaves everybody the poorer, and the poorest worse of all. That is all the clearer when we look at the impact of the current crisis. Exporters and their supply chains are responsible for millions of jobs in the UK. With unemployment rising during the crisis, job creation with exporters afterwards will be more important than ever, and we must have the flexibility to make our own measures for our own markets. Only by having that flexibility can we ensure that Britain’s economy is successfully refreshed.
As we look to ensure that we have what we need to protect us for the future—PPE, medicines and other things —it is natural to wish to turn inwards, to protect we have and to keep more for ourselves, and to ensure that we in our island can look after ourselves. In some ways, that is an understandable impulse, but not in the area of trade. Not only is it morally wrong to retreat behind a protectionist barrier wall by which the developing world is excluded—we would pay the consequences for that behaviour in any event—but it is against our own interests. We cannot make everything ourselves and we cannot make everything well. We should concentrate on what we are good at—high-tech industries, for example—and look elsewhere at where others can better help us and we can help them, too.
It is keeping open global trade routes that has enabled us to be fed, to buy PPE and to secure essential medication from all across the globe. Free trade is not just an economic opportunity, but the openness of the system itself provides a vital defence. We must seek to diversify our supply chains, because in that way we can improve our resilience to withstand future challenges and ensure that we reduce our reliance on countries—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I thank the hon. Gentleman for his speech, but we have to move on now to Paul Girvan—[Interruption.] We will come back to Paul Girvan, and will move on to Marco Longhi.
Marco Longhi (Dudley North) (Con) [V]
The Trade Bill we are discussing today is a framework that allows us to continue to trade as a nation state with those countries who already have a trade agreement with the EU. It enables UK service providers to seek out business in Government procurement markets worth £1.3 trillion, and reshores from the EU those protections available under WTO rules to support British business against unfair trading activities under the new trade remedies authority.
Why is that important? It means that we will harpoon yet again the ill cited arguments that we will crash out and fall off a cliff edge through Brexit. It means that we can seek out new business, and it means that we can finally take effective action ourselves against rogue nations who do not respect international trading conventions. Let us remind ourselves of the EU’s impotence when China dumped its excess steel on our markets, and the jobs it cost us here in the UK.
It is an undisputed fact that open markets and free trade generate wealth and our new-found and hard-won ability to seek out new markets will grow our economy. Covid-19 has brought about a global tendency towards protectionism, which we know has the opposite effect. We must not be drawn into this trap at any cost, as we shall be poorer for it. However, what covid-19 has shown is that for all their rhetoric, the EU’s institutions fail to respond effectively, if at all, and its constituent members immediately behaved as a collection of nation states. They offered a shallow apology to the Italian people for leaving them to their own devices while protecting their own. I must ask, was that not entirely predictable? That begs the question of how, as a nation at this historic junction, we consider the strategic implications of a future crisis. Should we be more self-reliant in key areas such as energy, food and medicines? Many large corporates are now reshoring as they understand the total cost of outsourced activities, including problems with quality control, the cost of unreliable supply chains and the carbon footprint of products, just to name a few. That is why I was delighted to hear about our investment to produce 70 million masks in the UK and create around 450 jobs at the same time. It is about taking a risk-based approach and understanding the total cost-benefit arguments of decisions that we take in the key areas that affect our national resilience.
Globalisation is here to stay. As we harness the great opportunities presented to us by Brexit and FTAs, our biggest challenge is how we do so. The area that I represent in Dudley and the many areas that my new colleagues represent have not always benefited. Globalisation has seen benefits, but also a race to the bottom with a low-wage economy in traditional manufacturing and the loss of jobs in the sector. Buying a pair of boots for a few pounds less is not a huge benefit if there is not a job to go to.
Analysis shows that there are between 250,000 and 350,000 businesses that currently do not export but could. My plea is that we target those businesses, with a special focus on those in the midlands, with determination, enthusiasm and strategic focus, and at real pace, so that we can add value and bring new jobs to these areas while we also minimise the devastating impact of covid-19 on local economies and people’s lives.
Paul Girvan (South Antrim) (DUP) [V]
It is a privilege to follow the hon. Member for Dudley North (Marco Longhi) and to have an opportunity to talk about the Bill, which is a road map to the UK and Northern Ireland’s future trading relationship with the rest of the world. It is important that we uphold and protect the good standards that we have set.
The Bill is focused on five main areas: procurement and the GPA; trade agreements; the formation of a trade remedies authority; information collecting, mainly in respect of HMRC; and data sharing. I want to focus mainly on what will affect Northern Ireland, which has a large proportion of exports, with 17% of all Northern Ireland sales going out of the country—sales worth £6.2 billion in 2018-19.
Two of our main sectors are machinery and transport: machinery makes up £3.2 billion of our total, and food, agriculture and the export of live animals make up £1.5 billion. I agree with the comments by the hon. Member for Montgomeryshire (Craig Williams) about agri-food, which we have to protect. We must ensure that we maintain the standards that have been fought for and achieved, and that we implement them as much as we can in any future agreements. We have a fantastic farming and agri-food industry in Northern Ireland. We have fought hard to ensure that our industry is sustainable, and we want to ensure that it is there for the future.
The pharmaceutical industry plays a big role in Northern Ireland. In my constituency we have Randox, and elsewhere in Northern Ireland we have Almac and Norbrook Laboratories. All are working hard during this covid-19 crisis. They have an offer to the rest of the world that we have to maintain.
We have a great wealth of talent in our tech industry. It was recently announced that 65 jobs are to be created in Northern Ireland at the American firm Cygilant. We have to ensure that we have opportunities to uphold. I am a free marketeer, but I do believe that we have to protect those industries that are currently struggling and make sure that they have every opportunity to be included in trade deals.
The previous Bill fell in 2019 as a result of the Westminster election. As we did not have a Northern Ireland Assembly in place at that stage, we had no input from the Northern Ireland Executive in relation to what should or should not be included in that Bill. We have an opportunity to ensure that all areas of the United Kingdom are represented on the new body, the TRA, that will be set up. All regions of the United Kingdom and the devolved areas should be represented on it. I am asking for an assurance that when deals are put forward, they apply in full to Northern Ireland, are fully accessible to businesses and trade from Northern Ireland and will be for the benefit of all. This Bill is an opportunity for us to take back trade certainty and to take back control within our own Parliament and we will support it. I thank you, Madam Deputy Speaker, for giving me the opportunity to speak in this debate this afternoon.
Madam Deputy Speaker (Dame Rosie Winterton)
We can now go back to Richard Graham.
Richard Graham (Gloucester) (Con) [V]
I hope you can hear me better this time, Madam Deputy Speaker. I am grateful for the opportunity to join this debate.
As our debate across the country widens gradually from how to protect our citizens’ health to how to protect their jobs, this Trade Bill is important. Some 30% of our GDP comes directly from our exports, and they in turn generate many of the jobs of all of our constituents. This is especially true in high-value manufacturing and engineering, cyber and services, in all of which there are some great examples clustered around my constituency of Gloucester.
This Bill, which provides the infrastructure for our own trading agreements with the Government procurement and the Trade Remedies Agency, is part of our plan to put our exporters in a position not just to recover but to grow again. Alongside the talks with the EU being handled through the Cabinet Office, and those by the Department of International Trade with the US, Australasia and the Trans-Pacific Partnership, this Bill highlights some of the Government’s strategy to take this forward.
I support all the goals mentioned in the Bill, but at the same time we should be honest about the risks. Global trade is currently in decline. Nationalism and protectionism are on the rise. The backdrop is not as benign as it was for an overall expansion of our trade, growth of exports and expansion of jobs in exporting businesses. We clearly do need to finish the agreements with our allies, such as Singapore, Canada and Japan, with which agreements did already exist. Trying to negotiate separate agreements with separate teams simultaneously with both the US and the EU is high-wire trade diplomacy. I wish our ministerial teams and all the negotiators all good fortune in taking these forward successfully. I believe that many of these things will go down to the wire, and our teams should play tough. They should stick with the game, and we need their success.
It is also worth highlighting the opportunities from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is an important accession opportunity rather than an FTA. Even though there is some overlap, we should not forget the importance of the 10 members of the Association of Southeast Asian Nations. TPP is not a complete substitute for continuing to grow our business with ASEAN in terms both of exports and bilateral investment. The way in which investment from the Philippines, to pick one small example, has turned around the fortunes of the Glaswegian Scottish whisky blender Whyte and Mackay is a strong case in point when it comes to the advantages of inward investment.
May I encourage the Secretary of State, the Minister who in his place and their teams to focus strongly, as we go forward, on the Continent of Asia both for greater market access through economic dialogues, as well as on FTAs and the TPP, recognising that most of its agricultural commodities and handicrafts are completely complementary to rather than competitive with our own output. Our services, for example those providing health insurance for millions across south-east Asia, are hugely beneficial for those countries as well as for our businesses. Ultimately, that is why this Bill is so important: it is an opportunity not only for us but for our trading partners, and we are right to strongly make the case as to why free trade does matter across the world.
Madam Deputy Speaker (Dame Rosie Winterton)
I shall now suspend the House until 4.24 pm.
Madam Deputy Speaker (Dame Eleanor Laing)
We go now to Belfast South and Claire Hanna.
Claire Hanna (Belfast South) (SDLP) [V]
Thank you, Madam Deputy Speaker. We in the Social Democratic and Labour party have put on record our concerns about the concept of upending the trade environment for businesses, particularly while many are in the fight of their lives against covid, as well as our scepticism about the possibility of negotiating this deal in just seven months, given the social distancing and travel restrictions on us all.
We have another few objections to the content of this Bill. The first concerns democratic oversight and the Bill’s failure to uphold basic principles of scrutiny and oversight, including around delegated powers. When Brexit was fought for on the basis of powers for this Parliament, it seems bizarre that MPs would vote to hand those powers to the Government unchecked to allow them to negotiate and sign, with incomplete scrutiny, trade deals that could have a massive effect on many aspects of our lives. Trade is a reserved matter, and this has particular implications for those of us in devolved regions where the powers may very well cut across devolved matters.
Our second objection relates to the protection of the national health service. The Bill fails to provide cover for that, despite numerous invitations to the Government to do so. The Government may say that the national health service is not for sale, but many people feel that actions in the medium and recent past make that unlikely to be true. Many have pointed out that we had applause for the national health service just last Thursday, but on Monday of this week a Bill was introduced that will seriously hamper the ability to provide health and social care services. Leaked papers from last year make very clear—if they were not already—the US’s interests in a trade deal, namely further access to NHS contracts and data. If the Government want people to believe that that will be off limits, they need to legislate specifically for that.
We also have serious concerns about the environmental ramifications of the approach set out in the Bill, which we do not think is compatible with an acknowledgment of our obligations to address climate change and improve resilience. The Bill should be underpinned by binding high environmental standards and non-regression provisions, but it is not. If done badly, these trade deals risk a race to the bottom on environmental protections and standards, as well as labour protections and standards. The fact that the Government rebuffed attempts to introduce standards via the Agriculture Bill will convince many people that the Government are not serious about such protections.
That leads me on to farming. Farmers in Northern Ireland and, I would imagine, elsewhere were dismayed by the Government’s failure to accept reasonable amendments to the Agriculture Bill. That leaves farming and many other sectors facing an uncertain future. That is particularly true for farmers in Northern Ireland—I am sure it is the same in many other regions—who trade and market on the basis of exceptionally high standards. They now fear that they will face competition from products of low and, indeed, unknown standards.
I want to finish with some questions that I hope the Secretary of State will address in her wind-up. One is about the trade arrangements that we currently enjoy with other territories—I think there are 74. How many of those arrangements have been rolled over to date, given that we require them all to be so within a matter of months? Does she anticipate that any countries that have rolled over, or that have indicated a willingness to do so, will seek to renegotiate in the light of the tariff schedule that was published yesterday? Does she acknowledge that every differential between the UK and the EU tariff schedules adds to the list of goods at risk in the Northern Ireland protocol and offers incentives for smuggling? Does she believe that that is yet another unfortunate consequence that people in Northern Ireland have to deal with, despite having rejected Brexit at every turn?
Finally, the Secretary of State has pointed out in the past that Northern Ireland will have UK tariffs applied—and lower, if that is negotiated with partners—but if any future arrangements require changes to regulatory practices and areas that are covered by the Northern Ireland protocol, will those arrangements have a carve-out for Northern Ireland?
Cherilyn Mackrory (Truro and Falmouth) (Con) [V]
It has been almost four years since the United Kingdom voted to leave the European Union. For the majority of that time, my constituents have been wondering what this would mean for them, their families and their businesses. Much has been made of the negatives in the last few years. What might go wrong? What markets are being lost? What standards are being lowered, and so on?
Today, of course, we find ourselves in a state of flux. The year 2020 has taken an unexpected turn and has altered the world in such a way that we are currently not sure what our normal is. Our coastal and rural communities are understandably nervous about what their future will look like. I understand those concerns completely, but the Bill offers a glimpse of life in the future, and for this we must be optimistic. With this Bill, global markets are a step closer to being opened up to Truro and Falmouth, the whole of Cornwall and the entire United Kingdom.
Figures suggest that a free trade agreement with the US, for example, could potentially boost the economy in the south-west by £284 million in the long term. One business in my constituency that might benefit from this is a copywriting agency based in Penrhyn. It works for tech companies around the world, including the likes of Microsoft, Amazon, Oracle and Salesforce, and around 35% of its business is from overseas. Two of the biggest clients are now based in the US, and it received funding last year from the Department for International Trade to travel to Boston to develop stronger relationships with one of its clients, a global software firm. Another company, also based in Penrhyn, uses precision 3D laser scanners to offer a safe and highly efficient surveying service to a wide range of industries. Founded 10 years ago as a 3D mining surveying company, it has branched out and offers surveying for yachts, vessels and other architectural design, with work being explored in the Balkans and on the African continent. These are just two examples of businesses in my constituency where I hope future open markets will be of greater advantage. There are many such businesses in Cornwall that can springboard once tariffs and red tape are reduced.
To support the dairy industry, food and drink and small businesses, the FTA could allow changes to tariffs for key exports such as dairy, which are currently as high as 25%. It could also see protection and growth for the region’s famous local exports. The south-west already exports £3.7 million-worth of drinks to the US, and a deal could help to build those exports and maintain effective protection for food and drink names to reflect their geographical origins, such as Cornish cider and, of course, Cornish pasties.
Last week, we voted to ensure that the Agriculture Bill moved to the next stage of its progress through Parliament. The House will remember that there were two amendments regarding the protection of food standards. I voted with the Government because I felt that this was not a discussion that should disrupt an otherwise fantastic piece of legislation. However, it is an important issue and one that Cornish farmers and I feel very strongly about.
Many farmers in my constituency are concerned that opening up the markets to imports from the US, in particular, could unfairly disadvantage them. However, managed correctly, I strongly believe that the UK agricultural sector will greatly benefit from a UK-US trade deal. There are clear opportunities for agricultural exports, of course. Currently, the average tariff on Cornish cheese, for example, is around 17%, which means that US consumers must pay more, so our quality produce is often priced out of the market.
However, on the tricky subject of food imports, I believe that the Government need to consider open, clear and obvious labelling—I am a big labelling fan and I am becoming a labelling nerd. I really want to see the Government working with food and agricultural industries to ensure that consumers can really see what they are buying. In my heady days as a new MP, all the way back at the beginning of the year, the Secretary of State made encouraging noises about better labelling, and that, for me, is key. When purchasing fresh meat, we see that our labelling has got much better. I, for one, always look to see that a chicken is free range and British. I am reassured by that, as I know that our free range chickens are, on the whole, happy chickens. However, someone buying a chicken korma ready meal, for example, will see no indication of where that chicken started its life or of whether it was content with its lot.
In closing, we must trust the British people to do the right thing, and we must give them all the information they need to make the correct decisions. Most people want to support British farmers, and reward their hard work and high animal welfare standards. The Government have a responsibility to make that as easy as possible; it is not protectionism—it is trust. It is about trusting our farmers and farming industry to carry on being the best—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady has exceeded her five minutes.
Antony Higginbotham (Burnley) (Con) [V]
I welcome the opportunity to speak in this debate, as it represents a major step forward in the UK’s journey to reclaim its role as the independent, global trading nation we all want it to be, delivering on a pledge I made to my constituents and the Government made to the country. Burnley has been a beneficiary of free trade: our largest employers include Safran Nacelles, of France, and Paradigm Precision, of the United States, and only a few weeks ago, Ultimate Visual Solutions, a local business, worked with the Department for International Trade to secure its first order in Vietnam—I am sure it will be the first of many.
Sadly, however, our area has lost jobs in recent weeks. Lancashire is the fourth largest manufacturing cluster for aerospace in the world, and that is one of the most global of sectors, in terms of both the supply chain and the customers it serves. The sector has been hit hard, and our challenge is to make sure that free and fair trade helps to spur our recovery on, getting the hundreds of thousands of businesses that do not currently export exporting, and generating economic growth and the jobs that go with it. I am committed to doing everything I can to make sure that is the case in Burnley. I was particularly pleased to hear the Secretary of State mention the textiles industry, as anyone who knows Burnley well will know that it was once the centre of global textiles and continues to have a thriving industry, which I know can reclaim that title once again.
For international trade to work, we need to ensure we have a safety mechanism—a way of dealing with those countries that say they trade freely but seek advantage through anti-competitive means. The proposal in this Bill for a Trade Remedies Authority is therefore welcome. That body will need to have the teeth required to deal with subsidies, dumping and any other measures used to distort the market.
As we take this step again towards being an independent, global trading nation, it is right that we also consider why trade is important, and not just why we are supporting it. The simple truth remains that free trade creates free people; it has done more to lift people out of poverty than any other measure, and it continues to drive global economic growth. That is why the UK initially joined what was then the European Economic Community; we saw, and continue to see, the benefits of striking trade relationships with like-minded countries. Having left the EU, it is important for us to look at the agreements struck on our behalf over the past 40 years to identify whether to carry them over. This Bill allows us to do that. I congratulate the Secretary of State and the whole departmental team for the way in which they have done this; 48 of these agreements are ready to be rolled over, securing more than £110 billion-worth of trade.
I have heard some people criticise the way in which the Government are planning to roll over some of the agreements, including the one with Japan, as though trying to be more ambitious, liberalising more trade and securing thousands more jobs in the UK were, in some way, a bad thing. The message from the House in this debate should be clear: the Government have our full support in trying to strike the best trade deals. We should roll them over where we can, where it is in our interests, but we should also build on them where we can, getting the best for Britain, because as we emerge on to the world stage of trade, we should be the leading light. I welcome the Government’s transparency as to where they seek to do that. Last week, we got full sight of the negotiation objectives for the UK-Japanese negotiations, just as we have done in respect of the US ones. The Secretary of State has made herself available to all colleagues on many occasions to discuss the UK-US free trade agreement, and I am sure that similar time will be made available to discuss the Japanese negotiations. Committing to using the affirmative procedure for any secondary legislation required to implement these continuity agreements ensures that there is ample time for debate in both Houses.
We also need to ensure that our trade agreements—those that are getting rolled over and those we negotiate in the future—are fit for the 21st century. Where we can negotiate new deals that allow UK technology companies to operate globally, including through innovative regulatory mechanisms such as the FinTech bridge, we should do so. Chapters on that, along with those on SMEs, will allow our businesses not just in Burnley but beyond to scale up rapidly in the global market, delivering the economy of the future.
I warmly welcome the Bill. It puts the UK back on the global trading map with an independent trade remedies body, and it provides the mechanism needed to roll over and expand existing trade agreements. For that reason, I look forward to voting for the Bill later.
Sarah Olney (Richmond Park) (LD) [V]
The Liberal Democrats will be voting against the Second Reading of the Trade Bill. It denies the British people the same rights that they enjoyed as members of the European Union, including the right to scrutinise and properly debate the terms on which we will trade with the rest of the world. When we were represented by Members of the European Parliament, we enjoyed that right. Our representatives were required to vote on all draft trade deals before they could be ratified. There is not enough time today to go over the old debate on whether or not the UK is better off as part of a single trading bloc—Members will surely be in no doubt about my own views on that issue—but it is inconsistent to have secured the right for the UK to negotiate its own trade deals, only to promptly shut the British people out of all discussions about them.
What would our constituents wish us to prioritise if they were allowed a say? They would want to know that goods coming into our country were produced to the same quality standards as the domestically produced goods they will compete with; that any food coming from abroad was farmed with sufficient regard to animal welfare; and that consumers were protected from shoddy or unsafe goods. They would want to know that the workers producing those goods in other countries had the same rights as UK workers, and to know that cheaper prices for imported goods were not achieved at the cost of employee welfare. They would also want to resist a race to the bottom by business owners who argue that maintaining employment standards in this country makes them uncompetitive. They would want to know that the UK and our international trade partners were pushing forward towards the goal of achieving net zero carbon, and that we could not accept goods into our domestic market that were produced with environmental standards that where any lower than those of goods produced here.
The Government wish to preserve the Union, but we know that they are happy for part of the United Kingdom to trade under different terms from the other nations to meet their political objectives. What else will this Government trade away if they are left unscrutinised? Our counterparts in trade negotiations will have to have their deals endorsed by their legislatures. The US deal will need to be ratified by Congress. Its negotiators will know what will and will not get through Congress, and they will use that as a negotiating position. We will not have the same negotiating strength, as our counterparts will know that we do not have to defer to Parliament. It will be much easier for the UK to yield than it will be for the US, and how tempting will that be, if the Government prize a quick political win over uninteresting detail that nobody can scrutinise?
The International Trade Secretary is surely aware that the significance of tariff barriers is declining as the significance of non-tariff barriers increases. Those non-tariff barriers can be complex and shifting and require difficult choices. Do we prioritise cheaper goods over the fight against climate change? Do we open up foreign markets to our exports at the risk of bolstering a regime that does not respect human rights? These questions should be debated on the Floor of the House so that the public have a full understanding of the decisions that are being made on their behalf.
This country is a very different place from the one that last negotiated its own trade agreements. We have a far wider range of consumer goods available to us, and many of us have sufficient income to be able to make discerning choices about which ones we will purchase. We are better informed than we ever were, and we use that information to guide our buying choices. Consumers are using their buying power to demand and achieve significant improvements in the ethical and environmental production of the goods they purchase. Why should the British people not being able to influence how that same power is exercised on their behalf on a national basis in the global marketplace?
To oppose the Bill is not to endorse protectionism, as some Members on the Government Benches have implied. It is simply to state that the Bill does not seek to realise fully all the opportunities that building our own trade policy represents. It robs the British people of rights they have enjoyed for 50 years and it weakens our negotiating position on future trade deals.
Lee Rowley (North East Derbyshire) (Con)
I am grateful for the opportunity to contribute to this debate. Over the past three months, our primary focus has been coronavirus and the challenge we face on a national and local level. It is right that we have spent a huge amount of time, effort and focus on coronavirus. At the same time, if we do not prepare as parliamentarians for the future beyond coronavirus, whenever that terrible disease eventually moves on, and if we do not spend time thinking through how we reshape the world and take advantage of the opportunities that will come, we are not doing our jobs adequately.
One of the big jobs is ensuring that we have the right foreign policy, trade policy and international trade policy. That is why I welcome the opportunity to debate this Bill. I do not share the criticisms from Members that we are not giving the Bill adequate scrutiny or that now is not the time to make these decisions. I do not claim to be an expert in international trade, but in some ways, we do not need to be experts in international trade to welcome a Bill that, at its heart, perpetuates the principle that I hope most people in this place stand for: free trade.
Free trade is one of those principles and ideologies that is not much talked about other than as a negative, but actually, it has significantly improved our lot domestically over many centuries. Vitally, it has also improved the lot of so many people across the world, ensuring that so many people are lifted out of poverty and giving us so many opportunities. Yet Members on the Opposition Benches focus on the challenges or disadvantages of it.
We as parliamentarians suffer the quagmire—the fog—of special interest groups, who are perpetually rent-seeking when it comes to these Bills. We suffer the white noise of groups such as 38 Degrees who seek to spam us in ways that misinterpret and offer misinformation about the reality of what we are trying to do.
It is free trade that has partly been responsible for the reduction in absolute poverty by more than half since 1990. It is free trade that contributed to the magnificent growth of economies around the world, such as those in South Korea and Germany, out of the ruins of war 50 or 60 years ago. We should stand up for the opportunities that free trade offers.
This is not a paean to free trade on just a principled or conceptual basis. Free trade presents demonstrable opportunities for people in my constituency and constituencies across the country. It supports jobs in places like Clay Cross, where people go to work every day in highly skilled factories to export goods across the world. It supports entrepreneurs who see new opportunities and new markets around the world for their ideas, so that they can grow their businesses in places like Dronfield and Eckington. Bluntly, it supports us all in our old age, because we put money into pensions that grow by investing in companies that use free trade to satisfy demand, move goods around the world and ensure that, ultimately, people get the things they need. I do not just support free trade from a principled perspective; I support it because it helps North East Derbyshire and every single other constituency in this country.
We also need to support free trade and Bills such as this because of the opportunities that will come in the next few decades. We will have to get over the challenges caused by coronavirus in the next few years. Opening up markets, seeking to obtain deals across the world and seeking to roll over, as the Bill does, existing deals and enhance them where possible are exactly the kind of opportunities we need to take as we rebuild our country after the grave difficulties that were so unexpected in the last three months or so.
Free trade does not mean a free-for-all. It means the opportunity to build fair and equitable trade for all of us. Ultimately, free trade and the legislative framework that supports it give us and our constituents the opportunity to build better lives and to offer that to people across the world. It is something I celebrate, and I hope that the majority of people in this House do the same.
Margaret Greenwood (Wirral West) (Lab) [V]
There is a great deal of public concern about the Bill before us today, because it fails to provide for effective parliamentary scrutiny in future trade agreements. In effect, the Government will have free rein to do what they like in signing trade agreements with countries around the world, including countries that do not have the same level of environmental protections, food safety and animal welfare regulations that we currently have. Free trade agreements can have an impact on our labour standards, and on the ability of our public services to operate in the public sector. That has profound implications for the quality of all our lives, and for our democracy.
Before the current covid-19 crisis, large sections of the public had become aware of the privatisation of the national health service which has been going on under this and previous Conservative Governments. The Bill fails to protect the future of the NHS, since it does nothing to prevent trade deals from being done behind closed doors without proper parliamentary scrutiny.
The Health and Social Care Act 2012, introduced by the Conservative and Liberal Democrat Government, brought in complex changes, undermining our national health service as a public service delivered by public sector employees. The abolition of the student nurse bursary seemed designed to erode further the public sector ethos of our NHS. Yet, despite this onslaught from the Government, today we see doctors, nurses and other NHS workers putting their all into serving all of us as our country goes through the most terrible of public health emergencies. It is humbling and we owe them an immense debt of gratitude for their outstanding dedication. In this context, it is all the more important that those of us in Parliament and in this place stand up for the NHS and fight to protect it. I believe that the Bill fails to protect the future of our national health service.
The British Medical Association has been quite clear that the Bill should stipulate that the health and social care sectors are excluded from the scope of all future trade agreements to ensure that the NHS can be publicly funded, publicly provided and publicly accountable. It is also quite clear that the Bill should rule out investor protection and dispute resolution mechanisms, to ensure that foreign private companies cannot sue the UK Government for legitimate public procurement and regulatory decisions, and that protections should be included in the Bill to ensure that NHS price control mechanisms are maintained so that patients have access to essential and life-changing medicines.
I am very concerned that, while our fantastic NHS workers are doing everything they can to tackle covid-19 and provide care and support to anyone who needs it, the Government are seeking to pass a Bill that does nothing to enable elected representatives meaningfully to scrutinise trade deals to protect the NHS. The Trade Justice Movement has said:
“The current processes are fundamentally undemocratic: Parliament has no guaranteed say on trade deals, and the government is not required to be transparent before or during trade negotiations.”
At the last general election, the Conservative party manifesto promised:
“In all of our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards.”
Yet, the National Farmers Union has highlighted the absence of any provisions to safeguard the high farming production standards in the context of the international trade negotiations. Compassion in World Farming has quite rightly said that any new trade agreements must not undermine UK standards for animal welfare, food safety or environmental protections, and that they must protect UK farmers from imports produced to standards lower than those in the UK.
During the transition period following the UK’s exit from the European Union, trade remedies are dealt with by the EU. At the end of the transition period, we need our own trade remedies authority to investigate alleged unfair practices. However, the new trade remedies authority provided for in the Bill lacks the independence, parliamentary oversight and accountability needed to ensure that it will operate transparently and fairly when investigating and challenging practices that distort competition against UK producers in breach of international trade rules. There is no provision for ensuring a voice on the trade remedies authority for industry bodies or trade unions, and there is no proposed mechanism for their ongoing consultation on trade practices affecting the competitiveness of UK industries or the employment of workers therein.
To conclude, the Bill fails to make provision for meaningful and effective parliamentary scrutiny of trade deals and gives the Government immense powers to turn back the clock on safety standards in the food we eat, the products we buy, our employment rights and the way in which public services are delivered. It threatens the future of the NHS by leaving it exposed to greatly increased privatisation—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady has exceeded her five-minute limit.
Jo Gideon (Stoke-on-Trent Central) (Con) [V]
This is an important Bill for global Britain, and important too for our local manufacturers, not least in Stoke-on-Trent. As a passionate supporter of free trade, I am grateful for the opportunity to speak in this debate, not only as the Member of Parliament for Stoke-on-Trent Central—an urban constituency with many excellent exporting businesses—but as a former small business owner who traded with many nations and sold products internationally for UK markets.
Covid-19 is having a profound effect on world trade. We will not know the full impact for some time, but we do know that free and fair trade—the global movement of goods and materials—has been key to fighting this terrible virus. We all expect a vaccine, regardless of where it is first successfully developed, to be shared with the global community. Crucially, flexibility, wherever possible, is being demonstrated in the most extraordinarily creative ways by our domestic producers. After the pandemic, we will be able to embrace in full the exciting opportunity of free and fair trade.
Fair trade means rules-based trade. I welcome and am encouraged by the willingness of the Department to retain trade remedies against the outrageous practice of dumping, particularly of ceramic wares and especially by China. It is precisely because our manufacturers are not competing on a level, rules-based playing field that we need to keep tariffs on many ceramic goods. Our producers do not expect special favours, but they do expect safeguards against special favours being granted elsewhere.
Free trade can lead to fierce competition, but this should not necessarily be regarded as negative. Under normal circumstances, world-class firms like Portmeirion, Wade Ceramics and Emma Bridgewater in my constituency are more than up to the challenge of producing the very best products in the global market, leading consumer trends, creating sales opportunities, and attracting investment. Indeed, in much of the quality ceramics markets globally, we are the fierce competition. The prospect of a trade deal with America that feeds the huge US demand for British ceramics is a real and positive one. I know that both my right hon. Friend the Secretary of State and the US ambassador are particularly keen to seize the opportunity of feeding the US appetite for British ceramics.
But we are not currently in normal circumstances. The return to work is slow, and the new practices will take time to adjust to. The Trade Remedies Authority needs to be alert to the problems of rule-breaking and watch rogue actors, as we will be in Stoke-on-Trent. We hope that the Government take the lead by ensuring that “Made in Stoke-on-Trent” is emblazoned as a back-stamp on every piece of tableware they procure and that Potteries pottery is in use in our embassies and high commissions across the globe. Indeed, I hope that the Department will seriously look at housing a trade adviser in Stoke-on-Trent, hopefully at a purpose-built ceramics park and centre for international research into advanced ceramics manufacture. We are determined to keep Stoke-on-Trent as the world capital of ceramics, at the cutting edge of advanced manufacturing and traditional table and ornamental ware.
I welcome the clarity on the global tariff and support this Bill as a key step in realising the opportunities for global Britain.
Theo Clarke (Stafford) (Con) [V]
Free trade is vital for Britain to have a robust economy, so I welcome the fact that this new Trade Bill gives Britain the opportunity to write a new chapter in our trading history. Free trade provides an environment that encourages fair competition, leading to greater specialisation and increased innovation.
Over 250,000 UK businesses have tradeable goods and services but do not currently trade internationally. This represents millions of pounds and thousands of jobs that the British economy is missing out on. I have been speaking to Staffordshire County Council and the Department for International Trade to encourage more Stafford-based businesses, both big and small, to explore further exporting opportunities. I welcome this Bill because it sets out a framework for a truly global Britain.
We are all aware of the devastating impact that coronavirus is having across our communities, from the tragic loss of life to the long-term impact that it is having on our economy and my constituents’ quality of life. I fully support the wide range of measures that the Government have introduced to tackle coronavirus and the unprecedented lengths that the Chancellor has gone to in protecting the economy and supporting people’s jobs.
In my roundtable with members of the Staffordshire chamber of commerce last week, I was therefore disappointed to hear that jobs across Staffordshire may be at risk. Trade provides a beacon of hope for the future of our economy, and it is imperative that every link in the supply chain is encouraged to grow. Just as coronavirus has demonstrated in such a devastating way how closely we are all connected, it is global co-operation that will be vital to defeating this deadly virus, so we must use the lessons learned from this pandemic to foster more collaboration between nations.
I welcome the fact that the Government have been working with the World Trade Organisation and the Commonwealth to champion a liberal free trading agenda across the world and to support developing countries in maintaining the benefits of trade for their economies and populations, which is all the more important now that the Commonwealth Heads of Government summit in Kigali, which was scheduled for June—I had planned to attend—has now been postponed.
If I may focus for a moment on Africa, our two-way trade has enormous value—a total of £35.1 billion of goods and services in 2018, according to the Office for National Statistics—creating sustainable jobs both at home and abroad. I was pleased that our Prime Minister seized this opportunity by hosting the inaugural Africa investment summit in London earlier this year, where he promised to renew our economic partnership with Africa, which contains some of the fastest growing economies in the world.
Let me explain how trade with Africa directly affects my constituency in the west midlands. Last summer, I visited a Fairtrade co-operative cocoa farm in central Ghana. I saw for myself the jobs that the farm provides, especially for women and the families they support. Not only is it a great Fairtrade initiative, but the beans are used to produce chocolate that is transported throughout the world, including chocolate found in my supermarkets here in Stafford and across the UK. It was concerning to hear that Ghana’s cocoa industry is now facing a $1 billion shortfall in revenue, with devastating consequences for the farmers I met last summer.
African countries are facing a dual crisis with the impact of coronavirus on their populations and the global economic slowdown, which threatens to undo the hard-fought economic gains of the past 25 years. It is vital that Britain has the opportunity to create its own trade policy that strikes the right balance between encouraging imports of goods that we need and incentivising manufacturing and production on home soil to sell in Britain and export around the world.
I welcome the fact that the Trade Bill will work hand in hand with a number of other measures, such as the UK global tariff, to usher in a new era of trade. The UK is removing tariffs from goods that it does not produce and that come from developing countries—cotton yarn, for example, is going from 4% to 0%—and at the same time backing British agriculture by applying tariffs on other goods. The Prime Minister has pledged that the UK will be the foremost champion of free trade in the world. I hope that the Trade Bill will boost British goods and ensure that we can encourage others to trade out of poverty.
Imran Hussain (Bradford East) (Lab) [V]
I wish to focus my remarks on what the Bill and the Government’s trade policy means for human rights around the world in terms of our existing obligations and our commitment as a country to stand up against human rights abuses wherever they take place.
When striking trade deals across the world, many nations use trade to influence human rights policy, yet there is concern that, faced with the need to strike quick deals to demonstrate success in the aftermath of Brexit, the Government will water down human rights protections, particularly when China, India and Russia—all countries with a poor record on human rights—rank within the UK’s top 25 export and import markets.
China’s deliberate evasion of human rights is well known, with the mass detention, torture and mistreatment of the Uyghur Muslims in particular, along with controls on their daily lives. Russia is also notorious for its weak human rights record, lack of accountability for those in public office and widespread torture and persecution.
While any abuse of human rights is abhorrent and must be challenged, the Indian Government’s human rights abuses in Indian-occupied Kashmir—well-documented by several human rights organisations, including the United Nations—is particularly important for my constituents in relation to any trade deals with India. As we speak, the region is now almost 10 months into a brutal lockdown that has seen cities, towns and villages placed under what is in effect a siege, with food, water and medicines restricted from entering and civilians restricted from leaving. This lockdown has also seen communications cut on an unprecedented scale, which has prevented any spread of information and left security forces even more unaccountable. With a need for reliable information to restrict the spread of coronavirus, this electronic curfew causes yet more harm.
Sadly, this experience is nothing new for the sons and daughters of Kashmir. They are routinely subjected to persecution, discrimination and heavy-handed tactics by Indian security forces, with a disproportionate use of force, including the indiscriminate firing of live ammunition and the routine use of pellet guns that have left hundreds of Kashmiris, including children, blind for life. That is to say nothing of the repressive control measures, rapes, tortures and indiscriminate detentions that take place across the region at the hands of the security forces. What is scandalous is that those committing these human rights abuses are immune from prosecution under the Indian Armed Forces (Special Powers) Act, rendering them in effect untouchable, despite their crimes.
The Indian Government also continue to deny the Kashmiris their right to self-determination, as was mandated by a United Nations Security Council resolution that is now well over 70 years old. There is no prospect any time soon of the vote that will allow them to shape their own destiny, particularly following the illegal decision to revoke articles 370 and 35A. In effect, that decision repeals what little autonomy Kashmir held in its position as a disputed territory at the heart of an unresolved conflict. What the Indian Government are doing in Indian-occupied Kashmir is vile and abhorrent, and it must be called out and challenged.
We cannot let our desire for trade allow us to ignore this. The Government must not be afraid to put human rights and high standards before trade, especially when it concerns those nations, such as India, with whom we share strong historical, cultural and social ties. In this region in particular, we have both a historical and moral duty, and as is the case with all human rights abuses, it is an international issue, not a domestic one or a bilateral one, that we cannot and must not ignore.
With time not permitting me to speak longer, let me say in conclusion that while this Bill allows the UK to pursue new trade deals, it must not pursue a new approach on human rights or overturn years of hard work in pursuit of a quick deal that turns a blind eye to human rights abuses, human suffering, the abuse of workers or the watering down of environmental protections. Instead, it must commit to strengthening our human rights commitments and to ensuring that any future trade deal incorporates the highest standards on human rights. At the very least, this means an end to the detention camps in China and to the persecution, discrimination and injustice in Kashmir, with the repeal of the special powers Act and a free, fair and independent plebiscite for Kashmiris to decide their own future, in line with the United Nations resolutions that this House has an absolute duty to uphold.
Madam Deputy Speaker (Dame Eleanor Laing)
The last speaker from the Back Benches is Fay Jones.
Fay Jones (Brecon and Radnorshire) (Con) [V]
Thank you very much, Madam Deputy Speaker. It is an honour to have been called to speak in this debate, and to be called last.
The Bill before us today is one of continuity, which during these uncertain times will provide reassurance to many of the hard-working rural businesses in my constituency of Brecon and Radnorshire. The Bill builds on two manifesto commitments on which I was elected: to protect the national health service and to protect our farmers from substandard imports. Trade is the cornerstone of our economy, and ensuring that stability is maintained as we leave the transition period is paramount. With our exit from the European Union, there has never been a better time to broaden our horizons and to seek opportunities as an independent trading nation.
Constituents have contacted me recently to voice their concerns about the Bill and the fact that the national health service could be vulnerable to privatisation when the UK joins the Government procurement agreement in its own right. I am certain that it will come as great reassurance that the Bill makes it clear that the UK’s GPA coverage does not and will not apply to the procurement of UK healthcare services.
Every day we are reminded of the overwhelming importance of our national health service and the services that it provides, and I want to take this opportunity to thank all those working on the frontline, particularly in Brecon and Radnorshire. I am glad that no part of the Bill will change the way in which we deliver our healthcare provision in the UK. It is clear that the NHS will remain a public service that is free at the point of use, paid for by taxation and fundamentally working for the benefit of the public.
Brecon and Radnorshire is home to some of the greatest farmers in the country—arguably some of the best in Europe. This morning I had the pleasure of talking to the young farmers clubs of Brecknock and Radnor—or rather, they did most of the talking. Representing a constituency that revolves around farming, I want to ensure that those young farmers have a bright and prosperous future. Their high-quality produce is more than a tradeable commodity; it is a source of deep pride, to them and to me. Their commitment to the highest standards of animal welfare and food production is very inspiring and should be championed at every opportunity, especially as we deliver on signing new and ambitious trading agreements around the world.
I firmly welcome the Government’s commitment to ensuring that we will not compromise on our standards when pursuing future trade deals, as that would inevitably lead to a decline in our prized agriculture sector—something that I cannot accept. I wholeheartedly echo the comments of my neighbour and hon. Friend the Member for Montgomeryshire (Craig Williams), who called for greater engagement with the farming community on the Bill. I know that the Minister will give consideration to that. I am grateful that the Secretary of State confirmed yesterday that she is happy to visit one of the seven livestock markets in my constituency, and I look forward to welcoming her as soon as possible.
With the creation of a new independent body, the trade remedies authority, businesses and producers in the UK can have confidence that as we secure the benefits of global free trade, we can simultaneously provide a safety net for our domestic industries. As our trade remedies are currently maintained by the European Union, it is imperative that the authority has the necessary powers to protect UK producers against unfair trading practices such as unfair subsidies and dumping, and I wholeheartedly support those aims.
The Bill will ensure that we are able to roll over our current trading arrangements. Now, as an independent nation, we have the chance to reaffirm and expand our agreements. We are limited only by our ambition. Rural mid-Wales needs every opportunity to trade our produce and services around the world. Driving jobs and economic growth through international trade is crucial and a priority of this Government, but I urge Ministers to give rural entrepreneurs as much of a fighting chance as their urban counterparts. Our message is clear: an independent Britain will be open for business, and across Brecon and Radnorshire we are willing and eager to play our part.
Madam Deputy Speaker (Dame Eleanor Laing)
We now go to Bill Esterson to wind up the debate for the Opposition.
Bill Esterson (Sefton Central) (Lab) [V]
Labour believes in free and fair trade. International trade will play a vital role in how we recover from the biggest economic shock since the second world war, but we cannot return to a system of unscrutinised trade deals that open the door to lower living standards and higher carbon emissions. The Bill should provide a framework for trade policy, create a trade remedies regime that works for the whole country and give people the confidence that trade deals will be properly scrutinised by MPs and civil society, but it does very few, if any, of those things.
International trade agreements have the potential to undermine our public services, favouring foreign multinationals eyeing up our NHS, for example. They can be used to undermine workers’ rights here and abroad, and to damage food safety and animal welfare. They can prevent action to tackle the climate emergency. That is why there is so much concern about the Bill and why the lack of scrutiny envisaged under it is wrong—wrong for the agreements covered by the Bill and wrong because of the precedent it sets for future trade agreements, such as that with the United States. My hon. Friend the Member for Wirral West (Margaret Greenwood) was one of a number of Members who expressed similar concerns. My hon. Friend the Member for Bradford East (Imran Hussain) called for human rights to be strengthened, and not ignored, as part of trade negotiations.
My hon. Friend the Member for Bristol North West (Darren Jones) gave an excellent analysis of the case for investment in our manufacturing base, which of course requires a trade remedy system that acts in the long-term interest of manufacturers and does not give equivalent importance to temporary consumer gains from unfairly subsidised imports. In fact, the hon. Members for Dudley North (Marco Longhi) and for Stoke-on-Trent Central (Jo Gideon) gave perfect examples of what can go wrong when low prices for consumers are put first, only to see workers in domestic manufacturing lose their jobs.
The hon. Member for Dundee East (Stewart Hosie) was right when he said that trade agreements are about much more than trade. He also highlighted the lack of engagement with the devolved Administrations.
My hon. Friend the Member for Brent North (Barry Gardiner) did an excellent job of scrutinising the Bill last time around, as the then shadow Secretary of State. His description today of the weakness of the trade remedies system and what he called the Government’s view of Parliament as “an inconvenience” was again an excellent analysis of all that is wrong with what he called “this disastrous Bill”.
In last week’s Agriculture Bill, the Government blocked attempts to lock in food standards, and environmental and animal welfare protections. In a framework for international trade, rights and standards should include those proposed last week—not just food safety standards, but standards that do not deliver an unfair advantage from the cheaper production that results from insanitary conditions for livestock and often the use of GM foods to boost yields. The hon. Member for Tiverton and Honiton (Neil Parish) said that he was told last week that those were matters for the Trade Bill—perhaps the Minister will tell us whether that is true.
On continuity agreements, we told the Government what would happen when they tabled a similar Trade Bill to that in the last Parliament. We said then, and we say again now, that the new agreements need to be properly scrutinised by Parliament, by the devolved nations and by civil society. Twenty of the existing deals remain to be signed. Why? Because the third countries want better deals—deals that need proper scrutiny, the scrutiny so far absent from the 20 deals that have been signed already.
What is proposed is undemocratic. While we were part of the EU, the European Parliament carried out scrutiny and voted on new trade agreements. That scrutiny process has been deleted with nothing in its place. I hope that the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), will take note that his hon. Friend the hon. Member for Huntingdon (Mr Djanogly) quoted promises of a new scrutiny regime made by this Government. He called for more scrutiny, not less.
My hon. Friend the Member for Preston (Sir Mark Hendrick) made similar comments, and my hon. Friend the Member for Belfast South (Claire Hanna) made the same point in the context of the way in which trade is a reserved matter with the potential to cut across delegated powers in the nations of the UK.
Labour believes that MPs should have unrestricted access to negotiating texts as they are formulated, with the power to analyse those texts with the technical experts of their choice. As the House of Lords European Union Committee has warned mere “accountability after the fact” for Government negotiators does not represent “a sufficient basis for” meaningful “parliamentary scrutiny”. The devolved Governments, employers and unions should also be fully engaged.
When the Minister responds in a moment, will he tell me whether he has considered how the proposed parliamentary scrutiny and approval of trade deals in the UK compares with that in Australia, which the Secretary of State in her speech said was a model of free trade? While he is about it, will he tell us about the systems in the United States, in New Zealand and in other similar democracies? Finally, I ask him what the Government have to fear about emulating the level of consultation, evaluation and affirmation of trade deals that we see in those countries.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the Minister, whom I ask to take no more than seven minutes, please.
The Minister for Trade Policy (Greg Hands)
It is a pleasure to respond to what has proved to be a spirited and well-informed debate. The Bill provides us with the opportunity to come together to shape a piece of legislation that will underpin and enable our country’s prosperity in the years to come up. Members from all significant parties and parts of the UK made valuable and considered contributions this afternoon.
The House will be aware that I was the Minister responsible for taking the Trade Bill through Committee during the previous Parliament—as alluded to by the hon. Member for Brent North (Barry Gardiner)—in my previous role in the Department for International Trade, so I stress that I am a continuity Minister for a continuity Bill. Nevertheless, my involvement in this latest Bill has been limited until relatively recently, so I pay tribute to my right hon. Friend the Member for Bournemouth West (Conor Burns), who has done great service in engaging in constructive dialogue with colleagues from across the UK, as well as with key Opposition figures in both this Chamber and the other place, to bring the Bill back to Parliament.
Members have raised a number of important issues; I will try to answer as many of their questions as possible in the short time available. I am happy to write to Members to follow up on any further points, if any Members feel that to be necessary. I will also be holding a virtual “open door” session for all MPs on 4 June, when I can answer any further questions that they may have.
Before I turn to the issues, let me remind the House of the purpose of the Bill: it will enable the UK to implement our obligations in the trade agreements that we have signed and will sign with countries that already had trade agreements with the EU at the point at which the UK left the EU, on 31 January 2020. It will also enable us to implement our obligations under the WTO agreement on Government procurement, create the Trade Remedies Authority, and enable us to have data-sharing powers to assist in trade.
Let me respond to some of the individual points made. We welcome the right hon. Member for Islington South and Finsbury (Emily Thornberry) back to the Dispatch Box. Most extraordinarily, she said that the Bill was “not worth the wait”. She should try telling that to UK companies that are already participating in the $1.3 trillion global procurement market as a result of the GPA. She should try saying “not worth the wait” about the £207 billion-worth of UK trade with those countries with which we are signing continuity agreements. She should try telling that to those companies and jobs that depend on a strong trade-defence regime in this country to protect against unfair trading practices. The Bill is well worth the wait.
The right hon. Lady asked about human rights; none of the 20 agreements signed so far contains any weakening of human rights commitments. There was no termination clause in underlying EU agreements, which is all we are seeking to replicate in the Bill. All the continuity agreements that the UK has signed so far have been laid before Parliament under the Constitutional Reform and Governance Act 2010 process—a process that the right hon. Lady voted for, when she was a Labour Member of Parliament, supporting her Government of the time.
Let me turn to some of the other points raised. It was fantastic to hear my right hon. Friend the Member for North Somerset (Dr Fox) talking about trade, welcoming the UK global tariff and discussing WTO reform, the rules- based system and his continuing interest in the WTO.
My hon. Friend the Member for Huntingdon (Mr Djanogly) asked whether any countries did not want a deal with us; the answer to that is no. I am happy to meet him again, as I did during the progress of the previous Trade Bill, to discuss his other points.
My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made an important point about the US section 230 and how it is dealt with in the United States-Mexico-Canada agreement. I know he has had repeated assurances from the Secretary of State but, again, I am happy to meet him to discuss these issues. We heard an excellent speech from my hon. Friend the Member for Montgomeryshire (Craig Williams), talking about high-quality produce in rural Wales. It is worth pointing out that, although it is not covered in this Bill, the prospective US free trade agreement is a great opportunity for farmers in his constituency to be able to sell Welsh lamb into the US for the first time, and a great opportunity for Welsh cheese.
We also heard excellent speeches in support of free and global trade from my hon. Friends the Members for Witney (Robert Courts), for Stafford (Theo Clarke), for North East Derbyshire (Lee Rowley), for Burnley (Antony Higginbotham), for Dudley North (Marco Longhi) and for Truro and Falmouth (Cherilyn Mackrory). We heard from the hon. Member for South Antrim (Paul Girvan), who wants Northern Ireland to benefit from all UK trade deals. That is absolutely clear in the withdrawal agreement and it is one of our commitments. The hon. Member for Belfast South (Claire Hanna) asked how many have already been rolled over. The answer is 20.
We heard from two of our brilliant trade envoys. My hon. Friends the Members for Gloucester (Richard Graham) and for Fylde (Mark Menzies) asked about trade with Latin America, CPTPP and ASEAN. Those are all vital. We heard important points from my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon) and for Brecon and Radnorshire (Fay Jones) about important industries in their constituencies. The hon. Members for Brent North (Barry Gardiner) and for Sefton Central (Bill Esterson) gave continuity speeches for a continuity Bill.
Finally, this Bill is a pragmatic first step in the Government’s independent trade policy, ensuring stability now while building a bridge to the outward-looking, internationalist, truly global Britain that we envisage for our future. I urge hon. Members to reject the amendment and I commend the Bill to the House.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I must now conclude the debate and put the questions in accordance with the order of today. Before I put the question, I confirm that Mr Speaker’s final determination is that remote Divisions will take place on the reasoned amendment and on Second Reading. There is therefore no need for me to collect the voices or for Members present in the Chamber to shout aye or no. I remind the House that the first vote is on the reasoned amendment, in the name of Keir Starmer. The question is that the amendment be made, and it falls to be decided by a remote Division. The Clerk will now initiate the Division on MemberHub.
Madam Deputy Speaker (Dame Eleanor Laing)
The remote voting period has now finished. I will announce the result of the Division shortly. As the next question is contingent on the outcome of this Division, I will suspend the House for five minutes.
Madam Deputy Speaker
I can now announce the result of the remote Division.
Question, That the amendment be made.
Madam Deputy Speaker
We now come to the Question, That the Bill be now read a Second time. The Question falls to be decided by a remote Division. The Clerk will now initiate the Division on MemberHub.
Question put.
The House proceeded to a remote Division.
Madam Deputy Speaker (Dame Eleanor Laing)
The remote voting period has now finished. I will announce the result of the Division shortly. As the next Question is contingent on the outcome of that Division, I suspend the House for three minutes.
Madam Deputy Speaker (Dame Eleanor Laing)
I can now announce the result of the remote Division that has just taken place.
Question, That the Bill be now read a Second time.
Madam Deputy Speaker
The announcement was made to the House earlier this afternoon regarding the provisional determination that a remote Division would not take place on the following questions relating to the programme motion and money resolution. That is also the final determination.
TRADE BILL (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Trade Bill:
Committal
The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 25 June 2020.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including third Reading
(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed. —(Iain Stewart.)
Question agreed to.
TRADE BILL (MONEY)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That, for the purposes of any Act resulting from the Trade Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by a Minister of the Crown, government department or other public authority under or by virtue of the Act.—(Iain Stewart.)
Question agreed to.
Trade Bill (Second sitting)
Tuesday 16th June 2020
(4 years, 11 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 June 2020 - (16 Jun 2020)
The Chair
Before I welcome the witnesses, I remind everybody to please switch their electronic devices to silent. Tea and coffee are not allowed during sittings, but Members can obviously drink water. I also remind Members that the Hansard reporters would be very grateful if they could email electronic copies of their speaking notes to hansardnotes@parliament.uk.
We will now take evidence from the first panel. I welcome George Riddell, the director of trade policy at Ernst & Young, who is here in person, and I hope I can welcome Alan Winters of the UK Trade Policy Observatory. I think Charlotte Nichols wants to make a declaration.
Charlotte Nichols (Warrington North) (Lab)
I want to declare an interest: my father is the president of the TUC this year.
The Chair
Professor Winters, I am Graham Brady, and I am chairing the Committee. I know that you cannot see me and we cannot see you, so I am going to make sure everybody lets you know who is speaking to you when they are asking questions and making points.
I thank Professor Winters and Mr Riddell for joining us and helping the deliberations of the Committee. As Chairman, I am entirely independent. I will not be involved in the questioning, but I will be calling others to put their questions to you. I first call Bill Esterson, who is the shadow Minister. Could you introduce yourself before you start?
Bill Esterson (Sefton Central) (Lab)
Q
Professor Winters: I can if I concentrate hard.
Bill Esterson
Q
Professor Winters: In general, the Bill is trying to do sensible things in a basically sensible way. The issues that arise are about whether or not it is drafted in a way that would allow it to be used for things beyond these intentions.
For instance, it says that the Government do not expect to make major changes with this Bill, yet the procedures that it will set up might allow a Government that wished to do so to make really quite dramatic changes through secondary legislation. As we know, and you know better than me, secondary legislation is not typically challenged. For instance, under the GPA—the agreement on government procurement—if I understand it correctly, the Government have the power to make changes in the coverage of the agreement. A lot of that is about new members, which seems sensible, but if I understand it correctly, it also seems to be about the coverage of sectors within the UK.
When we deal with non-tariff provisions in the trade continuity agreements, for instance, the mutual recognition agreements are very serious bits of trade policy, particularly for services sectors. I think a non-tariff provision would include things like sanitary and phytosanitary regulations and technical barriers to trade. These are mostly governed by EU law at the moment, and in implementing a trade agreement, the Government could change a number of them. Rather than having to bring them back to the legislature as primary legislation, they would actually be able to move through a secondary legislation process, so I think there needs to be a little more attention on the potential spread of the use of this. The Bill can also be extended indefinitely in five-year periods. That seems to me to be not in the spirit of the Bill, which is about cleaning up.
Let me make one last point. The Bill is obviously designed, in terms of trade agreements, to deal with the continuity trade agreements, but there are at least two cases that, so far as I can see, will fall under the Bill and will really go further than just tidying up the details so that trade can continue. The first is UK-Korea. Korea and the UK have signed a continuity trade agreement, but with a commitment to renegotiate a fuller and more ambitious free trade agreement within two years. So far as I can tell, any of that would essentially be covered under this Trade Bill. Similarly with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific. Essentially, it reads as if it is going to be basically a new agreement; in a sense, the table is blank, and stuff will be put on or taken off. However, so far as I can tell, because Japan had an agreement with the EU on 31 January, it will be covered by the Trade Bill. Korea and Japan are two major trading partners, and this might not get very much scrutiny, essentially because you can undertake quite major changes under the heading of the Bill, which I interpreted largely as a tidying-up Bill.
Bill Esterson
Q
Professor Winters: The WTO’s government procurement agreement is restricted to the set of countries that have signed it, so quite a lot of this Bill is about what we do when that set of countries changes: what concessions do we expect from them and offer them? That seems, in a sense, to be fairly uncontentious. The other element of coverage is that the Government lists in the annexes to the government procurement agreement the sectors, and the thresholds for procurement in those sectors, that will be open, subject to the GPA’s requirements. I think that the powers in the Bill permit the Government to change that as they will, rather than, given that who you allow to bid for different bits of procurement is a fairly major piece of public policy, having a process that is open to more scrutiny.
Bill Esterson
Q
Professor Winters: Yes. The traditional way that we have handled trade agreements and, as far as one can tell, the Government’s intention going forward, is to say that the Government negotiate these treaties under the royal prerogative but that, to the extent that they require changes in regulation in domestic law, these will come to Parliament. In cases where that would normally be primary legislation, those changes will have to be made by Parliament through the processes for primary legislation.
What this Bill does—and it is the same in the European Union (Withdrawal) Act 2018—is say that a number of things can be changed by secondary legislation, even though they were originally set out under EU procedures through routes for primary legislation. It potentially brings to Ministers a number of issues one would generally expect to have the full scrutiny of Parliament. It would be a process that allows a little bit of scrutiny, the affirmative process, which, de facto, does not seem to result in very much. Again, in a sense, the worry is not that one might need these powers to tidy up a clause here or there, but that, in fact, quite serious issues would suddenly fall to the discretion of the Minister.
One of my colleagues, Emily Lydgate, has investigated this on environmental regulations under the European Union (Withdrawal) Act, and it is fairly alarming. As far as I can see, one could fall into that situation through the Trade Bill in the sense that the Japanese or Korean trade agreement could agree something that would normally be subject to primary legislation within the UK but that can now be handled with secondary legislation under the cover of the Trade Bill.
Bill Esterson
Q
George Riddell: Thank you; it is a pleasure to be here. I would characterise the Bill as creating the baseline of the UK’s trade policy. It tries to continue the basic trading conditions for rest-of-world trade that UK business currently enjoys.
That includes the continuity agreements. A lot of people, when commenting on those agreements, go straight to the tariffs: “If you don’t have a continuity agreement, you’ll face tariffs; if you do, it will continue as it currently is.” For the services sector, which I represent, there are also important establishment provisions within the services trade chapters of those agreements and mobility provisions that allow business travellers to travel between the UK and those third countries to supply services. The discussion about the continuity agreements and ensuring that the UK is able to continue to trade past 31 December this year is therefore wider.
The same goes for the government procurement agreement. The UK has enjoyed the status of the government procurement agreement at the WTO since its creation in 1995, although its membership of that particular agreement came through the European Union.
I will pick up two points that Professor Winters talked about. First, yes, new members join the GPA on a fairly regular basis. There are a number of ongoing accessions to the agreement, some with shorter timeframes than others. It is right that there is provision for the agreement to expand, as it naturally does, at the WTO. The other point is about the coverage and the entities. The UK list of covered entities is rather out of date. Many current Government Departments are not listed as part of coverage under the GPA, so the list is very outdated. Therefore, even if the thresholds the UK has signed up to as part of the GPA are not changed, there is a need for a technical update of the UK’s commitment to reflect the current machinery of government.
We are also establishing the TRA and bringing back powers from the Commission in Brussels to establish a trade remedies regime here in the UK. On the statistics front, which is very important in making trade policy, I would flag the interest in improving the trade in services statistics for the UK. Trade in services statistics are notoriously unreliable, and powers in the Bill could be used to make the UK a leader in how we measure services trade in this country and globally.
Bill Esterson
Q
George Riddell: If I understood correctly, Professor Winters’ point was about the potential for including new entities on the list and going further than the UK’s current commitments with regard to the GPA, leaving the continuity agreements question to one side. There are two aspects here. From my understanding of discussions in Geneva, they have been very focused on understanding what the UK’s current machinery of government looks like and how that could be represented as part of its GPA commitments. Certainly, the Government have said, from my understanding, that they do not intend to change the scope of the commitments, even if technical updates are necessary. I would not want to go further than that.
Katherine Fletcher (South Ribble) (Con)
Q
George Riddell: Two initiatives have been undertaken recently. One is that the Office for National Statistics has launched its experimental trade in services datasets, which it is looking to continually improve. Anything that supported that initiative would certainly look good. For the past Trade Bill, in the previous Parliament, a number of organisations, such as TheCityUK, put forward written evidence with more concrete suggestions. I do not have that with me, unfortunately, but I am happy to share it.
Coming to the point on the data being notoriously unreliable, both the US and the UK claim that they have a trade surplus in services with each other. There have been a number of attempts by statisticians on both sides to try to bottom out why that might be the case. It goes to show that, often, trade in services statistics are indicative and a good rule of thumb, but putting too much faith in them is not necessarily a wise move.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Q
Professor Winters: I confess that I do not know how to draft it in legislation, but I would suggest that one has something in the Bill that gives concrete form to the statements that we have that the Government expect not to use it to make major changes, and that such changes would come with primary legislation. At a practical level, one would need some sort of early-stage scrutiny to identify issues that were mere technicalities or minor issues, and to flag up larger issues that might require primary legislation.
I am afraid I am not a draftsman. I do not know how to write that, but it seems to me that that is what we require. This is a very sensible, pragmatic tidying-up Bill, but it seems to have loose ends that might, under some circumstances, lead to places other than those that the Bill says it is intended to cover, and more than the House would wish.
David Johnston (Wantage) (Con)
Q
George Riddell: In terms of the service sector, I would say that the two biggest elements are definitely the continuity agreements and the government procurement agreement. The government procurement agreement, although it largely covers goods, has several services provisions in it that are particularly important for small and medium-sized enterprises that operate cross-border government procurement contracts.
On the continuity agreements, it is difficult to say exactly, because there is different coverage in each of the continuity agreements for different service sectors. Broadly speaking, you have the horizontal elements in the more advanced trade agreements, such as that with Korea, which covers investment and establishment for service providers, and additional mobility provisions for short-term business visitors and the suppliers of services.
There are also, in some of those agreements, additional commitments on the digital economy, and how the UK and the third country can co-operate in order to foster more digital trade, which is of growing importance, particularly in the light of the pandemic that we are experiencing. I know that many of the people here have dialled in or participated remotely in these sittings, so it is a very pertinent topic for the service sector.
Fleur Anderson (Putney) (Lab)
Q
Professor Winters: I do not see strong and direct implications for our relationship with developing countries. Most of the countries with which we are signing these continuity agreements are, in fact, developing countries. I think the issue again, essentially, is that the Minister has powers to make regulations concerning non-tariff provisions, and some of those regulations could indeed rebound to the disadvantage of the countries we are dealing with—those on the other side. For instance, if we have issues surrounding conditions of entry for particular goods, the Bill might be used to tighten those up.
Having said that, the agreements we have with the developing countries—the continuity agreements—have genuinely continued, so far as they can, trade relations with those countries. There are some complications that are not in our gift, such as rules of origin, but I understand that the agreements that have been signed already under the heading of continuity trade agreements have made no changes, so far as access to the UK economy is concerned.
There is nothing I have seen in the Bill that is specific to developing countries that raises an alarm, but on the other hand, it is not clear that trade with developing countries is exempt from my residual nervousness about what the Bill might be used for under less satisfactory circumstances.
George Riddell: One thing that I am keen to emphasise is how the UK’s trading relationship with developing countries is split across the continuity agreements contained in the Bill and the customs Act, which gives effect to the generalised system of preferences and duty-free, quota-free access for least-developed-country exporters. You have the continuity agreements under this Bill, but there are also very important trade provisions in the customs Act, and making sure that they are aligned and work together to support developing countries’ trade into the UK is very important.
As for your question about SPS measures specifically, in my experience of working in developing countries and looking at how they trade, one of the biggest things is meeting food standards, health standards and environmental standards. The UK does capacity building very well through DFID—pending recent announcements today—and through programmes such as aid for trade in developing countries, in order to allow businesses and exporters to take advantage of the provisions in the trade agreements and EPAs.
Gareth Thomas (Harrow West) (Lab/Co-op)
Q
Professor Winters: I am not a huge fan of the process that we have under the CRAG, which seems to me to allow the Executive a bit too much scope to do things unscrutinised—
The Chair
We will try to find out whether we still have Professor Winters. Mr Thomas is there something you would like to pursue?
Gareth Thomas
I would very much like to hear what he has to say. [Interruption.]
Professor Winters: I did not catch all of your question. With the process we would be using for, say, the agreement with the US, my honest preference is that we would set up a system for new trade agreements that involved more formal consultation and more reporting back to Parliament than is obligatory under the CRAG. In one sense, I see the Trade Bill offering an even easier route for Executive decisions than the standard CRAG procedure, and I do not think that will really give us enough scope for bringing Parliament and the people along.
I think the issue, essentially, is that if this was abused in order to try to introduce major changes, there would be even less defence. There is no commitment to discuss, consult and so on, and the Minister is being granted extensive secondary legislative powers. Under the CRAG, although the treaty has to be approved through an affirmative process, if changes in domestic law are required to implement it as a new trade agreement, it would potentially have to go through primary legislation. As far as I can tell, that is not required here for any of the continuity agreements.
Gareth Thomas
Q
Professor Winters: In general, most other countries have processes that involve more formally required consultation and rather more engagement with the legislature as the process goes through. For instance, in the USA there is a whole series of trade advisory committees—I think that is what they are called—which the Government speak to on a confidential basis. There is formal approval of a mandate, particularly if they want to do something on fast-track.
Those are things we do not have in the UK. We do not yet have a completely definitive statement about how these things will be handled, but essentially the CRAG process is fairly light on scrutiny and consultation. Compared with Australia, the US and Canada—where there is, if not constitutionally, at least informally a good deal of consultation with the provinces—we have a system that allows the Government rather more discretion.
Matt Western (Warwick and Leamington) (Lab)
Q
Professor Winters: For the Trade Bill, which is presented as a piece of legislation to make it feasible to roll over the continuity agreements that we are trying only to roll over and not to change—we have already joined the GPA and are not trying to change our schedule—you do not necessarily need a huge apparatus. If we get into a situation where the Trade Bill is used to make quite dramatic differences to the arrangement with Korea or to make essentially a new agreement with Japan, it is unfortunate that there would be less of an obligation to consult the devolved Administrations, parts of the legislature and stakeholders. The solution is not so much to nail those processes on to the side of the Trade Bill, as to try to find a way to ensure that the Trade Bill is not used for purposes that involve a major change relative to the status quo.
George Riddell: I agree with many of the comments made by Professor Winters and would add two additional points. The first is on consultation and its importance. Not only does it help the UK to identify what its offensive and defensive interests are and how best to achieve them through negotiations; it also helps to build political support. The thing that businesses want when they are looking to use trade agreements is the certainty that, when they make an investment under the provisions, in five, 10 or 15 years they will continue to be able to trade under the terms of that trade agreement. By not having wide consultation and the necessary support, it calls into question that certainty. The question of scrutiny and everything else is for this House and this Committee, but from a business perspective, we want widespread support for the trade agreements so that they can continue into the future.
Matt Western
Q
George Riddell: My understanding from reading the Bill is that it covers the continuity agreements that existed between the EU and third countries.
Matt Western
Professor Winters?
Professor Winters: Is somebody trying to get my attention? I am afraid you all faded away.
Matt Western
Sorry, I was just asking whether you feel that the Bill covers the current UK-US negotiations.
Professor Winters: As I understand it, the Bill does not cover current negotiations with the US. It is restricted to those countries that had agreements with the European Union on 31 January this year.
The Chair
That brings us neatly to the end of the time allotted for questions to these witnesses. I thank both of the witnesses, Mr Riddell here in person and Professor Winters struggling with technology to join us. It is very kind of you both to assist. Thank you very much.
We will have a brief suspension while we engineer the next session.
The Chair
Welcome, Mr von Westenholz. We have until 3.10 pm to hear evidence in this session with the National Farmers Union. Will you give a brief introduction of yourself for the record?
Nick von Westenholz: Good afternoon, Chair, and thank you. The NFU has submitted evidence on the Trade Bill. We will come to more detailed questions, but we want to raise two issues in particular: one is on trade and standards of food production, which is not covered in the Bill at present but we think ought to be; and the other is the issue that has been discussed at some length, which is scrutiny of trade agreements, both roll-over and future agreements.
The Chair
Thank you very much. I should have introduced myself. I am Graham Brady, and I am chairing the session. I will call other Members to speak but will not ask questions myself. We will start with the shadow Minister.
Bill Esterson
Q
Nick von Westenholz: As I mentioned, one of the key issues that we have raised about the Bill and, indeed, the Government’s broader trade policy is to do with the way in which food imports are dealt with, in particular the standards of production of those food imports. I am sure that members of the Committee are well aware of many of the concerns that have been expressed for a number of months—even a number of years now—about the implications of future trade agreements for the standards of food imports.
The Trade Bill deals only with our existing agreements by merit of our former membership of the EU, and not with future trade agreements. It is really future trade agreements where many of the issues lie. Nevertheless, we think that this is an issue for this Bill because of something that has been communicated to us on a number of occasions in recent months. We had lobbied on the Agriculture Bill—[Interruption.]
The Chair
Mr von Westenholz, we have a bell ringing at the moment, for a three-minute suspension of the sitting in the Chamber. It will stop shortly, but will ring again when the sitting starts. It is probably worth pausing while the bell rings.
Apologies for the interruption—do continue.
Nick von Westenholz: Not at all. I was just referring to the passage of the Agriculture Bill, to which a number of amendments were tabled attempting to address this issue of trade and food standards. It was often stated in our conversations with MPs about that Bill that it was not the correct vehicle for dealing with the matter, because it was a matter for the Trade Bill. We listened to that advice and we are looking at the Trade Bill as a legitimate and suitable piece of legislation to address the issue.
It is a complicated issue; there is no doubt about that. It is not necessarily straightforward to legislate in a way that manages the broader issue of ensuring that food imports meet standards of production equivalent to those that UK farmers are required to meet, but there are ways of doing it; some of the amendments tabled to the Agriculture Bill were well drafted to meet that aim. We certainly think that it is a shortcoming of this Bill that there is no provision for that sort of legislative approach.
Bill Esterson
Q
Nick von Westenholz: The Bill as it stands does not go beyond continuity agreements. The provisions in clause 2, for example, seem clearly to deal with those continuity agreements that we are currently party to, or were party to as a member of the EU. Going further would require new clauses, certainly; the reason why, as you imply, we want to explore whether that is appropriate is that the point has been made on numerous occasions in recent weeks that the Trade Bill is the appropriate vehicle for that.
Gareth Thomas
Q
Nick von Westenholz: Sorry, the sound is not great, but I think that that question was about our potential concerns with the EU’s CETA deal and whether we have concerns about a UK-Canada deal.
Maybe the best answer is that all trade deals, whether they are continuity or future trade agreements, present opportunities for UK farmers. We are very keen to make that clear: we are certainly not opposed to the notion of free trade agreements, and we hope that they might present opportunities to increase our exports of our fantastic food.
At the same time, however, all trade agreements will also look to increase access to UK markets for overseas producers, which will increase competition for UK farmers. Again, that in itself is fine, but we want to ensure that that competition is fair—whether it is Canadian farmers, US farmers or anybody else. The reason why we talk about overseas farmers meeting equivalent standards to UK farmers’ is simply on the basis of fairness; we are certainly not opposed to trade liberalisation, as long as that liberalisation is fair.
Fleur Anderson
Q
Secondly, on trade information, clause 7 provides new powers for HMRC to collect information on the identity and number of UK exporters, but the Government have said that providing that information will be voluntary. What impact would that position have on your members?
Nick von Westenholz: I will answer the second question first because, I am afraid, my answer will be brief. We have members who are exporters as well, but most of our members are probably not directly exporting themselves—they will be at the start of the supply chain; it will probably be their customers who are exporting. We have not yet done any assessment on what the impact of those provisions would be, so I am afraid that I cannot comment directly on that, although I suspect that it would be minimal.
Coming to the first question, the point is that UK farmers—like most EU farmers—operate under high standards of production in terms of the requirements they observe, particularly on animal welfare, for example. That is not to say that there are not farmers around the world who operate high standards of welfare. But in many cases in the UK, those are legal requirements, for example those around stocking densities for poultry, access to light, limitations on veterinary medicines that they can use—antibiotics, for example—and many other things. All those will have a connected direct or indirect cost for farmers, and will increase the cost of production in comparison to farmers overseas, who do not have to meet the same requirements.
For farmers who then have to compete directly against produce that is produced more cheaply because the regulatory burden is lower, it is, for us, a simple issue of fairness. In a way, I am loth to put too much emphasis on the differences of approach, because, as I have said, many farmers overseas will produce to high welfare, but we know that many farmers overseas produce to lower requirements because, very simply, they are not required to by their legal and regulatory structures.
Fleur Anderson
Q
Nick von Westenholz: The EU—and, by extension, the UK at the moment—operates a plant protection approvals regime that is much more precautionary that in other parts of the world. That means that UK farmers have access to far fewer plant protection products—pesticides, say—than many of their counterparts in other parts of the world. Again, that really comes down to an issue of equity if they are then being asked to compete against those farmers who have access to many more technologies, which UK farmers do not.
We have to distinguish between the issue of fair competition and what those standards would actually be. As I have said, the EU approach is very precautionary and there is—and there should be—an ongoing debate about what sort of standards are required when it comes to plant health and plant protection.
It is not always as easy as saying, “Lower standards or higher standards?” about these things. There is, for example, a long-standing debate about the use of glyphosate, the most widely used weed killer in the world. Although people might prefer less glyphosate use, or even for it to be banned, doing so would probably result in more carbon emissions, because farmers would be required to cultivate more and use more tractors passes. They would use more fuel as they go over the land and release more carbon into the atmosphere as they plant as part of weed control.
These issues are not always straightforward, and there needs to be a proper debate about an appropriate level of protection that also provides farmers with the tools that they need. It is important to take the opportunity to distinguish between debating what our standards ought to be and ensuring fairness and equity in competing with farmers overseas once a decision has been reached about what those standards are.
David Johnston
Q
Nick von Westenholz: I guess I am thinking about some of the continuity agreements that are not quite continuity agreements—for example, the Japan agreement, which is being renegotiated. Certainly, we would hope that there is the opportunity for UK farmers to open up more markets in the far east.
Really what I was saying was that, as farmers, we want to be ambitious about increasing the markets, whether at home or overseas, for our produce. If we are going to increase them overseas, we have to recognise that that assumes a degree of free trade, international trade and imports. We certainly want to expand those overseas opportunities, and it may be that some of those continuity agreements, which are being looked at again, provide particular opportunities.
Matt Western
Q
Nick von Westenholz: I got the second question. Could you repeat the first question, sorry?
Matt Western
Q
Nick von Westenholz: In principle, the idea of mutual recognition agreements can work. There is nothing that we would object to in an MRA in principle. An important aspect of this is that, if we simply try to hold overseas producers to precisely the same standards as UK producers, that might create as many problems as it solves. We need to develop a mechanism for comparing standards as easily as possible to certify, accredit or whatever it might be a degree or level of production standards that we accept as equivalent to our own.
A lot of the things I have mentioned already demonstrate the complexity and difficulty with some of these issues. That is one of the reasons why we have suggested the establishment of a trade and food and farming standards commission to get under the skin of all these pretty tricky policy areas and set out a road map for Government of the sort of policies and legislation needed to tackle the issues properly. We would like that to be established in law, under the Trade Bill or any other legislation, so that it reports to Parliament and contributes to some of the shortfalls in parliamentary accountability and scrutiny that have already been flagged to the Committee. We think that that is a very good and sensible idea. That commission would absolutely look at such things as MRAs and broader issues of how you manage and measure equivalence.
On the Trade Remedies Authority, we have not flagged any specific concerns other than to acknowledge that the constitution of the committee is very broad, and quite a lot of leeway is provided to the Secretary of State in the formation of that committee. We would like to explore further the possibility of ensuring specific representation for specific sectors if necessary. Having said that, we would hope that the TRA, even in its current format as set out by the Bill, would consult fully and take into account all parts of the economy when advising on trade remedies.
Bill Esterson
Q
Nick von Westenholz: There is the prospect of including those sorts of provisions in any of the deals that the UK Government are either currently negotiating or imminently going to negotiate. I am not sure that that is an issue specific to the continuity agreements. Countries all around the world are increasingly considering how such issues can be better accommodated in trade deals. Traditionally, they have not been part of trade agreements, although we have seen in the draft text between the EU and Mercosur, for example, provisions for preferential access to Mercosur for eggs where the production standards have been equivalent to animal welfare requirements in the EU, which is interesting.
This is a really important point: the UK Government should be seizing this moment to be a global leader in negotiating trade agreements that accommodate some of these sorts of policy areas, such as animal welfare, environmental impacts and climate change, and being creative and imaginative in how future trade agreements ought to look—not looking backwards and seeing how trade agreements have been done in the past, and merely looking to replicate those.
The Chair
That brings us almost exactly to the end of our allotted time. Thank you, Mr von Westenholz, for your assistance to the Committee in giving evidence. We will again suspend briefly while we prepare for the next evidence session.
The Chair
Our third panel of witnesses giving oral evidence is from Make UK and the Chemical Industries Association. We have until quarter to 4. Could I ask both witnesses to introduce themselves for the record—first Richard Warren in the room, and then Mr Cranshaw?
Richard Warren: I am Richard Warren, head of policy and external affairs at UK Steel. Although UK Steel sits within the wider organisation of Make UK, I will be speaking specifically on behalf of UK Steel and the steel industry rather than the wider manufacturing sector.
The Chair
If you would like to make any opening remarks, you are welcome to.
Richard Warren: Certainly. The Trade Bill deals with a number of issues that are extremely important to the steel industry, not least the one I am most keen to discuss this afternoon: trade remedies. Of just over 40 measures that are being carried over from the EU, 15 or 16 relate to steel, so we are probably more affected than any other sector in UK industry. Obviously the vast majority of that regime and how it will operate is dealt with by the customs Bill, so I will not dwell on it too much, but the Trade Bill is critical in establishing the Trade Remedies Authority as an independent authority that can act independently from the Department for International Trade.
The second element, of equal importance to the steel industry, is the continuity of trade agreements. There are a number of trade agreements, particularly with Turkey, that I would highlight as critical for establishing continuity with. Turkey is our third biggest export market after the EU and the US, accounting for 300,000 tonnes, which is about 8% of UK exports. The ability of the Bill to ensure that we can have as much of a continuity arrangement as possible with Turkey and with other, smaller export markets is paramount to the steel sector.
The other issues dealt with in the Bill are of lesser importance but are still worth commenting on. The UK steel industry obviously supplies public contracts in other countries, so ensuring that we are still members of the GPA after the end of this year is critical for the steel sector. In terms of data management and data sharing, there is already an issue that has come up during the transition period and the process before that. Ensuring that HMRC is able to share data with the Department for International Trade is extremely important to us, and I will touch on that later.
The Chair
Q
Ian Cranshaw: Good afternoon, Chair, and thank you for the opportunity to address the Committee today. My name is Ian Cranshaw. I am head of international trade at the Chemical Industries Association. The CIA has been around for over 50 years, and it represents and advises chemical and pharmaceutical companies located across the UK. Our core membership is a mix of chemical and pharma companies. They are all obviously treated as UK companies, but many of them are multinational companies using the UK as a base for their European and UK operations. We have small and medium-sized enterprises and MNCs.
Chemicals is a significantly enabling industry for downstream manufacturing. I think that most members of the Committee will understand that chemicals are a key ingredient in 96% of manufactured goods, so pretty much everything you see, touch, drink or use will have chemicals in it.
That is our intro. I am sorry—I did not really hear what you wanted me to focus on straight after the introduction, Chair.
The Chair
We will move to questions now, Mr Cranshaw, but that is very helpful. Thank you. We will start with Bill Esterson, who is the shadow Minister.
Bill Esterson
Q
Richard Warren: Certainly. We have a very good relationship with the organisation, as it currently exists within the DIT. There is only one live case—a case on welded tubes that are produced in Corby by Tata Steel, which I believe has been live for three months now—and we have had very good engagement with the organisation.
One critical issue is our ability as a sector to participate in trade remedies investigations, and particularly to finance them. I do not think it will be any surprise to people in the room that those cases cost an awful lot of money, particularly at this stage, when, frankly, industry in the UK does not have the same level of expertise that our European counterparts do. Bringing in external legal support and external consultancy has been critical, and our ability to do that as a sector has been severely disrupted by coronavirus. To put it bluntly, discretionary spend within many manufacturing companies, including in the steel industry, has effectively been halted. I say that to point out that we have asked for an extension with the TRA, and it has been as flexible as possible in providing us with an additional three months. I provide that case as an example to show that we have a very good working relationship with it .
In terms of how well, practically, those investigations will operate on an ongoing basis, and whether we feel that we are getting a fair hearing, I cannot comment on that yet, in the sense that we really are at the very first stages of the first investigation. We have another two or three investigations to go through this year. If I was to comment again at the beginning of 2021, I would probably have a more informed opinion.
To touch on the second question, about the membership of the Trade Remedies Authority, that is an important point. I would say that it is probably the only outstanding issue specifically within the trade remedies element of the Bill that we would still be pushing for reform of. In terms of the non-executive membership selected by the Secretary of State and appointed by them and the chair, there is no stipulation about how, or where from within industry and wider society, those members will be chosen.
That is an important point, because nowhere does the Trade Bill, the customs Bill or the secondary legislation actually define the role of the non-executive membership of the Trade Remedies Authority. All reference to decisions by the Trade Remedies Authority— recommendations to the Secretary of State—are referred to as, “The Trade Remedies Authority will do x or y.” Precisely what the role of those non-executive members is is still somewhat vague.
I understand that the Government will have left it that way to provide maximum flexibility and to allow for the organisation to grow into its role and to find its feet. But, from our perspective as industry, while it remains vague, we can have anything, from the board or the non-executive membership merely providing an admin task—looking over the funding of the organisation, the remuneration of staff and so on—right through to it having influence on the recommendations that the organisation ultimately makes on anti-dumping and anti-subsidy measures.
Therefore, while we have that ambiguity, industry is keen to see representation from a cross-sector of business. Everything from unions through to manufacturing interests and people who may be classified as trade remedies experts, who may have a slightly different view on trade remedies to industry, should be represented on that organisation to show there is a spectrum of views.
Bill Esterson
Q
Richard Warren: To a certain extent, it depends, ultimately, on the role of the non-executive membership. If the non-executive membership functions as a board providing steering for how the organisation operates on an admin basis, you could say it was less important. If the membership has a high level of influence over the outcomes of those investigations and the recommendations that are made, we would say it is extremely important.
On the same token, if the board membership was made up exclusively of trade lawyers from firms that have exclusively represented exporting producers, one would say that the outcome of those investigations may be biased. On the opposite end of the spectrum, if you had the entire membership made up of people who had a more protectionist bent, again, that may result in a biased outcome. While we have ambiguity around the role of the non-executive membership, industry will err on the side of caution and say it should represent a range of views so that it can come to a balanced decision on whether those measures are in the interests of industry and the wider UK economy and its workers.
Bill Esterson
Q
Ian Cranshaw: We started this journey back in January 2017. Previously, I would have said that policy has moved quite quickly—that was before coronavirus, where, obviously, policy has been delivered in a matter of weeks or months. However, I think some credit goes to the Department for International Trade, which has gone from a standing start, with a handful of 30 or so trade policy experts on trade defence instruments within the EU. Now, we have a significant and very capable resource in the Department. At the same time, when the Trade Bill passes, they will establish the authority, which will have 100, growing to 130, staff whose level of expertise has grown significantly over the last three years. We have seen many of them, and we have had good exposure to many of the employees of the Trade Remedies Investigations Directorate.
But the point I would make, and what that highlights, is that when they were developing that knowledge, who did they turn to for expertise and the nuance of how to carry out an investigation, how to assess the injury margin and how to build a case to prove that there had been inappropriate trade behaviour by a competing company or nation? That was really about turning to the manufacturers. One of our member companies has welcomed a continuous stream of TRID or TRA officials into their facilities, explaining how to build the case, because that case has to satisfy WTO criteria. It is a significant piece of work. Mr Warren mentioned the cost of building the case, and companies do not go into this lightly.
The second part of your question was about the make-up of the TRA board and how to achieve the balance. The Minister, Mr Hands, said that you do not necessarily invite people with a specific ideological position to the board—we really want trade experts. All that I would say is that trade experts are not necessarily trade remedy experts, and often that representation from the manufacturers or trade unions—some labour point of view; labour with a small “l”—generates and delivers real balance for any non-departmental public body that has to look at the entire scenario, certainly in a period when we are looking to build back better.
I am not going to keep stealing other’s summaries of how we are trying to work, but the Government have already said that they want to rebalance the economy and put more investment in certain areas. The chemical sector is focused in the north-west of England and the north-east, along the Humber—areas that require significant investment, and they need to know that they are competing on a level playing field. All of that, with a balanced view and a balanced board, would really help to ensure that all views and positions were reflected appropriately in policy development.
Bill Esterson
Q
Ian Cranshaw: Sorry, I heard that the question was about chemical regulation. Was it about whether chemical regulation is covered in the Bill?
Bill Esterson
Do you think that it should be covered in the Bill? It is not, as it stands. Do you think that it should be, and why?
Ian Cranshaw: There is an awful lot of work going on in chemicals, and the Government are keen to deliver a chemical strategy. That is something that DEFRA has covered over the past couple of years, and it is right that we have one. We have no issue with the amount of regulation on the chemical industry. We are dealing with sensitive products, and they ought to be regulated in the way that they are. Again, we have had a good hearing from the Government, but it is about the criticality of making sure that any deal with the EU—this is key for us—can include access to data sharing, because we do not need to replicate the testing of individual chemicals to build up a UK database when a perfectly functional database exists at the European Chemicals Agency. There is plenty of provision elsewhere for chemicals and chemicals regulations, and I do not necessarily think that it needs to be in the Trade Bill.
Katherine Fletcher
Q
Ian Cranshaw: That is probably me for me, because Richard is focused on steel. It is really important. We want a Trade Remedies Authority to be established, fully functioning and delivering support for UK industry from 1 January next year. Chemicals go into every other manufactured good. There are chemicals in the automotive sector; there are chemicals in chlorination of water; there are chemicals in putting the aroma into the natural gas that we all use in our stoves every evening. Chemicals does have downstream industries that will all be impacted, so we need a strong chemicals sector.
If I am honest, looking at remedies and chemicals, there are not a huge number of current remedies in place in the EU, so when the Department transitioned those remedies that were relevant to the UK, did a call for evidence and assessed exactly which remedies should be brought into the UK, of the 23 remedies that existed in the chemicals sector, only two were transitioned into UK law. I am not suggesting that it is a huge area, but it is a very significant area, and those two remedies that are in place are very important to those companies, and to downstream industries in the UK. One of them is producing fertilizer, and it is the major supplier of that fertilizer in the UK, so you can appreciate that its availability to UK farmers is absolutely crucial to their operations. If they were exposed to unfair trade from external operators, that really would be a significant loss to UK capability, especially when we are looking at supply chains and ensuring that our really critical production is safely onshored at the moment.
Katherine Fletcher
Q
Richard Warren: There are a number of agreements that are obviously already in motion to be carried over. One to highlight is that north African nations like Morocco, and South Africa, are important markets for steel. It is a bigger concern that the agreement for one of the biggest markets for our UK exports, Turkey, probably will not be carried over, regardless of the Bill. Whilst the Bill would allow for it to be carried over—the steel element, without getting into too many dull details about the coal and steel free trade agreement between the UK and Turkey—it seems like it is an almost impossible ask now to get that carried over.
So that wider concern, that sits outside the Trade Bill, is a bigger one for us; it is a very important one. The Trade Bill would allow that to legally happen, but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey—8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head. At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey, but it would be a very uneven trading relationship at that point. That is probably our biggest concern at this point, in terms of continuity trade agreements.
Katherine Fletcher
Q
Richard Warren: Obviously, yes. If we do not pass the Bill, there is no way that the Turkish agreement can be passed, but there are other complexities on top of that.
Matt Western
Q
Richard Warren: Certainly. As I said, the vast majority of how the trade remedies regime will operate—the responsibilities of the organisation itself, how it reports to the Secretary of State and so on—are dealt with within the Taxation (Cross-border Trade) Bill and the secondary legislation. There were still outstanding issues that we had with that legislation. Obviously, it has passed now, and we are working with the regime as it has been established. If we had an opportunity as an industry—we are talking about a hypothetical now—to strengthen the trade remedies regime, change elements of how it was operated, perhaps be more explicit in legislation about how those investigations are conducted, and change certain elements of the methodology, like dumping and how we treat certain non-market economies, that would be fundamentally best be dealt with in the Taxation (Cross-border Trade) Bill and the secondary legislation that supports it.
This Bill is fairly cursory in what it establishes in the trade remedies regime. Our key request at this point remains the make-up of the non-executive membership, rather than dealing with precisely how that regime operates. It really is the customs Bill that we would look to if we were making changes.
The Chair
It was a slow burn, but I have to say that the witnesses have excited the Committee, and I am getting lots of people wanting to get in, so if everybody can try to be quite crisp in their questions and answers, it would be appreciated. Antony Higginbotham next.
Antony Higginbotham (Burnley) (Con)
Q
Richard Warren: As Ian Cranshaw noted earlier, we have been on this journey for quite some time. We first started having discussions on the possibility of a Trade Remedies Authority at the back end of 2016. At that stage, there obviously was uncertainty. I do not think the UK Government had thought about—no one in the UK had—the need to establish a Trade Remedies Authority. Obviously, after the Brexit vote in 2016, that became immediately apparent to the UK steel industry. So if there has been an assessment done, I suppose it was an unofficial assessment through the evidence that we provided and the discussions we had with Government, and it became evident that this was an absolute must and there was no question that the UK would need an authority. I am happy to provide further data or evidence to the Committee afterwards.
If you look at the impact that trade remedies have had on imports and on dumping into the UK, the evidence speaks for itself. It is clear. China was exporting perhaps 500,000 tonnes to the UK in 2015-16. That has been reduced to 100,000 tonnes because of the measures that have been in place on the key steel products that it was found to be dumping and that were subsidised by the Chinese state. If that had gone on—it was a major cause of the difficulties that the steel industry was undergoing in 2015-16, when we saw a major restructure of the steel industry and new ownership—and those measures had not come in, the situation would have been far more dire, and the modest recovery that the steel industry saw in 2017-18, which has obviously been knocked off course by recent events, certainly would have been far slower and far more fragile.
Drew Hendry
Q
Ian Cranshaw: In chemicals, the REACH regulation is the key documentation, and that is stored by ECHA. We would accept that if you had to design a system now, it probably would not look a lot like what it does, but here we are 13 years after the ECHA database and the REACH regulations were introduced. UK companies alone have spent upwards of £600 million in furnishing that information on to the database, so you can appreciate the nervousness that, if we do not negotiate a deal with the EU that gives us access to that data, we will be back to a point where UK companies will have to rebuild a new database under UK REACH. There is no suggestion from DEFRA that we would move away from REACH. Globally it is seen as the gold standard for chemical regulation, so it is critical that we secure access to the data.
It is worth pointing out that UK companies are the second largest contributor of data to the information held on the ECHA database. Not only have our companies paid for the ability to use those chemicals, but, through their own innovation, research and capability, they have contributed significantly to the value of that database. It is crucial that we secure access to the data.
David Johnston
Q
Richard Warren: From our perspective, in terms of continuity—obviously, putting the EU to one side—the most important market is Turkey, with 300,000 tonnes and 8% of exports. It has a value of around £350 million. I can provide further details afterwards, if that would be useful. Without a shadow of a doubt, in terms of carrying over, that is the most important agreement.
There are other important markets, perhaps less for the sector as a whole but for individual companies supplying them. Manufacturing sectors in certain countries are very important, such as South Africa, Mexico and some of the north African countries I mentioned earlier. In terms of opportunity, we are essentially establishing what we already have, so it is difficult to see that there is a brand new opportunity. I wouldn’t say that it isn’t hugely important—we want to continue to trade with these countries and to make sure that we do not have a resumption of tariffs, but fundamentally the position is not going to be any different to what we currently have.
It depends on how you view the question. If you view it as, “If we don’t have this, you will have tariffs,” then there is a huge opportunity, because we would be in a worse situation than we currently are. If you view it from how we currently are, we are looking at exactly the same situation.
The Chair
Mr Cranshaw, I think you wanted to answer as well. Mr Cranshaw? We may have lost the line. We only have about three minutes left. Would you like to ask the witness a question, Gareth Thomas?
Gareth Thomas
Q
Richard Warren: Indeed. While it is not dealt with directly in the Bill, the complexity and complication around agreeing a deal with Turkey is that, obviously—sorry if I am teaching Members to suck eggs—it is in a customs union with the European Union. Once we have a trade deal with the European Union, we will have tariff-free access to the Turkish markets for things covered by the customs union.
Unfortunately for the steel sector, there is a rather antiquated agreement that just deals with coal and steel products. That would need to be replicated in addition for them to get access. As far as I understand from discussions with officials, it is not really on the table for discussion until an agreement with the EU has been established. Until we manage to get to that perspective, we are not looking at a replication of current arrangements and therefore it will be a 15% tariff, on average, for steel products going into Turkey. As I said before, we will not be putting any tariffs on steel coming in from Turkey, because we already have a zero-tariff position on steel. In a nutshell, that is the situation we find ourselves in. If you would like further information, we can provide it. [Interruption.]
The Chair
Apologies for the bell, which is out of our control, as the sitting is suspended in the main Chamber. We are nearly at the end of the time allotted for this session. I thank both the witnesses and all the Members for being here. If Mr Cranshaw cannot hear us, we will make sure that he is subsequently thanked for joining us.
The Chair
Q
Rosa Crawford: I am Rosa Crawford, a policy officer covering international trade at the Trades Union Congress. We are the national union centre of the UK, representing just over 5.5 million workers. I did not hear the second part of what you wanted me to introduce—was it some headline concerns on the Bill?
The Chair
Yes, if you just give an overview of your views about the Bill, that would be really helpful.
Rosa Crawford: The TUC believes it is crucial that UK trade policy supports a recovery from the pandemic based on good jobs, respect for workers’ rights, quality public services, support for the UN sustainable development goals and a just transition. Within that, we believe that the trade priority of the UK must be getting a good deal with the EU to protect rights and jobs, and we believe it is reckless that the UK Government have dismissed the offer by the EU of a deal that would provide zero tariffs and no-barrier access to the EU single market, with a guarantee that workers’ rights and social standards will not be lowered.
We are concerned that what we see in the Trade Bill is not a framework that would support the trade policy that workers need. Our main concerns focus on the fact that it provides no role for trade unions or Parliament in the negotiation of trade deals. It fails to provide a role for trade unions at the Trade Remedies Authority—to be able to have a say on the measures to prevent unfair trade and dumping. It provides no assurance that workers’ rights will be respected in trade deals, and it fails to ensure that UK procurement rules will promote respect for workers’ rights. It provides no assurance that public services will be protected in trade deals. I am happy to go through those concerns in more detail if that is helpful to the Committee.
The Chair
We have until 10 past 4 for questions, so perhaps we will see whether they are drawn out by questioning.
Bill Esterson
Q
Rosa Crawford: The TUC is in contact, and works very closely, with trade unions around the world, in advocacy for trade deals that promote good jobs and strong protection for workers’ rights and public services. We find that in other parts of the world, there is much more meaningful engagement between Government and trade unions, as well as with employers in trade negotiations. In our partners in Europe—in countries such as Austria and Sweden—there is routine consultation with the Government on the negotiation offers in trade negotiations.
Outside the EU, in countries such as the US, there is systematic and ongoing consultation by Government of the unions on the text that they propose. In the UK-US negotiations that have just been launched, we know that our US counterparts have seen a number of proposals that the US negotiators are putting to the UK Government. On the UK side, we have not seen any part of that negotiation so far. There is a much more meaningful engagement and a process whereby unions can comment on the text of the negotiations and have that input taken on board, which is very important, so there is a process whereby texts can improve to reflect what workers need in them.
As an example, the US unions were able to comment on the USMCA labour chapter and add significant improvements that prevented, for example, restrictions on freedom of association in Mexico. We would want that process in the UK trade negotiations and so we would want the Trade Bill to outline and affirm that trade unions would be engaged in the process of trade negotiations and would be consulted on the text, and that that would be the process going forward, not just for the continuity agreements but for all agreements. We would obviously also want that for the UK-EU negotiations, which we have not had that engagement on.
I would flag that there has been some movement in terms of Government consultation with members of the expert trade advisory groups that the unions sit on roughly half of. It has been indicated that we may get to see confidential material associated with trade negotiations on the condition of signing a non-disclosure agreement, but it is important to flag that the non-disclosure agreement is currently drafted so broadly that unions are concerned that it would limit what we are able to say in terms of our public advocacy. A balance needs to be struck between the legal restrictions placed on organisations and their ability to comment on the text of negotiations.
We welcome the fact that it looks like the Government are taking some steps forward in consultation, but it is currently not in the shape that we think is adequate and we have concerns about the restrictions they might place on us. We seek engagement with the Government on that, as the TUC and unions going forward. In the Bill specifically, a reference and an affirmation that unions will be consulted on the process of trade negotiations—as well as Parliament, which is crucial for democratic scrutiny—is key for us.
Bill Esterson
Q
Rosa Crawford: Yes. The TUC and unions were concerned about the fact that we were not consulted on any of those 19 continuity agreements before they were ratified and the fact that they were negotiated with countries where there are significant concerns about workers’ rights expressed to us by the unions in those countries.
To give two examples, the UK has now signed continuity agreements with South Korea and Colombia. In South Korea, for many years we have been expressing concern, with trade unions in South Korea, that freedom of association has been routinely overridden, with trade unionists thrown in prison for peaceful protest for workers’ rights, including two union leaders imprisoned last year who were only freed after a concerted global campaign. Trade union offices are raided and exploitative conditions are prevalent in large Korean multinationals such as Samsung. The UK signed an agreement with them that has no enforceable commitment on workers’ rights within it. Although there is a mention of International Labour Organisation standards, there is no enforcement mechanism for that, and therefore there can be no reprisal through the agreement and no penalty for abuse of workers’ rights.
We also have significant concerns about Colombia, which is one of the parties to the UK-Andean agreement. Colombia is listed by the International Trade Union Confederation as the world’s most dangerous country to be a trade unionist, with routine murders of trade union leaders, widespread repression of freedom of association and a real rolling back of rights, in contrast with the commitments made in the peace process by the Government. The fact that the agreement was signed, again without an effective enforcement mechanism on workers’ rights, is very concerning to us and indicates that these agreements will not be used to increase respect for workers’ rights, but will actually make it easier for companies to go to places where it is easier to exploit workers because human and trade union rights are not respected.
Bill Esterson
Q
Rosa Crawford: Trade unions have expressed concern that there was no enforcement mechanism in the EU agreements with South Korea or Colombia either. However, the EU is now engaged in a process of reviewing the enforcement mechanisms in its trade agreements—[Inaudible.]
The Chair
Rosa, we are delighted to have you back. Bill Esterson has one further question.
Bill Esterson
Q
Rosa Crawford: The TUC has confirmed that the Bill does not give assurance that the UK’s public procurement rules will promote respect for workers’ rights or environmental standards in its accession to the World Trade Organisation’s government procurement agreement. The GPA as it stands has no requirement for members to promote social standards in their tendering process.
The UK’s Public Contract Regulations 2015, which you mentioned, transpose provisions in the EU procurement directive of 2014, which states that Governments must ensure that public contracts uphold international, environmental, social and labour standards. Importantly, those regulations also include provisions about a price-quality ratio, which is intended to ensure that public authorities select tenders on the basis of quality and positive social impact, rather than price alone. We are worried that once we leave any kind of relationship with the EU and we just have to rely on the UK’s public contract regulations, the UK Government may roll back on those commitments to promote social standards through the tendering process.
We know the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights around working time, agency workers directives and other important protections for workers’ rights. We are worried that that may be the direction of travel with procurement as well, which is why we seek an addition to the Trade Bill that states that the GPA schedule that the UK files will make sure that it at least replicates article 18(2) of the EU’s 2014 public procurement provisions, which makes it clear that social standards must be part of the criteria used for settling public contracts, and that contractors must uphold those international labour and environmental standards. We would want the UK to go further than that and actually make it a compulsory criterion that the highest standards are used by contractors who receive public money, because that is the way to ensure that we get the best quality public services and provisions through our procurement arrangements.
We are concerned at the moment that we do not have a rigorous enough process of selecting tenders that always have the highest social standards, and that has had a terrible impact on the quality of services that we get, so it has had real public health implications. With the pandemic that we are facing now, we have had cases such as the Government choosing to import 40,000 protective gowns from Turkey on the basis that they were presumably lower priced than gowns they could get from a country that has higher standards. As we all know, all those gowns had to be impounded, as they did not reach NHS standards for safety. It is worth remarking that, in Turkey, there is extreme repression of workers’ rights.
By choosing the contractor with the lower price and the lower protection for workers’ rights, it leads to a much worse result for the public, and obviously there is a cost as a result. If there were concerted Government support for domestic manufacturing and domestic producers, and a preference was provided through the provisions in the GPA and through domestic legislation for providers who upheld workers’ rights and promoted the higher standards of workers’ rights, we would see more contracts going to UK manufacturers where there are strong trade union agreements, good protection for workers, decent pay and generally better conditions that promote a much more sustainable approach to business. Ultimately, there will be a better product for the public, which meets a public health need.
We think it is very important to send a signal with the Trade Bill that the Government’s accession to the GPA will be linked with making sure that the highest social standards are embedded in our public procurement criteria, and that that will be used as a key component for selecting tenders—not just price, but quality and the overall investment in sustainable development, good jobs and strong protection for workers’ rights.
David Johnston
Q
Rosa Crawford: As I outlined at the start, the crucial trade relationship that we believe the Government need to secure is that with the EU, which is our closest and most integrated trading partner and where the majority of our exports go. We are crucially reliant on—[Inaudible.] The trade agreements that the UK Government have secured through the continuity agreements do not represent anywhere near the importance to our trade. Although there will be some gains for certain sectors, it is not anywhere near as important for the EU. For us, the crucial thing about the continuity agreements is the lack of engagement with unions on them. They have been agreed on terms that we do not believe are advantageous to workers—for example, they do not have enforceable commitments around workers’ rights in them, which facilitates capital and UK businesses to go to countries such as Colombia, where the respect for worker’s rights is much lower.
For us, the crucial trading focus of the UK Government must be on securing a good deal with the EU. We do not believe that continuity agreements can substitute for those or, indeed, for agreements with the US or Japan, or Australia and New Zealand, which have launched in the last few weeks. We agree that there is a place for agreements—
David Johnston
Q
Rosa Crawford: It would be hard to make that estimation, because drawing a direct line between how trade agreements facilitate access for our businesses and imports and exports and specific jobs is quite difficult. Unions would treat any figure with some scepticism. We could probably look into which sectors were linked with particular countries. As I say, however, what would come out again and again is the overriding importance of the EU in promoting and supporting jobs in the UK. The continuity agreements do not represent a significant proportion of the jobs that are supported in the UK, if you could draw out some analysis that was credible on that.
Fleur Anderson
Q
Rosa Crawford: To focus on public services first, we are concerned that the Bill does not provide a guarantee of an exemption for all public services through a positive list, which is what we want to see in the Trade Bill. That is the only way to affirm that public services will be protected in trade agreements to make sure that there is no investor-state dispute settlement.
We are concerned that the trading partners that the UK Government have lined up as priorities for trade agreements once we leave the customs union with the EU are those that have explicitly made it clear that they would seek access to the UK’s public service market as a particular objective in trade negotiations. The US in particular, in its negotiating objectives, made it clear that regulations on drug prices were a barrier to market access which it would seek to overturn in trade agreements.
We know that in all recent US trade deals, such as the USMCA with Mexico and Canada, they have taken the negative list approach, which is where all services are included in the agreement unless specifically exempted. That means that if we had a similar deal with the US, part-privatised public services in the UK would be included in the agreement. If a future Government tried to renationalise them or regulate privatised parts of the public service, such as the provision of pharmaceuticals and medicines, they could be sued by the US Government. If ISDS is in the agreement, they could be sued through an ISDS tribunal. We are concerned that without an explicit commitment in the Trade Bill, as well as in all future trade negotiations, that public services are written out and there is no ISDS, our public services could really be on the line. That is what we need to see, rather than empty assurances from the Government that the NHS is protected.
In terms of workers’ rights, we have particular concerns about the US and the fact that they have ratified only two of the five fundamental ILO conventions. Forms of child labour are still legal in the US and there is legislation against freedom of association in a number of states where right to work laws exist.
It is clear that the US would see many of the employment protections we have in the UK, which we have derived from EU law, such as around working time, discrimination and paid holidays, as barriers to trade. They would say to the UK, “We are signing a deal with you only if you remove those barriers to our businesses being able to make more money, because we want workers to be able to work longer hours, have less holiday pay or be dismissed without any notice, or for agency workers to be fired on the day they are hired if we want to.” That kind of flexibility, we know, is the US approach.
Trade unions in the US have expressed grave concerns about that. The TUC and trade unions in the US have signed a joint statement making it clear that trade deals must protect workers’ rights and expressing concern about the breaches of workers’ rights in the US. With the Trade Bill not providing any affirmation that trade deals with existing countries, through the EU and the continuity group, and new trade agreements will have enforceable protection of workers’ rights, unless we see that kind of language making an affirmation that workers’ rights will be protected and effectively enforced through trade agreements, we know the realpolitik is that the likes of not only the US, but others such as Australia, New Zealand and others in the comprehensive and progressive agreement for trans-Pacific partnership, the CPTPP, are likely to pressure for lower workers’ rights. That will be their objective in a trade agreement; otherwise, the UK is a less attractive option for them.
The Chair
Ms Crawford, thank you very much for your time and for assisting the Committee with your evidence. That brings us to the end of the time allotted for this session. We will suspend briefly while we get the next one set up.
The Chair
We will now hear oral evidence from George Peretz, QC, of Monckton Chambers. We have until half-past 4 for this session. Let me introduce myself, Mr Peretz. I am Graham Brady; I am chairing the Committee and will be calling Members to put their questions, but I will not be questioning you myself. If you would be so kind as to give a brief introduction of yourself and any opening observations about the Bill, we would be very grateful.
George Peretz: Thank you, Chairman. I am George Peretz and I am a QC at Monckton Chambers. I specialise in a number of areas of law, but, relevant for these purposes, customs law and EU law, including trade remedies.
The Chair
Thank you very much. Do you have any initial observations on the Bill, or would you like to move straight to questions?
George Peretz: It is a short Bill and the Members are familiar with it, so while there are a number of issues that I am sure people will want to discuss, I do not have any opening observations.
Bill Esterson
Q
George Peretz: Did you say the scrutiny provisions?
Bill Esterson
The scrutiny provisions.
George Peretz: I am sorry, I am having slight difficulty hearing you.
Bill Esterson
The scrutiny elements of the Bill.
George Peretz: Yes, I thought I had heard it correctly. The first point to make is that the scope of the Bill, as set out in clause 1, is clearly confined to agreements with countries that had either a free trade agreement or an international package agreement with a free trade agreement with the EU before exit day. In that sense, it is limited, but none the less it is not quite right to portray it as simply a roll-over Bill, because the Bill does not prevent the Government from entering into an agreement, with a country that had such agreements with the EU—such as Japan or Canada—that is significantly different from the agreement that that country had with the EU before the United Kingdom left the EU. The absence of scrutiny provisions in the Bill needs to be seen in that light: that the agreement that the Government negotiate with Canada or Japan, for example, might look somewhat different—in fact, there is every reason to think that they probably will look somewhat different—from that which both countries entered into with the EU, most obviously because for those countries, an agreement with the United Kingdom is not the same as an agreement with the EU—it is a different market. Both countries will have different objectives and concerns in relation to the United Kingdom from those they had when negotiating with the much larger EU.
When one looks at the provisions of the Bill, which essentially do not provide much scrutiny at all, it is important to have that background in mind. There is the debate, with which Members are probably familiar, about the extent to which it is appropriate for there to be parliamentary scrutiny of free trade agreements. I can give you some thoughts on that, if you like. It is important with this Bill, however, to make that preliminary point.
Bill Esterson
Q
George Peretz: In this country, or elsewhere?
Bill Esterson
Either would be good.
George Peretz: I am just trying to think of an example. I suppose a case that ran into trouble, at least in part because it was accepted that there was not adequate scrutiny at an early stage, was negotiations between the EU and the United States on the transatlantic partnership agreement. Essentially—you would have to ask someone else for the precise detail—the EU side ran at what the European Parliament and member states were prepared to accept. That is one potential difficulty.
The issue with free trade agreements now, compared with what they looked like in the 19th century, when Richard Cobden could trot off to Paris to negotiate a free trade agreement with Napoleon III in a week or so, which involved a few tariff reductions, is that they are a lot more complicated than that now. Particularly once you move away from tariffs into other areas, agreements now require a lot of potentially important decisions on questions such as how matters of food safety are regulated, or the terms on which professional and other types of services are regulated, like auditing. Those are very sensitive indeed; they can profoundly affect both the public generally and particular interests.
So there is always the risk that, if an agreement has not been scrutinised properly at an early stage, a Government will go too far and then not be able to get the necessary legislation through Parliament. That is less of a risk inherent in our system, particularly in the present Parliament, given that the Government have a healthy majority, so it is not politically that likely. Also, the Government can quite often control agreements by secondary legislation anyway. But that can be a bit of a problem, and the TTIP negotiations turned out to be one.
Another issue with lack of scrutiny is much more difficult to find examples of, because it is not something from the textbook of finding examples. None the less, it is a fact, which people involved in trade negotiations fairly freely acknowledge, that it can be quite helpful to a Government to be able to say, “We are under scrutiny from our Parliament. We simply cannot make concession X, because we have discussed this with our own Parliament and know very well that it’s going to be very controversial; it’s going to be very difficult for us. We simply can’t do it.” That can be quite a useful negotiating tactic. As a lawyer, one is quite familiar with a situation where one is in negotiations with the other side and it is actually quite helpful sometimes to be able to say, “I’m afraid my client is very unreasonable; I simply can’t accept that.” That is quite a useful way of resisting certain types of pressure, and I think the same is true in trade negotiations, so it is another advantage of scrutiny.
Bill Esterson
Q
George Peretz: On the first question, plainly an unsatisfactory situation would have happened, had the United Kingdom left the EU with no deal last year. It is plainly an unsatisfactory situation if you have a whole set of powers in one Act of Parliament that are conferred on an authority that does not actually legally exist, because the legislation that sets it up has not at that stage been passed. That is what happened with the Trade Bill in the last Parliament. It is a bizarre situation, which is bound to create legal problems of one sort or another. There would have been challenges, no doubt, to the validity of the decisions taken by the Secretary of State, given that the mechanism by which he took them had no satisfactory statutory basis. The Department for International Trade told the world that the mechanism that it had adopted to get round that problem would have been sufficient to deal with it. We will never know whether it was right about that, but I think it would have created a set of legal issues that probably everyone could have done without if trying to—[Inaudible]—effective trade remedies. It will certainly be better if, at the end of transition, when all this comes into play, there is a strong remedies authority in existence, doing the job that the 2018 Act gives it.
The structure of the 2018 Act did seem to me sensible. I wrote an article that laid out the—[Inaudible.] It is the largely technical task of looking at the potentially legal point—[Inaudible]—a factual question about whether the various tests of dumping, subsidy domestically and so on have been met, through an independent authority that would be able to assess those reasonably objectively. It is charged with those functions. And there is the essentially political job of assessing the public interest, which is carried out by the politicians, who are directly accountable to you in the House of Commons. That seemed to me to be a sensible divide, and that is what the Government have done. That division of competence seemed to me to be broadly right.
A final point about the composition of the Trade Remedies Authority, going back to what I just said, is that the TRA’s job is in large part a technical one. It has to make a series of quite difficult legal and economic judgments that are essentially technical ones, but it does have a job of assessing the economic interests of the United Kingdom, which involve somewhat wider criteria. There is a case for the non-executive directors having to fit a number of those criteria; it is always desirable for there to be a diverse group of people on bodies such as this, because diversity brings strengths of its own. To focus on the particular task of this body, it is almost certainly helpful to have people who have experience of industry, because they will understand a lot of the issues and concerns that the TRA will have to grapple with. It would be helpful for some of the board to have backgrounds in law and in economics, because those are essential aspects of the TRA’s work, and it helps to have people right at the top who are familiar with such things.
The Chair
Mr Peretz, thank you very much. I am keen to get one more question in in the time we have available, if possible.
Gareth Thomas
Q
George Peretz: I am only broadly familiar with the US position, but I know a bit more about EU scrutiny. It is certainly at the lower end. This question was gone into in some detail at the International Trade Committee’s evidence session on 10 June, which I had the chance to listen to. It was with Brigid Fowler, who some people know from the Hansard Society, and a couple of other people whose names I cannot remember off the top of my head—one person from the Institute for Government and one from Global Justice Now. They went into some detail about the comparative perspectives, and it is worth looking at that.
In broad terms, the UK system as currently set up is something of an outlier. I do not know anything about the Canadian system, but one of the experts who gave evidence to that Committee—I think it was the person from the Institute for Government—said that Canada’s system is comparable to the UK, in that it has a reduced level of scrutiny. However, it is hard to think of any other examples of leading western countries where the scrutiny level is as low as it is in the UK.
One always has to be conscious that this sort of system is very different from the United States’ system. The US has separation of powers between the legislature and the Government, so it is rarely very enlightening when applied to a UK context, because the setup is so different. The EU is of course a very different body, because it represents a whole set of different states and has a set of controls that is appropriate for that, but not so appropriate for a unitary state. However, if we are looking at more obvious comparators such as Australia or New Zealand, I do not claim expertise on either of them, but I think there is a considerably greater degree of parliamentary scrutiny in both countries. It is certainly true, if one draws a comparison to the EU, where the European Parliament has to approve the mandates given to the Commission and has to be informed of changes and developments in the negotiations throughout. It is—[Inaudible]—comparable to what we have in the UK.
The Chair
Mr Peretz, thank you very much. I am afraid that brings us to the end of the time available for this session. Many thanks for joining us, and for assisting the Committee with its deliberations. We will now suspend briefly while we prepare for the next session.
The Chair
Q
Simon Walker: I am Simon Walker. I have been the chair of the Trade Remedies Authority for three months—a fairly recent appointment. From my limited exposure, given that I only made two visits to the office before the lockdown, I can report that the authority to be, which is still part of the Department for International Trade, is in good shape and raring to go.
Bill Esterson
Q
Simon Walker: I am not sure that falls within the purview of the Trade Remedies Authority to be. It seems a broader question than that. The TRA’s decisions will be subject to parliamentary scrutiny, because the final decision maker on our recommendations is the Secretary of State. If she rejects our recommendation, she must table her reasoning before Parliament.
Bill Esterson
Q
Simon Walker: I do not think I do, to be honest.
Bill Esterson
Q
Simon Walker: There are two underway at the moment, which are both transition agreements. One is about welded steel and tubes, and the other is about rainbow trout. Those two transition arrangements are in process at the moment. I cannot pretend that it will always be cheap to lodge a claim with the TRA, because it will require quite a lot of legal and technical expertise, so I would not want to over-sell that. It is a very substantial meta-seeking recommendation from us on the base of anti-dumping and fair subsidies or the need for an economic safeguard. It is a major intervention in economic process that I think justifies significant resource going into it.
David Johnston
Q
Simon Walker: I suppose the big worry about anti-dumping in general is that an overseas producer will seek to eliminate domestic competition in a predatory way and then force up prices as soon it has put its UK competitors out of business. That is at the heart of the issue, but there are infinitely more subtle variations of that, particularly if the exports come from countries where there are hidden or perhaps unfair subsidies of different sorts or where there is a disguise. The absolutely crucial thing is that there have to be UK producers of that product. If a product which happens to be massively available in another country is dumped cheaply in the United Kingdom and there are no UK producers, there is no domestic interest in that. That kind of unfairness aspect is fundamental to everything that we are going to be doing.
David Johnston
Q
Simon Walker: I think the Canadian, Australian and European Union’s trade remedies authorities operate competently and efficiently. The United States authorities have rather wider powers and a broader, much more variable political remit than this country’s will have, where our role is going to be to implement very strictly what is in the legislation. However, we are going to have to evolve something that is suited to the interests of this country absolutely specifically. That will be a challenge, because it has not been a function that the UK has had for some decades now, but I am confident that we can build up the expertise that will be required in the three basic strands. One is legal, one is analytical and economic analysis, and the third is investigatory, where claims are brought to us that require a detailed investigation. My hope is that over time we will build up the expertise to be recognised as an independent authority operating very much in the interests of this country, but that is an ambition and it will take a while to get there.
Gareth Thomas
Q
Simon Walker: It is important to stress that it is the Secretary of State who will make that ultimate decision. There are appeals mechanisms in this country, should we come to that finally. The appeals would need to be exhausted properly, but the remedies would be enforced in the same way as tariffs are enforced on imports to this country. There is not the ability of companies in other countries just to refuse to pay. That would have the same consequence as if they refused to pay normal tariffs or import duties on any goods.
Gareth Thomas
Q
Simon Walker: Certainly there are arguments that happen at WTO level all the time. One of the realities is that proceedings at the WTO normally take a very long time—I think that is particularly the case at the moment for various internal reasons—in the course of which considerable damage could be done in that case, unless the remedy were applied. That is why it is important that this country has the ability to act in that situation.
Fleur Anderson
Q
Simon Walker: I am happy with nine as a target. Three of them are internal, but we are going to want the other five non-executive directors all to be appropriately qualified in some way. I think we will get there. Nine to me feels the right sort of level.
It is important to stress that this is a board and it is fundamentally about governance. I would not want to mislead you about its decision-making capacity. Its role will be to set strategy, to hold the Executive to account, to test the strength of the arguments internally and to maintain the independence of the TRA from any organisation, including the Government. Those are the fundamental roles of the board, and we are going to be needing people who have that governance orientation in particular.
I am not supportive of the principle of representatives of particular organisations as such—to have representatives of industry or trade unions or the devolved Administrations —for a number of reasons. One is that I feel it would compromise the objectivity of the members of the board. The second is that it might reduce the capacity to appoint on merit. Thirdly, I think it would reduce the accountability if someone’s primary reporting back was to a sectoral interest group. To me, that would be a weakness.
Will there be people with trade union or industry experience, with close links with farming or with the devolved Administrations? I absolutely hope so. I very much hope that there will be people in those categories who apply for the board and are appointed, but they will be appointed as individuals who will work together as a board to hold to account the Executive.
I suppose the special skills I would cite that I am quite keen to see in non-executive board members are someone with a strong legal background, so that they can hold the legal team to account; someone with a financial and accountancy background, with real strengths in those areas; and if there is someone who has an investigatory background, perhaps, who could probe into material that is not always going to be easy to extract, that could be a useful facet. I hope they will be people who understand and relate to the devolved Administrations. I hope they will be diverse, because that has always been a goal of the Department and will be of the TRA once it is independent, but they will there as individuals working together on a board that is fundamentally about holding the Executive to account rather than making decisions itself.
Fleur Anderson
Q
Simon Walker: I am not sure that is really in our domain. I am very sympathetic to your point, but I am not sure how much that is in the remit of the TRA as such. Our professional teams will be trying to establish whether there is dumping, for example, from a particular country, and the sale of a product below its cost in that other country. If that is contrary to the economic interests of the UK, the TRA will try to assess that as objectively as possible. It is conceivable—I do not think it likely, but it is conceivable—that that might be from a developing country. There are shields for developing countries against an awful lot of tariffs—that is an element of exports that I hope will help them—and I certainly do not see developing countries being a big part of our focus, but I do not think that our remit is to look specifically at that.
Matt Western
Q
Simon Walker: I have not looked at other nations in that sort of competitive way. I suppose that what I have looked at is, as an organisation of not quite 100 people that might grow to 140 or 150 people—that sort of size—what it will take to run an organisation like that in terms of personnel with professional qualifications. It is not that hard to arrive at a budget for that kind of organisation, because it is not as if we are going to be paying for the submissions that are made to us. We are obviously taxpayer funded and our proposed budget—we are not in existence until the legislation is passed—is laid down by the Department. I think it is pretty much what anyone would expect, within a relatively modest scale, for an arm’s length body. Does that answer your question?
Matt Western
Q
Simon Walker: I do not think, I am afraid, that we have powers in that situation. Our mandate is very strict: it is about dumping, unfair subsidies and—this is very rarely used—safeguards in the event of unforeseen exports from another country that swamp the market. As I say, that is very rarely used. I take your point completely; that is a serious problem for the UK if that situation happens. I do not think it is one that the TRA can address.
Matt Western
Q
Simon Walker: The Department for International Trade and the Government as a whole. It is a matter for the Department and the Government as a whole rather than for us as an independent arm’s length body that will then be completely separate.
The Chair
That brings us to the end of our allotted time. I thank our witness very much. We are very grateful for your assistance.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
Trade Bill (Third sitting)
Thursday 18th June 2020
(4 years, 11 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Thursday 18 June | Until no later than 12.10pm | Client Earth The Trade Justice Movement |
Thursday 18 June | Until no later than 12.35pm | Sam Lowe, Senior Research Fellow, Centre for European Reform and member of the Strategic Trade Advisory Group |
Thursday 18 June | Until no later than 1.00pm | Nick Ashton-Hart, Geneva Representative, Digital Trade Network |
Fleur Anderson (Putney) (Lab)
I have a declaration of interest. In my former role as head of campaigns for CAFOD—the Catholic Agency for Overseas Development —I was a co-founder of the Trade Justice Movement.
The Chair
Thank you. That will be noted on the record.
We will now hear oral evidence from ClientEarth and the Trade Justice Movement. Do we have them online?
David Lawrence: I am here; I can hear you.
The Chair
Hello. I am Judith Cummins, the Member responsible for chairing proceedings. I will not be asking you any questions, but I will be calling Members and witnesses to speak.
David Lawrence: That sounds good.
The Chair
Q
Welcome, and thank you very much for coming. Thank you, Tom—lovely to see you—and thank you, David. Could you start by introducing yourselves? Let us start with Tom.
Tom West: Thank you for inviting me. It is really good to be here, if slightly surreal; it is my first time out of the house for a while.
My name is Tom West. I work for an environmental law non-governmental organisation called ClientEarth. We are interested in the implications of the Bill and trade policy in general on the environment. The way we see it, there are a number of ways in which trade policy can affect the environment, directly and indirectly, in terms of the quality of goods we are trading, but also in terms of how our trade rules affect how able we are to meet our important environmental commitments.
At the moment, the UK has this great opportunity. It has this great chance to redefine and refresh how trade policy is designed. A lot of trade policy is quite old—years and decades old—and was not written in a time when the global environmental challenges, like climate change and biodiversity loss, were understood to the same extent. It is very well established now that there is a real urgent need to take action here. We think there is a chance for the UK to refresh the approach to reflect that and to move us forwards as global leaders in that area.
The Chair
Q
David Lawrence: Good morning, everyone. My name is David Lawrence and I am the senior political advisor at the Trade Justice Movement. We represent 60 NGOs, faith groups and trade unions that have an interest in trade issues. Our group has done a lot of work on international development and the relationship between that and trade agreements, but obviously our focus recently has been on post-Brexit trade agreements and the UK’s new independent trade policy. We have previously given a lot of evidence on parliamentary scrutiny of trade agreements, which I would like to talk about today, if possible. I also very much share Tom’s concerns about upholding environmental standards and using trade in an environmentally sustainable way, so I will touch on that as well.
Bill Esterson (Sefton Central) (Lab)
Q
Tom West: Sure. I will focus on the continuity trade agreements and what is being done there. It is worth saying at the outset that it is sensible to try to roll over and maintain where we are, as a starting point. It is also important to see that as a starting point as to where we are and where we want to go. The process gone through there demonstrates the need for, first, a better approach to scrutiny and oversight for how we conduct and design our trade policy. Secondly, there is the point about saying, “Let’s review and refresh.” With the continuity agreements in particular, there is a need to put in place mechanisms to review those in due course and to check up on them and say, “Are these delivering the economic things we need from the trade agreements but also, importantly, the environmental issues that we need to deliver on?” If we want to become a global leader in environmental issues, we need to think about what that means for all areas of policy. We cannot simply rely on directly environmental ways to deliver those. Let’s look at those and see: are these the sorts of trade agreements that are working from an environmental point of view? Are they encouraging the right sort of trade and the right sorts of goods and services? And are they allowing us to take the actions we will need to take to fight climate change and reverse biodiversity decline?
Bill Esterson
Q
David Lawrence: Could very quickly remind me what the question was?
Bill Esterson
What is your view of the Trade Bill as it is? Do you have concerns about it, and are there any additions you would like to see made to it?
David Lawrence: As I said earlier, parliamentary scrutiny is a big concern for us. When the Trade Bill was first introduced, which was a while ago now, it was billed as an open conversation on scrutiny and a new framework for how trade could be done, but in fact we see nothing new on parliamentary scrutiny, and so far the Government have not seemed to be very open to having that conversation or to listening to proposals for how scrutiny should operate. That is not just our concern; it is shared by a lot of other NGOs and businesses, and indeed by many MPs. The UK currently uses a pretty archaic form of treaty scrutiny that dates back to the first world war. It was designed to deal with secret defence treaties between European powers. Today’s trade agreements are a million miles from that. They cover a huge range of policy areas—from food standards and environmental regulations, to NHS prices and digital services. We think it is completely inappropriate to expect that MPs should have no say in how those deals are made.
It is also worth noting that that is an issue that many members of the general public are concerned about. If you think back to the Transatlantic Trade and Investment Partnership, or TTIP—the proposed EU-US trade deal—you will see that one of the reasons it collapsed was that people were not happy about the idea that these important talks were happening behind closed doors and that their own elected representatives did not have much of a say over them. In Westminster, MPs have less of a say over trade deals than MEPs in Brussels or, indeed, Members of Congress in Washington DC.
If I am honest, I think lots of people would be quite surprised and shocked to learn that their own elected MPs do not have a say over these trade agreements, the new deals we are doing with the EU, the US, Australia and Japan, or the new ones announced yesterday. It is not clear who people are meant to write to or who represents them and their interests when they are concerned about how these deals might affect their livelihoods, the food they buy or, as Tom mentioned, environmental standards and principles.
For us, scrutiny is an absolute priority. We also want to use trade to maintain high standards. We have concerns about the GPA and the way that public procurement works, but scrutiny is absolutely the priority. If we do not have that, there is no way Parliament can make sure that trade in the future meets with those high standards, and there is no democratic representation or transparency.
Bill Esterson
Q
David Lawrence: There is a scrutiny concern that is specific to public procurement as well—making sure that Parliament has a role, that there are democratic processes involved—and there is a standards concern to ensure that procurement can be used in a way that maintains standards. The Government have this levelling up agenda and the idea that post-Brexit Britain will support parts of the country that are not doing so well economically. Procurement is an opportunity to support those areas as well. As we have seen with covid, all sorts of big questions are raised around global supply chains. One of the immediate effects of covid was countries putting in place things like export controls and wanting to localise their supply chains. Procurement is one of the many tools that Governments can use to support local industries in that way and to maintain standards. The more that Parliament has a say over that process, the better.
Bill Esterson
Q
David Lawrence: From our perspective, there are four elements to an ideal scrutiny procedure. First, before negotiations begin, we think there ought to be a full debate, with a vote on the negotiation objectives, and that ought to be written into law. At the moment, the Government can grant a debate, if they want to—and they have done so, at very short notice, as some of you will remember, I am sure, on the US objectives and the EU objectives—but we want a guaranteed debate and vote on the objectives. Secondly, during negotiations, there should be regular reports back to Parliament on the progress of those negotiations, and, ideally, publication of texts from each negotiation round. That is a practice that is done elsewhere: the EU has updates during negotiations. As I am sure all of you are aware, MPs are very much left in the dark. At the moment, US and EU negotiations are going on, but we rely on leaks, essentially, and reports from Brussels or from DC because there is no formal process for reporting back.
Thirdly, after negotiations there should be a debate and a vote on the final deal to approve it. Again, that is something that happens in the US Congress and in the European Parliament. We do not have that guaranteed. The only way we can get a debate and a vote on a trade agreement is if the Opposition force a debate on it during an Opposition day within a 21-day sitting period. As you all know, it is not guaranteed that there will be an Opposition day that falls in that period, and if there is, the Opposition may decide to use it for other things. The Government are proposing a lot of new trade agreements, so the current system is not reliable in terms of ensuring that debate and vote on the deal.
Fourthly, throughout this whole process we would like to see public consultation and independent impact assessment. There have been some half-hearted attempts at that. I sit on one of the expert trade advisory groups at the Department for International Trade, but there is not a well-established, formal process of consultation with actual trade agreements where businesses and NGOs are brought in to comment on and critique the trade agreements themselves. We have not seen that happen yet. Again, that is something that happens in other countries, but the UK is very much behind on this.
Bill Esterson
Q
David Lawrence: It is about public trust. We saw in the TTIP negotiations a lot of distrust that ultimately led to the deal falling apart. If you wanted TTIP to happen—if you want these trade agreements to work—you need the public behind you. If there is not transparency, there will be conspiracy, leaks, theories about what is being discussed, accusations and a lot of uncertainty. That is why it is something that businesses and NGOs are united on: regardless of your view on whether the specific trade deals are good or bad for the economy or society, at least if you have transparency, you know what is being discussed and what is on the table. That is why we are pushing for it, and we have joined the British Chambers of Commerce, the International Chamber of Commerce and the CBI in pushing for that level of transparency. It has been a source of frustration, not just among civil society but also among businesses, that these important deals are supposedly on the way but we do not know what is being discussed at the moment.
Bill Esterson
Q
Tom West: We are supportive of the asks and processes David outlined. Greener UK, which is a coalition of environmental organisations, is also a signatory to the document David mentioned. I will just add some extra things around the side.
First, once a trade deal is in place and up and running, there is a need for ongoing scrutiny and involvement of civil society in making sure it is being implemented in the right way. That is crucial looking forward. Secondly, to give a bit more clarity as to the value of this, within the environmental sphere, the value—in fact, the necessity —of public participation is long recognised. The Aarhus convention 1998 enshrines in law that the public must be engaged in the design of policies related to the environment. It is true here as much as in other areas: by involving the people affected by the policies, you get better policies and better buy in.
There is another interesting point on the value of this. Last year the US negotiators said, “Look, we can’t refer to climate in our negotiations”. They were able to point to an Act of Congress and say, “Our hands are bound here. It’s impossible for us to do this”. In that way, a steer and an instruction from Parliament can strengthen our negotiating arm. As I have said, our vision is that the UK uses its blank sheet of paper on trade policy to align its trade policy with its global environmental ambition. Let us get that clear and written down so that our negotiators can point to it and say, “The conversation that we want to have—and, in fact, that we need to have—is around robust implementation of the Paris agreement, meeting our environmental goals”.
Lastly, David mentioned the need for public support: this matters to the public and they care. For me, this goes to the question—and annunciating—what are we going to get from these trade deals? What is the benefit and value to people? That is very much part of the question and review of what our trade policy is for. We have seen various estimates of what a US trade deal might get us, for example, from an economic point of view. The figures sometimes are relatively small. I have seen some say that the benefit in reduction in tariffs might amount to £8 per household per year. If that is the case, we need to understand what that will do for us and what other benefits we might be able to get from a trade policy that is more closely aligned with our environmental ambitions.
David Johnston (Wantage) (Con)
Q
First, given that this is about continuing agreements that we already have, if we sought to change them, they would not really be continuity agreements anymore. Secondly, could you both talk about the counterfactual? If we did not have this Bill or the continuity agreements, what would be the consequences for this country and for those countries in the developing world with which we are seeking these agreements?
Tom West: I think it is right to say that the Bill itself is focused on those continuation agreements, but in some ways that is symptomatic of the wider problem I am talking about in terms of the lack of an approach that says, “Let’s review and revisit what our trade policy is for and how it should be designed,” with an eye, in particular from our perspective, on what that means in terms of delivering our climate and environmental goals. As a first step, yes, we need to take those sorts of measures and it is sensible to do so, but that is just a first step. That, in and of itself, cannot be the full range of what we should be seeking to achieve when it comes to our approach to trade. However, taking that more ambitious approach requires putting in place certain mechanisms and frameworks. We are talking about scrutiny processes as a key part of that and, in addition, frameworks that seek to guarantee that, through our trade deals, we will be protecting and supporting our delivery of environmental goals by making sure that we retain our right to regulate in environmental matters and doing that thoroughly; that we have non-regression in environmental standards and a meaningful and enforceable commitment to non-regression; and that our import standards match up to our environmental goals.
David Johnston
Q
Tom West: I think that the EU’s approach to trade needs improvement, yes. This is not just about trying to replicate what the EU is doing in any of these areas. There is scope to do things better, to use this new power to conduct our trade policy in new ways where we can be a world leader and use our seat at the WTO to say, “There is a better way to do these things,” and that is a great opportunity.
David Lawrence: Can I just add to that? There are issues around the substance of the agreement, but you can improve the scrutiny processes without necessarily changing the substance of the roll-over agreements, while recognising the importance that those deals are rolled over the before the transition period ends. We work closely with Fairtrade and Traidcraft, which are two of our members. They have direct links to lots of the countries that have the EPA trade agreements—economic partnership agreements—with the EU that are being rolled over. There is a tension because a lot of countries want to change those EPAs—they see Brexit as an opportunity to renegotiate those deals—but there is also a desire for those to be done in time. Our hope is that those things are not completely incompatible and that you can have a new Bill, like the Trade Bill, that implements these agreements while also having a process of scrutiny and an opportunity for countries to reform EPAs where necessary.
In terms of the scope of the Bill, the Bill is about roll-over agreements. It is also about the creation of a Trade Remedies Authority and acceding to the government procurement agreement. Both of those latter two things are about future trade policy. They are not just backward looking—"We need to make sure those things are rolled over”. They are also about the UK’s new trade policy. That is why, for the previous version of the Bill, a number of amendments that were ruled in scope, both in the Commons and in the Lords, were about why the scrutiny process is not just for roll-over agreements but for new agreements as well. Indeed, some of those amendments were successful in the Lords. There is an element of, “If not us, then who, and if not now, then when?” about it as well, because the Government are not proposing any alternative trade legislation at the moment.
This is the only legislative opportunity, as far as we know, to put in place these scrutiny provisions. If the Government want to bring forward a trade framework Bill, or something else where there is an opportunity to have a proper conservation about scrutiny, then fine, but in the absence of that, this Bill should be used to put in place those scrutiny procedures, as with the previous Trade Bill.
Tom West: If I may add to that quickly, this lacuna that David and I are both describing, in terms of where is this bigger picture of trade policy, comes through in the conversations on the Agriculture Bill as well, where the issue of food import standards is, quite rightly, an important topic for debate. We are saying that what we do around our import standards is going to matter. It will matter for British farmers, but for our environmental impact and overseas footprint too.
Our view is that the Government clearly need to act to put in place those manifesto commitments to not compromise on environmental, animal welfare and food standards. We have seen statements in the media in the past around the Trade Bill being the right place to do this, but at the moment there is nothing in the Bill about it. The Agriculture Bill provides that opportunity as well. Clearly, there is a need to do something on import standards. That is true of food import standards, but it is true more widely as well. It is not just food that we are looking to import, and we need to make sure that that approach is compatible with our domestic environmental ambition and our global environmental ambition too.
David Johnston
Q
The Chair
Q
Tom West: We have not run the counterfactual of saying what would happen if these had not gone in there. Overall, the idea of continuing those agreements for now, and then looking at them in the round later on, is an approach that makes sense.
David Lawrence: Yes, I agree with that. The Bills both need to pass before the end of the transition period in order for the deals to be rolled over. We are in agreement on that. The question is whether you can do that, while also having better scrutiny and setting in stone better standards for the future.
Gareth Thomas (Harrow West) (Lab/Co-op)
Q
Tom West: Starting with the US deal, we are concerned about the attempts and the approach from US negotiators, particularly around agriculture and food standards, to change the way the UK currently regulates and legislates in that area. It is clearly set out in the US negotiating objectives that they want to open up UK markets to US agricultural products. Our view is that in many areas those are produced to lower standards than is currently allowed here in the UK.
That also raises the indirect effect that trade deals can have on environmental standards, which is incredibly important. Trade rules can place restrictions on what it is that countries can do to meet their environmental goals. Our view is that achieving environmental goals is a good thing do—it is of value in and of itself—and that trade rules should work within that framework. Limiting what we can do, in order to achieve certain trade goals, is a restriction that we should not have in place.
To go back to the specifics of the US deal, another area of concern is chemicals. Currently in the UK, there are more than 1,300 chemicals for use in cosmetics that are not allowed; in the US, that is around 11. I think that demonstrates the stark difference between the regulatory approach in the US and the current approach we have here. While the UK now has the chance to do things differently—I am not saying we must stick to EU ways; that is not necessarily the approach we need to be taking—we do want to make sure that our standards get better and not worse.
David Lawrence: In terms of the scope of the Bill, I do not think what we want is for the Trade Bill to become a big debate about the US trade agreement, but we do want it to be a debate about scrutiny. If you have those scrutiny practices in place, when the US deal comes round, Parliament can actually debate that properly, rather than relying on the occasional parliamentary question or a Backbench Business debate, which is what currently happens, even though it is on the Government’s own terms for really important big trade agreements.
I completely agree with what Tom said about standards. The key thing here is that there are two dominant regulatory regimes in the world—the EU’s and the US’s. In many ways, Brexit will force the decision about which of those regimes we align with. Something that we have called for—I believe Tom and ClientEarth have called for it as well—is sequencing, whereby the EU deal comes first. We sort out our relationship with our largest trading partner, with whom we are already aligned on so many things and have been for so long, before we negotiate with the US, because the US really do want us to align with their regulatory regime, as Tom said.
You mentioned Canada. Canada and Japan have both asked not to renegotiate their existing terms, but essentially want to seek new free trade agreements with the UK. They have also both emphasised that they want the UK to sort out its relationship with the EU first, because historically the UK has been a springboard, particularly for Japanese investment in the European Union. For a lot of our trading partners, sorting out our relationship with the EU is an absolute priority. We have said let us do that first and then we can think about new trade agreements, such as one with the US.
There are a number of other concerns with the US deal. I will not go into huge detail on that unless you want me to, but we have concerns around public services provision, digital services and regulations in a number of areas, not just the environment, but also health regulations and food standards; we are also concerned about investor protection provisions, because we have seen that those have been used in really damaging ways in other US trade agreements, such as NAFTA. Those are some other concerns we have about the US deal. As I have said already, the real priority is scrutiny, because then we can have that debate properly in Parliament.
Gareth Thomas
Q
Tom West: So, as David was talking about, there is this point about the two big regulatory spheres of influence. Canada is very much close to that US sphere and so, while there might be less of the direct issues, we see that stepping-stone effect.
One extra thing to add is that there are approaches that the US takes in its trade agreements and trade deals that are clearly better than what the EU is doing. Around enforcement, for example, some of the approaches that the US will often take include better enforcement mechanisms for environmental provisions in trade deals. Looking at the different approaches is certainly worth considering.
Fleur Anderson
Q
For Tom, a recent High Court decision about Heathrow airport ruled that we could not have Heathrow airport because it was counter to the Paris climate agreement. Are there risks if we do not put extra environmental standards in the Bill that future trade agreements will be brought into question, as that national policy statement was?
David Lawrence: In terms of downsides to scrutiny, we are very much calling for scrutiny and I do not think there are any really obvious downsides. As I said, it is an area where, perhaps unusually, we are very much aligned with the private sector. A lot of businesses are also calling for similar things.
In terms of developing countries, as you will know very well, Fleur, there are a lot of organisations in the UK representing the interests of developing countries and a lot of foreign aid organisations who would like to be able to see what is going on in trade negotiations and be able to represent those interests to MPs, but at the moment there simply are not those scrutiny proceedings in place. Obviously, the process of scrutiny takes time, so maybe it would slow things down a bit, but on the long-run game of improving public trust in what the Government are doing and public understanding of how trade deals work—where they are beneficial and where they are potentially harmful—it is absolutely worth having those additional scrutiny proceedings in place.
Tom West: The Heathrow decision is a really good example of how important it is to make sure that all of our policies are compatible with our environmental goals. While we might not get a direct read-across in this case here, what it does demonstrate is that we need to make sure that what we are doing in all areas is compatible with meeting Paris and our other environmental goals, too. We have got net zero and an Environment Bill that could provide a framework for some ambitious targets, and we need to make sure that that is compatible. Making sure that we have got that clear framework in legislation will necessarily help with that.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Q
David Lawrence: We have very similar concerns in relation to devolved nations. It is obviously tricky because you do not want to necessarily end up in a gridlock situation where an entire UK-wide trade agreement is blocked because one of the nations has a veto, but at the same time there will be parts of trade agreements that primarily or only affect the industries in the devolved areas and that cut across regulations that are normally devolved competencies. In those areas, we would like that to be the decision of the devolved authorities. Obviously, there is a role for consultation throughout that, as there has been through the Brexit process. I know it has not been handled perfectly in the Brexit process.
More generally, it is about applying the normal standards of democratic scrutiny that we would expect for other areas of domestic legislation to trade agreements, in recognition that trade agreements have a large and wide-reaching domestic effect. If the Government want to build a new railway like HS2, they have to put it in a Bill that has all of its Commons stages, layers of scrutiny and Committees like this one, and then it goes to the Lords and it comes back again. It goes back and forth, the media get involved and people write to their MPs about it. That is just for a railway and this is for a trade agreement that, if the Government are to be believed, is central to the UK’s post-Brexit industrial strategy, and MPs do not have anywhere near that level of say over it. So what we are calling for is similar to the way in which other regulations and big projects and proposals are treated with the level of democratic scrutiny that they receive.
Tom West: Yes, I agree. With environment, agriculture and fisheries all being devolved, this is obviously really important to our concerns, too. Clearly, there is a need for better mechanisms to be in place to make sure that the four Governments of the United Kingdom can work together to have the appropriate conversations about how we are going to work these things out. It is not straightforward exactly how it will work, but clearly it needs to be done so that the devolution settlements can be respected, and, as David says, so that the proper democratic input into trade agreements can be had.
The Chair
If there are no further questions from Members, I will thank the witnesses for their evidence and we will move on to the next panel. Thank you, David and Tom.
David Lawrence: Thank you.
Tom West: Thank you.
Examination of Witness
Sam Lowe gave evidence.
The Chair
Q
Sam Lowe: Thank you for inviting me. My name is Sam Lowe and I am a senior research fellow at the Centre for European Reform, a think-tank. I am also a member of the Strategic Trade Advisory Group.
Bill Esterson
Q
Sam Lowe: The first thing that I should say is that I think the Bill is necessary; there is a need for continuity when it comes to the UK’s trade relationships with third countries. Looking at the provisions for the government procurement agreement, I can see why there might be some concerns about the powers given to the Executive to alter things in future, but I also understand why the provisions are there, in that the government procurement agreement will evolve over time, new members will accede to it and there will be a need to update it.
Specifically on the continuity agreements, there are a few points that I would like to make. First, I am not sure that the scope is fully understood, in that it maybe covers more agreements than people think. As well as the ones that we all know about, for example Chile, Jordan and the like, it also covers Singapore and, to my reading, Vietnam, which was signed by the EU in June 2019. That is something that should be considered.
When it comes to the broad categorisation of continuity, I have a few questions. I would probably recategorise the agreements. I would start with category 1, which is the pure continuity agreements where there are just minor changes to be made. I am thinking of Chile, Israel, Jordan, Lebanon, Faroe Islands and the like. I would also include South Korea stage 1 in that box.
My second box would be the agreements that are continuity agreements but will be substantially different from what exists within the EU. Those are the agreements with Norway, Iceland, Switzerland and Turkey, and I would probably add Ukraine to that box as well. Because the existing relationship is so contingent on our EU membership, there is no doubt that the future agreement we have with them will be substantially different from today.
The third category are just new agreements, because we have decided that they cannot be rolled over and we are set to renegotiate them. That would be Japan and Canada. I would also put South Korea stage 2 in that box, in that the South Korean roll-over agreement contains a commitment to consider renegotiating after three years, but it also contains a poison pill that means that we will inevitably have to, because the rules of origin provisions that allow for EU inputs into UK goods to continue to qualify for the agreement’s local content provisions expire after three years. In that case, it will be a renegotiated new agreement.
As to whether I think the Bill is appropriate in its coverage, I think for box 1—pure continuity with minor changes—it is fine. For box 2—continuity but with big changes—I would say that it is probably still fine. There are obviously some concerns that they will change substantially, but those agreements are ones where we probably need to prioritise continuity over all else. In box 3, to my mind, they are new agreements, so I am not sure why they will be covered by a Bill that is focused on continuity—particularly in the case of Japan, where we have seen new objectives and even statements that we want to go beyond the EU’s existing agreement.
I would conclude with the need to consider the counter- factual. What we are discussing here is not necessarily the whole trade agreement; we are discussing how we deal with the implementing legislation accompanying the trade agreement. If we think about what that covers in practice, we are largely just talking about procurement and perhaps some issues on technical barriers to trade—that is it. In practice, we are probably talking about fairly minor changes in this space.
In the grand scheme of things, I suppose the question we are asking ourselves is: would slowing this down for everyone in order to do this via primary legislation add sufficiently extra scrutiny on the whole? I am not convinced it would, considering that it is ultimately still a yes/no decision either way. Parliament is not going to change; it just has to decide whether it wants it. Here is where I think it speaks to the bigger issue, which the Bill does not address but is hard to ignore. I listened to some of the first panel, and they touched on it. Parliament’s role vis-à-vis trade policy is incredibly limited; it is largely an Executive competence. Parliament has very little influence over what trade agreements look like, and very little ability to object to them if it comes to it.
Bill Esterson
Q
Sam Lowe: The question of whether it is needed is a very good one. I am not sure I can actually answer it. You have just acknowledged that some of the agreements have passed. I suppose it is required, in that there might be a need to get some legislation through very quickly at the last minute if some of these negotiations drag on, so there is an issue there. Your first point was about what is in the agreements.
Bill Esterson
Q
Sam Lowe: I cannot confess to have looked at the text of every single one, but one of the concerns that had been raised was that there was an issue about whether the tariff rate quotas will have been changed in a specific agreement. When I looked at Chile in this case, the changes that had been made did, to my mind, make sense. For me, the most interesting point about some of the continuity agreements is the approach to rules of origin, which I mentioned earlier. It is the process by which a product qualifies for tariff-free trade under a trade agreement, dependent on the amount of local value added. As the UK has an issue, which is that in many sectors we do not create enough local value added to qualify for free trade agreements under normal rules of origin-type provisions, we have inserted conditions that allow for EU inputs to continue to be accounted for—either indefinitely in the case with Chile, or temporarily with South Korea. That is not necessarily a concern, but it is interesting. It is actually quite a new approach to rules of origin, and the jury is out on whether it is WTO-compliant. I probably lean towards it being compliant, but I have certainly heard counterarguments.
Antony Higginbotham (Burnley) (Con)
Q
Sam Lowe: Sorry, you cut out at the end.
Antony Higginbotham
It was just about what the impact of our not having a TRA might be. Have you given any thought to that?
Sam Lowe: We do need a Trade Remedies Authority. As it stands, this is dealt with at EU level, and when it comes to disputes over trade—be it because we are worried about unfair subsidies abroad, or worried about products being dumped on our markets or being sold at an artificially low price—we need a means to investigate and remedy them. In the interim, I believe the approach is that following our exit from the transition, we are just going to continue with the EU trade defence measures. However, those measures might not be justifiable if we are only taking into account the UK context, so they are all going to need to be reviewed.
I do have some concerns about the practicalities of the Trade Remedies Authority. First, I believe it has lost two provisional chief executives already, and it is still looking for a new one. Secondly, speaking as someone who comes from south Wales, from Llanelli—I am not an “everything needs to happen in London” person—I am not convinced that it was a sensible decision to put it in Reading and offer the salaries it does when it is trying to attract trade lawyers with vast amounts of experience. My fear is that it will create a false economy: we will end up paying law firms to do it all for us for a while as we build up the internal capacity, and then because of the pay constraints, the people who have learned how to do the job will be able to leap into these law firms to get paid a lot more. That may point to a broader problem with retention in the civil service.
Gareth Thomas
Q
Sam Lowe: Canada is a long story, in that it links back to the previous iteration of the Government’s no-deal tariff schedule and its publication. When we put forward a tariff schedule that was very liberal and offered a lot of access to everyone, the Canadians looked at it and said, “We do not want to roll over any more, because you are giving the whole world for free what we had to pay for via our trade agreement”—remember, they also had to open up their market in that context. I believe that the more recent update to the new global tariffs has changed that calculation slightly on the Canadian side, and will lead to a renegotiation.
The reason that the Japanese were not able to roll it over from a domestic point of view was that from their perspective, they had liberalised their agriculture sector to a great extent over previous years—through their agreement with the EU, through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and also through their more recent agreement with the US. If they were to roll the agreement over to the UK, they would be giving extra agriculture access to their market on top of all that, but for free. That was just not politically doable within the Japanese context, so it led to the need for this renegotiation.
Turning to the contentious issues, I suppose that with Canada we could return to some of the TTIP issues around investment all over again. That is also the case with Japan. I think both those deals are probably doable by the end of the year under certain circumstances, but you will notice that the UK has had difficulty replicating agreements with the bigger countries. It has not been so difficult with some of the smaller countries, but if you think about the ones that have not been done yet—Japan and Canada, but also Mexico and Ukraine—many of those countries want to be certain of what the future UK-EU relationship looks like, and what concessions the UK offers the EU, before finalising anything with the UK.
The Chair
We have until 12.35 pm for this session, and three other Members want to ask questions, so it would be good if we could keep questions and answers quite concise.
David Johnston
Q
Sam Lowe: Yes. In terms of countries that require continuity, Turkey is quite a good example: we currently have supply chains that run out of the UK into Turkey and back. I think particularly the automobile industry has some exposure here. This is a really tricky one, in that we are currently in a customs union with Turkey via our membership of the EU and, unless we are in a customs union with the EU, which is obviously not Government policy, we are going to be unable to replicate that relationship with Turkey. When it comes to the future trade agreement with Turkey, at least on the tariffs level, the most we can expect is for it to match what we have agreed with the EU. That, of course, would be better than not having a trade agreement; but the benefit of being in a customs union is you do not need to worry about rules of origin. So all of a sudden this becomes a slight issue with Turkey, and it is why I put it in my second box earlier, of being a continuity agreement but with big changes.
Of course the other ones that really do, probably, matter are Switzerland and the EEA countries—Norway, Iceland—in that we have quite deep trade relations with them now, as we are part of the single market. That will obviously, again, change quite substantially because of our decisions over our relationship with the EU.
Another country that does matter, and I believe it has been resolved—I do not want to say certainly, because I do not have a list up in front of me—is South Africa, in that we actually have automobile supply chains that run through South Africa. There we have a different problem, in that it does not achieve the same for the companies as now; we currently export products to South Africa—inputs to South Africa under the EU-South Africa agreement— that are put into, say, a car there and then sold back into the EU under the preferences of the agreement, because the UK-based inputs can qualify as local to South Africa under something called bilateral cumulation. That will cease to exist under the new agreement.
The point I would make is that all the agreements are going to change. I have just, in my head, got three different categories.
Matt Western (Warwick and Leamington) (Lab)
Q
Sam Lowe: Having read the Trade Bill, I think the approach seems broadly sensible. I do not have it in front of me at the moment, but I believe the Secretary of State approves the chair; and then the chair makes a recommendation on the chief executive, subject to sign-off of the Secretary of State, unless the chair is not there, in which case the Secretary of State does it. I understand it is an independent body to the Government, but it obviously needs to have close ties with the Department for International Trade.
Fleur Anderson
Q
Sam Lowe: Taking into account the current scope of the Bill, which is to achieve continuity, it is slightly unique in that sense. However, I agree with a comment by an earlier witness: if there is not going to be further legislation to lay down the scope for Parliament’s engagement in future trade agreements, it seems to me that it would be possible to expand the remit of the Bill to cover that. I think that is right, in that the Trade Remedies Authority and GPA provisions are forward-looking, so there is no reason why you could not do that as well.
The UK’s general approach to scrutiny is very poor. I think parliamentary scrutiny is very poor. Parliament has very little ability to influence trade negotiations or set the agenda of trade negotiations. To my mind, it has—[Inaudible]—yes/no vote. Just from a democratic point of view that seems slightly out of order to me, in that, when we compare it with the US or the EU, Parliament at the crudest level has a yes/no option on whether to approve a trade agreement or not. As a result it is much more involved with the process. That is something I should like changed. Of course that is not currently in the scope of the Bill, but if the Government are not going to introduce further legislation, I would understand if the scope of the Bill was expanded.
The Chair
Q
Sam Lowe: The point I am making is that this Bill is not really comparable to other systems, in that it is sort of unique. To score the UK approach more generally to treaty scrutiny out of 10, it would be below five.
The Chair
Thank you very much for giving evidence. If there are no further questions from hon. Members, I ask that we move on to the next panel. We are just waiting to get the technicalities sorted out, so we will suspend for a few minutes.
The Chair
We will now hear oral evidence from Nick Ashton-Hart from the Digital Trade Network. Nick, can you hear us?
Nick Ashton-Hart: I can indeed.
The Chair
Q
Nick Ashton-Hart: Thank you. I will try to be brief, because it is important for you to have time to ask me things. I am Nick Ashton-Hart, the Geneva representative of the Digital Trade Network, which is a coalition of industry groups throughout the world. I am the focal point for industry on digital economic policy in Geneva. I have been involved in the trade community for more than a decade and participated for about 20 years in multilateral telecommunications and trade policy as it relates to use of the internet.
I am frequently on national delegations and an adviser to countries or groups of countries that are negotiating economic policy. I am also the special adviser on international internet policy for the International Chamber of Commerce in the United Kingdom, although I am speaking to you today in my personal capacity as a trade expert in the field.
Bill Esterson
Q
Nick Ashton-Hart: Thank you very much for the question. Thank you all for asking me here. It is a great privilege and honour, as an immigrant who arrived here in 1986 with £900 in my pocket, to be heard by Parliament.
With respect to the Bill, many of the comments I made about the Bill in the last Parliament remain true. There are some changes in this Bill, but the core of the issue is the road it sets out in terms of consultation on trade policy with not only Parliament, but industry as a whole. In my work, I see how Trade Ministries worldwide relate to stakeholders and how they choose to involve stakeholders in trade policy-making and negotiating.
I understand the argument that the continuity agreements are intended to be as close as possible to and a simple replication of the provisions of the agreements that you benefited from via membership of the EU, and that consultation is not necessary because of that fact. As I said in 2018—and this remains true—these are not the same agreements. At that time, we did not have any of the agreements rolled over, if you will, so we assumed that they would not be the same agreements. Based on my experience in trade policy, nobody makes exactly the same deal with a smaller party that they did with the larger party, because it is not in their interest to do that. In this case, we have even more reasons.
As an example of how these agreements are not the same, I offer up the Swiss agreement. There are 20 mutual recognition chapters of the Swiss-EU agreement. The UK-Swiss agreement has only three, because Switzerland cannot agree that our regime is equivalent unless we continue to apply the EU regime, as the Swiss-EU agreement requires that. So, 24% of the UK’s exports and 16% of imports in that deal are not covered currently. That is also true in the agreement on customs, so UK goods will not be expedited through the Swiss border in many cases as a result.
Therefore, these are fundamentally not the same agreements, yet they are treated, in terms of consultation with industry and Parliament, as if they are, when they are materially different. It is like anything else—if you start out on a road, you want to make sure that the destination you are heading towards is the destination you want to reach. I think that, as a country, the destination we should want to reach is that the country as a whole buys into the arrangements for trade policy that the country proposes to make.
While I accept that in February 2019 the Government’s roadmap for consultation with Parliament and with civil society and the like began to approach what we would consider a more standard relationship, I offer this comment to Committee members to consider. If you are negotiating with another party about economic affairs, the reason why you want industry to have a close relationship with you when you are doing that is because industry has relationships with industry on the other side—in the country that you are negotiating with. Industry can then help you to gain support from industry in your negotiating partner for the provisions that you are recommending, which are also in the interests of industry in that other country, or negotiating partner. If industry is not a close collaborator with you throughout the negotiating process—not just in setting up the terms that you are looking for before you negotiate, but throughout the negotiation and ratification process—you are robbing yourself of a key element that will help you to negotiate a successful outcome.
That is just as true when you are dealing with issues such as the GPA as it is when you are dealing with regular free trade agreements, or regulatory co-operation agreements, which are not really discussed that often but are fundamentally important—financial technology bridges, or FinTech bridges, and the like.
That is the key thing that I have heard from industry, and the key thing that I have seen is that the continuity agreements are taking longer to reach than had been thought. I wish I had been wrong about some of my predictions back in 2018; unfortunately, pretty much all of them have turned out to be taking place. These agreements have been more difficult, they have been more different and there are gaps in coverage. Of course, all of that is not terribly surprising, but despite the knowledge that industry and other stakeholders were right when they said that more consultation was needed, the Bill still does not provide for that consultation to take place, which is a real lack, and an opportunity that should be seized.
The consultation should not be seen as a negative; it should be seen as a positive. These agreements will last longer than they are expected to, and the successor agreements to them will take longer to negotiate than is estimated, because there is one thing that you can guarantee about a trade agreement negotiation process and it is that the target date for finishing it is not the date you will finish. You will definitely finish at some later point than you predict. That has proven true for us with these continuity agreements, which is not a surprise to anyone in the trade community.
Hopefully, that is not too long an answer.
Bill Esterson
Q
Nick Ashton-Hart: First, I should say that you will have testimony from other witnesses who will have more knowledge of all the continuity agreements than I do. As you know from our conversations, I am a services guy, so I tend to focus on services and digital services.
As is the case in the Norwegian agreement, we will find that in any third-country agreement we try to make, the EU will quite naturally have made conditions on that country’s negotiations with additional third countries—the regulatory choices that the third country has with other parties with which they negotiate, other than the EU, are constrained by the agreement with the EU.
When it comes to regulatory chapters in trade agreements, there are really three major powers: the US, the EU and China. We do not have the regulatory freedom to determine, on our own sovereign nature, exactly what we do. Ultimately, we will adopt one of these three—we are smaller, and that is how it works. Big blocs carry the weight and tend to get more of what they want than do smaller parties. That is true of negotiating for anything in life. Anyone who has bought a car or a house will realise that those things stay the same. We will find that the choices that other countries are allowed to make in terms of their agreements with us are constrained by their deals with the great powers.
David Johnston
Q
Nick Ashton-Hart: The GPA is its own special animal. You will already have had descriptions of it, so I will not describe it. The GPA is a pretty loose agreement, and you can decide what you want to include within it and what you want to exclude. In theory—actually, in reality—it offers access to large amounts of potential supplies to Governments around the world, because Governments are major purchasers of everything. There are many conditionalities on that, and we will get less out of it than is suggested by the headline numbers, because of the flexibility of the arrangements and the scheduling. Countries, naturally, often like to sound more open than they are in this area.
I know of a certain European example: a major trading partner of ours in the EU that speaks a language that is not in the world’s top 50 most spoken languages has the same commitments on government procurement as does the EU, in terms of market access to third countries. What is not stated, however, is that you must do all of your bidding, contractual work and work with that party in that language that is not in the world’s top 50 languages, which quite naturally rules out the vast majority of people and companies in the UK, especially small companies. I am sure that a vanishingly small number of people in the UK speak that language.
So yes, the GPA is important, and yes, it does allow our firms access to many other markets but, looking at the fine print, access is not as simple and straightforward as is suggested. The GPA allows you to say to another country, “You—service provider X—can bid on services with my country.” It does not say, “And we will treat you as if you are one of us for regulatory issues.” You still need to be able to meet the regulatory requirements as a service provider that a domestic service provider has to meet. That is understandable and reasonable, but if your regulatory system in the UK is not seen as equivalent by that country, you will have to go through the additional step—if it is a regulated service, and many of them are—of being found to be regulatorily compliant with the regime of the country you are selling into. As we know, services are all heavily sensitive to regulation and to regulatory compatibility in third countries that you are selling into. That is why the single market is such a massive enabler of services trade throughout the European Union and its member states.
David Johnston
Q
Nick Ashton-Hart: Certainly.
Matt Western
Q
Nick Ashton-Hart: We are, as you know, one of the world’s powerhouses in services. Part of the reason we are a powerhouse in services is because, in the digital realm, we are also a great power in terms of innovation and firms that have had a lot of international success. Something like 60-plus per cent. of UK trade is underpinned in one way or another by digitalisation, so we are highly sensitive to any barriers to services through regulation, as well as through things such as the free flow of data and data protection.
We know that the agreements will not be duplications, because they are already not exactly the same. To the extent that we can, we should try to ensure that there are liberalising measures associated with at least the fundamentals of digital trade—some arrangements on data protection and on mutual recognition. Of course, that would also require us to stay quite close to the EU regime on data protection, which I and the industry have strongly argued in favour of. It is difficult, because if you are a negotiator and say, “I want to replicate this agreement, but I want to change one thing,” the other side is quite naturally incentivised to say, “Okay, then I want to change another thing.” The reality is that everyone will come to this with some changes, because—for many reasons, only one of which I covered—you cannot just copy and paste.
To the extent that we can put in digital measures, we should. It should be a part of the negotiating mandate for those agreements. It may be; I speak to DIT people quite frequently and have not heard whether it is, so I would not like to say whether it is, one way or the other.
Charlotte Nichols (Warrington North) (Lab)
Q
Nick Ashton-Hart: I would say that, at the level of principle, it probably should be. This is an example of an area of regulation that is not only economically consequential, but social and politically consequential. It is also not understood very well. The issues around platforms relate to business-to-consumer platforms, and particularly to social media. Those platforms are a tiny minority of the actual economic value of platforms as a whole. Business-to-consumer traffic represents about 10% of a platform’s value vis-à-vis the 90%, which is business-to-business traffic.
It is important at a level of principle to recognise that there are sensitivities, but it is also important to recognise that economic policy does not solve social problems and that the hooks need to be there to allow for exceptions, so that social problems can be anticipated and dealt with by the competent authorities that are responsible for them. In economic policy, however, the default is that platforms are a public good in the same way that markets are a public good. We want to facilitate innovation in the platform space, and our economy is a huge beneficiary of that.
The Chair
If there are no further questions from Members, on behalf of the Committee I thank you, Nick, for your evidence.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
Trade Bill (Fourth sitting)
Thursday 18th June 2020
(4 years, 11 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Chair
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It may be helpful if I note that, because no one is present to pass the Hansard reporters notes, there is an email address, which is hansardnotes@parliament.uk. To keep any great orations in their most accurate form in the record, you should email your speaking notes to that address.
Clause 1
Implementation of the Agreement on Government Procurement
Stewart Hosie (Dundee East) (SNP)
I beg to move amendment 29, in clause 1, page 1, line 4, leave out “may” and insert “must”.
It is a pleasure to serve under your chairmanship on this important Bill, Sir Graham. If I may, I will crave your indulgence for a few minutes to make some introductory remarks about the Bill before I move on to amendment 29. First, I recognise the difficulty the Minister has in the absence of officials. A number of the amendments I have tabled are technical, so it is not my intention—I hope this is helpful to you, Sir Graham—to press to a Division any amendments or new clauses until we hear detailed responses from the Government, probably towards the end of these Committee proceedings next week. Of course, I reserve the right to come back to these themes on Report, if and when we reach that stage.
Right now, there are three main threats to trade, as I have said before. The first is self-evidently the covid crisis. The World Trade Organisation has suggested there will be a fall in global trade of between 13% and 32%, which is larger than the collapse in trade during the financial crisis. The second threat is the impact of Brexit. We have all seen many of the assessments, which suggest a significant fall in UK global trade. The third threat is a more systemic problem, from the continued implementation of new, and the continuation of existing, trade restriction measures, mainly tariffs—about $1.5 trillion or $1.6 trillion-worth around the world. I am not confident that any of those problems will be resolved any time soon, not least because there is no cure or vaccine for covid; because of the well-publicised difficulties with the Brexit negotiations; and because of the failure to appoint a functioning appellate body in the WTO.
However, the Bill does address a number of other matters. It implements procurement obligations arising from membership of the GPA—the agreement on government procurement, it creates the Trade Remedies Authority and it gives Her Majesty’s Revenue and Customs and others powers to collect and share data. It also allows the Government to modify retained direct principal EU legislation, and it appears to me that, other than a few minor restrictions, those modifications are almost without limit.
The Bill also includes descriptions of what an international trade agreement is and says that it may be
“an international agreement that mainly relates to trade, other than a free trade agreement”.
But, as we know, modern agreements are little to do with quotas and tariffs, and as much to do with standards, conformity, dispute resolution and food safety, for example. Many people are therefore uncomfortable that the Government may be able to modify existing legislation, even in roll-over agreements, in the way proposed. I am sure we will come to all those matters over the next few days.
Amendment 29 does not appear to be particularly important, but it is, because it would require the relevant authority to make the regulations referred to. The reason is as follows. The UK is already party to the GPA, and requiring the relevant authority to make regulations to implement the GPA would ensure continuity upon withdrawal from the EU. Under clause 1(1), the Bill grants an appropriate authority the power to make regulations that it “considers appropriate” to implement the GPA. If the intention is to ensure implementation of the GPA 1994, the authority should be required to make such provisions. While it could be helpful to allow the relevant authority discretion—that is facilitated by the current wording—to make regulations that it considers appropriate to implement the GPA to ensure continued alignment with EU requirements, if the intention is actually to implement the GPA in order to ensure continued alignment, the relevant authority must make the necessary regulations. I commend the amendment to the Committee.
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. The hon. Member for Dundee East has made some important observations about our proceedings, which I agree with. We may take a slightly different view on pressing our amendments, and we will come to that in due course. I make no promise; it will depend on the nature of the Minister’s answers, his ability to garner information and what he says.
The hon. Member rightly drew attention to the impact of the covid-19 crisis on trade. He also drew attention to the importance of discussing trade, and indeed legislating for international trade, at this time in recovering our economy and the prosperity of our people. He referred to the estimated fall in the economy of between 13% and 32%. He is right that that fall is far larger than in the global financial crisis—it is the largest in history, over all the time in which such figures have been recorded. It is therefore essential that, where we can, we get what we are doing as accurate as possible.
Following the hon. Member’s speech, I now have a much better understanding of the intention behind the amendment. I am confident that he is trying to do what he has set out. The Labour party, as we made clear on Second Reading, fully support the accession to the GPA. If that is the Government’s intention, it seems entirely right that they should make sure they do so, and it is odd that they have not already committed to that in the Bill.
Gareth Thomas (Harrow West) (Lab/Co-op)
Might one of the other potential benefits of the amendment be that it helps to create a voluntary pressure on the implementing authority to support businesses to take advantage of the procurement opportunities that Ministers have said the GPA offers? If there is a slightly more lackadaisical approach, as the hon. Member for Dundee East appears to suggest, the incentive for Ministers to actually find ways to support businesses to take advantage of those opportunities may not be there in quite the same form.
Bill Esterson
My hon. Friend makes a good point. We want businesses to take advantage of the opportunities available in procurement. Having the Government make the strength of that case through how they legislate is an important way of achieving that goal. It should be clearly set out that the procurement obligations that we currently have through our EU membership have passed into UK law via EU retained legislation, and the Government should make clear commitments to their implementation. The hon. Member for Dundee East said that, if the Government intend to implement the GPA, they should say so, to ensure the continuity that my hon. Friend the Member for Harrow West rightly referred to and to make sure that alignment in the regulations is in place straightaway.
Gareth Thomas
Perhaps I can be a little clearer. My concern is that, under successive Governments the opportunity, the opportunity for local organisations to take advantage of public procurement opportunities has not been given as much assistance or priority as it might have been by both central Government and—on occasion, sadly—local government. Perhaps the amendment might help to create the pressure for central Government, in particular, to take a bit more seriously their responsibility to make that happen.
Bill Esterson
My hon. Friend is quite right: we need to make more of the opportunities available in procurement, and this kind of amendment is a way of delivering on that agenda.
I am pleased that the hon. Member for Dundee East has tabled the amendment. I note his comments about waiting, to ensure that the Minister is able to respond in full and in the event that he needs additional advice. I am happy to support the hon. Member in principle, on the basis of waiting to hear what the Minister’s reply might be.
The Minister for Trade Policy (Greg Hands)
Sir Graham, first of all, it is a pleasure to serve under your chairmanship, and I welcome everyone to the Committee. I think the previous Bill Committee I served on was for the previous gestation of this Bill, in early 2018, so I know from past experience that we have interesting discussions ahead in the coming days on this important legislation.
As the Secretary of State and I made clear on Second Reading, the Bill is about ensuring continuity and providing certainty for businesses and consumers as the UK strikes out once more as an independent trading nation. We will use the freedom that we have gained through our departure from the EU to negotiate trade agreements with new partners, but we also remain committed to seeking continuity in our trade relationships.
I will turn to the amendment in just a moment, but let me be absolutely clear. I have not spoken about the Bill since Second Reading, and I was genuinely surprised that the Opposition parties opposed the principle of it. The Bill consists entirely of wholly sensible proposals to secure the continuity of more than 40 trade agreements and our continued membership of the World Trade Organisation’s government procurement agreement, and to allow UK trade defences.
I hope that the Opposition parties will reconsider their principled opposition to the Bill after all the scrutiny that we are about to have and on Report, and will consider voting for it on Third Reading.
Gareth Thomas
I am sure we would be happy to reconsider if the Minister committed at this point to being sympathetic to some of the amendments we have tabled—for example, on extending scrutiny opportunities and extending the Bill to cover future free trade agreements. I will look sympathetically at his request if he will look sympathetically at ours.
Greg Hands
I thank the hon. Gentleman. He is an old sparring partner of mine over different years and different Sessions. It would be impossible for me to commit to that today, because there is still the opportunity, as I understand it, for further amendments to be tabled, so it would be impossible for me to either rule in or out opposing all future amendments.
I want to say a quick word on the practicalities for Members who are on their first Bill Committee. Due to the social distancing requirements, as you mentioned, Sir Graham, there is no one to pass notes to the Hansard reporter. Normally, the Minister also has with him or her a small group of officials, but they are unable to be with us today, also due to social distancing. On occasion, therefore, if a Member has an extremely technical question—I am just trying to think of a good example; perhaps it would be something about diagonal accumulation rules in the EU-Faroes agreement—it may be necessary for me to write to them. However, I commit that if I do write to a Member, I will of course copy the information to all members of the Committee.
Gareth Thomas
That may be one of the issues on which the Minister needs to write to the Committee. He will know that there have been long-standing concerns about British companies’ ability to get access to public procurement markets in an honest way, in, for example, China and Russia, given the levels of support that the Governments there often give to their own companies. The market is not necessarily an honest and level playing field. I understand that China and Russia are in the process of acceding to the GPA, but it might be helpful at some stage for the Committee to understand how far along the journey to accession those two countries are. They are potentially critical for British companies that want to get into the procurement markets there.
Greg Hands
I thank the hon. Gentleman for that very good question. I do not have current information about how far down that process China and Russia may be. Of course, both those countries are members of the WTO. It would, ordinarily, not be unnatural for them to seek membership of the GPA, but, of course, the GPA does not include all members of the WTO—it has 20 members, and they are typically western liberal democracies. Australia is the most recent to join. I imagine that China and Russia joining would become a significant issue on the international stage, and at the WTO.
If the UK were not an independent member of the GPA in its own right—or if it were to fall out—our ability to influence accessions would be very much diminished. That is another good reason to be a member of the GPA—so that we can exert UK influence on the global stage to make sure that accessions are in the interests of the wider world community, as well as UK businesses and taxpayers.
The reciprocal nature of the agreement supports the public sector to get the best value for every taxpayer pound that it spends. Those benefits will increase each time another party joins. Each new party that joins increases the procurement opportunities available to UK businesses and public sector bodies.
Turning to amendment 29, the powers in clause 1 will enable us to give effect to our international obligations on joining the GPA as an independent party, and to make changes as necessary in response to specific circumstances that may arise from time to time after our accession. Examples might be changes to reflect, and arrange for, the accession of other parties to the GPA—the hon. Member for Harrow West mentioned a couple of possible future members—or to make the necessary adjustments where parties leave the agreement. The ability to make these changes is essential to allow us to keep in line, and up to date, with our international obligations.
Gareth Thomas
The Minister will understand that there have been concerns about acceding to the GPA and doing so at a time when we have exited the European Union. One concern relates to how low the threshold is for other GPA members to potentially get access to central Government contracts, thereby potentially putting at a disadvantage British companies wanting to win those contracts. What reassurance can he offer British companies that are potentially beginning to seek out opportunities to win central Government contracts that they will not lose out against other countries’ companies?
Greg Hands
It is a good question, but the assurance I would give is that our intention is to join the GPA with substantially the same arrangements as we currently have as members of the EU. That will give the assurance of continuity as we move forward.
The power in the clause is appropriately drafted to ensure that our international obligations will be fully complied with, including by making changes to national law, where appropriate, using the power in this clause. The use of the power is expressed in the usual way. I say to the hon. Member for Dundee East that we have expressed these powers using quite a usual formulation, allowing authorities to make regulations in the circumstances set out. If the wording were to be changed from “may” to “must”, as proposed in the amendment and as he suggests, changes would need to be made in all circumstances covered by clause 1. There would, however, be certain circumstances where it would not be appropriate or necessary for regulations to be made. For example, a dispute with another party might be resolved without the need to make any changes at all to domestic regulations. Likewise, not all modifications of another party’s appendix I will require changes to domestic law. On that basis, I ask the him to withdraw the amendment.
Stewart Hosie
I make a number of observations. The Minister said that the Bill was about continuity. If I take that at face value, as I do, it strengthens the case for the relevant authority being required to make the necessary regulatory changes. He also said that the flexibility allows the relevant authority to respond to specific circumstances, but if those change, there are lots of reasons why it should—absolutely must—make the necessary regulations to respond to those changes. The final argument the Minister made does not hold water:
“An appropriate authority”—
must—
“by regulations make such provision as the authority considers appropriate”.
So if a circumstance stands changed where the relevant authority did not deem it appropriate to make a change, it would not be required to do so.
The hon. Member for Harrow West said that the amendment might encourage more businesses to take advantage of procurement opportunity. It would not do so directly, but, certainly, if the relevant authorities were required to do something, it might act as a nudge measure to encourage businesses to look at those procurement opportunities.
I will do what I said at the beginning: I will not seek to press these matters to a Division now, but I will ponder on the Minister’s answer. I am sure he will consult others and ponder further, and we may have a similar debate on Third Reading. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 24, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
The Chair
With this it will be convenient to discuss the following:
Amendment 25, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater environmental exceptions and carbon considerations in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 26, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater scope for UK small and medium-sized enterprises in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 27, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing improvements to public health as a consequence of any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Bill Esterson
In the debate we have just concluded, the Minister referred to matters that fall under the set of amendments we are now considering and the reciprocal nature of the benefits of the GPA. These amendments relate to the impacts on those companies tendering for UK procurement contracts and the way they might be addressed through the annexes to the GPA that we might seek once we have acceded to that body. The amendments relate to the desire for procurement to look beyond short-term pricing—a problem that has bedevilled procurement—and I will give some examples a little later. All four amendments pick up elements of the points made to us by Rosa Crawford in her oral evidence on Tuesday about the desirability of price value or life cycle costing in procurement.
In his remarks just now, the Minister said that we should have the same arrangement we have with the EU, and we agree with the accession to the GPA for that reason. But if we are to have the same arrangement that we have as members of the EU, there is also the significant matter of retained EU law, which needs to continue if that statement is to hold. In this case, it is the Public Contracts Regulations 2015, which will run out on 31 December 2020. As my hon. Friend the Member for Harrow West has said, it is extremely important that we maintain the strongest possible procurement system for companies in this country, and there are other reasons referred to here to do with international and domestic labour rights.
Gareth Thomas
The House of Commons Library brief is very helpful in this regard, because it makes clear that
“the GPA will limit the ability of UK public sector buyers to choose to buy only from”
British or local companies, for example. It is surely an extraordinary situation for Ministers not to want to do more to help British companies or, indeed, to help local councils support local businesses to get access to procurement contracts.
Bill Esterson
Yes, and that is why it is important that we maintain as a minimum not just the GPA regulations but the Public Contract Regulations 2015, that they are renewed and that we look to build on them, which is the reason for the amendments. Ministers—including, on occasion, the Minister present—have indicated their support for British business, and the Prime Minister on numerous occasions has encouraged us to buy British. I imagine that the logical extension of that statement is that he wants Government procurement departments to buy British as well, and I will come to other examples of what Ministers have said.
This is about having the strongest possible procurement system. That is why our amendments call for the Government to pursue with GPA partners the potential for the inclusion of labour standards, environmental standards, support for small and medium-sized businesses and consideration of public health consequences in our annexes to the GPA. I will define what we mean by that.
In amendment 24, we refer to
“labour market interventions and compliance with ILO standards”.
That means we want to ensure that companies that fulfil their obligations to their workers, treat workers well and meet their commitments to working with trade unions in a productive manner are not undercut by companies that do not. This is about rewarding responsible businesses, as well as supporting workers.
Labour market interventions in procurement allow for minimum wages and living wages. They also allow for maximum wages, although that is rarely used. They allow for legislation to prevent discrimination on the grounds of age, sex and religion; legislation to support or regulate trade unions; a maximum working week; legislation on health and safety; behavioural nudges, which are making an appearance for a second time in our deliberations, to encourage workers to take up pensions, for example; and Government provision of education and training schemes to enhance skills and encourage the recruitment of apprentices.
Charlotte Nichols (Warrington North) (Lab)
I just want to come in on the point about labour market interventions. Local government procurement is a good example of where there is a need for something sectoral and robust. For example, there is a national agreement for the engineering construction industry, known as NAECI, for which the minimum rate of pay is £18.63 an hour. If a local council was to procure even on a real living wage, rather than the Government’s living wage, the minimum rate of pay would be about 60% of that. In local government and central Government procurement, companies that are trying to do the right thing and are abiding by sectoral agreements are being undercut. That is why it is very important that we get that right in this legislation.
Bill Esterson
I thank my hon. Friend for that excellent example of why ILO obligations matter. She is absolutely right that it is about paying decent wages, but of course one of the consequences of having such provisions in public procurement is that not only the workers and their families, but communities benefit due to greater spending power in local economics. This is an economic measure as well as a social measure. That is why it is right that progressive procurement considers it.
Gareth Thomas
I do not think my hon. Friend has the great benefit of being supported by the Co-op party. One of the ways in which I am unique is that I am from the co-operative tradition in the Labour movement, and therefore have had a lot of contact with social enterprises and co-operatives. A social enterprise that stands out is Hackney Community Transport, which has won contracts from a central Government organisation—in this case, Transport for London. It has done so while providing employment for offenders who are seeking to get back into the work environment, and offering discounted minibus hire to local community groups. The risk is that, if there is not proper support and flexibility in the procurement regulations, such initiatives will be stifled. Hackney Community Transport is a big social enterprise, but there are many similar community transport organisations that do not have its size and depth, and if this amendment is not passed, they risk not being able to access public procurement opportunities.
Bill Esterson
I am grateful to my hon. Friend. He said that smaller organisations find it difficult to win contracts, and that is why the Government have to use their authority and make sure the regulations are in place. Amendment 26 is about small and medium-sized enterprises, and it should absolutely cover social enterprises too, many of which are SMEs. It is essential that such things are in regulations to support the sorts of enterprises that my hon. Friend describes, and to pursue socially valuable activities. I will come to the Public Services (Social Value) Act 2012 a bit later, which was initiated by a former Conservative MP, Chris White, and passed with the support of the coalition Government. It gives more detail in this area.
Similar descriptions are applied in amendment 25, which mentions,
“environmental exceptions and carbon considerations”.
The current UK minimum standards take into account energy and water use, carbon footprint, resource efficiency, and life-cycle costs in order to set minimum standards of sustainability for Government purchases. Our standards need to be protected, both in terms of maintaining these procurement standards and of ensuring that our schedules at the GPA remain up to date with the action needed to address the climate crisis. If we allow the public procurement regulations to lapse, we will not include such provisions as those I have just described, which are picked up in amendment 25. I know that Ministers take this seriously because the point was made in oral questions just this morning. I cannot remember whether it was the Minister of State or the Secretary of State who quoted the Government’s attitude towards the climate crisis and the achievement of net zero, but it certainly was quoted by Ministers this morning.
Bill Esterson
It was you. I knew you wouldn’t sit there quietly.
I am glad that the Minister did mention it, because he is absolutely right, but without the support of the regulations, it is that much harder. The climate crisis will not be addressed unless there is intervention—and substantial intervention. Public procurement policy through the GPA is one very important tool in the toolbox in achieving those objectives.
Gareth Thomas
On the climate crisis, I wonder whether I can pray in aid the example of Baywind Energy, which is a comparatively famous wind energy co-operative in Cumbria. For a long period of time, the energy that it supplied and could have supplied to local authorities would have been more expensive than that from its nearby neighbour, the great Sellafield nuclear plant. Had the local authority wanted to source its energy needs from Baywind without the type of measure that my hon. Friend is suggesting be locked into law, Cumbria Council might be at risk, in a modern situation, of not feeling able to take advantage of the Baywind offer, and would, perhaps, have had to accept the lowest supplier of energy costs. That would have meant that a substantial local business helping to tackle the climate emergency did not benefit.
Bill Esterson
I thank my hon. Friend for providing an excellent example in the renewable energy sector of just how important it is that we do as we say and that we are strongly committed through Government action—at national, local and devolved level—to tackling the climate crisis.
Charlotte Nichols
Just to pick up on that point, it is important to consider employment multipliers in public procurement around renewables. I am concerned that as the balance of renewables in our energy mix has increased substantially over the past 10 years, which is fantastic news for the UK’s commitment to decarbonisation, the number of green jobs has actually significantly reduced. The Office for National Statistics estimates that about 40,000 green jobs have been lost during a period in which the renewable output in our energy mix trebled. A big part of that is procurement, because as we are investing more in wind technology, a lot of this is coming in from Korea, Denmark and Holland. Meanwhile, companies such as Appledore and BiFab, whose shipyards manufacture things such as jackets for wind turbines, are lying empty because the Government are not procuring them from these places. I just really want to pick up on my hon. Friend’s point about the need to lock in this legislation going forward to ensure that, as we meet our climate change objectives, we are also meeting our economic and jobs objectives, too.
Bill Esterson
I thank my hon. Friend. That is absolutely right, and there are a number of good examples. Unfortunately, the evidence is there that we did not adopt a life cycle-costing approach or a price-value ratio for procurement decisions, instead basing them on narrow, short-term pricing. My hon. Friend the Member for Harrow West made a similar point but, fortunately, life-cycle costing was chosen in his example from Cumbria. This is one of the changes. Yes, the amendments are about ensuring the continuity of existing arrangements, but in the end they are about improving our procurement and improving the social, environmental and labour outcomes of these matters, to the benefit of society as a whole.
Gareth Thomas
The Soil Association gives another example that perhaps supports my hon. Friend’s point. It notes the considerable amount of processed food that we eat in the UK, and how that has contributed to our obesity crisis. It says that one way to tackle that obesity crisis is to try to stimulate demand for British, locally produced fresh fruit and vegetables, particularly by trying to get public bodies such as hospitals and schools to source more of the fruit and veg that they need from domestic producers. Would that not be at risk if our amendments were not to succeed?
Bill Esterson
Again, I am grateful. We should take my hon. Friend’s question seriously, because if we have a procurement system that encourages a greater carbon footprint in our food supplies, the consequences will be damaging to our attempts to meet our climate obligations and to tackle the climate crisis. He also mentions the public health elements of this; in fact, he picked up on at least two of the amendments just in that example.
In the end, we want to address the problems of obesity, which has been one of the most serious public health challenges in our society for some time, but we also want to address the carbon footprint. There are some wider questions, which may well be raised as we discuss the next set of amendments, about where we source food from and the need to consider not only the carbon footprint and transport, but some of the impact of intensive farming more widely and the way that our society eats a lot of meat, which is a real concern not only for health, but for the climate, because of the natural resources used up in feeding animals. We have so far addressed the descriptions of ILO standards, environmental exceptions and carbon considerations in the amendments—
Matt Western
It is a pleasure to serve under your chairmanship, Sir Graham. On the environmental amendment, so many authorities have shown leadership in recent months on adopting a zero carbon objective. At a simplistic level, it is perhaps easy perhaps to look at what that might translate to, but it is actually a proper audit of every facet of the services they provide to the community, and is about how they show leadership to the public, but also to businesses, on how far-reaching that should be. We in this place said that we want to be zero carbon and carbon-neutral by whatever date it was, and likewise our county and district councils—Warwick District Council is in my constituency—have really sought to show leadership, but are they actually going to be able to without the amendment?
Bill Esterson
That is a good question: what is possible if restrictions are in place because of international obligations in this area? I imagine the Minister will pick up on that in his response, but there are a number of important points in my hon. Friend’s comments. Yes, we must show leadership, but we should do that at a local and national level for businesses in this country. We should also show leadership elsewhere in the world, by setting our sights high regarding our obligations on the environment, labour, public health and support for SMEs. Through our procurement policy there are other areas of regulation and law where such things also apply.
Gareth Thomas
Another reason to endorse my hon. Friend’s suggestion is the productivity challenge our country faces. As I understand it, we are the worst country in the G7 for productivity performance. We have even fallen behind France. We know from the evidence of business analysts that the response of medium-sized businesses and co-operatives often is often more productive because of the closeness of management to staff. Moreover, co-operatives have joint collective management and a sense that everyone benefits from the collective endeavours of the business. My hon. Friend’s suggestion of including a carve-out in the UK’s GPA arrangements would be an eminently sensible way to tackle the productivity crisis that the Government have not even begun to get to grips with.
Bill Esterson
I am pleased that my hon. Friend has mentioned the innovation and entrepreneurial ability of our SMEs. The Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), said this morning that small businesses are the “backbone of the economy”—I think I have remembered that correctly—and he is right. However, we need to encourage them more. They are innovators and entrepreneurs. That entrepreneurial spirit is often where the best ideas come from, and my hon. Friend is right that that drives productivity.
Businesses running start-ups and scale-ups with new ideas and often enthusiastic members of staff are in a stronger position to deliver the kinds of new ideas, changes and technological advances that make such a difference. Indeed, that is generally where effective research and development in technology is derived from. Lately, large firms without their own research and development departments have simply taken over small firms that do. That is because of the kind of the situation under discussion.
If we want to succeed, it is essential that we put our investment, including public investment through procurement, into those small businesses. I intended to speak later about some of the procurement problems, but I will mention one or two now. I am about to move on to public health improvements, which is the subject of the fourth amendment in this group, and in which context contracts have been awarded.
SMEs that have come to me since the start of the crisis have expressed concerns about their inability to contract directly through the Department for Business, Energy and Industrial Strategy or the Cabinet Office, or to get support for exports—this point is often made—through the Department for International Trade. They have been unable get such support because everything goes to the big firms. The big firms have their own procurement departments and they win all the contracts.
That has happened yet again with Serco, which only a few months ago was fined for failing to complete a contract successfully. Serco was the cause of so much of the problem in the failed probation privatisation. Thankfully, last week’s statement by the Justice Secretary put a final nail in its coffin. However, Serco has now won the contract for the test and trace system. It has no experience whatever in test and trace. There are companies and small firms out there that have the expertise and have been saying for months that they can do it. They have been trying to help, but they have hit a brick wall.
Once we join the GPA, I do not see why we could not negotiate along those line with our partners. Ideally, that would be part of our procurement regulations. That is possible. In the interim we need to retain the best possible arrangements and then build on them. The danger is that the public contracts regulations will expire at the end of December and we will go backwards when we need to go forwards. The Government spend nearly £6.5 billion—a very large figure—on procuring with UK SMEs. That is great, but it is not always going to the SMEs that it should.
There are other examples from the public health crisis. Companies in my own constituency have come to me wanting to either import or manufacture personal protective equipment, but they have been completely unable to do so because of the barriers to entry in our procurement system.
Stewart Hosie
May I seek some clarity? When it comes to general SME bidding for Government contracts, the proportion of Scottish Government contracts that go to SMEs is substantially higher than the UK Government figure. It is all done through the public procurement quota. Likewise, the manufacture and supply of PPE has been done through a specific portal, but I know there was a dedicated Minister—a Trade Minister was actually involved directly in this—and the situation in Scotland is not the same as that in the UK, as described by the hon. Gentleman. I just want to make sure that, if the regulations are changed in the way he describes, we do not end up throwing out good bits of local SME procurement from around the country—the nations and regions—and lumping it all into a Westminster system that he is right to say has not so far covered itself in glory.
Bill Esterson
I am grateful to the hon. Gentleman for raising that issue. I have seen from the figures that Scottish procurement has been significantly better, by an order of magnitude. I do not know the balance between direct and indirect procurement, but if indirect procurement is handled appropriately and margins are still maintained and the quality and innovation is still available in the contracts, then that works.
The hon. Gentleman asked me a question. My intention is to make things easier to do, not harder. Our request is to improve the regulations, negotiate with our partners in the GPA, and to retain and enhance what is in retained EU law. This applies not only to Scotland but to local government, Northern Ireland and Wales. There are different systems and they do a much better job. For example, Manchester City Council—I want to ensure a good political balance in the examples given by Labour Members—has delivered according to an environmentally sustainable local agenda. It has delivered support for workers—the agenda set out by my hon. Friend the Member for Warrington North—and it has delivered on public health agendas, too.
Charlotte Nichols
The Government’s professed commitment to levelling up is really important and relates to points made by other hon. Members. My constituency of Warrington North is considered to be the second-best place in the country for start-ups and the best place in the north-west. It is important to get public procurement right. As my hon. Friend the Member for Sefton Central has said, there have been examples during this public health crisis of it going disastrously wrong. In my own constituency, a certified medical devices manufacturer put itself forward to make ventilators, which it was already in a position to do. I was told that the Government turned down the contract because of its geographic distance from London. Given that this is a national public health crisis, it is alarming that a north-west manufacturer with experience in the sector was told, basically, that it was too northern to be procured by the Government. It is very important to underline even further the point that we must get this right for all the regions and nations of the UK.
Bill Esterson
That is an excellent local example. As I said, constituents have made similar points to me. I have a constituent who can manufacture 40,000 reusable medical robes a month. They are reusable up to 100 times. In comparison, the winner of the contract—whichever very large conglomerate it is that keeps winning them—is delivering medical gowns from overseas. We saw the fiasco with the Turkish consignment, where most, if not all, were unusable. There have been earlier examples of where what was taken out of the packaging fell apart. Yet here was somebody in my constituency making that offer, but they were completely unable to make progress or to win the contract. They had demonstrated their capability, having gone through all the accreditations. Yes, of course, there are questions about ensuring that quality standards are in place—I understand that and they understand that—but they had done all that work because they have a long-established business. Yet they were unable to break through the procurement system.
I will give another example of a company that contacted me. It was set up by a British man in California, so it operates in America. He has the scientific specialism to design tests that identify whether people have the virus. He worked out how to do it with a saliva-only test. He had proven to the Food and Drug Administration, the US accrediting organisation, that he could do it and won a sizeable contract, including with the US military. He then approached the UK. This was at a time when we had a real problem with a shortage of tests. I will not go into how many tests we are doing, whether they are actually being done, how much double-counting is going on or any of that. He had a solution, which was better because it did not involve the invasiveness of nasal swabbing—it was saliva only. I have raised this with the Minister’s colleagues and tried to break through. I am not just using these as examples; I have done my best to get through to Government procurement, because they can really make a difference in this crisis. To this day, he still has not managed to get UK approval for those tests, which are easier to administer and easier to analyse. He could have set all that up and we could have been here two months ago, given when he first developed the technology to do it. I think that is a real shame. That is a piece of international trade we could have benefited from, which should add to the value of the story. I am afraid that we have not done this well.
Gareth Thomas
My hon. Friend the Member for Warrington North gave a great example, sadly, of bias by the Government against northern firms.
Gareth Thomas
One of the more encouraging stories of northern procurement in recent times comes from Preston, where the council has sought to use its limited procurement tools to try to counteract the gradual moving away of businesses and good jobs out of Preston to other areas. If our amendment were to be passed, and the carve-out for small and medium-sized enterprises in the US, as described by my hon. Friend the Member for Sefton Central, were adopted by the UK, would that not provide additional tools to councils such as Preston to counteract that northern bias in Government procurement?
Bill Esterson
That is my understanding. I heard a reaction from one Member on the Government Benches that suggested that they did not agree with the assertion that there was a bias against the north. I represent a constituency very near to that of my hon. Friend the Member for Warrington North. I am glad that our mutual hon. Friend the Member for Harrow West raised that point, because one of the reasons given to firms in my constituency was that they were too far from London. I am afraid that that is what has been said by procurement officials in Government, and that cannot be right. My hon. Friend is right to raise the matter, and he is right that it has to be one of the answers. It covers the environmental aspects of amendment 25 and the small business and economic requirements of amendment 26, as well as those under amendment 27.
Lee Rowley (North East Derbyshire) (Con)
I hate to break up the party, but as a fellow northern MP I do not recognise anything that has been stated with regard to this issue, which is slightly broader than the scope of the discussion. However, given that we are on it, I would be very interested in getting more details from the hon. Members for Sefton Central and for Warrington North about why they think that their companies are being affected in that way. The companies in my constituency have not had the same experience.
Bill Esterson
I am very glad that the hon. Gentleman’s constituents’ companies have been successful in contracting with the Government, but the fact remains that in the experience of my hon. Friend for Warrington North, and in mine, that is what has happened.
Lee Rowley
May we have the documents? I would be very grateful to receive them separately, so that I can see the issues. I am sure that we are all extremely concerned about the things that are being asserted with regard to northern constituents and northern firms being unable to access those kinds of contracts. I would be very keen to see the written information.
Bill Esterson
The hon. Gentleman will know that commercial confidentiality would mean that I would have to ask first.
Bill Esterson
No, not yet, because I have not finished answering the hon. Gentleman’s first question. He really needs to wait, rather than intervene. We can certainly discuss the point further. I have raised it at length with officials and with the Ministers’ colleagues, and it needs to be addressed. It may well be that officials were speaking out of turn. I am prepared to believe that, and I have not made a big issue out of it previously. The bigger point is that we are losing out on expertise, and we have lost out on the potential during this crisis for better procurement and supply of PPE and, in the case of the firm in America, of testing capacity and capability. That is not sensible and it is not where we need to be. I am happy to discuss the matter with the hon. Gentleman later, but I suggest that we move on.
Greg Hands
I would not usually intervene on the shadow Minister, but perhaps I could bring this to a satisfactory resolution by inviting him and the hon. Member for Warrington North, who raised a similar issue, to write to me with the details of what has happened. I will get the Government to investigate what is alleged to have taken place, and will copy in members of the Committee. That is probably a reasonable way of seeking resolution. We would all be very concerned about companies in any part of the UK being discriminated against because of their geography.
Bill Esterson
I am grateful for that offer. It is something that we have already done with Ministers, but I am happy to revisit it. It may be that revisiting it would be helpful now that some time has elapsed since the response to my case—I do not know about that of my hon. Friend the Member for Warrington North—was received. It is important to recognise that we are trying to improve the situation so that we do not have such problems, whether they are authorised by Ministers or not. I am not going to stand here and say that the Minister and his friends authorised that kind of comment, but I am afraid that it happened, and I think the Minister’s offer is a good one. We need to find out why and ensure that it does not happen again, so I will take him up on that.
Matt Western
There is a broader point here. The geography may be one thing, but there may also be a cultural issue. I am not talking about the Government, but the machinery of government and the Departments. We recently found, through the crisis—this was a real revelation to me—that many businesses in my constituency and the region of the west midlands were being bypassed. They could have provided face masks, plastic visors and so much kit. Those were established manufacturing engineering businesses that had the capacity, the skills and the agility to do it, but for whatever reason—this is not a party political comment—cultural or otherwise, they were not looked at. It is almost as if we do not recognise the capacity of manufacturing in this country, but perhaps we should in the sense of procurement.
Maria Caulfield (Lewes) (Con)
On a point of order, Sir Graham. The debate is fascinating, but I ask your advice as to whether we are truly sticking to the scope of the Bill. I am aware that more than an hour has passed and we are on only the second group of amendments. Of course it is an important issue, but I would hate to reach a point next week where Opposition Members felt that we had not given proper scrutiny to the rest of the Bill.
The Chair
I am grateful for the point of order. I have listened carefully to the exchanges. I thought that they were being used to illustrate a point about the amendment, so, in my view, they were entirely in order, but the point has been made.
Bill Esterson
Thank you, Sir Graham. Am I allowed to respond to the intervention before the point of order?
Bill Esterson
Thank you. There is a wider point about making sure that we get these things right.
On amendment 27, we have heard examples of why the annexes to the GPA need to improve the way in which public procurement operates. They should address, or attempt to address, public health. The timing, because of the covid crisis, makes that all the more important. What I mean by “addressing public health” is that the public health value of a provider should be considered in addition to the price, rather than simply going for the cheapest provider. Some of the examples demonstrate where there have been problems in that regard.
In a public health sense, that includes, but is not limited to, ensuring that air quality is protected as part of projects; that the UK diet is not harmed, as we have discussed; that the cost of healthy diets does not increase; and that projects do not adversely affect UK mental health. In terms of UK procurement, when we talk about public health, we mean the health of the public in a wider sense as a result of the way in which public and private organisations operate.
Public health medicine is part of the greater enterprise of preserving and improving the public’s health. That is why procurement matters in that respect. We took evidence about the social impact—I mentioned the Public Services (Social Value) Act, which I will come to later—which includes, but is not limited to, wages, including the gender pay gap and workers’ rights. It covers the climate impact of emissions, deforestation and biodiversity and the economic impact of the government procurement agreement on UK businesses, including on job creation and skills, and, as I have described, on public health. That is what the amendments seek to address.
I turn to some of the challenges and the evidence that we took mostly from the TUC and Rosa Crawford. In the TUC’s written evidence, it described the threats of the government procurement agreement.
The evidence says:
“Currently the UK is part of the World Trade Organisation’s Government Procurement Agreement (GPA) through the EU’s membership. The UK government plans to accede to the GPA as an independent country once the transition period ends at the end of December 2020.
The GPA aims to liberalise and increase access to member states’ public procurement markets.
The TUC has concerns that provisions in the GPA are more limited than current measures included within the EU Procurement Directive 2014, which was transposed into the UK domestic law through the Public Contract Regulations 2015. These limitations centre on two areas:
The definition of most advantageous tender set out in Article X paragraph 9 of the GPA does not include reference to a price/quality ratio that includes qualitative, environmental and/or social aspects as currently set out in Section 67(1) to (3) of the Public Contract Regulations 2015—this should be a minimum requirement.”
I think the debate we have just had makes that point, with many examples.
Gareth Thomas
One cross-party concern in recent years has rightly been how to tackle the horrendous problem of modern slavery. Using public procurement to lock in the best possible defence against examples of modern slavery in procurement supply chains is surely a sensible thing for any Government to want to achieve. Is it not the case that the amendments my hon. Friend has tabled will make it easier to make the carve-outs that enable central Government, local government, the NHS and so on to put in place appropriate measures against modern slavery?
The Chair
Before I ask Mr Esterson to respond, I hope he is going to be very specific about which of the amendments relate to modern slavery, and not simply move on to that further aspect of policy.
Bill Esterson
Thank you, Sir Graham. My hon. Friend is right to raise this issue, because it is absolutely relevant to amendment 24, which deals with
“labour market interventions and compliance with ILO standards”.
The way that workers are treated in supply chains is an extremely important aspect of procurement, and a great deal can be learned from the Modern Slavery Act 2015, which was passed by this Government’s predecessor. The way that those at the top of supply chains are required to police those supply chains for evidence of modern slavery and exploitation more widely gives us a valuable lesson about how procurement might be used to achieve the goals set out in all these amendments, not least amendment 24, which deals with labour.
I mentioned defence security. Security is a carve-out of its own: Governments are allowed to procure domestically on the basis of security. However, we are all aware of the saga of the fleet solid support ship. Happily, it appears that the Government, having delayed taking decisions or making announcements, are heading to the point where there may be a domestic award of that or a similar contract. It is remarkable, and really quite scandalous, that we got to the point where there was a question mark over whether that contract would be awarded domestically. Security, and the way security contracts are let, gives us examples—in the same way my hon. Friend the Member for Harrow West did with modern slavery—of how the amendments might be applied by Government if we can negotiate them with our GPA partners.
Too many UK companies are not winning UK contracts—a point that was made by Nick Ashton-Hart earlier—and it would be a challenge for them to compete on price in other GPA markets with lower regulatory and labour standards, such as China, which I think my hon. Friend touched on earlier, other parts of south-east Asia, and even the United States. There is a massive question mark about whether that is desirable, which is one of the reasons I tabled amendment 24, which addresses labour market interventions and compliance with ILO standards.
I know that the Government are very keen on non-regression when it comes to labour rights and standards. That is one reason why amendment 24 matters—it gives the Government an opportunity to demonstrate, in the area of procurement, that they do what they say they believe in. Indeed, all these amendments give the Government an opportunity to support policies that were proposed in the manifesto that Conservative Members fought the December election on, or to support things like “buy British”. I am not advocating a similarity to Buy American, but that is the way the United States applies its GPA provisions and there is much we can learn from that, as I said earlier about support for smaller firms. Domestic procurement spending is an essential part of how we will recover from the economic crisis that has come alongside the covid crisis, and I hope the Government will act on that basis.
[Interruption.] It is always a good idea to come to a Bill Committee very well prepared. I could not help but enjoy the Minister’s description in this morning’s evidence session that he had not enjoyed a filibuster for a long time. I assure you that I have no intention of filibustering and I will not be reading out the entirety of what I have available, but in bringing my remarks to a close, I want to say this: the four amendments are tabled in the hope that we are supporting Government policy, as stated by the Prime Minister and Ministers and in the Conservative manifesto.
The four amendments are designed to support our domestic economy, and to balance the needs of our domestic economy with supporting the rules-based approach to international trade. They are designed to support the levelling-up agenda that the Government say they are keen to promote. I hope that the Minister and Conservative Members will take them in that context and consider the long-term economic, social, environmental and labour value to be had from this kind of approach to procurement. Unless we are prepared to use this moment to deliver the continuity that the Bill is about, it is hard to see how we will maintain the standards of procurement that we have at the moment, let alone enhance them.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. This is my first opportunity to speak in a Bill Committee as a new MP, and what an honour it is to speak in such an important debate—an important debate for not only my constituents in Putney, who are very interested in this Committee, having been told all about it, but people across the country and across the world.
In bringing forward the Trade Bill, there is an opportunity to take back control. It is as if we were all in a car and we decided we would like to start driving, so we said to the driver, “Can we start?”. There were a couple of years of intense negotiations about who would drive the car, and we have taken back control of the car, but instead of doing something with that—driving better, maybe moving from the middle to the fast lane of the motorway, having a better car, or going further and faster—we have decided to chunter along in the same way and to just decide journey by journey. The Bill could give us a better journey every single time. This is an opportunity to have a much more modern and ambitious Trade Bill, and the amendments we have tabled seek to do that. Standards and scrutiny will improve the Bill enormously.
Turning first to the International Labour Organisation and amendment 24, the UK was a founder member of the ILO in 1919 and has been an active member ever since. It has ratified 87 conventions, including the eight core fundamental ILO conventions contained in the 1998 declaration on fundamental principles and rights at work, as well as two protocols. Amendment 24 absolutely aligns with that.
The ILO makes it clear in no uncertain terms that member states must treat the conventions with the utmost seriousness, and agreeing the amendment would do just that. The declaration states:
“all Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions”.
Since the 1998 declaration, it has become commonplace for the ILO conventions and instruments to be implemented in free trade agreements, so the amendment is absolutely within the remit of the Bill. For example, only recently, the free trade agreement between the European Union and Vietnam has been praised by the ILO for its commitment to labour standards. We could endorse that approach and lock it into the continuity and future agreements by passing the amendment.
Gareth Thomas
My hon. Friend is quite rightly setting out some of the reasons why the ILO standards are so important. In the context of how ILO standards benefit British workers, is there not a significant fear that by not including amendment 24 in the Bill, we might inadvertently encourage a race to the bottom? It might allow other countries with lower standards and pay arrangements to win procurement contracts that British firms could have won. In turn, that would encourage British firms to lower wages and standards to try to win those contracts in future.
Fleur Anderson
I thank my hon. Friend for that apposite remark. That is what we risk if we do not include the amendment. If it is not explicit in the Bill, it will have to be negotiated in every single agreement, so we might miss out on some.
The dangers have already been manifested through the continuity trade agreements that have been agreed. Trade deals have already been struck with countries where labour and human rights abuses pervade, such as Colombia and South Korea. In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights, while Colombia remains the most dangerous country in the world for trade unionists, as around two-thirds of murders of trade unionists take place there. The risks are very real. The UK has also rolled over an agreement with Lebanon, which was criticised last year by Amnesty International for allowing the exploitation and abuse of many of the country’s 250,000 migrant domestic workers, most of whom are women.
None of those continuity agreements contains mechanisms to sanction Governments who fail to respect fundamental labour and human rights, yet every member of the Committee would agree that that is what we would want to do. All trade deals must contain mechanisms to enforce labour rights and decent work, so as to prevent trade deals from being used as a way to pressure labour standards to be lowered, causing a race to the bottom. To ensure that those mechanisms are effective, trade unions must be given a role to trigger investigations into abuses of workers’ rights. The Bill must therefore affirm that all UK trade deals will contain a mechanism to enforce International Labour Organisation conventions, so that trade unions are able to trigger investigations into suspected abuses. Amendment 24 will achieve that and assure that the UK upholds its responsibilities to the International Labour Organisation.
Amendment 25, on climate and carbon considerations, would put us firmly in line with sustainable development goal 13 on taking climate action, to which we have signed up. On 1 May last year, we in this place declared a climate emergency and, as has been mentioned, that was echoed by councils and devolved Governments. Wandsworth, in my own constituency, declared a climate emergency, and we want to see that reflected in the Bill. While our attention has rightly been on responding to the coronavirus crisis, we would all agree that the climate crisis has not gone away. That is why we feel it was important to table the amendment.
The rush to fill the gap created by leaving the customs union cannot be used as an excuse to undermine and circumvent our legally binding climate change commitments, made under the Paris agreement, or the Government’s own target of achieving net zero by 2050. That is why that issue is listed in new clause 2, along with a whole list of important issues, such as waste, water, quality and biodiversity.
In February, I was in the Court of Appeal when it ruled in a landmark judgment that the national policy statement underpinning a third runway at Heathrow airport was unlawful, as it was incompatible with the Paris agreement. The decision not to take the Paris agreement into account in that policy statement was deemed by the judges to be legally fatal to the national policy statement. If we do not accept this amendment, we risk having a contradiction between our environmental agreements and our trade deals.
To date, trade deals have been negotiated separately to climate agreements, but a joined-up policy would be far more effective for both. Not having a joined-up policy is a mistake, as current trade rules place trade promotion and liberalisation ahead of climate goals. The Trade Justice Movement, which we heard from this morning, has identified three ways in which current trade rules can do that. First, investment chapters in trade and investment deals allow companies to sue Governments for measures taken to support climate goals, such as the denial of a permit to construct an oil pipeline, and thus to undermine those goals. Secondly, WTO rules have been used regularly by states to challenge each other’s subsidies to renewable energy industries, and yet not one case has been brought against fossil fuel subsidies. Thirdly, no trade deal that is currently in force contains any binding commitments to ensure that international trade supports climate targets.
Trade agreements also impede Government implementation of climate commitments. For example, they prohibit the use of local content requirements, which can be crucial in producing domestic support for renewable energy. If trade agreements do not have an explicit commitment towards honouring climate commitments, they can hinder the sharing of green technology, for example by implementing far-reaching intellectual property provisions that threaten to hinder the sharing of green tech.
Trade rules can also threaten to increase fossil fuel use, which we explicitly decided not to do in declaring a climate emergency. Current trade and investment agreements foster a global culture of fossil fuel dependency, for instance by prohibiting export and import restrictions on fossil fuels, thereby depriving Governments of a tool to limit production of those fuels.
Unless it is properly regulated, trade can present a huge barrier to alleviating the climate emergency and achieving carbon reduction targets. Indeed, when trade agreements are done badly, they can accelerate a race to the bottom on environmental standards. Therefore, I echo the call of Greener UK in its evidence to the Committee, including its written evidence, that the Bill must include a lock and a legal commitment on carbon reduction targets.
The Bill is silent on climate issues and carbon reduction issues, and so misses a huge opportunity to enshrine our climate commitments and the SDGs in UK law. We have an opportunity to be world leaders in enshrining climate commitments in our trade legislation, but we are missing that opportunity.
Our new clauses and amendments would ensure that all trade agreements that the UK negotiates are climate-aware. The UK should use trade deals to show the world how trade and trade agreements can be made compatible with net zero ambitions, including by prioritising goods and services that are low carbon and environmentally sustainable.
We can push on from what already exists in the continuity agreements and show the rest of the EU what can be done. We could ensure that the UK’s trade negotiations and agreements are underpinned by high environmental standards. That would act as a safeguard against regression in standards, and not just those linked purely to economic advantages.
The Government have already shown that they are willing to backtrack on global environmental standards. For example, the Environment Bill fails to include a legally binding commitment to meet World Health Organisation guidelines for fine particulate matter. That is a very big issue for people in Putney, because Putney High Street has one of the highest levels of air pollution in the country, and we look to the EU to set that standard. My constituents would not be encouraged by trade deals that do not include an assessment of the impact on air quality, for example. Amendment 25 would also prevent trade agreements from impeding the UK’s ability to ratify and properly implement international treaties such as the Paris agreement, which would send a message to the world that compliance with international climate agreements are the norm—this is how we can do it.
Amendment 26 is about small and medium-sized enterprises. As has been said, SMEs have been hit incredibly hard by the coronavirus crisis. Since March, more than 60 businesses in my constituency have written to me in desperate need of help, and I am sure the same is true for other Members. The future of 39% of businesses in my constituency, the majority of which are SMEs, rests on the trade deals contained in this Bill. Many have fallen through the cracks of the Government’s economic support package. They are unable to secure grants, loans or even business rate support for different technical reasons, and they are staring down the barrel of liquidation.
SMEs are the lifeblood of the UK economy—the backbone, as was said earlier. Future trade agreements must be tailored to support the sector and give it the hand-up it needs, over and above the interests of large multinationals, which otherwise disproportionately win out. In particular, the Bill must establish a level playing field—we all love a level playing field—for procurement, and procurement rules must be simplified to encourage and enable bids from SMEs. The Bill must make it easier for SMEs to export. It currently offers very little for small businesses. Surely everyone on this Committee wants to support the SMEs in our constituencies and across the country. Our amendments would ensure that the needs of SMEs are met.
Amendment 27 is about public health. The covid-19 crisis has taught us some valuable lessons about the importance of our national health service. Through the PPE scandal and the EU ventilator scheme farce, the Government have learned the hard way about the importance of procurement and trade to public health. At the peak of the crisis, I called every major social care provider in my patch, and they were all experiencing shortages of PPE. We discussed earlier companies whose offers were not taken up. In Putney, local voluntary groups had to resort to 3D printing their own visors. There are 100 volunteers right now at their sewing machines making up packs of scrubs for local health providers. The Turkish shipment of 400,000 gowns that failed UK safety standards showed us the importance of high procurement standards in trade Bills for public health services. We learned the hard way, across the country, how important that is.
As the NHS Confederation noted,
“Health issues are often not high on the agenda (or on the agenda at all) in trade negotiations.”
Trade agreements often risk a trade-off between lowering standards and increasing the financial burden for patients and the health and social care system. Impact assessments must be carried out to ensure that trade deals do not prioritise commercial advantage over and above health.
Operating on World Trade Organisation terms will not force the NHS to open services to foreign providers. If the NHS is sold off bit by bit to foreign providers in trade deals, that will be a political decision made by the Government. Yesterday in the House, I asked the Secretary of State for International Trade about the trans-Pacific partnership and the risks to the NHS. She said that there is no risk that the NHS is on the table. However, if that is not explicitly written into the Bill, we run the risk of it being missed out and changed through negative ways of doing trade deals.
Gareth Thomas
It is a pleasure to serve under your chairmanship, Mr Brady. I cannot do as much justice to these four amendments as my hon. Friend the Member for Sefton Central did from the Front Bench or my hon. Friend the Member for Putney did from the Back Benches, but I want to raise one or two slightly different points to try to underline some of the interventions I made. There is an understandable fear that at some future point the Government will roll back existing legislation that allows public authorities, the Government, devolved Administrations and local authorities to go beyond having to accept all the time the lowest price and instead to be able to think much more seriously about accepting quality concerns within contract offers. I am sure the Minister will have his most benevolent face on when he winds up and will say that the concerns that we have articulated, as have organisations such the TUC and good trade unions such as the GMB and Unison, are without any foundation. None the less, these concerns exist, because once we leave the protection of EU regulations, we will find that the provisions in the GPA are much more limited than those currently supplementing that under the EU procurement directive from 2014, which was transposed into UK domestic law under the Public Contracts Regulations 2015.
What these organisations understandably want to achieve is that little bit of extra protection against such an event happening, through the amendments that my hon. Friend the Member for Sefton Central has tabled. Indeed, they are seeking more ambition from the Government in terms of public procurement, and to move beyond the era in which big multinationals always win the big contracts. One thinks of the Sercos, the Carillions and the G4Ss, of which a little more anon.
I come back to the example that I gave in one of my earliest interventions on my hon. Friend: Hackney Community Transport, a local organisation that has managed to become much bigger in terms of the community transport offer that it makes. It depends on winning contracts from Transport for London to provide bus services, but has also been able to win contracts in many other local areas to provide transport services.
Hackney Community Transport provides a comparatively low offer because it has managed to get to a decent size where it can compete and, as my hon. Friend alluded to, it has a number of staff who are not just providing the service but thinking about how they win contracts. However, it has never lost its community roots. For the people of Hackney, it provides very cheap minibus hire and helps to train those from the local community who want to learn to drive a minibus. It employs ex-offenders and goes the extra mile, in a way that perhaps one of the corporate giants might not.
By comparison, Harrow Community Transport, which is a much smaller organisation but much valued by many of the most vulnerable people in my constituency—it uses its services to go to local day centres—struggles to survive. It has only one employee, and cannot imagine being able to win contracts from Transport for London given its present situation. There appears to be no sustained offer from central Government to change the situation for not only Harrow Community Transport but all those other community transport associations, or all those other local organisations, be they small and medium-sized businesses or small and medium-sized charities and co-operatives, that nevertheless provide commercial services that could be used effectively by public contracting organisations.
It is important that we build in that additional protection, so that procurement under the GPA does not inhibit local organisations that are determined to do something to provide good jobs with fair pay—not the kind of jobs that some individuals in my constituency have to do. Some of them have to work three jobs in order to make ends meet because the amount they are paid is so low. Businesses that want to help those who are disadvantaged in some way to get into employment must not be excluded as a result of our accession to the GPA. Amendments 24 to 27 help, very effectively, to give a little more protection against such exclusion.
I mentioned the Modern Slavery Act, which is a remarkable piece of legislation. The campaign for it was led by the Co-operative Group, to which I pay tribute for its work through its supply chain, and for the cross-party campaign that led to the Government passing that groundbreaking piece of legislation. Surely the last thing that we would want is not to build on it, and to inadvertently stop organisations that are committed to preventing modern slavery from getting into their supply chains winning the public contracts for which they bid.
My hon. Friend’s amendments seem to be about helping to prevent that from happening.
I served for a long time as chair of the Co-operative party. As a result, I have always wanted more co-ops growing and trading in the economy, and able to win government contracts, whether in local government, the NHS or central Government. I suspect that those of us of a certain generation remember Margaret Thatcher promising a world where owning shares would be as common as having a car. That grand promise of a share-owning democracy has long since disappeared, leaving economic power—according to some, certainly—concentrated in a few hands. That is why there are, I am pleased to say, organisations that champion the building of wealth in communities.
That brings me to the powerful demonstration that is taking place in Preston, where an inspirational council leader is seeking to use the public procurement tools that he and the local authority have available to them, working in partnership with other public bodies to try to contract locally. If we can reinforce those efforts that will surely help to tackle the anti-northern bias that we discussed earlier and allow imaginative council leaders to put extra support behind community organisations that want to do the right thing.
As to the failures of the Sercos, it is not only on test and trace that Serco’s performance has begun to be criticised. I remember it being accused and, so to speak, convicted, of false accounting and of breaching its responsibilities in handling radioactive waste. Carillion is another horror story, and the Public Administration and Constitutional Affairs Committee blamed the Government for outsourcing contracts based on the lowest price, and went on to say that that had caused public services to deteriorate. Surely, then, measures that would not stop us acceding to the GPA but would help us to get the best from our membership are sensible.
Matt Western
My hon. Friend makes some powerful points, but perhaps I may add some emphasis on public health and broaden that aspect of the argument. The emphasis on lowest price is mistaken. Perhaps we saw that with small and medium-sized enterprises—or more of a medium-sized to larger business in the case of De La Rue. However, on the public health side there has over the years been public anger, resentment and frustration at pressure for very low-cost meals to be provided in local authority schools, through companies such as Compass and others that source poor quality foods when they should think about the best value for public health and the health of children. That should be part of what we are talking about on this clause.
Gareth Thomas
My hon. Friend makes a good point. Part of the problem is that schools are not properly resourced. I am sure that he agrees about that. Other examples that we might point to are the difficulties that local authorities, whether Conservative or Labour-led, have had with refuse contracts. A number have had to bring contracts back in-house, or retender. Having gone for the lowest price, as my hon. Friend said, they have not got the value for money that local people rightly demand, and that councils expect from contracts.
Andrew Griffith (Arundel and South Downs) (Con)
I, too, would like to see a greater diversity of types of enterprise and we should do anything that we can in that regard. Co-operative, owner-managed and small businesses are all worthy of our support. I did not want to let the comments that are being made and the amendments that are being spoken to conclude without recording the fact that, if we look merely at the thrust of the amendments, one would conclude that the hon. Gentleman does not fully understand the benefits of free trade, or the substance of what we are trying to achieve in terms of creating wealth, prosperity and opportunities for people, lifting people out of poverty, making sure that our economy is competitive, and creating the tax and the wealth that will produce our public services and make us thrive. I just wanted, by means of an intervention, to give him the opportunity to place on record all those positive benefits of trade, as well as the opportunities that he is seeking to create through the amendments.
Gareth Thomas
I am very grateful to the hon. Gentleman. I will send him the Co-op party membership application form as a result of this exchange. It is very nice to find a new convert from the Conservative Benches to the need for a more diverse economy. I had thought that the hon. Member for Wycombe (Mr Baker) was the only such enlightened Member of Parliament on those Benches, but I am glad that the hon. Member for Arundel and South Downs is first up of the new intake to catch my eye.
Katherine Fletcher
The hon. Gentleman may have to get a larger book to tally up those of us who are interested in the Co-operative movement. I have worked with both the credit union movement and the co-operative movement, and my grandad was a Co-op milkman. The hon. Gentleman is right that the movement has a huge role to play in productivity. Co-ops should look forward to the opportunities to export to a greater range of markets within a free trade deal, such as the framework here.
Gareth Thomas
I am in danger of leaving tonight in a good mood, Sir Graham. I am delighted that a second convert to co-ops has emerged. I will have to send another membership form for the Co-op party to the hon. Lady.
Lee Rowley
Given that we are discussing this, I would just like to declare an interest as a former employee of the Co-op, so I look forward to more such discussions.
Gareth Thomas
There was once a Conservative Co-op movement, which in practice had only one member. Richard Balfe left our ranks, in a very misguided move, and set up the Conservative Co-op group. We appear to have three potential new members of such an organisation, which would be fantastic. Membership of the all-party parliamentary group for mutuals is definitely on offer to the three hon. Members who have intervened.
Matt Western
I tried to intervene a little earlier, and I thank my hon. Friend for giving way yet again. This serious, honest, and important point will probably be echoed across the room: the contract to provide food vouchers to schools over the Easter period and Whitsun was given to Edenred, which happens to be a French company, and an unproven business. I have had a huge number of issues with constituents who did not get vouchers on time, and those vouchers could have been provided by the Midcounties Co-operative, for example, which makes them—they are available. That could have been done locally, and I am sure it would have been done very cost-effectively.
Gareth Thomas
As ever, my hon. Friend makes a serious and important point about the contribution that co-operatives can make. If I may, I will return to the intervention from the hon. Member for Arundel and South Downs, who asked me to extol the benefits of trade. I will certainly do that, but I do not think our country should sell itself short, which is why we have tabled these amendments. In a former life, in happier times, I served as Minister for Trade Policy. As a result, I am an enthusiast for the benefits of trade, but there are caveats to that enthusiasm. If the hon. Gentleman stays awake and enthused, he will listen to examples of our enthusiasm for trade, as well as some of our concerns about the Bill.
I will conclude my remarks by noting the significant potential for co-ops to help deal with some of the issues arising from our ageing society. By 2030, the number of people who need help to wash, feed, or clothe themselves in this country will have doubled to some 2 million. That will place heavy burdens on local authorities and national Governments who seek to procure the support to help those vulnerable people. With a bit of imagination from procurement managers, co-operatives could help to meet those needs, and I suggest that they would also provide a good service. That will require imagination and proper Government support and thinking about procurement, so that co-operatives, and small and medium-sized businesses—they are mentioned in amendment 26 —can benefit from those procurement opportunities. That is another reason why the amendments tabled by my hon. Friend the Member for Sefton Central are spot on.
Greg Hands
We have had a far-ranging debate, but I will speak to amendments 24 to 27. The amendments seek to place a statutory obligation on the Secretary of State to enter into negotiations with GPA parties, with the aim of advancing policy objectives across labour standards, environmental protections, SME participation, and public health in UK procurement opportunities covered by the GPA, and—crucially—before making regulations under clause 1(1).
Let me remind Committee members of our approach to the UK’s GPA succession as a whole. As I have said, we intend to join the GPA as an independent party on substantially the same terms that we had as an EU member. That approach will support a swift accession at the end of the transition period, and preserve the access of UK businesses to procurement opportunities covered by the GPA, which are estimated to be worth £1.3 trillion annually.
Ensuring continuity in the terms of the UK’s participation will not prevent public procurers from taking into account a range of factors when conducting procurement. Social, labour and environmental considerations can continue to be taken into account, as they are today, so long as they are consistent with the UK’s international obligations, including, importantly, under the GPA, non-discrimination obligations. Those obligations already apply to the UK under our current GPA membership.
Indeed, the UK has an active procurement policy agenda on SME participation, sustainable procurement, social value, and labour considerations. As an independent party with our own voice, we will have the opportunity to engage other GPA parties on those issues—for example, via the GPA work programmes, other multilateral forums or bilateral channels. Unless we succeed in securing the UK’s independent accession, the UK will not be party to those discussions within the GPA. Parliament will be updated on developments across those areas through the Department for International Trade annual report, which will be published each year from 2021.
On amendment 27 on health, let me reassure the Committee that the UK’s GPA coverage does not cover healthcare services. It does cover goods and certain services above a specific value threshold procured by the NHS, such as medical equipment, cleaning and building management services, which keeps those types of opportunities open to overseas competition. That helps to ensure that the NHS can access vital resources at competitive prices. Contracting out such non-healthcare services—it is important to stress that—has been a long-standing practice within the NHS across successive Governments that frees up money to be spent on frontline delivery.
Greg Hands
I will take the intervention from a member of the last Labour Government, which played an active role in this aspect of the GPA when he was in office.
Gareth Thomas
I remind the Minister that we are not opposing accession to the GPA. We are merely seeking to make sure that our country benefits properly from GPA membership. He gave the example of cleaning, but I gently remind him that cleaners in the NHS and more generally are often very low paid, so anything that we can do, as amendment 24 sets out, to help to raise the quality of jobs in cleaning services must be sensible. Surely the Minister recognises that, given the covid emergency that we are all experiencing.
Greg Hands
The hon. Gentleman makes a good point about raising the quality of opportunities available, but that will not be done through the GPA.
Let me explain that. Overall, the effect of the amendments would be to place on the Secretary of State a statutory requirement to have entered into negotiations with the 20 parties to the GPA on each of the four areas before creating the ability to make the regulations, and then to report on the outcome of those negotiations to Parliament. It would be an unusual approach for the Secretary of State to enter into negotiations with each of the 20 before implementing the general regulations that could implement any changes to obligations that would result from acceding to the GPA.
I will deal with a few of the individual points raised. I was surprised when the hon. Member for Sefton Central mentioned something about a filibuster. He certainly made a comprehensive speech. When I was in opposition, I remember doing an actual filibuster; I spoke for one hour 49 minutes on beer duty.
Greg Hands
I certainly will not do that now, but I recall making an unlikely entry in the Manchester Evening News the next day. At the time—I think it was the Finance Act 2008 or 2009—the paper had something called the lads index; I am not sure that it would have that these days. As I recall, it took Hansard for the day and gave something like five points for every Member of Parliament who mentioned “Coronation Street”, three points for “Manchester United” and one point for “beer”. The next day, it reported a shock brand-new entry at No. 1 in the lads index, the Member for then Hammersmith and Fulham, Greg Hands, who with in excess of 300 mentions of the word “beer” had catapulted himself to the top of the lads index for that year.
Gareth Thomas
On a point of order, Sir Graham. Surely that is not within the scope of the Bill. I ask the Government Whip to intervene, and encourage you to restore order as well.
The Chair
I think that in the spirit of the latitude that was given to the Opposition, I should offer the same now.
Greg Hands
I thought, Sir Graham, that as a Manchester MP, you would enjoy that story.
The hon. Member for Sefton Central made an impressive oration, and had an impressive memory of our oral evidence earlier. He made some good general points on procurement. Alas, not all were relevant to the government procurement agreement, but let me try to deal with a few of them. First, he mentioned the EU public contracts regulations expiring in 2020; they date from 2015. To be clear, they will not expire in the UK; they are preserved in preserved EU law under the EU withdrawal agreement.
Secondly, the hon. Gentleman made comments about small business, and it is important to emphasise that the Federation of Small Businesses is absolutely right behind our GPA accession. It says that it is essential for the UK to become an independent member of the GPA; it will allow small businesses to have continued access to Government contracts and procurement opportunities.
Let me deal with the specific comments on procurement by the hon. Members for Warrington North, for Harrow West, for Warwick and Leamington and others. I was interested—in fact, I was shocked—to hear what they had to say about alleged discrimination faced by companies that they had reported. I was also shocked at the slight implication that the Opposition had some kind of monopoly on this Committee over northern voices. I looked around and counted more midlands and northern MPs on the Government Benches than on the Opposition Benches, so I thought that that was a bit unwarranted. On a serious note, I would be very interested in seeing significant evidence of discrimination. I will certainly get the Government to investigate those reports and I will copy the response to the whole Committee.
Overall, these amendments would be unhelpful. Each time there was a change to the UK schedule, we would have to produce the four reports. Let me give an example. The current schedule is through our membership of the EU. The EU schedule, which was last updated before 2010, includes names of Government Departments that no longer exist. I think the old BERR—Department for Business, Enterprise and Regulatory Reform—is on the list. DCMS is obviously the Department for Culture, Media and Sport. Every time we made one of those changes—if, for example, we changed DCMS back to its previous name—we would have to produce, as I understand it, the four reports and enter into negotiations, which would simply be an unrealistic and wasteful use of the Government’s time.
The hon. Member for Sefton Central talked a bit about a lowering of standards. To be absolutely clear, we are joining the GPA on the same terms as our current membership, so we are not reducing standards. The EU withdrawal Act preserves existing standards, and of course we already exceed or greatly exceed many EU standards in these spaces. The fact that we have rolled over continuity agreements demonstrates exactly that there has been no lowering of standards.
The hon. Member for Putney made a comprehensive maiden speech for a Bill Committee. As a constituency neighbour, I was delighted to hear her praise for Wandsworth Council. That is a fantastic thing. It is a very, very well-run local authority. She complained about the poor air quality on Putney High Street. If only the Labour council on the other side of the river, in Hammersmith and Fulham, could even monitor its air quality in the first place. Of course, one cause of the deterioration in air quality is Hammersmith and Fulham Council’s closure of Hammersmith bridge, so perhaps if she could join the lobby to reopen Hammersmith bridge, she would then realise that there is better air quality to be delivered on Putney High Street.
Fleur Anderson
Just to clarify, the air quality in Putney High Street was dreadful before the unfortunate closure of the beautiful Hammersmith bridge, due to years of neglect under previous administrations, so that is not the reason; it has been a long-term issue.
Greg Hands
I accept that, but the additional 4,000 cars a day going over Putney bridge into the hon. Lady’s constituency as a result of the closure of Hammersmith bridge has certainly not improved air quality—shall we put it that way?
The hon. Lady raised concerns and, I think, quoted the TUC in relation to continuity agreements with South Korea and Colombia. It is worth pointing out that both those agreements have been rolled over with largely identical wording on labour provision and workers’ rights, so those concerns are not valid. The UK takes labour rights extremely seriously, of course, and UK legislation already provides for robust measures to tackle such issues as human trafficking. Continued GPA membership will not affect that.
In September 2019, the Government announced new measures designed to ensure that Government supply chains are free from offences of slavery, servitude, forced or compulsory labour and human trafficking. The hon. Member for Harrow West, in what I think was an impromptu speech, made some good points on co-operatives. I am delighted to see that on this side of the aisle, we immediately trounced him with the commitment to co-operatives from my hon. Friends the Members for South Ribble, for Arundel and South Downs and for North East Derbyshire.
Gareth Thomas
I heard applications to join the Co-operative party and the all-party parliamentary group for mutuals; I did not hear any new commitments towards co-operatives. None the less, I do not wish to indicate in any way that I was not encouraged by the contributions of the three Conservative Members, but it would have been nice to hear from the Minister an offer of additional support for co-operatives.
Greg Hands
I accept that intervention, but I would say that my three hon. Friends have been here, I think, for six months, six months and about three years so far, and the commitment that they have shown in that time matches quite favourably with the commitment that the hon. Gentleman has shown over his 23 years of membership of this House.
I think the take-away was the hon. Gentleman’s praise for Margaret Thatcher’s share-owning democracy. I remember him as a Minister in the new Labour years, which he referred to; maybe he thinks it is now safe to return to those new Labour years and his view of those years before the right hon. Member for Islington North (Jeremy Corbyn) took over the party. We live in hope.
I hope I have persuaded the Committee that opening negotiations within the GPA will undermine our independent accession to the GPA and thus our ability to advance UK public procurement objectives. I therefore ask the hon. Member for Sefton Central to withdraw his amendments.
Bill Esterson
That was quite some debate. I was very impressed by the speech of my hon. Friend the Member for Putney, who made some formidable comments and demonstrated her knowledge of the subject matter in relation to environmental matters and the ILO. I certainly appreciated her reminding us all about the importance of ensuring that we follow the sustainable development goals in everything we do in this country. I look forward to more of her contributions in the remaining time this afternoon and in next week’s sittings.
My hon. Friend the Member for Harrow West spelled out in more detail some of what he said in interventions. He made a reference to my relationship with the co-op; I should tell him that, like him, I am a member of the Co-operative party—I think he knew that, but had temporarily forgotten—and come from a very proud family of co-operators. My mum, having been a director of the co-op for very many years, taught me well on that subject. I agree with everything he said in that respect, and he quite rightly referred to the sensible nature of our amendments.
I will give the Minister credit for one thing. Unlike some of his parliamentary colleagues, he did not try to name any footballers at Manchester United and get them wrong, so I suppose that is in his favour. However, I think he might have got confused between this set of amendments and the next set. Having double-checked what he said, I should tell him that the reviews that we are requesting are in the next set of amendments.
The amendments in this set call for negotiations with our partners, so there is no suggestion that we would require the Government to look at Government Departments that no longer exist. We can assure the Minister that that is not a concern that he needs to consider. He mentioned what, I think, all hon. Members on this side referred to regarding the public procurement regulations. The issue here is that under UK retained law they were implemented in 2015 for a five-year period and therefore expire at the end of December this year. If the Minister will tell us that they will be reinstated when they expire, that would be undoubtedly helpful, but that is not what he said in his response to the debate, so I am still concerned.
We entirely support our accession to the GPA; we made that clear in the reasoned amendment, and we make it clear again this afternoon. The amendments are about trying to ensure that we retain the provisions in the GPA to ensure continuity, but we also ensure continuity initially by ensuring that there is continuity of what is in the public contracts regulations. That is the issue, because without the public contracts regulations continuing alongside our annexes in the GPA, procurement policy in this country will be significantly weakened. A big part of why we tabled the amendments in the first place was to ensure continuity.
The amendments attempt to ensure that we do not see that as a standstill situation, and that we are pushing the Government to enhance the regulations as much as possible in order to achieve the sorts of policy objectives that Ministers have set out, and that the Opposition have referred to in our contributions this afternoon. I do not think the Minister addressed the points made in the debate we have had on these amendments; some of what he said was about the next group. He made decent points about the difficulties of those reviews, but that comes next. I ask the Committee to support these amendments, and we will push them to a vote.
Question put, That the amendment be made.
The Chair
The shadow Minister has indicated that he does not wish to press the other amendments to votes.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 1—Regulations: review of social impact—
“(1) The Secretary of State must conduct reviews of the social impact of any regulations made under section 1(1).
(2) ‘Social impact’ shall include but not be limited to the impact upon—
(a) the exercise of any right for workers under the Employment Rights Act 1996,
(b) the exercise of any right for consumers under the Consumer Rights Act 2015,
(c) the exercise of any right under the Trade Union Act 2016, and
(d) the fulfilment of any obligation held by the United Kingdom by virtue of its membership of the International Labour Organisation.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 2—Regulations: review of climate and environmental impact—
“(1) The Secretary of State must conduct reviews of the environmental impact of any regulations made under section 1(1).
(2) ‘Environmental impact’ shall mean the impact upon—
(a) progress toward meeting the UK’s Net Zero targets,
(b) global emissions,
(c) producer responsibility,
(d) resource efficiency,
(e) management of waste,
(f) regulation and enforcement of waste management,
(g) air quality,
(h) the recall of motor vehicles for the purpose of protecting the environment,
(i) regulation of water and sewerage undertakers,
(j) water abstraction,
(k) water quality,
(l) land drainage,
(m) biodiversity gain in planning,
(n) biodiversity objectives and reporting,
(o) local nature recovery strategies,
(p) tree felling and planting,
(q) creation of conservation covenants, and
(r) the effect of conservation covenants.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 3—Regulations: review of impact on public health—
“(1) The Secretary of State must conduct reviews of the impact in England of any regulations made under section 1(1) upon—
(a) food safety,
(b) standards in food production, including the treatment of animals and impact on consumer choice, and
(c) any public health outcome within the definition used by Public Health England.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 4—Regulations: review of economic impact—
“(1) The Secretary of State must conduct reviews of the economic impact of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 10—Regulations: review of impact on SMEs—
“(1) The Secretary of State must conduct reviews of the impact upon small and medium-sized enterprises of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 14—Regulations: review of impact on equalities—
“(1) The Secretary of State must conduct reviews of the impact of any regulations under section 1(1) upon persons with a protected characteristic, as defined in Chapter 1 of Part 2 of the Equalities Act 2010.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
It has already been noted that I was generous in allowing latitude in the debate on the previous group of amendments. I gently say that there is a bit of trade-off here in the usual way; we should not have repetition of all the same arguments on clause stand part.
Bill Esterson
As it is a clause stand part, I had thought the Minister was going to propose this group of new clauses.
Bill Esterson
You will be pleased to learn, Sir Graham, that I have no intention of repeating exactly the same debate. I will just repeat what I said in response to the Minister—I think he was referring to this group when he mentioned the reviews. I take his point, and these are probing amendments partly for that reason.
Greg Hands
I have already set out for the Committee the benefits of GPA membership. It is an agreement that mutually opens government procurement markets between its parties. Preserving the UK’s membership of the GPA will keep these markets open to UK businesses, ensuring that they continue to have guaranteed access to approximately £1.3 trillion per year in procurement opportunities, as well as delivering value for money to the UK taxpayer. I am slightly perturbed by the Opposition’s approach to the GPA, given that they voted against the provisions during proceedings on the 2017-19 Trade Bill. I do not believe that it is appropriate or sensible for UK businesses from across the country to be denied access to the procurement opportunities provided for by the GPA.
New clauses 1, 2, 3, 4, 10 and 14 would place a legal duty on the Government to carry out reviews of the social, environmental, public health, SME, equalities and economic impacts of any regulations made under clause 1(1). First, let me assure the Committee that a detailed impact assessment of these powers relating to the UK’s independent accession to the GPA has already been carried out and published prior to the introduction of the Bill. The Delegated Powers and Regulatory Reform Committee agreed with the assessment that the implementation of our independent accession to the GPA would have no direct impacts, since it simply ensures the continuation of existing arrangements after the transition period.
As I have set out, clause 1 will allow the Government to implement the UK’s independent GPA membership in domestic law, and therefore to respond appropriately to a limited set of circumstances within the GPA. The circumstances in which the powers could be used after accession are set out in the Bill and largely concern technical or administrative modifications—for example, to reflect changes in the names of Government entities as a result of machinery of government reorganisation, which all Governments engage in. The shadow Minister is right that my arguments have inadvertently drifted from being about this group of new clauses to being about the previous group, but it is an excellent argument, and no harm has been caused by making it twice. Such modifications will have no significant—if any—social, environmental, public health, SME, equalities or other economic impacts.
Aside from regulations relating to technical changes, the powers in clause 1 will also allow the Government to make the necessary amendments to domestic law to reflect new parties joining or withdrawing from the GPA. Without the power, we would be unable to meet our obligations in relation to those acceding to the GPA. As well as being unable to give rights of access to public contracts to bidders from joining members, we would also be unable to remove rights of access to bidders from those members who had left. I am sure the Committee will agree that that cannot be a situation we find ourselves in. Recognising concerns that regulations made to reflect new accessions could have material impacts, however, we will engage the International Trade Committee and the House of Lords treaties Sub-Committee in advance of any new party acceding to the GPA. This will provide ample opportunity to explore potential impacts before any regulations are made.
Stewart Hosie
May I ask a brief question? Is the Chair of the International Trade Committee aware of the obligation that he will have to consider this in advance?
Greg Hands
I thank the hon. Gentleman for that intervention. I do not know whether the Chair of the Committee was aware of that, but he is now and I think he will welcome the change. He is always somebody who likes to be consulted, as we well know, so I think he would agree with me that this is a welcome move for additional consultation.
I have set out that the powers in clause 1 can be useful, but I want to be clear with the Committee about what they cannot be used for. The clause 1 powers cannot be used to implement any wholesale renegotiation of the GPA, or of the UK’s market access offer. Any such changes would require further primary legislation.
I hope I have persuaded the Committee that there would be no benefit in carrying out extensive reviews after regulations under clause 1(1) have been made. I ask that hon. Members do not press their new clauses to a Division, and I commend clause 1 to the Committee.
Bill Esterson
I think this is the first time in the Minister’s parliamentary career that he has ever admitted he was wrong—[Laughter.] I give him credit for being gracious enough to do so. We may have seen history in the making.
The Minister does this a lot. He claims we are against something when we are not. We spelled out in our reasoned amendment last time, and we spelled it out in our reasoned amendment this time, that we support the accession of the GPA. We voted against the Bill as a whole because we oppose the Bill as a whole. That does not mean that we oppose everything in the Bill. He knows that, but he keeps saying it. I know he likes to have some fun.
I do not object to the suggestion of asking the International Trade Committee and the Lords treaties Sub-Committee to take on additional roles, although I share the slight surprise of the hon. Member for Dundee East about the fact that the Chair of the International Trade Committee was not consulted before the announcement was made. That is not the real issue, however. The issue is that the new clauses request a review of the regulations. They do not request a review of the membership or proposed new members, so that is a rather different point. I hope that the International Trade Committee would be asked to review any proposed changes to the regulations in discussions and negotiations with our partners. I do not object to the same thing for potential accessions, but that is a rather different point from the one we were making. Having said that, and as I said in my opening remarks, they are probing provisions and we will not be pressing them to a Division.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Implementation of international trade agreements
Stewart Hosie
I beg to move amendment 30, in clause 2, page 2, line 9, leave out “appropriate” and insert “necessary”.
I will be mercifully brief on amendment 30. The effect of the amendment would be to limit the scope of the powers to be delegated to an appropriate authority to what is actually necessary to achieve the implementation of international trade agreements. Clause 2(1) provides that:
“An appropriate authority may…make such provision as the authority considers appropriate”—
to implement a future agreement. However, the word “appropriate” is vague and subjective. A necessity test—I am sure I have heard the Minister make this argument in the past—is clearer and more objective. The power should be limited to making the regulations that are necessary to implement the agreement.
Gareth Thomas
I hope to be equally brief. I have some sympathy with the amendment. I recognise the appetite of the hon. Member for Dundee East to prevent overreach by the Government in adding to legislation via secondary legislation anything that they think is a “nice to have” rather than a fundamental and necessary consequence of a trade agreement. Our biggest concern is that the Bill will not deliver the effective meaningful scrutiny of either so-called roll-over agreements or the larger agreements to come, such as the US trade deal and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, on which the Government have begun negotiations.
Taken as a package with the Command Paper from February last year on parliamentary scrutiny of future FTAs, the Government’s failure to include in this Bill several amendments that were tabled on Report in the Commons in February 2018, and in the Lords, raises concerns about Government overreach. We hope to tackle those issues with further amendments that we have tabled to clause 2. I recognise that devolved Administrations will worry that the devolution settlements might be further undermined by Government overreach because of the use of the word “appropriate” instead of “necessary”. We have some sympathy with that concern, as indicated by one of our amendments further down the line.
The witness from the CBI made a striking intervention on Tuesday morning when he said that business was desperate for certainty. To get certainty, Parliament needs to have more say and involvement in future trade agreements, otherwise we risk the development of a situation of considerable mistrust, undermining the appetite of business to take up the opportunities offered by new trade agreements. Our amendments seek to prevent that from happening by locking in more opportunities for parliamentary scrutiny. I suspect the hon. Member for Dundee East does not intend to press this amendment to a vote. In that spirit, I have flagged up some of our concerns about the Bill, which we will address in the group that begins with amendment 4.
Greg Hands
Speaking to amendment 30, which was tabled by the hon. Member for Dundee East, I can assure him that all regulations made under the clause 2 power to implement international trade agreements will be both necessary and appropriate. The power is needed to implement obligations arising from continuity trade agreements into domestic law over time and in all circumstances. Our expectation is that the power will be mainly used for obligations relating to procurement or mutual recognition of product conformity assessments. To be clear, it cannot be used to implement tariff-related provisions. Without such an ability to make changes, the UK would be at risk of being in breach of our international obligations. It is the Government’s responsibility to ensure that that does not happen. The proposed amendment would prevent that by constraining the vires or scope of the regulations that can be made under clause 2, particularly when using the concurrent powers to legislate in areas of devolved competence.
I can assure colleagues that the powers in the Bill will be used in a proportionate way and that consultation with colleagues in the devolved Governments and elsewhere is a fundamental part of our approach. The Government view “appropriate” and “necessary” as synonymous, and our intent is only to make use of the regulation power where it is needed to fulfil obligations under agreements. I therefore ask the hon. Member for Dundee East to withdraw his amendment.
Stewart Hosie
I thank the Minister for his response and I will take his assurances at face value. I just say to him that the objective not to use this to change tariffs is not one of the exclusions in clause 2 in relation to the implementation of trade agreements. The Government might want to look again later in our proceedings at how exclusions to the use of this power are documented in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stewart Hosie
I beg to move amendment 31, in clause 2, page 2, leave out lines 13 and 14 and insert—
“(b) an agreement between two or more countries aimed at reducing the barriers to trade in goods or services between them”.
The Chair
With this it will be convenient to discuss amendment 15, in clause 4, page 3, line 26, at end insert—
“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
Stewart Hosie
The effect of this amendment is clear: to provide a more precise definition of an international agreement and achieve greater clarity in the Bill. The amended wording would provide a clearer definition of an international trade agreement than is currently provided for in the Bill. That is in line with the Government’s own intention, as set out in the explanatory notes. Paragraph 31 states:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
The principle of certainty is central to good law making. In clause 2(2), an international trade agreement means “a free trade agreement”, but that is further defined in paragraph (7). Subsection (2)(b), as it currently stands, refers to
“an international agreement that mainly relates to trade, other than a free trade agreement.”
We had a discussion on Second Reading about that. These modern trade agreements have little to do with quotas and tariffs and far more to do with other things, as I said in my introductory remarks earlier this afternoon. The phrase “mainly relates to trade” does not grant sufficient certainty in terms of interpretation.
As I have said, the explanatory notes give the following definition:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
I consider that definition to be clearer than the multi-part definition currently in the Bill. This amendment does not reduce the scope of what might be deemed to be in a trade agreement, but it provides it with a purpose: to reduce the barriers to trade in services and goods. In that sense, I think it a helpful amendment, which I am sure the Government will want to look at positively as we proceed with our deliberations.
Gareth Thomas
I rise in sympathy with the spirit of the amendment moved by the hon. Member for Dundee East, but I wish to speak specifically to amendment 15, which seeks to insert at clause 4, page 3, line 26:
“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
I join the hon. Gentleman in wanting to see good law making and, therefore, proper definitions of what constitutes a trade agreement that would be covered under the Bill. The hon. Gentleman’s amendment refers just to an agreement on trade in goods and services. Our amendment includes the Government’s definition, but expands it to make it crystal clear that it includes a range of other trade related agreements, including investment agreements.
My hon. Friend the Member for Brent North (Barry Gardiner), speaking on an amendment similar to this one at the Committee stage of the Bill in January 2018, noted the lack of detail about what constitutes an international trade agreement and worried about whether trade agreements, or agreements that had substantial trade elements, would be brought to the House for even the limited scrutiny that the Minister proposes.
Mutual recognition agreements are crucial in terms of scrutiny; many of them help to minimise unnecessary regulatory non-tariff barriers. However, they potentially have implications for phytosanitary standards, food standards and environmental obligations. Strategic partnership agreements can add social and political conditionalities to accompany the more commercial aspects of trade agreements. For example, one wonders whether there might be strategic partnership agreements with some developing countries, perhaps to provide aid for trade support as they seek to implement new trade agreements with us.
Investment treaties are returning to being a UK competence, having left our responsibility in 2009. One of the most significant investment treaties that the European Union has been negotiating—the negotiations on it have not yet concluded—is with China, where there have been 28 rounds of negotiations. I suspect that there would be considerable interest in the UK, including within this House, if the Government sought an investment treaty with China. Surely, it is right to make sure that such an agreement would fall within scope, and it would also need to receive proper scrutiny.
Bill Esterson
I am glad that my hon. Friend has mentioned investment treaties; they absolutely should be part of the description given in clause 4. Does he agree that that is not least because of the fact that the 180 bilateral investment agreements that this country is party to have investor-state dispute settlement clauses, some of which are being used right now to prepare legal cases against our own Government?
Such clauses are a particular concern in areas such as construction. I suggest to my hon. Friend that in this crisis, given that they are being used along with construction contracts and procurement, we need to be very careful to ensure full scrutiny of everything of an international trade and investment nature.
Gareth Thomas
I was moving on to say where there might be concerns about an investment treaty that warranted the type of scrutiny that the Bill allows, and the Bill could allow even more of that type of scrutiny if the Government accepted later amendments. There are absolutely major concerns around the ISDS provisions in some investment treaties; I am sure that we will come to discuss those concerns when we debate other amendments.
The International Trade Committee has highlighted other aspects of investment treaties about which there are concerns, such as the question of sustainable development provisions in investment treaties so that developing countries can postpone investment liberalisation if they need to for various developmental reasons.
There have also been concerns in the past about performance requirements in investment treaties: conditions attached to foreign investors by host states, such as stipulating that a certain quantity of domestic inputs into goods that are being produced have to come from the host country.
For those reasons, therefore, we want to make sure that the Bill allows proper scrutiny in relation to any of those concerns that might or might not be raised by a future investment treaty. I look forward to hearing the Minister’s response.
Greg Hands
Amendment 31, which has been tabled by the hon. Member for Dundee East, seeks, as he pointed out, to modify the definition of an international trade agreement. Our definition of an international trade agreement is drafted so that it will sufficiently capture the range of agreements that we currently access through the European Union. That includes free trade agreements but also stand-alone mutual recognition agreements, or MRAs. By changing the definition, the amendment would limit important elements of trade that businesses and consumers rely on.
As Members know, provisions under free trade agreements are wider than simply goods and services; the point was made by the hon. Member for Dundee East. That is an essential fact of modern trade agreements that the hon. Gentleman’s amendment overlooks. The amendment would create an unnecessary risk that important agreements became out of scope of the powers, leaving us unable to ensure continuity of trading relationships for UK businesses and consumers. He drew attention to tariffs but, legally, we cannot use clause 2 for tariffs, as he knows, because that has to come under the Taxation (Cross-border Trade) Act 2018.
Amendment 15 seeks to limit the range of agreements that the UK will be able to sign outside FTAs. Specifically, again, that would have an impact on our stand-alone mutual recognition agreements. As Members will be aware, the UK has signed agreements that replicate the effects of existing EU arrangements for mutual recognition of conformity assessment. Those arrangements ensure continuity for UK manufacturers and businesses, meaning that they are able to continue having UK testing bodies certify that their products meet the regulations of other countries. The alternative would be to send our products for testing in other countries, significantly increasing costs and making many exports unviable.
The international trade agreement power enables continuity agreements to come into effect. That includes continuity MRAs. Amendment 15 therefore risks the UK being unable to fulfil obligations arising from continuity MRAs. If stand-alone mutual recognition agreements were taken out of the scope of the power, the UK would not be able to amend product-specific UK legislation to ensure that we were able to implement fully our obligations stemming from the continuity MRAs. Not only would that harm the UK’s standing on the international stage but, more importantly, it would materially impact on UK businesses and their employees at a time when they need to be able to maintain and grow their trading relations. No member of the Committee would want to see that.
An example of that power are the Electromagnetic Compatibility Regulations 2016 as covered by the mutual recognition agreement that the EU has with the United States, which reduces regulatory barriers to trade for goods such as microwave ovens. We seek to replicate the effects of that MRA, allowing businesses and consumers to continue to benefit.
I hope that I have been able to reassure the Committee about the reasoning behind the Government’s approach. I ask hon. Members to withdraw their amendments.
Stewart Hosie
May I make an observation? Clearly, my amendment was driven by the lack of clarity on the face of the Bill, compared with the more elegant phraseology in the explanatory notes. The hon. Member for Harrow West spoke about investment treaties and the Minister himself about MRAs, but the fact that investment treaties and MRAs are not included in the definition—although the Minister says that it is wide enough to capture everything—probably tells us that there is an issue of public understanding of the definition of a trade agreement in the Bill.
It might be that better can be done, however it is done, and more clarity provided as to what precisely the Bill intends to cover by way of treaties in the future. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
Again, that will come at a later stage in the Bill, so it cannot be moved at this point.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
5.4 pm
Adjourned till Tuesday 23 June at twenty-five minutes past Nine o’clock.
Written evidence reported to the House
TB12 British Veterinary Association (BVA)
Trade Bill (Fifth sitting)
Tuesday 23rd June 2020
(4 years, 10 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
The Chair
Good morning, everyone. Before we start, I remind Members that the Hansard reporters would be grateful if you emailed electronic copies of your speaking notes to hansardnotes@parliament.uk. At 11 o’clock, I will invite the Committee to observe a one-minute silence in memory of the victims of the knife attacks in Reading on Saturday.
Clause 2
Implementation of international trade agreements
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 4, in clause 2, page 2, line 14, at end insert—
“(2A) Regulations under subsection (1) to make provision for the purpose of implementing an international trade agreement may only be made if—
(a) the provisions of section [Parliamentary scrutiny of free trade agreements before signature] were complied with before the United Kingdom had ratified the agreement;
(b) the requirements under subsection (3) and under paragraph 4(1) to (1D) of Schedule 2 have been met;
(c) the requirements under subsection (4) and under paragraph 4(1) to (1D) of Schedule 2 have been met; or
(d) the requirements under subparagraph 4A(1) to (1D) of Schedule 2 have been met.”
This amendment would put in place a structure for Parliamentary scrutiny of proposed international trade agreements.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in clause 2, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to a free trade agreement immediately before exit day.
(4) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing an international trade agreement other than a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day.
(4A) Paragraph 4A of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing any international trade agreement not falling within subsection (3) or subsection (4) above.”
This amendment would apply the provisions of the Bill to trade agreements other than EU rollover trade agreements.
Amendment 6, in schedule 2, page 13, leave out lines 13 to 16 and insert—
“4 (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which meets the criteria under section 2(3) or 2(4) may not be made unless all provisions of sub-paragraphs (1A) to (1D) have been satisfied.
(1A) The Secretary of State must lay before Parliament—
(a) a draft of an order to the effect that the agreement be ratified, and
(b) a document which explains why the Secretary of State believes that the agreement should be ratified.
(1B) The Secretary of State may make an order in the terms of the draft order laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft order is laid, no committee of either House of Parliament has recommended that the order should not be made, and
(b) after the expiry of a period of 40 sitting days after the draft order is laid, a motion in the terms of the draft order is approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that an order should not be made under subparagraph (2), the Secretary of State may, after the expiry of a period of 60 sitting days after the draft order is laid, make a motion for a resolution in each House of Parliament in the terms of the draft order.
(1D) If a motion in the terms of the draft order is approved by a resolution of each House of Parliament under subparagraph (1B)(b), the Secretary of State may make an order in the terms of the draft order.
(1E) A free trade agreement to which this paragraph applies shall not be deemed to be a treaty for the purposes of Part 2 of the Constitutional Reform and Governance Act 2010.
(1F) In section 25 of the Constitutional Reform and Governance Act 2010, after subsection (1)(b), at end insert “but does not include an international trade agreement to which paragraph 4(1) of Schedule 2 to the Trade Act 2020 applies.”
This amendment would establish a form of super-affirmative procedure for scrutiny of an international trade agreement before ratification and before regulations implementing the agreement could be made.
Amendment 7, in schedule 2, page 13, line 25, at end insert—
“4A (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which does not meet the criteria under section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1A) to (1D).
(1A) The Minister shall lay before Parliament—
(a) a draft of the regulations, and
(b) a document which explains why the Secretary of State believes that regulations should be made in terms of the draft regulations.
(1B) The Minister may make an order in the terms of the draft regulations laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft regulations are laid, no committee of either House of Parliament has recommended that the regulations should not be made, and
(b) after the expiry of a period of 60 sitting days after the draft regulations are laid, the draft regulations are approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that the regulations should not be made, the Secretary of State may—
(a) lay before Parliament revised draft regulations, and
(b) after the expiry of a period of 40 sitting days after the revised draft regulations are laid, make a motion for a resolution in each House of Parliament for approval of the revised draft regulations.
(1D) If a motion under subparagraph (1C)(b) is approved by a resolution of each House of Parliament, the Secretary of State may make the regulations.”
This amendment would establish a form of super-affirmative procedure for scrutiny of regulations implementing all trade agreements covered by the bill. The procedure would apply to agreements other than EU rollover trade agreements if amendments extending the application of the bill were agreed to.
Amendment 19, in schedule 2, page 13, leave out lines 33 to 35 and insert—
“(3A) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4.
(3B) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(4A) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4A.”
This amendment would extend the super-affirmative procedure under former Amendment 19 to regulations where the Minister was acting jointly with a devolved authority.
New clause 5—Parliamentary scrutiny of free trade agreements before signature—
“(1) The United Kingdom may not become a signatory to a free trade agreement which does not meet the criteria under section 2(3) unless—
(a) before entering negotiations on the proposed agreement, the Secretary of State has—
(i) laid before Parliament a sustainability impact assessment carried out following consultation as prescribed by section [Sustainability impact assessments], and
(ii) published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the sustainability impact assessment, as long as that report is published within 30 sitting days of the day on which the sustainability impact assessment is laid before Parliament;
(b) both Houses of Parliament have passed a resolution authorising the Secretary of State to enter negotiations on the proposed agreement as prescribed by section [Parliamentary consent to launch of trade negotiations];
(c) during the course of negotiations, the text of the agreement as so far agreed or consolidated has been made available as prescribed by section [Availability of agreement texts];
(d) the Secretary of State has, within ten sitting days of the close of each round of negotiations on the proposed agreement, laid before Parliament a statement detailing the progress made in each area of the negotiations and the obstacles still remaining at the close of that round;
(e) the text of the agreement in the form to which it is proposed that the United Kingdom should become a signatory has been made available to Parliament for a period of 21 sitting days; and
(f) a resolution has been passed by the House of Commons approving the Secretary of State’s intention to sign the agreement.
(2) “Sitting day”, for the purposes of subsection (1)(a)(ii) shall mean any day on which both Houses of Parliament begin to sit”.
This new clause would set out a structure for parliamentary scrutiny of negotiations on proposed trade agreements.
New clause 6—Sustainability impact assessments—
“(1) A sustainability impact assessment laid before Parliament under section [Parliamentary scrutiny of free trade agreements before signature] (1)(a) shall be carried out following consultation.
(2) A consultation under subsection (1) shall—
(a) be carried out in line with any guidance or code of practice on consultations issued by Her Majesty’s Government, and
(b) actively seek the views of—
(i) Scottish Ministers,
(ii) Welsh Ministers,
(iii) a Northern Ireland devolved authority,
(iv) representatives of businesses and trade unions in sectors which, in the opinion of the Secretary of State, are likely to be affected by the proposed international trade agreement, and
(v) any other person or organisation which appears to the Secretary of State to be representative of interests affected by the proposed international trade agreement.
(3) The Secretary of State shall ensure that public bodies, non-governmental organisations and the public may be made aware of the consultation by circulating and publishing details of it prominently on relevant government websites.
(4) A sustainability impact assessment under subsection (1) shall be conducted by a credible body independent of government and shall include both qualitative and quantitative assessments of the potential impacts of the proposed trade agreement, including as a minimum—
(a) the economic impacts on individual sectors of the economy, including, but not restricted to—
(i) the impacts on the quantity and quality of employment,
(ii) the various regional impacts across the different parts of the UK,
(iii) the impacts on small and medium-sized enterprises, and
(iv) the impacts on vulnerable economic groups;
(b) the social impacts, including but not restricted to—
(i) the impacts on public services, wages, labour standards, social dialogue, health and safety at work, public health, food safety, social protection, consumer protection and information, and
(ii) the government’s duties under the Equality Act 2010;
(c) the impacts on human rights, including but not restricted to—
(i) workers’ rights,
(ii) women’s rights,
(iii) cultural rights and
(iv) all UK obligations under international human rights law;
(d) the impacts on the environment, including but not restricted to—
(i) the need to protect and preserve the oceans,
(ii) biodiversity,
(iii) the rural environment and air quality, and
(iv) the need to meet the UK’s international obligations to combat climate change;
(e) the impacts on animal welfare, including but not restricted to the impacts on animal welfare in food production, both as it relates to food produced in the UK and as it relates to food imported into the UK from other countries; and
(f) the economic, social, cultural, food security and environmental interests of those countries considered to be developing countries for the purposes of clause 10 of the Taxation (Cross-border Trade) Act 2018, as defined in Schedule 3 to that Act and as amended by regulations.
(5) The elements of the sustainability impact assessment to be undertaken under (4)(f) must be sufficiently disaggregated so as to capture the full range of impacts on different groups of developing countries, and must include both direct and indirect impacts, such as loss of market share through trade diversion or preference erosion.
(6) A sustainability impact assessment under subsection (1) shall include recommendations for possible action to maximise any positive impacts and to prevent or offset any negative impacts foreseen, including the possible limitation of the negotiating mandate so as to exclude those sectors most at risk from the proposed trade agreement.”
New clause 7—Parliamentary consent to launch of trade negotiations—
“(1) The Secretary of State shall not commence negotiations relating to a free trade agreement which does not meet the criteria under section 2(3) unless all provisions of this section have been satisfied.
(2) A Minister of the Crown shall lay before Parliament a draft of a negotiating mandate relating to the proposed international trade agreement.
(3) The draft mandate under subsection (2) shall set out—
(a) all fields and sectors to be included in the proposed negotiations;
(b) the principles to underpin the proposed negotiations;
(c) any limits on the proposed negotiations, including sectors to be excluded from the proposed negotiations; and
(d) the desired outcomes from the proposed negotiations.
(4) The Secretary of State shall make a motion for a resolution in the House of Commons in respect of the draft, setting out the elements listed in subsection (3), but such a motion shall be made—
(a) no earlier than 25 sitting days after the day on which the draft of the negotiating mandate is laid under subsection (2), and
(b) not before the Secretary of State has published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the draft negotiating mandate , as long as that report is published within 20 sitting days of the day on which the draft mandate is laid before Parliament.
(5) A motion for a resolution under subsection (4) shall be made in such a way as to permit amendment of any of the elements prescribed under subsection (3).
(6) A motion to enable consideration of the negotiating mandate shall be laid before the House of Lords.
(7) The terms of any negotiating mandate authorised by a resolution under subsection (4) shall be binding upon the Secretary of State and anyone acting on his or her behalf in the course of negotiation.
(8) “Sitting day” shall, for the purposes of subsection (4), mean any day on which both Houses of Parliament begin to sit.”
New clause 8—Availability of agreement texts—
“(1) The text of any proposed international trade agreement which is being negotiated shall, so far as it is agreed or consolidated, be made publicly available within ten days of the close of each round of negotiations.
(2) Every—
(a) document submitted formally by the United Kingdom government to the negotiations, and
(b) agenda for each new round of negotiations
shall be made publicly available by the Secretary of State.
(3) All other documents relating to the negotiations and not falling within the descriptions provided in subsections (1) and (2) shall be made publicly available by the Secretary of State, subject to subsection (4).
(4) The Secretary of State may withhold from publication any document of a kind falling within the description in subsection (3) but must publish a statement of the reasons for doing so.
(5) In the case of any document withheld under subsection (4), the Secretary of State shall provide full and unfettered access to that document to—
(a) any select committee of either House of Parliament to which, in the opinion of the Secretary of State, the proposed agreement is relevant, and
(b) any other person or body which the Secretary of State may authorise.
(6) In the case of a document to which access is provided under subsection (5), the Secretary of State may specify conditions under which the text shall be made available.
(7) The Secretary of State shall maintain an online public register of all documents published under subsections (1), (2) and (3) or withheld under subsection (4).”
New clause 19—Report on proposed free trade agreement—
“(1) This section applies (subject to subsection (2)) where the United Kingdom has authenticated a free trade agreement (“the proposed agreement”), if—
(a) the other party (or each other party) and the European Union were signatories to a free trade agreement immediately before exit day, or
(b) where the proposed agreement was authenticated by the United Kingdom before exit day, the other party (or each other party) and the European Union were signatories to a free trade agreement on the day the proposed agreement was authenticated by the United Kingdom.
(2) This section applies only if the proposed agreement is not binding on the United Kingdom as a matter of international law unless it is ratified by the United Kingdom.
(3) Before the United Kingdom ratifies the proposed agreement, a Minister of the Crown must lay before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the proposed agreement, and
(b) the trade-related provisions of the existing free trade agreement.
(4) Subsection (3) does not apply if a report in relation to the proposed agreement has been laid before Parliament under section (Report to be laid with regulations under section 2(1))(2).
(5) The duty imposed by subsection (3) applies only at a time when regulations may be made under section 2(1) (see section 2(8)).
(6) In this section a reference to authenticating a free trade agreement is a reference to doing an act which establishes the text of the agreement as authentic and definitive as a matter of international law.
(7) In this section—
“the existing free trade agreement” means the free trade agreement referred to in subsection (1)(a) or (b);
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
New clause 20—Report to be laid with regulations under section 2(1)—
“(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1) for the purpose of implementing a free trade agreement to which the United Kingdom and another signatory (or other signatories) are signatories.
(2) A draft of the statutory instrument containing the regulations may not be laid before Parliament unless, at least 10 Commons sitting days before the draft is laid, a Minister of the Crown has laid before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the free trade agreement to which the United Kingdom and the other signatory (or other signatories) are signatories, and
(b) the trade-related provisions of the existing free trade agreement.
(3) Subsection (2) does not apply if, at least 10 Commons sitting days before a draft of the statutory instrument containing the regulations is laid, a report in relation to the agreement has been laid before Parliament under section (Report on proposed free trade agreement)(3).
(4) In this section—
“Commons sitting day” means a day on which the House of Commons begins to sit;
“the existing free trade agreement” means the free trade agreement to which the European Union and the other signatory (or other signatories) were signatories immediately before exit day;
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
Gareth Thomas
It is a pleasure to see you back in the Chair once again, Mrs Cummins. We had an interesting sitting in your absence on Thursday afternoon, at which three Conservative Members of Parliament applied to join the Co-operative party, the Government Whip tried to shut down a debate on what we could do to tackle an anti-northern bias in procurement, and the Minister gave the first hint that he recognises the Bill is in need of improvement.
Let me say at the outset that I want Britain to be ambitious in trade, in the deals we look to achieve, and in our determination to help imaginative and innovative businesses access new markets. However, I do not want us to sell ourselves short. That is why the amendments are so important.
Trade agreements done well create new economic opportunities. They can help inspire the generation of thousands of new jobs and expand the horizons of the very best of British businesses. They can and have helped to lift thousands out of terrible poverty and hunger, and they have helped to generate substantial tax revenues for better public services.
Trade deals done badly, however, cause myriad problems. They can lead to the loss of markets for vital companies, and in turn create left-behind communities and a race to the bottom in wages and conditions. When done well, trade agreements can help to generate competition, giving more consumer choice and lowering prices for consumers, but there needs to be fair competition. When done badly, trade agreements can entrench unaccountable corporate power and miss vital opportunities to improve our environment. That is why it is essential that we have effective, detailed scrutiny, with a Trade Ministry that is determined to be open and transparent, if we are secure the trade deals that can fulfil the country’s potential and avoid creating the worst of all worlds.
As the Committee will know, Parliament has its legions of critics, but the structures it provides for scrutiny—if Ministers are willing to allow both Houses to do their job—can help to create the consensus behind trade policy that business organisations are desperate to see, as they set out in our first witness session. Ministers have told us repeatedly that the Bill will provide the basis for the country’s future trade policy once we have left the European Union. In the debate on the Queen’s Speech, it was said that the Trade Bill would
“put in place the essential legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”—[Official Report, House of Lords, 28 June 2017; Vol. 783, c. 437.]
If one potential trade deal serves to underline the failure of the Bill to meet that ambition and the need for proper parliamentary scrutiny, it is the deal that the Department seeks to negotiate with Donald Trump’s Administration. There are already a huge number of public concerns around food standards, the national health service, the use of investor-state dispute settlement mechanisms, the future of geographical indications and whether the Bill will help to cement action on climate change. Let me run through some of those concerns. The Soil Association has very helpfully charted a series of concerns that highlight the need for proper scrutiny—proper scrutiny that is not as yet locked into the Bill—of a future US trade deal. We know that US negotiators are pushing hard for the weakening of UK food and farming standards, describing EU farming—and therefore, implicitly, UK farming—as the “Museum of Agriculture”.
The UK Government have made repeated commitments, including at Trade questions last Thursday, to high environmental and animal welfare standards, but those standards could be undermined by a US trade deal, as a series of Members from across the House have noted. That underlines the need for proper parliamentary scrutiny of a UK-US trade deal, which the Bill does not currently allow for. That is why our amendments are so important.
The Soil Association has a list of the top 10 risks for the US trade deal. The first is anti-microbial resistance. Experts are warning that by 2050, as many as 10 million people could die annually from anti-microbial resistance. The use of antibiotics per annum in US farming is, on average, five times higher than in the UK. Investigations have shown that antibiotics crucial to human medicine are still being used in unacceptable quantities on US livestock farms, despite rules being brought in last year to try to curb their use and combat the spread of deadly superbugs. A US trade deal risks undermining the efforts that UK farmers have been making to reduce antibiotic use, fuelling further anti-microbial resistance, with potentially grave consequences for public health. Surely we, the House of Commons, and indeed the other place, should have the opportunity to scrutinise on the Floor of the House and in Committee whether there is adequate protection from such an eventuality.
Secondly, a number of farmers’ representatives in the unions, a number of Conservative Members of Parliament, as well as Opposition Members, and a former UK ambassador to the US have warned of the threat to the UK farming industry if British farmers are forced to compete against cheap low-quality food imports. If UK farming is forced to compete on price with countries such as the US that operate to different or lower standards, UK farming may become unprofitable. That could create a race to the bottom, putting pressure on Ministers to lower existing standards here in the UK, including standards of food quality, environmental protection and animal welfare.
Thirdly, a US trade deal could affect EU market access for our farmers. The UK currently holds a suite of significant and valuable agri-food trade relationships with the EU27. A weakening of UK food standards or a future lack of alignment with EU standards resulting from a US trade deal could result in barriers to UK farmers and food companies wishing to export their products to the EU single market. In turn, those barriers would pose significant risks for food businesses and farmers’ livelihoods. Why would we not want, as the House of Commons, to have the opportunity to scrutinise whether that fear about a potential UK-US deal merits rightful concern?
Then there is chlorine-washed chicken. The American poultry industry is more intensive, with lower animal welfare standards than in the UK. The chicken produced has high levels of bacteria, so the industry has resorted to acid and chlorine washes at the end of the meat production chain, producing chicken that may not be safe for consumers to eat. Recent comments from a senior representative of the US Government have suggested that the US is “sick and tired” of UK concerns over chlorine-washed chicken, but it remains an important issue for UK citizens, who, I suggest, have no desire to see welfare standards lowered after the UK leaves the European Union.
Bill Esterson (Sefton Central) (Lab)
My hon. Friend puts his finger on the point. For many people, quite rightly, this is about not lowering animal welfare standards. Has he seen reports from trade unions in the United States that, in order to speed up processes, there are now fewer inspections of the meat production process, particularly around chicken, which increases the likelihood that the acid or chlorine wash is less effective? There are not only animal welfare concerns, but concerns about the safety of food that we have been told we should not be concerned about because the chlorine wash removes the threat of food poisoning.
Gareth Thomas
My hon. Friend makes a good point. Not only is there a multitude of expert analysis that chlorine washing chicken is ineffective at getting rid of the risk of infection but, as he rightly points out, there are concerns that the inspection regime for the chlorine washing of chicken is not remotely as effective as we had been led to believe. That is all the more reason why it is so important that amendments 4 and 5, and the subsequent amendments, are added to the Bill.
The fifth concern that the Soil Association helpfully sets out concerns hormone-treated beef. The US Food and Drug Administration allows steroid hormone drugs for use in beef production, which we banned in the UK and the European Union in 1989. Cattle producers use hormones to induce faster, bigger animal growth, but there is a cost to that: an EU scientific review back in 2003 concluded that one of those commonly used hormones is carcinogenic. In the event of a UK-US trade deal, hormone-treated beef could be sold in the UK, posing potential public health risks. Surely it is the responsibility of the House to understand and scrutinise in detail a UK-US trade deal, to ensure that there are no such potential public health risks for UK consumers.
Lee Rowley (North East Derbyshire) (Con)
I am hugely grateful to the hon. Gentleman for letting me intervene. He is right that a US trade deal needs to be scrutinised, but I remind him that we are not debating a US trade deal. We are debating what is effectively a continuity Bill, and while much of what he says is incredibly interesting—although I disagree with it—it is not relevant to the scope of the discussions.
Gareth Thomas
With due respect, the coffee that the hon. Gentleman had this morning may not have quite kicked in at the beginning of my remarks, when I set out what the Queen’s Speech defined as the purpose of the Trade Bill. As I said, it made clear that the Bill was designed to set the tone for the future of UK trade policy post Brexit, which it quite clearly does not if all the Bill serves to do is to explore the scrutiny of roll-over agreements. Our contention is that we need a proper parliamentary scrutiny process for future trade deals that we negotiate, including with the US and the Trans-Pacific Partnership—on which more anon.
Matt Western (Warwick and Leamington) (Lab)
My hon. Friend makes some powerful points. To broaden this a little, because it would be easy to become extremely focused on the US-UK trade deal, he knows very well that these sort of issues—food standards and production, and safeguards for consumers—apply to other countries, such as Australia. Any UK-Australia trade deal will face exactly the same issues as those we are talking about between the UK and the US.
Gareth Thomas
My hon. Friend is absolutely right. There is not the option at the moment for proper parliamentary scrutiny of a trade deal with Australia. If the Government were to bring forward a trade deal with China, there is as yet no scope in Parliament for proper scrutiny of such a deal. That is why amendments 4 and 5 and those linked to them are so important.
Matt Western
I just want to elaborate on that point. It is really important that the public are fully aware of what we are talking about. Hormone-fed beef applies to Australian-produced beef as much as to US beef. When it comes to egg production in Australia, they use battery hens, caged hens and so on. It is really important that consumers are made fully aware of what will happen with these trade deals if they are opened up in the way that the Government would like.
Gareth Thomas
My hon. Friend remakes my point for me. We need to have proper parliamentary scrutiny locked into the Bill. As we have been told, this the only trade legislation that is likely to come before this Parliament. There has been no hint of any other legislation to improve the parliamentary scrutiny of future trade agreements. That is why this group of amendments is so important.
Bill Esterson
Just for the benefit of the hon. Member for North East Derbyshire who intervened, if he looks at the explanatory note to amendment 5, he will see that the amendment would apply the provisions of the Bill to trade agreements other than the EU roll-over trade agreements, so it covers trade agreements that go beyond those that were originally in the scope of the Bill. As my hon. Friend said, this is relevant, not only because of what the Queen’s Speech—
Bill Esterson
I do not think the hon. Gentleman is allowed to intervene when I am already intervening on my hon. Friend. He will get his chance to make a speech later. The important point is that we have tabled amendments precisely because of the need for the Bill to cover more than the narrow scope that clause 2 originally envisaged. My hon. Friend is right to highlight what was in the Queen’s Speech, but I want to remind the hon. Member for North East Derbyshire that it is actually in our amendments. They have been allowed by the Clerks and must therefore be within the scope of our debate.
Gareth Thomas
My hon. Friend makes his point to the hon. Member for North East Derbyshire, who intervened on me very well. I do not know whether the long title of the Bill was as badly drafted as some other parts of the Bill, allowing as a result for our amendments to be in scope, but they are. The hon. Member for North East Derbyshire in his heckle suggested that I was making a series of hypotheses. I would not use his phrase, but I gently suggest that that is surely the purpose of parliamentary scrutiny—to test the concerns that the wider public and organisations outside the House have about particular pieces of legislation.
The Soil Association highlighted a further concern about nutritional labelling—so-called traffic light labelling—which has been a very important tool in supporting improvements in UK public health. The US is clear that it considers nutrition labelling a barrier to trade, and it has an ongoing dispute with the European Union over this. Imported US food already enjoys a voluntary concession to the UK labelling requirements. Any trade deal could weaken those consumer labelling efforts still further. A US trade deal could result in low-cost, ultra-processed foods flooding the UK market, placing a potential double health burden on UK citizens. That is one of the concerns of the Soil Association, and it is right that parliamentary scrutiny should give us the opportunity to test that.
There are serious concerns about the public health implications of genetically modified foods and pesticide regulations, which we will come on to under amendment 11. Incidents of food poisoning in the US affect 14% of the US population annually—10 times greater than in the UK, where just 1% is affected. Again, surely, it is the purpose of Parliament to allow our amendments to test whether or not a deal with the US or any other country in the world is likely to lead to an increase in food poisoning. Those are the Soil Association’s concerns around food standards.
There is a series of other concerns about a potential deal with Donald Trump’s Administration. Let us take the national health service, where Ministers have been desperate to try to reassure the public. If investor-state dispute settlement clauses were to be included in a UK-US trade deal, or any other post-Brexit trade agreement, there is a real chance that the corporate giants that had bought the right to run part of the national health service might be tempted to challenge a decision by a future Government about the provision of that part. If a future Government wanted to favour a public provider over the big private corporate provider, or renationalise parts of the health service that have been privatised, that could be challenged by the corporate giant using the investor-state dispute settlement system, potentially at huge cost to the British taxpayer and resulting in huge damage to the national health service.
Bill Esterson
My hon. Friend is right to highlight the challenge of ISDS. The debate about the Transatlantic Trade and Investment Partnership, which was dragged into the public domain when negotiating texts were eventually shared with the public, was the only way for the potential problems that he has highlighted to come into the public domain. The initial lack of scrutiny poses a great threat of the kind that he has set out.
May I add to the list the concerns about the negative list system, where every single service has to be named, and about ratchet clauses and standstill clauses? In addition to ISDS, they are a real threat to the ability of this country’s Government to have control over what is in the public sector and what services are delivered, whether the health service or other public services.
Gareth Thomas
Not surprisingly, my hon. Friend is ahead of me in making that concern clear. I underline the issues about negative listing that he sets out, which I will come to. To finish the point about medicine pricing, Donald Trump’s chief negotiator has made it clear that they wish to use a trade deal to challenge the NHS’s current purchasing model for NHS drugs. That could be done through them securing specific market access provisions or other clauses aimed at helping the US pharmaceutical industry. Again, surely it is the responsibility of the House, and indeed the other place, to have in place the scrutiny mechanisms to check whether that concern is justified.
My hon. Friend set out the concerns about standstill clauses and ratchet clauses in trade agreements, which can lock in levels of privatisation and other forms of liberalisation and accelerate them, which will limit the scope of future Governments to take sensible steps, when services are not being properly provided, to bring them back into the public sector. He rightly set out concerns about negative listing, which emerged in particular in the EU-Canada deal, which we will explore in more detail in the debate on amendment 9. There are concerns that NHS management data services could be opened up to US corporate giants as a result of a UK-US trade deal. Surely it is Parliament’s responsibility to explore those concerns.
If a UK-US deal were concluded by the Government, MPs would not be guaranteed a vote or a debate on the signed deal. The proposals in the Command Paper, which Ministers were forced to publish in February last year, allow a scrutiny Committee to recommend one, but leave it at the Government’s discretion whether to hold one.
The deal is being negotiated in secret, even though it could have huge implications for Britain’s post-Brexit future. Negotiations with the US are particularly controversial, yet after six rounds of preparatory talks and one round of formal negotiations, we still are in the dark, at least from a UK perspective, about the substance of what is being debated. It is true that the Secretary of State made a statement to the House. However, apart from listing the major areas of the talks, which were hardly revealing, and reassuring us all that the meetings were positive and constructive, again, no substance was offered on the real concerns that members of the public and organisations outside this House have set out on food, import standards and medicine prices. As Mr Lawrence from Trade Justice Movement reminded us all in last Thursday morning’s witness session, there will have been more scrutiny of the decision to proceed with High Speed 2 than there will be, as things stand, of a UK-US deal. Our amendments would help put that situation right.
Matt Western
When those of us on the International Trade Committee were hearing evidence about potential trade agreements with Japan and South Korea and the Government’s failure to be transparent, to be open, to set objectives and to consult, we discovered in that process, online, that the Koreans had already shared publicly what was going on and where they were in the negotiation. It was secret from our side but open on theirs. It was not until we discovered that information online and Google Translated it that we knew what the Government were up to. Isn’t that extraordinary?
Gareth Thomas
That is an extraordinary position, but sadly, it is becoming clear that that is how Members of Parliament are likely to find out about the substance of these trade negotiations. Let us again take the US as an example. We are finding out through evidence to Congress what many of the concerns of UK business organisations are in terms of the desire to secure access to UK markets, which is surely an entirely outrageous situation for the House of Commons. We were promised we would be taking back control after Brexit, yet the Houses of Parliament and the British public are being left in the dark.
There are real concerns from a UK-US deal about the potential for ISDS.
Bill Esterson
Before my hon. Friend moves on from the point about where evidence comes around what is a negotiating text, he will remember the evidence from Rosa Crawford from the TUC that the unions in this country are finding out what is in the negotiating texts for the US-UK talks from unions in the United States, which have access to those texts from the US Government. That is completely absent in this country. Is this not yet another example of how absurd it is that we have different approaches to scrutiny in this country compared with others? Surely those approaches need to be equivalent to ensure proper scrutiny and the right outcomes in the interests of the people of our country?
Gareth Thomas
We should thank the TUC for its work with American trade unions to help inform British workers and the British House of Commons, and for that little bit more of an insight into what is really going on in the UK-US negotiations. I hope Ministers will be sufficiently embarrassed by the British people’s reliance on what is being told to Congress to open up more scrutiny opportunities for this Parliament.
ISDS clauses have been favoured by the US in many of its existing trade deals. They potentially allow new investors, if included in a UK deal, to sue our Government over measures that harm their profits. We know that ISDS lawyers are already talking up the possibility of compensation for corporate giants whose profits have been hit by Governments taking lockdown measures to tackle the covid pandemic. In case Government Members think that is not a real threat, the American firm Cargill won more than $77 million from the Mexican Government after they introduced a tax to deter high-fructose syrup to tackle serious health issues in Mexico.
ISDS provisions create regulatory chill—the temptation for Governments not to introduce necessary public health or, indeed, other environmental measures, for fear of being taken to an ISDS tribunal by a big overseas investor. They create a two-tier system, since it is rarely small and medium-sized enterprises that are able to access these secret courts. There is normally no appeals system for the Government to access, and there is extraordinary secrecy around the nature of the settlements.
The irony is that there is little obvious benefit to businesses from those clauses being included in trade agreements. Indeed, the Government under David Cameron published an analysis of the pros and cons of ISDS clauses and could not find any great pros to champion. Business organisations tell us—although this tends to be in private—that ISDS clauses do not matter much to them; what they take serious notice of is the business environments.
There are real concerns about the labelling of geographical indicators, where products in the UK have a geographic indicator that prevents their being imitated: one thinks of Welsh lamb, Scottish salmon and Armagh Bramley apples, for example. The American negotiators do not like those types of food label and will seek to get rid of them. Surely it is the responsibility of this House of Commons to explore whether those concerns have merit and to push the Government to protect those labels.
Matt Western
That labelling is so important because throughout this process the public have been led to believe, because the Government have insisted on this point, that they as consumers will always be informed about what it is that they are buying. The only way they can be informed of that is by labelling, but that is not going to happen because, as my hon. Friend says, the US negotiators will not allow it to. When I approached KFC—other leading fast-food outlets are of course available—and asked, “Will you be informing the consumer where the chicken has come from that has gone into those nuggets or whatever the product is?” there was no reply, but clearly it will not be doing so, which must be a profound concern.
Gareth Thomas
I have made my point already about chlorinated chicken, and my hon. Friend raises that concern again.
The point that I was specifically referring to is the significance of GIs for many British products, and I think particularly of Welsh lamb and Welsh beef, where the Welsh Government have concentrated much of their promotional effort around the agriculture industry in Wales on talking up the benefits of those GI-protected products. There is real concern that that is at stake in some of the trade negotiations that the Government are taking part in.
It is surely right that this House have the opportunity to scrutinise whether such concerns would be appropriate with respect to a UK-US deal, a UK-Australia deal or a UK-Japan deal. At the moment, we, as the House of Commons, will not have the chance to explore in detail whether that is a concern, or have the opportunity to force Ministers to take action. Our amendments would put that right.
One last concern to flag about a UK-US deal is Donald Trump’s hostility to action on climate, and therefore the possible lack of potential for Ministers to make progress on bringing carbon dioxide emissions down and helping to tackle the climate and nature emergencies that the world and our country face. Those are the potential concerns being talked about around the headline free trade agreement being negotiated by Ministers, which merit proper parliamentary scrutiny.
Amendment 4 would put in place a structure for proper parliamentary scrutiny of free trade agreements. New clause 5 sets out the process for scrutiny of those free trade agreements before they could be signed, including giving parliamentarians a vote on whether to approve the start of negotiations. That would help to lock in scrutiny of trade negotiations from the very beginning of the process.
Andrew Griffith (Arundel and South Downs) (Con)
May I congratulate the hon. Gentleman on his damascene conversion to parliamentary democracy and scrutiny of trade, which are things that, as part of our membership of the European Union, we would never have been able to engage in? It is only because the Government are getting Brexit done that we can even entertain these ideas.
Gareth Thomas
The hon. Gentleman opens up a whole new area for discussion and I am grateful to him for doing so. Let me confess in these secret discussions here in this House that the biggest mistake that I made when I was a Minister was to agree in 2007—in the run-up to the general election in that year that never was—to appear before seven Select Committees in the space of two weeks, confident in the knowledge that a general election was about to happen and that, actually, I would instead be spending my time with the great people of Harrow West.
Imagine my horror when I discovered that we were not going ahead with a general election and that I would have to appear and talk about our trade policy to seven Select Committees, one after the other over a two-week period. Boy, did I know the detail of trade policy by the end of those that two weeks, and crucially I also had confidence that the negotiating teams working on the EU negotiations knew the detail, too.
The hon. Member for Arundel and South Downs mentioned Brexit. The decision of the British people to go ahead with Brexit gives us the opportunity to rewrite the UK’s deal with Canada, which we will consider when we debate amendment 9—I suspect that the whole House could potentially be grateful for that opportunity. I look forward to hearing the hon. Gentleman’s interventions then, too.
As well as seeking a mandate, the amendments would require Ministers to be much more open and transparent with the British people about the likely impact of the negotiations and, crucially, how each round of the negotiations have gone. They would require the consent of the British people through their representatives in this great House of Parliament to agree to any trade treaty. In short, our amendments would genuinely help the British people to take back control of who the businesses they work in can trade with and on what terms. They would give, for example, key workers a say in how the services that we all recognise as essential—such as medicines and drugs and our health services—are delivered, and whether trade agreements should impact on them or not. They would give British people the chance to say, “These are the standards that we want those selling goods and services to us as consumers to abide by.”
I do not think it is unreasonable to expect Ministers to put their plans and their record for securing better trade terms to the House of Commons for approval. Under cover of lots of offers of consultation, Ministers seem determined to keep for themselves and No. 10 a power to decide with who and on what terms a trade deal gets done. The picture is painted already, but let us imagine for a moment that the Prime Minister decides to ignore the concerns of Government Members as well as Members across the House about a potential trade deal with China. The negotiated plans would not need the approval of the British people. We would not have access to any of the detail of how those negotiations were going, and potentially only a handful of MPs would have a say. Parliament would in effect be sidelined. The British people, as a result, would be sidelined.
Let us be honest: Government Ministers would pack any statutory instrument Committee with ambitious young Turks, such as the hon. Member for Arundel and South Downs, who recently intervened on me, who are desperate for advancement and so inclined to ask tough questions that they would sit on their hands throughout the entire process. If the Prime Minister would not listen to Conservative MPs’ concerns over Dominic Cummings’s future, what confidence can we have that he would listen to their concerns about a future free trade agreement with China or anyone else?
Modern trade agreements are wide ranging and comprehensive. They do not only cover tariff reductions, but a whole range of regulatory issues, including issues of public health, social standards, labour rights and environmental standards, so detailed parliamentary scrutiny, making Ministers work to convince the British people of the merits of a deal, should be seen as entirely appropriate.
There is a need to properly consider the trade-offs in a trade agreement. The Committee might have heard of a book that five-year-olds like called “The Enchanted Wood”, which I am currently reading with my five-year-old. In it there is a magic faraway tree. At the moment the central characters are going up the magic faraway tree and out through a hole in the clouds to a new land: the land of take-what-you-want. I gently suggest that that is the way in which Ministers are presenting the merits of the trade negotiations that they are seeking to do at the moment. They are not seeking to explain the difficult trade-offs that such negotiations involve. They seek to give the impression that it is all wins for the British people and that there are no downsides to trade agreements.
Once they are signed, trade agreements are very hard to unpick. They are not benevolent arrangements.
Fleur Anderson (Putney) (Lab)
My hon. Friend is making a powerful argument with many different opinions on how important scrutiny is. I can add to that the voices of three other groups. One is the constituents and businesses of Putney: 39% of businesses will be affected by these trade negotiations, but I as their representative would be shut out from scrutinising those negotiations by the lack of scrutiny afforded by the Bill. Another group is the Institute of Directors, which we heard from in our evidence session. It has concerns that it will not know about the standards that will feature in the negotiations. It is concerned about immigration policy, temporary labour mobility, e-commerce and digital commerce and how wide the Bill will go. The final voice is that of the Confederation of British Industry which, in its paper, “Building a world-leading UK trade policy”, said:
“Governments worldwide are finding that public concerns on trade are necessitating an opening up of transparency, and it is becoming increasingly crucial for ratification of trade agreements”
and for building public support for trade agreements that will last. While the rest of the world is opening up its trade scrutiny and getting better trade deals as a result, we are going in the opposite direction.
Gareth Thomas
My hon. Friend is right. I fear that if Ministers persist with their refusal to give the House of Commons greater opportunities to scrutinise and vote on trade deals, her membership of this Committee may be her only opportunity to vote on concerns about a future UK-US deal. She rightly also opens up a concern about immigration. One of the trade-offs in trade deals, under so-called mode 4 agreements, is often the requirement for Governments to give ground on immigration requirements, yet we hear no mention of that from Ministers.
Ministers give the impression that it is a win-win-win and there are no trade-offs, but trade agreements are not benevolent arrangements in which our negotiators can simply rock up to another country’s trade ministry and pick up some wonderful new bargain deals. We cannot just take what we want. That is the nature of negotiations.
Another analogy might be that Ministers talk about trade agreements as if they were the Christmas sales; they only have to turn up and there are amazing bargains to be had. They have not bothered to explain that the negotiator sitting opposite them will want something in return, which will not necessarily be a comfortable choice for us as a country. All the more reason, therefore, for us to have proper scrutiny to consider whether the downsides of a potential trade agreement are not as significant as the gains.
To listen to some sceptics about a UK-US deal with Donald Trump’s Administration, our farmers will be undercut, standards of food production will be lowered, the NHS will be on the table, climate change will not feature, big corporates will be even more powerful and labour rights will be undermined. Ministers will say that is an outrageous and scurrilous description of the likely benefits of a UK-US trade deal. Those are the potential downsides, however, so we should be able to consider whether the trade-offs of a UK-US deal, or indeed any deal with any other country, outweigh the benefits and therefore should not be approved, or whether, in fact, the benefits outweigh the downsides.
It is certainly the job of the Government to try to negotiate the best possible terms for a free trade agreement with another country, but surely it is for the people of this country to decide in the round, through their Members of Parliament, whether, on balance, it is the great deal that it has been set out to be. I ask the Committee why Ministers are apparently desperate to exclude the British people from having the final say, through their MPs, on whether a trade deal goes ahead.
Trade agreements can take a long time to negotiate and can seem like great prizes to have. I recognise the potential desperation of the Secretary of State to rock up to the signing ceremony for a new free trade agreement and bask in the positive glow from newspapers such as The Daily Telegraph and the Daily Mail, and maybe even the Daily Mirror and The Guardian, which will provide all sorts of photo opportunities for Members of Parliament. That desperation to get a deal, however, might sometimes take ministerial eyes off the downsides of a deal. It is surely the job of the House to look in the round at whether a trade agreement is genuinely in the interests of the country.
Surely Ministers having to work a bit harder to convince us that they have a genuinely good deal can be only a good thing in law. Giving the British people back control through a series of votes in this House and the other place on future free trade agreements will help to lock in high standards of deal making. Ministers seem to be taking the George Bush approach—the “Read my lips: taxes won’t rise” approach to trade. They are saying, “Trust us, we won’t reduce standards; we will protect the NHS and we will deliver the most amazing opportunities for British business.”
Let us pretend for a minute that I am willing to believe such a message from this particular Minister and this particular Secretary of State. The trouble is, Ministers change. Governments change. A commitment may not outlast the next Minister or Secretary of State who comes along. That is why it is essential to underpin in law a right for the British people, through the people they have chosen to represent them in the House of Commons, to agree to start negotiations and to vote on the final result of those negotiations.
Even over the last three years, ministerial attitudes to trade have shifted back and forth, as we shall discuss in debates on other amendments. One moment, the Government are opposing the idea that they should produce a report on a proposed free trade agreement, then they agree to do it voluntarily but oppose the idea of having that written into law; and then they agree, on Report on the 2017-2019 Trade Bill, to write it into the Bill. Today, we are back to a voluntary process—a commitment given by a Minister who is no longer Trade Minister. If the Executive’s line can change on such a simple point in so short a time, it is essential that the interests of the British people are protected by a lasting lock in law on a clear and sensible process to give the people through their representatives in the House of Commons a direct say on trade agreements that will have a lasting significance for their lives.
Ministers have a record of promising the earth on trade deals. Who can forget the last Secretary of State, who said in October 2017:
“I hear people saying, ‘Oh we won't have any free trade agreements before we leave’. Well believe me we’ll have up to 40 ready for one second after midnight in March 2019”?
Sadly, as the Minister knows only too well, the reality is very different. One of my favourite trade quotes has to be from the Chancellor of the Duchy of Lancaster, then the Secretary of State for Agriculture I think, who said:
“There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU. After we vote to leave we will remain in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would remain part of this free trade area—and Britain would be on the outside with just Belarus—is as credible as Jean-Claude Juncker joining UKIP.”
We all know what has happened since.
My final quote demonstrating what Ministers have said on free trade agreements is from the now Foreign Secretary, who said:
“I hadn’t quite understood the full extent of this, but…we are particularly reliant…on the Dover-Calais crossing”.
If Ministers do not understand the basics about the nature of British trade, it is even more essential that we lock into law a process for giving Parliament the right to scrutinise free trade agreements.
Governments make mistakes. Ministers make mistakes. Let us think about this Government: too late to the lockdown, a failure to protect care homes, a failure to stockpile personal protective equipment, the chaos over schools reopening and now the test-and-trace app fiasco. Ministers make mistakes. Scrutiny in the House of Commons helps to minimise the damage that those mistakes can have. Given the long-term significance of trade agreements, and to help to prevent mistakes being made, we need to lock in a tighter, stronger process of parliamentary scrutiny.
Matt Western
To amplify that point, irrespective of where we currently sit in the House—whether on the Front Bench or the Back Bench, or on the Government or Opposition Benches—it is important that we have some say. That is not simply about scrutiny and holding the Government to account; it is about asking the questions that ultimately lead to better governance. Surely that is what this place is all about.
Gareth Thomas
My hon. Friend is right. I recognise the temptation, having been a Minister for Trade, to fear scrutiny—to fear being asked detailed questions about rules of origin and things like that. However, that fear helps to make Ministers and officials get over the detail of those hugely important technical questions on trade agreements, which as a result helps to make government better, helping to make trade deals much better as a result.
As I indicated, Ministers had to be dragged kicking and screaming to publish the February 2019 Command Paper on future scrutiny of free trade agreements. A series of commitments were implicit in that Command Paper, but we have heard in recent times that some of those commitments may no longer enjoy ministerial support. Indeed, there seems to be some suggestion that Ministers will no longer publish reports at the end of negotiating rounds. Perhaps the Minister can clarify that point in his wind-up remarks.
Certainly, there has been zero progress on agreeing to give a Committee of this House access to confidential information and briefing from negotiators. If ministerial views on parliamentary scrutiny of new FTAs have changed since the publication of that Command Paper, surely the British people have a further justified claim for ensuring that a process for scrutinising all trade agreements be locked in to law. If Ministers are determined to row back on that commitment to work with a dedicated Committee in both Houses, providing confidential information and private briefings from the negotiating teams, there is even more need to lock into law new powers for Parliament to have more leverage over Ministers regarding those trade agreements.
The amendments would also widen the scrutiny requirements for continuity trade agreements that Ministers are negotiating with countries that already have a trade agreement with the European Union. Many agreements already notionally negotiated have small but significant differences from the original EU agreement on which they are based. At the moment, the British people do not have a say, through their representatives in the House, on whether those changes were appropriate.
It is slowly becoming clear, from the little we are able to glean from those negotiations on continuity trade agreements, that the agreements that have been signed, and indeed being negotiated, are slowly making the terms of trade for British businesses and our existing partners and allies worse. As Professor Winters made clear in his evidence last Tuesday, in conversations about how negotiations on the so-called roll-over agreement with Japan were going, Ministers and negotiators were being studiously vague about what was really going on.
The detail of concerns expressed about what has been negotiated only underlines the need for increased scrutiny—not only of all future FTAs but, crucially, of existing continuity deals. Nick Ashton-Hart of the Digital Trade Network noted that the UK-Swiss deal that has been negotiated has only three mutual recognition chapters, compared with the EU-Swiss deal, which has some 20. It will be interesting to know from Ministers why the UK-Swiss deal had just three mutual recognition chapters whereas its predecessor, the EU-Swiss deal, had 20. Apparently, there are similar problems with customs arrangements. In the case of Norway, only a goods arrangement was rolled over, so British companies have no idea at the moment what they will be able to access in terms of services markets in Norway from 1 January next year. There is a similar position with Switzerland—much has not been rolled over. Companies operating in services markets will have little idea at the moment what access to those markets in Switzerland they will have from 1 January.
Matt Western
My hon. Friend is quite right to highlight the vulnerability of UK automotive manufacturing, particularly with Japanese plants, and the consequences of that throughout the entire sector. The Japanese clearly want to hold off on any negotiation with the UK until there is clarity on our future position with the EU. I recall attending a Japanese ambassador’s event two and a half years ago, at which the Japanese chamber of commerce said, “We will be watching you very closely to see what you decide to do, particularly in relation to your arrangements with the EU. If you get it wrong, watch this space.” The UK is incredibly vulnerable. That is why the Japanese are treading very carefully around any trade deal with us and why they will only come to high-line arrangements; they are going to hold off until they can see what happens with the EU.
Gareth Thomas
That is a very good point. Specific Japanese automotive manufacturers such as Nissan have been very public with their concerns about the way trade negotiations are going. In that sense, they amplify the case for proper parliamentary scrutiny of our future trade agreements.
A series of witnesses, as my hon. Friend the Member for Putney mentioned, made clear the lack of proper parliamentary scrutiny of trade agreements. Indeed, it would be fair to say that a majority of the witnesses who appeared before us in the three evidence sessions we had last week noted the lack of proper parliamentary scrutiny for free trade agreements and expressed serious concerns about it.
I remember that Sam Lowe from the Centre for European Reform suggested that our scrutiny of trade is very poor and not particularly democratic when compared with the US and the European Union, and he gave the UK parliamentary process for trade treaty scrutiny less than five out of 10. He made it clear that some agreements that Ministers have negotiated are purely continuity agreements and alluded to those with the Faroe Islands, Chile and Jordan. He thought there would be substantially different trade agreements with Turkey, Norway, Switzerland and Ukraine, and in effect fundamentally new agreements—surely they are not within the terms of the Bill, if it is limited merely to agreements we have through the EU with existing trade allies—with Japan, Canada and the stage 2 deal with South Korea, which will merit a different, more robust parliamentary process.
David Lawrence from Trade Justice Movement said he has heard “nothing new” billed by Ministers on scrutiny of trade agreements. He described the process as archaic, dating back to the first world war when it was used for secret defence treaties. It has not changed in about 100 years. Trade Justice Movement made clear that it has relied on reports from Washington and Brussels to find out what is going on in trade talks that the UK is a part of, which again underlines the point that surely the British people, through their representatives in the House of Commons, should have access to much more detail.
The principal justification that Ministers have deployed and hidden behind to resist giving the British people more control over such agreements is a decades-old convention first articulated, I believe, by Arthur Ponsonby in 1924. One can understand why Ministers look to Mr Ponsonby for inspiration as he was a Labour Member of Parliament, from whom Ministers get their best advice. Trade then was very much with the different parts of the empire; it looks completely different now, with the drastic changes we have seen to world trade and, of course, our exit from the European Union.
That convention was formalised in part 2 of the Constitutional Reform and Governance Act 2010, which no one conceived would still be in use should Britain exit from the European Union and need to negotiate all sorts of future free trade agreements on our own, without our EU allies. CRAG does not require Parliament’s approval for the Government to ratify treaties. Indeed, as a House of Commons Library briefing helps to make painfully clear,
“it gives any parliamentary objection to ratification (or similar processes like accession) a limited”—
limited is crucial—“statutory effect”. There is a theoretical power for the House of Commons to block ratification, but in practice that power does not amount to much. The briefing continues:
“Parliament does not have to debate or vote on the treaty, and indeed time to do so is hard to secure given the Government’s control over the timetable of the House of Commons.”
That the Conservative Government have a large majority underlines how it is entirely in No. 10’s gift whether a debate and a vote takes place on a UK-US deal, a UK-China deal, UK membership of the transatlantic partnership or on a deal with Australia or New Zealand. Why should not Members of Parliament have a vote on those free trade agreements?
It is worth underlining that Parliament cannot make amendments to a trade treaty under the CRAG process as the treaty will have already been signed. Parliament can only object to ratification of an entire treaty, and that is very much a theoretical power—it is fantasy. There is also the slightly less than theoretical option of Parliament refusing to put into domestic law the different elements of a new trade agreement. Again, with a Government with an 80-seat majority, it is difficult to see how that, in any way, could be anything other than a fantastical possibility.
The Chair
Going forward, I am happy for Members to remove their jackets if they feel the need to do so.
Bill Esterson
My hon. Friend the Member for Harrow West has given the Committee a tour de force that is worthy of parliamentary history. The Minister says it lasted an hour and a quarter. I hate to correct him on this occasion, because there are plenty of other opportunities to do so, but I made it one hour and 23 minutes, or possibly one hour and 24 minutes. It was slightly longer than an hour and a quarter but was very good anyway.
My hon. Friend made some incredibly important points about the amendments we have tabled, and about exactly why putting a proper set of parliamentary scrutiny procedures in place is so important. He described the 19 or 20 agreements that have gone through already, the lack of scrutiny of those procedures—some are more significant than others, such as the agreement with South Korea—the remaining 20 or so agreements that have to go through, and the prospect of having a scrutiny system for future international trade agreements. As he quite rightly pointed out, the framework of the Bill is to:
“Make provision about the implementation of international trade agreements”,
which provides the opportunity to get this right and to get it in place. That is why our amendments are so important.
In an intervention, my hon. Friend the Member for Putney absolutely nailed this as well. I do not want to play down in any way the importance of the one-hour-and-23-minute contribution from my hon. Friend the Member for Harrow West, and her single intervention did not go into the depth that he did, but she made a very good point about the scrutiny of trade policy in this country and the fact that it is going in the opposite direction to that taken by almost everybody else in the world, at a time when international trade agreements are so significant and so far reaching. They are about so much more than trade, which is the point my hon. Friend the Member for Harrow West made later in his speech, when he described the way that our current procedures are based on the 1924 Ponsonby rule.
In an intervention, the hon. Member for Arundel and South Downs, who is no longer in his place, made the Brexiteer point about taking back control, in all its lack of glory, yet I am afraid he was wrong. The European Union had full scrutiny arrangements. This is one of the points about our amendments. We are now left with a complete absence of those arrangements, and the fact is that we should be looking to replicate, at the very least, what we inherit from the EU.
I will read from the EU’s step-by-step guide to trade deals:
“After both sides sign, the Council examines the proposal for conclusion and sends the agreement to the Parliament for its consent (approval)…The Parliament receives the agreement. The Parliament and its trade committee (‘INTA’) consult with representatives of industry, trade unions, environmental groups and other outside experts about the agreement. The committee:
• writes up a report on the agreement
• votes on it
…The whole Parliament votes on whether to give its consent to the agreement. This is a ‘Yes/No’ vote.”
We have nothing on that scale of detailed scrutiny to replace such arrangements in order to look at the agreements to which the Government want to confine the Bill, or for future agreements. We are left with a process of rubber stamping, not scrutiny. In his analysis, my hon. Friend the Member for Harrow West set out the dangers of that lack of scrutiny when he described in detail the evidence presented to us that only three of 20 mutual recognition agreement chapters from the Swiss-EU deal are in place in the UK-Swiss deal; that only the goods element of the Norway deal has been rolled over; that the South Koreans want to renegotiate after two years; and that only two of 11 products from the equivalent EU-South Korea deal have been included at the same zero tariffs for export to South Korea.
My hon. Friend also made some good points about the lack of trade negotiating expertise, which he said has been raised by the Japanese and South Korean negotiators. It has also been raised by the US and Canadians as a reason that they are reluctant to engage with the UK. They feared that the quality of negotiations would be so weak as to affect the outcome of those negotiations so badly that it simply was not worth engaging. Things have moved on a bit on the American side since they raised those reservations last year, but we still await signs of progress with Canada. It must be the role of scrutiny, as my hon. Friend said, to try to avoid mistakes that we will regret for years to come.
My hon. Friend the Member for Warwick and Leamington made several good interventions, including on the need to avoid mistakes. He is quite right about that. If we do not get it right now, we will pay for years to come. However, this place is about not only governance, but representing constituents. We are the only 650 people in the United Kingdom with the ability to scrutinise and potentially vote on such matters in Parliament, which is why it is so important that we have access to that level of scrutiny and that Parliament is able to play its full part. That European system is a good place to start.
On Second Reading and on other occasions, the Minister described this as a continuity Bill, and he described my speech—I do not know whether kindly or unkindly—as a continuity speech on a continuity Bill. He is keen to play this as a continuity Bill, and of course, for many of those agreements, it is; where there have been only changes of wording to reflect that the agreement relates to the UK rather than EU, that is true and we have acknowledged it. However, for many other agreements, it is not true—it is far more than that.
That is also true of scrutiny, because we have not applied continuity to the system of scrutiny. If this was a continuity agreement, that EU system’s level of scrutiny would be replicated as far as possible, by having a Committee with those responsibilities, having that level of engagement and consultation on the content of the deal and having those kinds of vote. However, that is not what is being offered. That is why our amendments cover it as one option, because that is precisely what we should be doing.
The Library note is a good place to go to as it sets out what is going on elsewhere in the world. We have no formal role in scrutinising most treaties while they are being negotiated, but while they are being negotiated is the only point at which the terms of the proposed treaty could be amended. The Minister may well want to say this, but I will say it for him; I will anticipate what he might say. My hon. Friend the Member for Harrow West mentioned the statement on the mandate for the US deal. There was a statement on the mandate for the EU deal. There was a statement on the first round of negotiations—
The Chair
Order. I will now suspend the Committee for one minute of silence in memory of the victims of the knife attack in Reading.
Sitting suspended.
Bill Esterson
It is appropriate to pause and reflect at this time to remember that terrible attack. The thoughts of all present in the Committee are with those affected—the victims, their families and the emergency services and civilians who intervened.
I was referring to the processes of scrutiny on trade agreements, as the Minister might describe them. The statements that we have had—statements in general—permit him to say what the Government are going to do. They allow for a five-minute response from the Opposition, a three-minute response from the SNP and individual questions from Back Benchers. That is not thorough scrutiny. It does not allow cross-examination. It does not allow scrutiny beyond the Chamber.
There is a limit to what a parliamentary statement can achieve and what it does achieve, and the idea that written parliamentary questions deliver very much other than a stonewall from Ministers—this Minister is very good at that—would be laughable, if that were to be used as an example of detailed scrutiny. Questions in the Chamber are invariably met with an ability by Ministers to avoid answering them, rather than shedding very much light. The Government control the timetable, so the ability to debate in detail is limited. Of course, we have Opposition day debates, but we are competing for time with so many other urgent and important topics, which limits our ability to scrutinise.
Committees are important and they can carry out scrutiny, but without access to negotiating texts and without detailed engagement in the development of mandates, all these processes are limited by definition. At this time, when other countries are looking to expand—whether that is Canada, Australia, New Zealand or the United States—in all those countries there is far greater access throughout the process of the development of mandates and in the scrutiny of negotiating texts, and greater engagement of industry, trade unions, civil society, environmental groups and elected representatives.
There is a lack of continuity in scrutiny from what we have now, but, as the Library note sets out, there are at least four possible ways for Parliaments to be involved in treaties: first, by setting the negotiating mandate; secondly, by scrutinising negotiations; thirdly, by approving or objecting to ratification; and fourthly, by passing implementing legislation for treaties that need changes to domestic law. All those are covered by amendments. All those are what my hon. Friend the Member for Harrow West has covered in great detail, so I shall not go into that same detail on the amendments. That is set out for us in the Library note and covered by these proposals.
International trade agreements cover so much now that they deserve that level of domestic scrutiny. I thought the example of HS2 and the way its development has been subjected to massive scrutiny, compared with the minimal scrutiny of international trade agreements, made a pretty good argument about what is wrong and why there is the need to put this right. If not in the Bill, when?
Gareth Thomas
There is perhaps an even better example to use in comparing the lack of parliamentary scrutiny of a potential UK-US deal, or any other free trade agreement deal, with existing legislation. The Minister, as a London Member of Parliament, will remember that Transport for London sought additional powers in a private Bill and there was substantial scrutiny of that private Bill on the Floor of the House of Commons. That is vastly more than Ministers are planning for a UK-US deal or, indeed, any other free trade agreement.
Bill Esterson
That is another good example. I thought for a minute my hon. Friend was going to mention Heathrow, because the Minister, last time he was in this job, had to resign from it to vote against the Government. However, I think we are in different territory and the current Prime Minister and he were in the same place there, although I do not know whether the Prime Minister is talking of lying down in front of bulldozers these days—[Interruption.] I do not know whether the Minister will want to respond to that.
The Library note also mentions the Constitutional Reform and Governance Act 2010, or CRAG, provisions. The point about CRAG is that it does not require Parliament’s approval for the Government to ratify treaties. That is the point my hon. Friend the Member for Harrow West made. There is such a democratic deficit here, which is why these matters need to be set straight. In the previous debate on this in Committee, the point was made that Labour introduced CRAG. Yes, we did, but we introduced CRAG in the context of being members of the European Union and in the context of the scrutiny system that I described a few minutes ago.
CRAG is no longer suitable precisely because we are no longer party to that European Union system of scrutiny—which, by the way, we were entirely able to contribute to and to access as much as any other nation, and which was far ahead of what is being offered now, albeit concerns were raised about the level of engagement over the Transatlantic Trade and Investment Partnership under that system. That is why we should be pushing for a better system than that of the European Union and the one we have just left. TTIP showed that we need to continue to improve the level of scrutiny and engagement, and the involvement of wider society.
There is no continuity in scrutiny, whatever the degree of continuity may be in the agreements being considered. The House of Lords amended the previous Bill to give Parliament a role in setting the mandate for trade negotiations and approving the final agreement, which goes to the point made in the Library note. The Command Paper that my hon. Friend referred to was produced in time for the Report stage in the House of Lords. Although the Lords felt that the Command Paper did not go far enough, it started to make progress, so I am keen to hear the Minister’s response to my hon. Friend’s question about what has happened to the recommendations in the Command Paper.
There is quite a lot of support on the question of what good scrutiny looks like, as set out in the House of Commons Library paper and as in the evidence from David Lawrence, who described broadly similar points. The written submissions from a number of organisations make the same point about debates and votes on objectives; reports back to Parliament on progress; ideally, the publication of texts from each round; a debate and vote on the deal after negotiations; a public consultation; and an independent impact assessment that looks at social and environmental factors, which is why we tabled new clause 6.
As my hon. Friend said, we have scrutiny measures from world war two that are completely inappropriate. There is no way, as David Lawrence told us on Thursday, that trade deals can meet high standards without more scrutiny. As to future trade agreements, he told us that unless we get this right now, there will not be an opportunity to revisit how we approach scrutiny.
David Lawrence said on Thursday that sequencing issues are not being addressed in the Bill and that there should be priorities in respect of when we legislate. That goes back to my hon. Friend’s point about the response from Japan, South Korea and Canada. They want to know what is in the EU deal before they reach an agreement with us. The EU deal, because of its impact on the agreements that we were party to through our EU membership, should come first before the US deal.
We need a level of scrutiny in place for those agreements and for the US deal, which will concern public services, digital services and regulations on health and food standards, which are the subject of a series of amendments that I imagine we will reach this afternoon. There are similar concerns about Canada, which is why greater scrutiny needs to be agreed to in the Bill. We should be able to consider the exact consequences of that deal. The scrutiny should be of the same degree and nature as that described by my hon. Friend earlier.
My hon. Friend mentioned Sam Lowe’s evidence and his three boxes. The problem deals are in box 3: Japan, Canada, Mexico and Ukraine. Those countries want the certainty of an EU-UK deal before they negotiate with us, for reasons related to future arrangements for mutual recognition or rules of origin. The examples that my hon. Friend gave of what has already been agreed in the deals with South Korea and Switzerland show what those concerns might be.
Gareth Thomas
My hon. Friend will remember that Professor Winters described the information he got back from negotiators about how the UK-Japan talks were going as “studiously” vague. Is that not a fair description of all the information we have had back from Ministers thus far about the progress on free trade agreements? That is all the more reason why this group of amendments needs to be in the Bill.
Bill Esterson
The arguments set out by my hon. Friend were extremely well made by our hon. Friend the Member for Brent North two years ago. My hon. Friend the Member for Harrow West has surpassed the formidable nature of the arguments made on that occasion.
Bill Esterson
Having sat and listened to both speeches—as did the Minister—my hon. Friend’s contribution has taken us to a whole new level, and the point he just made is exactly right.
George Peretz, QC made the point that scrutiny can help negotiators. Parliament just will not accept that point in this country, but the US uses that tactic. It is a strength to have the buy-in of Congress for the US trade negotiators, because they can say “I cannot agree that because Congress will not support it.” That is a standard negotiating tactic used across the world. It is used by trade unions that go back to their members. It is how good negotiators operate. They do it by having engagement, by building trust from their stakeholders and by using the strength of that engagement, trust and support as a negotiating tactic. There are many good examples around the world. We should be seeking to emulate them. These amendments give a good guiding light on how to do so, and I suggest to Members and to the Government that they seriously consider taking them on board in the same way as the House of Lords did last time.
Gareth Thomas
I draw my hon. Friend’s attention to the document that he briefly referred to: the Command Paper, “Processes for making free trade agreements after the United Kingdom has left the European Union”. He will remember from that Command Paper Ministers’ commitment to have a close relationship with a specific parliamentary Committee in each House. They proposed
“to work with the House Authorities to establish which committee”
it should be,
“including the possibility of creating a new one”.
They go on to say that the Committee
“could have access to sensitive information”
that would not be more widely available. Has my hon. Friend heard of any update on the progress of establishing such a—
Trade Bill (Sixth sitting)
Tuesday 23rd June 2020
(4 years, 10 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 5, in clause 2, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to a free trade agreement immediately before exit day.
(4) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing an international trade agreement other than a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day.
(4A) Paragraph 4A of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing any international trade agreement not falling within subsection (3) or subsection (4) above.”
This amendment would apply the provisions of the Bill to trade agreements other than EU rollover trade agreements.
Amendment 6, in schedule 2, page 13, leave out lines 13 to 16 and insert—
“4 (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which meets the criteria under section 2(3) or 2(4) may not be made unless all provisions of sub-paragraphs (1A) to (1D) have been satisfied.
(1A) The Secretary of State must lay before Parliament—
(a) a draft of an order to the effect that the agreement be ratified, and
(b) a document which explains why the Secretary of State believes that the agreement should be ratified.
(1B) The Secretary of State may make an order in the terms of the draft order laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft order is laid, no committee of either House of Parliament has recommended that the order should not be made, and
(b) after the expiry of a period of 40 sitting days after the draft order is laid, a motion in the terms of the draft order is approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that an order should not be made under subparagraph (2), the Secretary of State may, after the expiry of a period of 60 sitting days after the draft order is laid, make a motion for a resolution in each House of Parliament in the terms of the draft order.
(1D) If a motion in the terms of the draft order is approved by a resolution of each House of Parliament under subparagraph (1B)(b), the Secretary of State may make an order in the terms of the draft order.
(1E) A free trade agreement to which this paragraph applies shall not be deemed to be a treaty for the purposes of Part 2 of the Constitutional Reform and Governance Act 2010.
(1F) In section 25 of the Constitutional Reform and Governance Act 2010, after subsection (1)(b), at end insert “but does not include an international trade agreement to which paragraph 4(1) of Schedule 2 to the Trade Act 2020 applies.””
This amendment would establish a form of super-affirmative procedure for scrutiny of an international trade agreement before ratification and before regulations implementing the agreement could be made.
Amendment 7, in schedule 2, page 13, line 25, at end insert—
“4A (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which does not meet the criteria under section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1A) to (1D).
(1A) The Minister shall lay before Parliament—
(a) a draft of the regulations, and
(b) a document which explains why the Secretary of State believes that regulations should be made in terms of the draft regulations.
(1B) The Minister may make an order in the terms of the draft regulations laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft regulations are laid, no committee of either House of Parliament has recommended that the regulations should not be made, and
(b) after the expiry of a period of 60 sitting days after the draft regulations are laid, the draft regulations are approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that the regulations should not be made, the Secretary of State may—
(a) lay before Parliament revised draft regulations, and
(b) after the expiry of a period of 40 sitting days after the revised draft regulations are laid, make a motion for a resolution in each House of Parliament for approval of the revised draft regulations.
(1D) If a motion under subparagraph (1C)(b) is approved by a resolution of each House of Parliament, the Secretary of State may make the regulations.”
This amendment would establish a form of super-affirmative procedure for scrutiny of regulations implementing all trade agreements covered by the bill. The procedure would apply to agreements other than EU rollover trade agreements if amendments extending the application of the bill were agreed to.
Amendment 19, in schedule 2, page 13, leave out lines 33 to 35 and insert—
“(3A) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4.
(3B) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(4A) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4A.”
This amendment would extend the super-affirmative procedure under former Amendment 19 to regulations where the Minister was acting jointly with a devolved authority.
New clause 5—Parliamentary scrutiny of free trade agreements before signature—
“(1) The United Kingdom may not become a signatory to a free trade agreement which does not meet the criteria under section 2(3) unless—
(a) before entering negotiations on the proposed agreement, the Secretary of State has—
(i) laid before Parliament a sustainability impact assessment carried out following consultation as prescribed by section [Sustainability impact assessments], and
(ii) published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the sustainability impact assessment, as long as that report is published within 30 sitting days of the day on which the sustainability impact assessment is laid before Parliament;
(b) both Houses of Parliament have passed a resolution authorising the Secretary of State to enter negotiations on the proposed agreement as prescribed by section [Parliamentary consent to launch of trade negotiations];
(c) during the course of negotiations, the text of the agreement as so far agreed or consolidated has been made available as prescribed by section [Availability of agreement texts];
(d) the Secretary of State has, within ten sitting days of the close of each round of negotiations on the proposed agreement, laid before Parliament a statement detailing the progress made in each area of the negotiations and the obstacles still remaining at the close of that round;
(e) the text of the agreement in the form to which it is proposed that the United Kingdom should become a signatory has been made available to Parliament for a period of 21 sitting days; and
(f) a resolution has been passed by the House of Commons approving the Secretary of State’s intention to sign the agreement.
(2) “Sitting day”, for the purposes of subsection (1)(a)(ii) shall mean any day on which both Houses of Parliament begin to sit.”
This new clause would set out a structure for parliamentary scrutiny of negotiations on proposed trade agreements.
New clause 6—Sustainability impact assessments—
“(1) A sustainability impact assessment laid before Parliament under section [Parliamentary scrutiny of free trade agreements before signature] (1)(a) shall be carried out following consultation.
(2) A consultation under subsection (1) shall—
(a) be carried out in line with any guidance or code of practice on consultations issued by Her Majesty’s Government, and
(b) actively seek the views of—
(i) Scottish Ministers,
(ii) Welsh Ministers,
(iii) a Northern Ireland devolved authority,
(iv) representatives of businesses and trade unions in sectors which, in the opinion of the Secretary of State, are likely to be affected by the proposed international trade agreement, and
(v) any other person or organisation which appears to the Secretary of State to be representative of interests affected by the proposed international trade agreement.
(3) The Secretary of State shall ensure that public bodies, non-governmental organisations and the public may be made aware of the consultation by circulating and publishing details of it prominently on relevant government websites.
(4) A sustainability impact assessment under subsection (1) shall be conducted by a credible body independent of government and shall include both qualitative and quantitative assessments of the potential impacts of the proposed trade agreement, including as a minimum—
(a) the economic impacts on individual sectors of the economy, including, but not restricted to—
(i) the impacts on the quantity and quality of employment,
(ii) the various regional impacts across the different parts of the UK,
(iii) the impacts on small and medium-sized enterprises, and
(iv) the impacts on vulnerable economic groups;
(b) the social impacts, including but not restricted to—
(i) the impacts on public services, wages, labour standards, social dialogue, health and safety at work, public health, food safety, social protection, consumer protection and information, and
(ii) the government’s duties under the Equality Act 2010;
(c) the impacts on human rights, including but not restricted to—
(i) workers’ rights,
(ii) women’s rights,
(iii) cultural rights and
(iv) all UK obligations under international human rights law;
(d) the impacts on the environment, including but not restricted to—
(i) the need to protect and preserve the oceans,
(ii) biodiversity,
(iii) the rural environment and air quality, and
(iv) the need to meet the UK’s international obligations to combat climate change;
(e) the impacts on animal welfare, including but not restricted to the impacts on animal welfare in food production, both as it relates to food produced in the UK and as it relates to food imported into the UK from other countries; and
(f) the economic, social, cultural, food security and environmental interests of those countries considered to be developing countries for the purposes of clause 10 of the Taxation (Cross-border Trade) Act 2018, as defined in Schedule 3 to that Act and as amended by regulations.
(5) The elements of the sustainability impact assessment to be undertaken under (4)(f) must be sufficiently disaggregated so as to capture the full range of impacts on different groups of developing countries, and must include both direct and indirect impacts, such as loss of market share through trade diversion or preference erosion.
(6) A sustainability impact assessment under subsection (1) shall include recommendations for possible action to maximise any positive impacts and to prevent or offset any negative impacts foreseen, including the possible limitation of the negotiating mandate so as to exclude those sectors most at risk from the proposed trade agreement.”
New clause 7—Parliamentary consent to launch of trade negotiations—
“(1) The Secretary of State shall not commence negotiations relating to a free trade agreement which does not meet the criteria under section 2(3) unless all provisions of this section have been satisfied.
(2) A Minister of the Crown shall lay before Parliament a draft of a negotiating mandate relating to the proposed international trade agreement.
(3) The draft mandate under subsection (2) shall set out—
(a) all fields and sectors to be included in the proposed negotiations;
(b) the principles to underpin the proposed negotiations;
(c) any limits on the proposed negotiations, including sectors to be excluded from the proposed negotiations; and
(d) the desired outcomes from the proposed negotiations.
(4) The Secretary of State shall make a motion for a resolution in the House of Commons in respect of the draft, setting out the elements listed in subsection (3), but such a motion shall be made—
(a) no earlier than 25 sitting days after the day on which the draft of the negotiating mandate is laid under subsection (2), and
(b) not before the Secretary of State has published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the draft negotiating mandate , as long as that report is published within 20 sitting days of the day on which the draft mandate is laid before Parliament.
(5) A motion for a resolution under subsection (4) shall be made in such a way as to permit amendment of any of the elements prescribed under subsection (3).
(6) A motion to enable consideration of the negotiating mandate shall be laid before the House of Lords.
(7) The terms of any negotiating mandate authorised by a resolution under subsection (4) shall be binding upon the Secretary of State and anyone acting on his or her behalf in the course of negotiation.
(8) “Sitting day” shall, for the purposes of subsection (4), mean any day on which both Houses of Parliament begin to sit.”
New clause 8—Availability of agreement texts—
“(1) The text of any proposed international trade agreement which is being negotiated shall, so far as it is agreed or consolidated, be made publicly available within ten days of the close of each round of negotiations.
(2) Every—
(a) document submitted formally by the United Kingdom government to the negotiations, and
(b) agenda for each new round of negotiations
shall be made publicly available by the Secretary of State.
(3) All other documents relating to the negotiations and not falling within the descriptions provided in subsections (1) and (2) shall be made publicly available by the Secretary of State, subject to subsection (4).
(4) The Secretary of State may withhold from publication any document of a kind falling within the description in subsection (3) but must publish a statement of the reasons for doing so.
(5) In the case of any document withheld under subsection (4), the Secretary of State shall provide full and unfettered access to that document to—
(a) any select committee of either House of Parliament to which, in the opinion of the Secretary of State, the proposed agreement is relevant, and
(b) any other person or body which the Secretary of State may authorise.
(6) In the case of a document to which access is provided under subsection (5), the Secretary of State may specify conditions under which the text shall be made available.
(7) The Secretary of State shall maintain an online public register of all documents published under subsections (1), (2) and (3) or withheld under subsection (4).”
New clause 19—Report on proposed free trade agreement—
“(1) This section applies (subject to subsection (2)) where the United Kingdom has authenticated a free trade agreement (“the proposed agreement”), if—
(a) the other party (or each other party) and the European Union were signatories to a free trade agreement immediately before exit day, or
(b) where the proposed agreement was authenticated by the United Kingdom before exit day, the other party (or each other party) and the European Union were signatories to a free trade agreement on the day the proposed agreement was authenticated by the United Kingdom.
(2) This section applies only if the proposed agreement is not binding on the United Kingdom as a matter of international law unless it is ratified by the United Kingdom.
(3) Before the United Kingdom ratifies the proposed agreement, a Minister of the Crown must lay before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the proposed agreement, and
(b) the trade-related provisions of the existing free trade agreement.
(4) Subsection (3) does not apply if a report in relation to the proposed agreement has been laid before Parliament under section (Report to be laid with regulations under section 2(1))(2).
(5) The duty imposed by subsection (3) applies only at a time when regulations may be made under section 2(1) (see section 2(8)).
(6) In this section a reference to authenticating a free trade agreement is a reference to doing an act which establishes the text of the agreement as authentic and definitive as a matter of international law.
(7) In this section—
“the existing free trade agreement” means the free trade agreement referred to in subsection (1)(a) or (b);
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
New clause 20—Report to be laid with regulations under section 2(1)—
“(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1) for the purpose of implementing a free trade agreement to which the United Kingdom and another signatory (or other signatories) are signatories.
(2) A draft of the statutory instrument containing the regulations may not be laid before Parliament unless, at least 10 Commons sitting days before the draft is laid, a Minister of the Crown has laid before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the free trade agreement to which the United Kingdom and the other signatory (or other signatories) are signatories, and
(b) the trade-related provisions of the existing free trade agreement.
(3) Subsection (2) does not apply if, at least 10 Commons sitting days before a draft of the statutory instrument containing the regulations is laid, a report in relation to the agreement has been laid before Parliament under section (Report on proposed free trade agreement)(3).
(4) In this section—
“Commons sitting day” means a day on which the House of Commons begins to sit;
“the existing free trade agreement” means the free trade agreement to which the European Union and the other signatory (or other signatories) were signatories immediately before exit day;
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Sir Graham. By the way, it is very nice to have you back. During the interval, I have come under pressure from a Government Member to speak again at length. To do so comfortably, it would be appreciated if you allowed us to take off our jackets.
The Chair
I was minded, given the forecast of a warm week, to allow Members to remove their jackets, but the way the argument has been advanced is making me wonder. I think, on balance, that Members may remove their jackets if that makes them more comfortable. I gather that we had this morning a thorough examination of the topics, so I anticipate that we may be poised to make progress at this point, but I also understand that Mr Thomas had just come to the conclusion of an intervention and has been eagerly anticipating in the intervening hours the response from Mr Esterson.
Bill Esterson (Sefton Central) (Lab)
Welcome back, Sir Graham. It was getting warm for those of us standing up and holding forth, so I am grateful for your ruling. My hon. Friend the Member for Harrow West intervened before the break and asked me to comment on the Command Paper and the indications in it about reports on changes to agreements that have been made. In his speech earlier, he pointed out that the Government have changed their mind several times on this matter, and I think we are none the wiser.
The point is that it is desirable to have the reports on the differences between the existing EU agreements and the so-called continuity agreements that replace them, but more important is what we do with the information. Unless there is adequate scrutiny and proper analysis of it by having the right processes in the House and outside, it is very difficult to do anything meaningful with them.
I had just one or two more pieces of evidence that we had been presented with and I was reminded of a cautionary tale from Australia about what happens when international trade agreements are not properly analysed and scrutinised before they are signed. In Australia, there used to be a car industry and there is no more, in large part because of the international trade agreements—the free trade agreements—that Australia signed, including the one with Thailand in 2005, in which Australia agreed to lift the import tariff on cars from Thailand. Since then, more than 2 million Thai-made vehicles have been imported into Australia. They are familiar brands: Ford, Holden, which is familiar to Australians, Toyota, Honda, Nissan, Mitsubishi, Mazda and others. In return, Australia ships to Thailand just 100 Ford Territory SUVs. The reason for that imbalance in trade is the hidden non-tariff barriers that the Thais maintained while Australia opened its borders completely. It is a cautionary tale of what goes wrong when international trade agreements are not properly implemented, when they are not adequately scrutinised and when one party does not get it right. We would do well to learn from that example.
Bill Esterson
I was hoping that we would be able to accept the advice from the Chair and move on, but I will briefly give way.
Robert Courts
The hon. Gentleman mentioned Australia and the vehicle tariff, and he is right that Holden was the last big Australian manufacturer, but is it not the case that there is a 5% tariff on imported vehicles for Australia? Is not the cause of the demise of Australia’s vehicle industry in fact the protectionist tariff that was imposed? I think it lingers on.
Bill Esterson
I think that we will be in a rather worse position if we do not sort out our agreements in this country, where we would face a 10% tariff, with rather more devastating consequences for the car industry here. Anyway, we dealt with the car industry at some length this morning; I do not anticipate spending longer on it.
Gareth Thomas
Is not the significance of the intervention from the hon. Member for Witney the fact that it underlines the need for a proper opportunity for the House to consider the impacts of free trade agreements and all their tariffs—10%, 5% or whatever—on British industry?
Bill Esterson
My hon. Friend is quite right. That was the point he was making this morning at slightly greater length. If we want to get these things right and avoid unintended or adverse consequences, scrutiny is the answer. I thank my hon. Friend for pointing that out again.
I want to remind the Committee of the work of the International Chamber of Commerce UK. Its coalition of business groups, trade unions, consumer groups, environmentalists, other non-governmental organisations and civil society more widely produced a paper in 2017, “A Trade Model That Works for Everyone”, in which there was consensus about the need for proper scrutiny from elected representatives and wider stakeholders. It is a point made right across society. In its written evidence to the Committee, the ICC UK points out:
“The Bill ignores the seriousness of the situation we face regarding trade. Public trust in the system is at an all-time low—this is an opportunity to acknowledge the failures and get it right if the UK wants to set new global standards, ensure everyone benefits and future proof trade governance.”
The Bill is the chance for this country to set new global standards—to lead the way and show the rest of the world what is possible, by creating a new gold standard.
As George Riddell from Ernst and Young told us last week, business wants certainty, political security and support across the board, so they know trade deals will last. That means proper parliamentary and non-parliamentary scrutiny. That is how we can achieve the new global standards that the ICC recommends.
Matt Western (Warwick and Leamington) (Lab)
Thank you, Sir Graham. I rise to speak very briefly. I concur with all the comments made by my hon. Friends and will not rehearse many of them. I would just say that we should remember the famous line from the film, “Infamy! Infamy! They’ve all got it in for me!” There is something about scrutiny and more scrutiny. We have to keep repeating the word, because it is so important for all of us, wherever we sit. Whether we are Government Back Benchers or Opposition Members, the opportunity for scrutiny is important. Trust and transparency are in short supply and it is critical for the validity of this place that they are restored. There is likewise a matter of competency, which I will come on to. How do we face the challenges of the trade deals before us and ensure that we have sufficient competency and capacity?
The issue is secondary legislation and what Ministers are permitted to do that allows them to avoid full scrutiny. As such, the affirmative process in the Bill will not allow us the checks and balances that our constituents require, irrespective of the territory, geography or community that we represent. There will be serious issues that will fall to Government Ministers, and it should be a great concern for hon. Members on both sides of the Committee to make sure that Ministers can be held to account.
The process should be iterative. A great thing that we found out when the International Trade Committee visited Canada and the US was how involved their Parliament and Congress are in the process of determining and setting parameters for their trade representative bodies. That is what we should be pushing for: from the beginning, we as parliamentarians should have more say on the direction that the trade representatives take in negotiating our position.
We mentioned the situation with vehicles and what that means for our automotive sector, but irrespective of the sector or region that is up for discussion, trade deals will have an impact. It is about understanding those impacts through modelling, so a value decision or judgment can be made. Understanding and appreciating the consequences of that sort of trade deal was important in the evidence given to us by the Australian trade people and, likewise, the US and the Canadians.
I mentioned what we discovered several months ago from the South Koreans about where they were in their negotiations and discussions with the UK. It was all published online but there was nothing from our side, which should not be the case. I do not see how any of us, Back Benchers or Front Benchers, in government or in opposition, can face constituents or the major businesses that each of us have in our constituencies and say that we are unaware of what is going on on their behalf. In contrast, the Koreans—in the case of vehicles, the Kias, Hyundais, Samsungs and so on—will be totally aware of what is going on in the negotiations.
Trust and transparency are important because, without scrutiny, the process will lead to poor governance. As has been said by my hon. Friend the Member for Harrow West about events in the recent crisis, if more had been put into the parliamentary domain and if there had been more involvement across the House, perhaps we would have avoided some of the difficulties that we have experienced. We have to avoid a bunker mentality. It is not healthy for the Government or for the reputation of Parliament.
As has been said, while we are sitting here, many trade deals are being discussed, such as the UK-Japan deal, the UK-Australia deal, the UK-US deal and so on. They are seriously huge undertakings. In our evidence sessions in the International Trade Committee, we discovered that many such trade deals typically take six to eight years, yet the Japanese are telling us that they want a trade deal within six weeks. That is terrific—good for them—but they are holding us in a difficult position. They know that we need a trade deal, but it will be on their terms, because we are in a weak position. None of us want to be in that weak position.
The Australians are saying, “Yes, we will have a trade deal within a year.” Again, that will be very much on their terms. That is the sort of understanding that we need to share with the public and that needs to be shared in this place, so that we fully appreciate what the consequences of those decisions will be.
As we heard in the evidence sessions last week, there is no real rocket science about it. The ideal approach to negotiating trade deals is that there is involvement through parliamentarians, through consultation with trade unions, with business sectors and so on. It is understood, through some sort of guaranteed debate, what is trying to be achieved. Then, during negotiations, texts are published and updates are given. That is what the US, the EU and other nations such as Australia do. The negotiated deal can then be put to a formal voting process for ratification. However, it seems the Government do not wish to do that. Looking across the room here, that has to be of concern, irrespective of the constituencies we represent, because of what it means economically and what it means for some of our businesses, the agriculture sector and so on.
Fleur Anderson (Putney) (Lab)
It is four years to the day since the referendum vote to leave the European Union and here we are, hardly oven ready. The stripping out of scrutiny is the most alarming of the many alarming parts of the Bill. A world-leading trade Bill must contain strong parliamentary scrutiny and transparency. The amendments and new clauses would enable debates to be held before, during and after negotiations, and the meaningful involvement of businesses, trade unions and interest groups across the country and around the world to assess the impact of any negotiations and help us make the best decisions.
The coronavirus crisis has shown the importance of proper parliamentary scrutiny. For example, the Chancellor’s economic support package—while I commend and welcome the support on offer—has been flawed in many crucial areas. I do not think that would have happened if there had been time—and there was not, I can see that—for much longer parliamentary scrutiny. That would have allowed self-employed people, people who had new contracts and limited company directors to say where they needed support from the economic support package. That is an example of where there needed to be better parliamentary scrutiny—there should have been more, catching up—and of where there are failings when we do not have time to look at the Bills we pass.
In the post-Brexit world, trade has been catapulted from the margins of public debate into one of the major talking points of political discourse. Trade agreements will have huge implications for our economy and future prosperity, and cut across huge swathes of public policy. They are of interest to all parliamentarians and to all areas of public policy, and are not to be done in secret in smaller areas. Future trade deals should be developed democratically. As such, it is wrong that the Bill does not address the gaping democratic deficit in trade policy. That is what the amendments seek to address.
The system under the Constitutional Reform and Governance Act 2010 is entirely inadequate and has not kept up with the times. It is no surprise that it has been criticised by no fewer than five parliamentary Committees. As the Minister himself has said:
“Parliamentary scrutiny is crucial for trade agreements, and we have seen the difficulties in recent years with trade agreements that have been insufficiently scrutinised, or where there was a feeling that there had been insufficient scrutiny—the Transatlantic Trade and Investment Partnership perhaps being the most important example.”—[Official Report, 17 July 2018; Vol. 645, c. 281.]
Under the current system, MPs will have less say than our counterparts in Brussels and in Washington. In my constituency, 39% of jobs are in sectors identified as being directly and severely impacted by the continuity agreements. I am angry that, as an MP, I will have little say and little opportunity to prevent that. Moreover, given the profound effect that trade deals will have on jobs in Putney and Wandsworth, in London and across the country, it is troubling that under the Bill there will be no formal assessment of the impact of trade deals on different sectors of the economy and different regions of our nation, or consultation with businesses and trade unions.
New clause 6 lists all the different impact assessments: economic, social, human rights, environmental, animal welfare and food standards. Those things are of immediate concern to constituents, and yet we will not have an assessment of the impact of trade deals on them—or, if it does happen, it will happen behind closed doors and will not be open for public debate and scrutiny.
The CBI has noted:
“A trade policy that provides a clear, meaningful way for businesses to feed in all their experience and expertise into government will create the greatest value from the UK’s opportunities across the world—and ultimately support prosperity across the country.”
Surely that is what we want. There are expert groups, of course, but they need parliamentary scrutiny to lock in their feedback.
It is concerning that the Bill only addresses EU roll-over agreements and does nothing to set the parameters of future agreements with non-EU nations such as the United States. The Bill is a huge missed opportunity to establish a framework for future trade negotiations. The scope of the Bill is just too narrow.
For four years, we have been repeatedly told by Trade Ministers that the world is queuing up to do business with the UK. Last year, the then Secretary of State for International Trade declared to the Future of Trade and Export Forum that
“the UK has an untapped potential of £124 billion in the export of goods alone.”
The current Secretary of State has triumphantly announced:
“We are growing wheat more competitively than the Canadian prairies. We’re producing more varieties of cheese than the French. And we are even selling tea to China.”
If the Government are so confident in our attractiveness to prospective trading partners, as they should be, why is there such reticence about codifying the high standards and regulations that have been promised by the Prime Minister? Why are the Government so intent on ensuring the lowest common denominator in trading standards—a rush to get it through without an ambition to get through the best?
There is a constitutional point to be made here as well. The Trade Justice Movement, which represents 60 organisations, noted in its evidence to the House of Lords Constitution Committee that proper parliamentary scrutiny of trade deals is far more compatible with
“the UK’s traditional constitutional division between executive and legislative powers, where the executive is responsible for foreign policy.”
The crucial point is that, when it comes to trade, it is impossible to distinguish between the international and the domestic. The two are intricately linked, so to take trade out of the hands of Parliament runs contrary to hundreds of years of constitutional precedent. To ensure that Parliament is sovereign over domestic affairs, it is essential that it is given a role in scrutinising trade agreements.
To summarise, the amendments and new clauses that my colleagues and I have tabled would address the democratic deficit and create a stronger trade policy, which would ensure greater prosperity across our country. They would ensure a meaningful vote and debate for MPs on the Government’s negotiating objectives from the start, and a much-needed widening of the scope of a Bill that is silent on too many crucial issues. They would ensure far greater transparency during the negotiations, proper public consultation and meaningful engagement with civil society, businesses and trade unions, and the introduction of much-needed impact assessments that look beyond economic metrics to include the impact on the environment, human rights and developing countries. The Trade Bill would be far better for them.
The Minister for Trade Policy (Greg Hands)
May I start by welcoming you again to the Chair this afternoon, Sir Graham? In an oversight, I was not able to welcome Mrs Cummins this morning, because there had yet to be a contribution from the Government Front Bench, thanks to the expansive efforts of the two chief Opposition spokesmen, the hon. Members for Harrow West and for Sefton Central.
Let me start by being in complete accordance with the words the hon. Member for Sefton Central said at the end of our minute’s silence, in paying tribute to the first responders and the emergency services in Reading at the weekend. We owe them all a debt of gratitude for the public response that took place.
Amendment 4 would mean that, before regulations were made under clause 2, the process of parliamentary scrutiny set out by the Opposition in new clause 5 or amendments 6 or 7, as appropriate, would need to be completed. I take this opportunity to remind hon. Members that the power in clause 2 is needed to provide for the continuity of existing trading relationships, not to implement free trade agreements with new trading partners. It will ensure that the UK continues to benefit from the EU-third country agreements to which we were a signatory before exit day.
During the evidence sessions, we heard from a very diverse group of witnesses, ranging as widely as the Institute of Directors, the CBI and ClientEarth, that the Government’s continuity programme was sensible and reasonable. Indeed, Parliament has so far ratified 20 continuity agreements with 48 countries. That accounts for £110 billion-worth of UK trade in 2018, which represents 74% of the trade with countries with which we were seeking continuity before the withdrawal agreement was signed. Those agreements were, of course, subject to extensive scrutiny in their original form as EU agreements. The main purpose of the power in clause 2 is to replicate existing obligations in current agreements. Additional new scrutiny, on top of what we already have in place, would not be a proportionate use of parliamentary time for existing agreements.
To reassure Parliament, we are going further and providing additional measures to constrain the power in clause 2 and provide extra scrutiny for any resulting legislation. All regulations made to implement obligations under these arrangements will be subject to the affirmative procedure, and the power is also subject to a five-year sunset period, which can be extended only with the consent of both Houses. We will discuss the sunset clause under a later group of amendments. Moreover, we have voluntarily published parliamentary reports—alongside continuity agreements—outlining any significant differences between our signed agreements and the underlying EU agreement.
Gareth Thomas
The Minister is referring to the voluntary tabling of reports. At Report stage of the last Trade Bill, Ministers were going to put that on the statute book. Why the change this time?
Greg Hands
I will come on to that shortly, but in brief, the proof has been in the pudding. For each of those 20 agreements, we have published the report. The reports have been available for Members of both Houses to study. A few of the reports have been made subject to a debate in the Lords. None of those Lords debates resulted in a motion to regret on the ensuing agreements. I would say this: rather than trusting in our word, trust in our deeds. We have published those reports and we will continue to do so.
Gareth Thomas
I simply make the point that the most significant of the so-called continuity trade agreements—with the exception of Singapore and what Sam Lowe described as phase 1 of the South Korea agreement—have yet to be rolled over. Locking into law reports on the significance of those agreements would, I suspect, attract substantially more interest than the other reports have attracted so far.
Greg Hands
More than half of the continuity agreements have already been ratified, each with a report. The intention is to carry on producing those reports. I will deal with some of the points that the hon. Gentleman raised earlier, including his quite technical points in relation to the roll-over of the South Korea and Switzerland agreements. I will come back to him on the points he raised about differences between the EU version and the UK version.
The reports have enhanced parliamentary scrutiny, and I can confirm that we will continue to publish reports for the remaining continuity agreements.
Bill Esterson
A moment ago, the Minister mentioned that the Lords had held debates on previous agreements that have been subject to these reports. That did not happen in the Commons; that has gone. Given that the Government set the time, will the Minister take this opportunity to promise that the Government will create time in the Commons for debates on the remaining so-called continuity agreements, not least because agreements such as the one with Japan are significantly different to the ones we were party to as members of the EU?
Greg Hands
I thank the hon. Gentleman for that intervention, but there is no way of knowing whether the UK-Japan agreement will be significantly different, because it is yet to be negotiated. We are trying to get an enhanced agreement with Japan, but that negotiation is under way. It is be impossible to speculate in what way, or to what degree, it will be different from the EU agreement. We are hoping for an enhanced FTA, and we believe there is further to go with Japan on that, so I do not think the hon. Gentleman’s request would be appropriate.
Stewart Hosie
Taking what the Minister has said at face value, it is true that reports have been published, but the affirmative resolution process that he spoke about is effectively a “take it or leave it” option. There is no ability for Members to amend what the Government have proposed. If the Government were to use clause 2(6)(a) to modify retained legislation, we would be given no more than the opportunity to take or leave something that may look considerably different from the pre-existing arrangement we had through the European Union.
Greg Hands
I thank the hon. Gentleman for that intervention, and I plan to come to constraints on that power shortly. He rightly said that on the face of it, the power is broad, but there are significant constraints on its use. We must not forget that the continuity agreements are already in effect, and have already been scrutinised through previous processes in both the Commons and the Lords.
I draw the Committee’s attention to our track record. Of the 20 signed continuity agreements passed through CRAG, their lordships have recommended six for the attention of Parliament, most recently the UK-Morocco association agreement on 9 March 2020. As I have said, not a single one of those debates carried a motion of regret. Due to the limited scope of the continuity agreements for which we intend to use the clause 2 power and the existing opportunities for parliamentary scrutiny, the scrutiny procedure set out by the Opposition in new clause 5, to which I will turn in due course, would be disproportionate and unnecessary. That consequently means that amendment 4 is unnecessary.
I will now turn to amendment 5, which would seek to bring new FTAs within the scope of the Bill. The Government are only seeking a power in this Bill to ensure the continuity of trading relations with our existing partners, with whom we previously traded as a member of the EU. The Bill is not, and never was in its previous form, a vehicle to implement agreements with partners, such as the USA, that did not have a trade agreement with the EU before 31 January 2020.
Gareth Thomas
In relation to amendment 5, will the Minister confirm that there is no current legislative requirement for the Government to hold either a debate or a vote on any UK-US deal they negotiate?
Greg Hands
We have been absolutely clear in the process we have laid out. The publication of the negotiation objectives and the economic impact assessment, the fact that we have reported back at the end of the first round with a written ministerial statement, and the fact that we will publish an impact assessment at the end of the deal all show our commitment to parliamentary scrutiny of deals as we go forward.
Then, of course, there is the procedure under the Constitutional Reform and Governance Act 2010. I would have thought that the hon. Member for Harrow West would be rather more proud of that procedure, because I had a look around at the members of this Committee and studied their dates of arrival in this place quite carefully. I worked out that two members of this Committee voted for that procedure in 2010: myself and him. The only member of this Committee who was here in 2010 and did not vote in favour of CRAG is the hon. Member for Dundee East. Not only that: the hon. Member for Harrow West was a member of the Government at the time, in an international-facing Department to which CRAG was highly relevant, so he would have been part of the team that put forward CRAG 10 years ago. Miraculously, he is now against it. Perhaps he could explain that.
Gareth Thomas
What the Minister’s brief may not have told him was that the provisions that implemented the relevant CRAG power came into force as a result of his Government’s decision in November 2010, but that is by the bye.
The Minister gave a skilful and studious non-answer to the direct question I posed. Let me give him another opportunity to confirm that there is nothing in legislation at the moment that requires a debate or a vote on any future UK-US deal that his Government may negotiate.
Greg Hands
Sir Graham, you will know that under CRAG it is up to Parliament to determine whether to have that debate. Parliament’s ability to scrutinise the agreement and its ability to study the economic impact of that agreement are absolutely clear. On top of that, any legislative changes that would need to be made as a result of any future trade agreement would have to go through both Houses of Parliament in the usual way.
It is understandable that colleagues are keen to make their voices heard on new FTAs, and as a result the Government have said repeatedly that we will introduce primary legislation to implement new FTAs where necessary. As I have just said, that primary legislation will be debated and scrutinised by Parliament in the usual way, and I can assure Members that Government will draw on the expertise and experience in Parliament when delivering our trade agenda.
Those are not just warm words; I invite the Committee to look at our track record. If we take the current negotiations with the USA as an example, before negotiations began, we launched a public bundle, including our negotiating mandate and a response to the public consultation that we had conducted as well as an initial scoping assessment. My right hon. Friend the Secretary of State made a statement in the House, and she and I have engaged with colleagues intensively. During negotiations, we have committed to keeping Parliament updated. Indeed, the Secretary of State provided a statement to Parliament on 18 May with a comprehensive update on progress in the US talks. These updates will continue as the negotiations proceed. We have said that once negotiations conclude, we will introduce implementing legislation, if it is required. Any agreement will also be subject to CRAG, which will provide further opportunities for parliamentary scrutiny.
I must stress that scrutiny of FTAs with new countries is a conversation that must take place separately from consideration of the Bill. Hon. Members such as the hon. Members for Harrow West, for Sefton Central and for Dundee East have expressed valid concerns about what will happen, and my door remains open to discuss such concerns at a future date. Nevertheless, we must not threaten this essential piece of continuity legislation by having discussions about the future.
Gareth Thomas
In the spirit of openness about future free trade agreements to which the Minister says he is committed, can he confirm to the Committee, given the concerns that exist about a potential UK-US deal, that there will not be any investor-state dispute settlement provisions in a future UK-US deal?
Greg Hands
I was being very generous in saying that my door was open, but it is not open to discuss the content of the current negotiations with the US. That, of course, is a matter—in the proper way—for statements to Parliament, but that is a live negotiation, so what may or may not be in that negotiation is probably a matter for that negotiation.
We laid out our negotiation objectives, in a document that I commend to the hon. Gentleman, on 2 March. It lays out our objectives in the talks, which are live at the moment, so it would be inappropriate for me to go down that road. However, my door remains open to having further discussions with all the Opposition parties about the scrutiny of future free trade agreements.
Stewart Hosie
I think the Minister is inadvertently getting to the nub of the concerns of many people both in Parliament and outside. It is all very well him saying, “We have published this, and we have made these statements to Parliament”, but does he not recognise that simply publishing what are no more than heads of terms for negotiations, and then updates that say “Everything’s going swimmingly”, really does not cut the mustard?
Greg Hands
I thank the hon. Gentleman for that intervention and I am glad that he made it, because I will take him back five years to a very interesting negotiation that I had with his friend, John Swinney, which was a negotiation between the UK Government and the Scottish Government. It related to the Scottish fiscal framework: how exactly Scotland’s finances and support from Westminster would work in coming years. We—John Swinney and I—agreed that it was a negotiation between two Governments, and it was not appropriate to publish text during the course of the negotiation. We would both provide general updates on the progress of the negotiation, rather than constant updates on text. That approach led to us getting a good agreement between the UK Government and the Scottish Government. I think both Governments were not entirely satisfied with it, but both could live with it. That shows the way forward, rather than publishing after each negotiation round, or mid-negotiation, what the latest text or approach is.
Matt Western
I hear that, and it is terrific, whatever happened between Scotland and the UK in that arrangement, but nub of this is essentially: how can it be that the EU informs and updates, providing not just heads of terms and whether things are going okay or badly or whatever, but the detail? That is what the US does and what Australia does. Why is the UK the only nation that will not give that detail to its public?
Greg Hands
Sir Graham, I think a comparison of how the UK and European Union do international treaties is a debate for another day. I do not think the two political systems are comparable. The approach proposed by the UK has greater parliamentary scrutiny than that of many Commonwealth counterparts that use the Westminster system—it is more extensive than that of Canada, Australia and New Zealand.
Gareth Thomas
The Command Paper that the Minister’s colleagues published last February committed the Government to publishing reports at the end of each negotiating round. Is that still a commitment and practice that the Minister recognises, or has his Department and new Secretary of State gone back on that?
Greg Hands
I was going to return to the Command Paper, because the hon. Member for Sefton Central asked me a direct question about it. If the hon. Gentlemen will bear with me, I will return to the status of the Command Paper in due course. I want to make a bit more progress in setting out why we think this approach is not right overall for the Bill.
The Bill focuses on ensuring continuity of trading relationships with existing partners. Businesses and consumers are relying on the consistency that the Bill provides. Amendment 6 would disapply CRAG to international trade agreements and instead seek to apply a super-affirmative procedure to scrutiny of continuity agreements before regulations could be made under clause 2. Like other Opposition amendments, that would undermine the constitutional balance and upset an established, well-functioning system of scrutiny. It would also create a two-tier system of scrutiny for international agreements, whereby trade agreements on the one hand, and other important international agreements on the other, are scrutinised in an entirely inconsistent way. It is worth reminding ourselves that CRAG was designed to cover international treaties of all the types we would expect.
Bill Esterson
The Minister has said that many times. CRAG was designed and passed in this place when we were a member of the European Union. It was designed when international treaties were an EU competence, to complement the system in the EU. I read that out earlier; I will not read it out again. He wants this to be a continuity Bill, but what is the equivalent continuity of scrutiny and parliamentary process for what we were party to where CRAG was part of that European process?
Greg Hands
It is simply not correct to say that all international treaties are subject to EU competence. Many international treaties are, of course, subject to a UK competence, and CRAG has worked well. It is worth remembering that CRAG was arrived at after an extensive period of consultation—and it may be, Sir Graham, that you voted for CRAG in 2010 as well. It was backed by both the Government party of the day, represented by the hon. Member for Harrow West, and the main Opposition of the day as a sensible way of codifying what he referred to earlier as the 1924 Ponsonby rule. The whole purpose of CRAG was to codify that long-standing rule that has served as well, including over the past 10 years. An extensive change such as this would add significant and unnecessary risk to the Government’s ability—
Bill Esterson
Yes, it is an international trade agreement, absolutely correct. Where is the equivalent to the EU process that we have been party to? CRAG was party to that international trade bit of it, and yes, I accept that it applies to other elements of international treaties. Where is the continuity from the EU process to what we have now? That was the other half of my question.
Greg Hands
Again, we are talking about continuity agreements that have already gone through a process of scrutiny in the House. I was a member of the European Scrutiny Committee pretty much exactly when the hon. Member for Harrow West was a member of the Government. There was an established process by which treaties were recommended by the European Scrutiny Committee for scrutiny in this House. Most have already been through an established process of European scrutiny.
On future trade policies, I would say that the EU has a fundamentally different constitutional set-up from the United Kingdom. Our most similar constitutional set-ups are in countries such as Canada, Australia or New Zealand, which have very successful independent trade policies, and have done for a number of decades. I am confident that our scrutiny system, as proposed, stacks up well—in fact, it exceeds those, and stacks up very favourably—against those systems in making sure that our Parliament can have its say on future trade agreements.
I stress again, however, that this Bill is not about future trade agreements; it is about the continuity of our existing arrangements. Such an extensive change as proposed in the amendment would add significant and unnecessary risk to the Government’s ability to secure and bring into effect the remaining continuity agreements by the start of 2021. That situation was not advocated by any of the witnesses we heard from. None of them said, “We want to junk all those 40 agreements and pretend that we have never had them”, from ClientEarth right the way across to the Institute of Directors. Only the Opposition seem to want to junk those agreements by voting against Second Reading of the Bill and by not having the continuity agreements in place.
Gareth Thomas
I am sure that the Minister would not wish to imply that the majority of witnesses simply supported the existing parliamentary scrutiny processes for trade agreements in general. It was clear that we heard a majority saying that, for new free trade agreements, the current parliamentary scrutiny set-up was not good enough.
Greg Hands
I am not saying that; I am clearly saying that the witnesses we heard from were, I think, unanimous in saying that the continuity agreements were important for the UK economy and trade. They would share my surprise at the opposition of the Labour party to rolling over those agreements, many of which were negotiated when Labour was in government, including the hon. Member for Harrow West. He was the Trade Minister when two of the agreements were negotiated by the European Union. I would love him to tell us what he was doing at the time. If he finds the agreements so objectionable in 2020, what on earth was he doing in 2008 or 2009 being party to the negotiations that led to those agreements being put in place in the first place? Perhaps he will tell us, or write to the Committee to explain.
Gareth Thomas
What we find objectionable is the lack of proper scrutiny in the process. That is the significant issue. I gently say to the Minister, he has not so far advanced an answer—I am agog to hear it—to the criticisms of a whole series of witnesses, from the business community and the trade union movement to trade exporters, about the failure of the Government to give Parliament a proper debating and voting opportunity on big new free trade agreements, such as a UK-US deal.
Greg Hands
We are going slightly around in circles, conflating the continuity arrangements and future free trade agreements. I will happily debate with the hon. Gentleman the merits of our proposals for future free trade agreements. I reiterate that my door remains open to his suggestions as to how we might scrutinise future free trade agreements. However, the Bill is about continuity arrangements for the 40 or more EU agreements that we currently have. Many of the witnesses, whatever they said about future trade agreements, were unanimous in talking about the importance of the continuity agreements.
Robert Courts
I am conscious of what the Minister has said about the Bill being a trade continuity Bill and that being its purpose. We have heard a great deal of debate today about scrutiny of future trading relationships. Would the Minister comment on something that seems to me is the case? We have parliamentary government in this country, where a mandate is derived from a general election. We do not have government by Parliament and any such scrutiny proposal needs to be considered very carefully in terms of its constitutional ramifications.
Greg Hands
My hon. Friend is absolutely correct. I was going to come on to describe the Opposition’s panoply of amendments taken in their entirety; at the moment, I am still going through the deficiencies in each of the amendments. When we put them all together, they seek fundamentally to rewrite the constitutional balance in this country in terms of international agreements. That is properly a matter for the Executive and for royal prerogative, as scrutinised by Parliament.
Once again, I remind colleagues that continuity agreements have already been subject to significant scrutiny as underlying EU agreements. I say again that we believe that the existing constraints in the Bill are proportionate and provide Parliament with sufficient opportunities to scrutinise agreements. I have drawn Members’ attention to the 33rd report of the Delegated Powers and Regulatory Reform Committee on the 2017-2019 Trade Bill, which raised no concerns about the delegated powers of the Bill and welcomed our move to introduce the affirmative procedure for any regulations.
I turn to amendment 7, which seeks to apply the super-affirmative procedure to any regulations made under clause 2 to implement FTAs with new countries, if the other amendments were to be carried. I will not recap why new FTAs are not included in the application of the Bill. However, I reiterate that we will introduce implementing legislation for new FTAs, if required, which would mean the proposals in the amendment are unnecessary.
Amendment 19 would extend the aforementioned procedures to any regulations made jointly with the devolved authorities. I have outlined the reasons why we do not believe those procedures are necessary. I can also assure colleagues that our approach with the devolved Governments is based on regular dialogue and consultation.
I thank Opposition Members for tabling new clause 5, which outlines in some detail the Opposition’s proposal for how current and future trade agreements might be scrutinised. I have already remarked that this is a continuity Bill and therefore not the place for discussing our wider priority FTA programme or our approach hereto. However, I am happy to reiterate to hon. Members the Government’s commitment to appropriate parliamentary involvement.
I believe we share common ground, insofar as we agree that Parliament should be able properly to scrutinise trade agreements and have sufficient information available to it in order to do so. The Government have ensured that that information is provided through sharing negotiating objectives, responses to public consultations and economic assessments. The amendments go beyond what is needed and, as hon. Members will be aware and as my hon. Friend the Member for Witney pointed out, cross the line that separates the powers of Parliament and the Executive.
We must respect that initiating, negotiating and signing international agreements are functions of the Executive, exercised under the royal prerogative. New clause 5 would have serious consequences. It would both undermine that cornerstone of our constitution and limit the Government’s ability to negotiate effectively and in the best interests of UK businesses, consumers and citizens.
To be clear, the prerogative power is not just a historical throwback or a constitutional quirk. It serves an important purpose in enabling the UK to speak with a single voice as a unitary actor under international law. It ensures that our partners can trust in the position presented during negotiations. It is the same principle that applies in similar Westminster-style democracies with sophisticated trade negotiating functions, such as Canada, Australia and New Zealand.
Setting aside for a moment the significant constitutional issues that we have just examined, the proposals are also unworkable in a practical sense. First, treaty texts are liable to change significantly right up to point of signature. As they say, “Nothing is agreed until everything is agreed.” Sharing texts as we go might be a waste of parliamentary time, as they could quickly be made redundant. It is also not in line with the practice of our FTA partners, including the US, let alone Australia or New Zealand. Those countries will have legitimate expectations of confidentiality around key negotiating texts in our trade negotiations with them.
Final texts of agreements—which, after all, are what matters—are already laid in Parliament for 21 days under the CRAG process, and the Commons has an option to restart CRAG, potentially indefinitely. The Government have gone well beyond the requirements of CRAG and its statutory obligations, in line with our commitment to transparency and scrutiny, by providing Parliament with extensive information on negotiations. For the trade talks with the US on a new FTA and with Japan on an enhanced FTA, the Government have set out their negotiating objectives alongside a response to the public consultation, as well as an initial economic assessment prior to the start of the talks. Ministers have also held open briefings for MPs and peers both at the launch of the US talks—I held one myself—and after the conclusion of the first round.
We will continue to keep Parliament updated on negotiations as they progress, including close engagement with the International Trade Committee in the House of Commons and the EU International Agreements Sub-Committee in the other place. We are committed to publishing full impact assessments prior to the implementation of the agreements. That provides Parliament with more than sufficient information to scrutinise the Government’s trade agenda properly.
Turning to new clause 6, I hope that on the issue of consultation, the Opposition will note the Government’s strong record of consulting widely with the public and key stakeholders on our trade agenda. The Government’s consultation on our priority FTA programme attracted 600,000 responses, making it one of the largest consultations ever undertaken by Government.
Gareth Thomas
I want to press the Minister on the proposals that were in the Command Paper last year. He has not quite answered us on that. The Command Paper said clearly that the Government would work with a Committee and give it access to sensitive information that is not suitable for wider publication, including private briefings from negotiating teams. On the record, is the Minister willing to confirm that they will do that with the International Trade Committee and the relevant Lords Committee, or not?
Greg Hands
I should be clear that the Command Paper was published by a previous Government in a different parliamentary context. However, we have in our approach so far followed what was set out in the Command Paper in relation to publishing negotiation objectives and impact assessments, and reporting back after the first round. I would again ask for confidence in our deeds, in terms of our overall commitment to parliamentary scrutiny.
In line with our commitment, we have published the Government’s response to the consultations on FTAs with the US, Australia and New Zealand, and on an enhanced FTA with Japan. In relation to sustainability impact assessments, as the EU calls them, the Department has published, and will continue to publish, our own scoping assessments for each of our new free trade agreements, prior to negotiations commencing. As with the published UK-US, UK-Japan, UK-Australia and UK-New Zealand scoping assessments, those include preliminary assessment of the potential economic impacts, the implications for UK nations and regions, the impact on small and medium-sized enterprises, the environmental impacts, and the effects on different groups in the labour market, including whether there are any disproportionate impacts on groups with protected characteristics, arising from an FTA with the partner country.
The scoping assessments attracted quite a bit of attention, not least because of all the nations and regions of the UK that would benefit from the US trade agreement, Scotland would benefit the most, followed by the west midlands and then the north-east of England. Those are good things. We are proud of that, and of the fact that we published the assessment.
We are committed to publishing full impact assessments once negotiations have concluded and prior to the implementation of the agreements, when the effects of an agreement can be better understood.
On the point about standards raised in new clause 6, I encourage hon. Members to look at our record on negotiating agreements. We said we would not lower standards, and we have not, as can be seen from the parliamentary reports we published on each of the 20 agreements. None of the 20 agreements that have been signed to date involved any reduction in standards.
Gareth Thomas
In the Command Paper published in February last year, the Government committed during negotiations to publish and lay before Parliament a round report following each substantive round of negotiations. Does that commitment still stand or has it been axed, like the commitment to give sensitive information to a Select Committee of the House of Commons?
Greg Hands
Nothing has been axed; all I am saying is that the Command Paper was produced at a different time. What we have done is to follow the Command Paper in publishing, for example, the written ministerial statement at the end of round one of the talks with the US. That has greatly enhanced parliamentary scrutiny, as has publishing the negotiation objectives and the scoping assessment of who would be most likely to benefit from the agreement.
Greg Hands
I will make a bit more progress.
As with new clause 5, new clause 8 contains a number of practical flaws in the proposed system. Those flaws would undermine negotiations and disadvantage the UK. I understand that colleagues are keen to remain abreast of negotiations, and the Government are supportive of that endeavour, as I have outlined. I point hon. Members not just towards our commitments to share information but towards our record on the recent US negotiations, which I have mentioned.
Ultimately, this debate boils down to whether we believe that it is right that the UK Government, supported by experts, civil service negotiating teams and advisers, are able to negotiate international agreements on behalf of those who elected them, drawing on the expertise and views of Parliament and of the devolved authorities, via strong scrutiny mechanisms. Or do we believe that Parliament itself should be in control of the negotiations, determining who we negotiate with and how, and within what timeframes?
It seems clear to me that in the national interest, the former scenario must be right. It ensures that when our partners face the UK around the negotiating table, they know that it has a credible single voice—one that is represented by the UK Government alone, after they have consulted with the devolved Administrations and drawn on the extensive expertise in this House and the other place, via close engagement and scrutiny processes, such as those we have here for international agreements.
Matt Western
I understand that point. The EU has 27 nations, and yet it manages to achieve that. It has a coherent position from 27 nations, but it can still carry out talks. Surely, it is possible for us to have the involvement of Parliament to scrutinise matters and to be updated about them, and to have its engagement in this process. Can the Minister just answer that one point?
Greg Hands
I have already outlined in immense detail, probably three or four times now, the involvement that Parliament will have in future trade agreements. I remind the hon. Gentleman that the Bill is about the continuity of existing trade agreements. I may be the only person in this room—perhaps the hon. Member for Harrow West has done so as well—who has represented the UK at trade Foreign Affairs Council meetings of the European Union. I can reveal to the hon. Member for Warwick and Leamington that the EU does not always speak with one voice when it comes to trade. I can tell him of many a fruity row at those meetings involving different member states—rows between the Commission and the European Parliament and so on in relation to EU trade policy. I am afraid that the idea that the EU is one happy whole as it goes into trade agreements, with total uniformity of opinion across the EU27, is for the birds.
I hope that I have provided Members with some assurance that the amendments are unnecessary and impractical, and will unquestionably limit the UK Government’s ability to negotiate in the best interests of UK businesses, consumers and citizens.
On a slightly different topic, new clause 19 seeks to oblige the Government to publish parliamentary reports on continuity agreements, which the hon. Member for Harrow West has already drawn attention to, outlining any significant differences between the signed agreements and the underlying EU agreements. I am aware that, in the last Parliament, the Government introduced an amendment to that effect to the previous Trade Bill. However, Members will be aware that, despite the previous Bill falling, we have committed to publishing such parliamentary reports on a voluntary basis, to assist the House with the scrutiny of agreements.
We have published such a report for each of the 20 continuity agreements we have signed, outlining any significant differences from the underlying EU agreement. That process affords parliamentarians extra transparency on our continuity agreements, above and beyond the statutory framework set out in CRAG. As is demonstrated by the measures we have taken, and by the inclusion of a sunset clause and the affirmative procedure for any secondary legislation, we will ensure that Parliament’s voice is heard when clause 2 powers are exercised. I reiterate the commitment that we will continue to publish parliamentary reports for all remaining continuity agreements.
I suspect the Committee will be glad to hear that I am finally turning to new clause 20, which stipulates that the parliamentary reports must be published at least 10 sitting days before any statutory instruments are made under this power. Members will be aware that trade negotiations, and indeed many other international negotiations, have a habit of going down to the wire. I have only to remind colleagues of the negotiations surrounding the EU withdrawal agreement as evidence of that fact, although that negotiation is not included in the scope of the Bill, perhaps thankfully. As such, it is possible that we will be unable to sign continuity agreements until very shortly before the transition period ends.
I stress that that is possible. We have already signed 20 such agreements, but some may well finally be negotiated and signed in the last days before the UK once again becomes a fully independent trading country. That would make it very difficult to leave a period of 10 sitting days before any SIs are introduced. I assure colleagues that we will leave as much time as possible for essential parliamentary scrutiny. I point again to our record: we have published parliamentary reports alongside all signed agreements entering the CRAG process, meaning that that information has been available for at least the full duration of CRAG. I remind colleagues that CRAG allows a period of 21 sitting days for our agreements to be scrutinised in Parliament before they can be formally ratified. That provides an effective period of time for parliamentarians to scrutinise the agreements.
Turning to a few of the more technical matters that have been raised, the Opposition said that the South Korean and Swiss agreements have not been signed. They have both been signed and have both gone through CRAG. The House of Lords European Union Committee called the Swiss agreement for debate but, as I said earlier, no motion of regret was passed. The hon. Member for Brent North (Barry Gardiner) loved to talk about the Ponsonby rule, which is exactly what CRAG sought to codify. The Ponsonby rule, if it exists at all today, is there only through the living embodiment of CRAG.
The Opposition talked about the mutual recognition agreements incorporated within the Swiss agreement. The MRAs that have been signed and are part of the agreement cover 70% of our trade flow. On a technical point, we have in place a memorandum of understanding to continue discussions about trade continuity before the UK-Swiss trade agreement comes into effect on 1 January. We are committed to aiming to put in place mutual recognition of conformity assessment bodies in time for the agreement coming into effect.
The sectors not covered by the MRAs are underpinned by international standards regimes, not by EU standard regimes. There is therefore greater regulatory confidence in conformity assessments within these. On tariffs and the South Korea agreement, the hon. Member for Harrow West effected some kind of melange between tariffs and tariff-rate quotas. A tariff is the rate of tax at which we charge a product coming into the country; a tariff-rate quota is the quantity of that product that would be allowed on either a lower tariff or on no tariff at all.
Tariff-rate quotas have been resized from the original EU agreement. That is an entirely normal and expected part of the process. The TRQ stated that a certain volume of this, that or another product—the example of Cheddar cheese was used—is allowed to enter from the EU into South Korea without a tariff or with a lower tariff being applied. That volume is apportioned in the ensuing agreements: this part of the tariff-rate quota belongs to the European Union, and this part of the tariff-rate quota belongs to the UK.
How do we determine which part goes to which? Generally, the way in which to do this, which the European Union has agreed, is to look at recent trade patterns, take the average of recent years and say that a part should be determined to be the EU’s and another part should be the UK’s? If no UK products have been exported to South Korea under the tariff-rate quota, the effect will be that the tariff-rate quota ends up going to zero in the ensuing UK agreement, but it may well be that we end up with far more than the UK overall trade flow in the ensuing South Korea agreement in other areas. It simply is not the case that we have lost our tariff-free access, if it is a product that the UK does not currently export to South Korea under the tariff-rate quota.
Crucially, the tariff reductions are in the ensuing UK agreement. Whereas the tariff-rate quotas divide up, the agreed tariff reductions carry on. That is particularly relevant to Cheddar cheese. Tariffs on Cheddar cheese entering South Korea under the EU-Korea agreement have been coming down steadily each year since 1 July 2011. From 1 July 2021, UK Cheddar cheese will be free of customs duties entirely as a result of that gradual stepping-down process, which affects Cheddar made in the EU as much as it affects the UK. There has been no change in that and no loss in our preferential tariff treatment in the UK-Korea agreement.
I have talked at length about the Command Paper and one or two other things. I have responded to each of the points made by Labour Members, possibly to their satisfaction. I find various things a little bit rich. I think I heard regrets from the Labour Front Bench that we will not be able to transition the EU-Canada agreement. I remember, because I was doing this job at the time, a large part of the Labour party, including current Front Benchers, voting against the EU-Canada agreement even coming into effect. So Labour was opposed to the agreement three years ago, but now they suddenly complain that we are not being quick enough in transitioning it to a UK agreement. If there was any consistency in the Opposition’s approach, they should be cheering any delay to an agreement that they do not agree with. I find their position typical of the chaos still present on the Opposition Benches. They complain that we have not rolled over an agreement that they did not want to be part of anyway.
The hon. Member for Putney, who started off regretting the vote four years ago today to leave the EU, then made a speech questioning the trade agreements negotiated by the European Union that we are seeking to roll over. There must be more consistency.
I appreciate that the Labour party has had a leadership change. I thought that the whole basis of the new leader’s approach was to bring organisation and method to its opposition, but instead, we have seen continuing chaos. We see a shadow Front-Bench spokesman who now objects to the agreements that they presented when in government, and a shadow Front-Bench team who now want to roll over the Canada agreement that they originally voted against. Those on the shadow Front Bench regret the Brexit vote but now want to vote against our transitioning the very agreements that the EU, with UK participation, negotiated successfully. That is a recipe for chaos and one that the Opposition would do well to reflect on.
Gareth Thomas
At the risk of disappointing the Government Whip, I shall be brief in my concluding remarks. We had a very strong contribution from my hon. Friend the Member for Sefton Central, who underlined that, at present, we will find out more on a UK-US deal from Congress than from anywhere else. My hon. Friend the Member for Warwick and Leamington rightly raised, among a series of other points, concerns about our ability to scrutinise the impact of a new free trade agreement on the automotive sector. My hon. Friend the Member for Putney rightly drew attention to the significance of scrutiny, or otherwise, of the roll-over agreements, given that some 39% of jobs in her constituency depend on trade with countries where there are roll-over agreements.
We also heard interesting interventions from the hon. Member for North East Derbyshire, who I hope has used the lunchtime adjournment to look up the reference in the Queen’s Speech to the Trade Bill. It makes it very clear that the Trade Bill’s purpose is to put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy on exit from the European Union. I appreciate that the Minister has sought to somewhat change the stated purpose of the Trade Bill, to provide some cover for not being willing to give Parliament proper scrutiny arrangements for future free trade agreements, but that is what the Queen’s Speech said.
Other interventions included that from the hon. Member for Witney on Australian cars. In their own different ways, hon. Members supplemented the arguments that we were making for greater scrutiny of free trade agreements.
Perhaps the most striking revelations were in the Minister’s winding-up contribution. In the previous Parliament, the Government committed to make limited improvements to the Bill by allowing parliamentary scrutiny in the form of reports and sunset clauses. Having witnessed them backslide on those commitments, we have now heard the Minister step back from commitments made in the Command Paper less than 15 months ago on scrutiny of free trade agreements. The Minister appeared to be clear that Parliament, including the International Trade Committee, will not have the opportunity to scrutinise the negotiators, receive private briefings from them, or access sensitive information, as was promised in the Command Paper. He was also studiously vague as to whether the commitment in the Command Paper to publish and lay before Parliament a round report following each substantive round of negotiations will be maintained or not. One can only conclude from his answer that that commitment is not being maintained, albeit one report, on the UK-US deal, has already been published.
This Bill is lamentable in the lack of proper opportunities it offers to scrutinise the continuity agreements, in particular the bigger ones, which have yet to be negotiated, on Canada, Japan and Turkey. It is also lamentable, as a series of witnesses and hon. Members have stated, in the arrangements for scrutinising new free trade agreements. On that basis, I intend to press the amendments to a Division.
Bill Esterson
On a point of order, Sir Graham. Is it in order to make a further speech at this stage? I understand that it is, but I stand to be corrected.
The Chair
It is in order, but given that the amendments have been moved, if you could do so briefly, that would be appreciated.
Bill Esterson
I shall be brief. I speak purely because the Minister made a number of comments that need further attention. He talked about our approach to the need for these agreements to be implemented. Our reasoned amendment said:
“That this House recognises that upon leaving the European Union, the UK will need effective legislation to implement agreements with partner countries corresponding to international trade agreements of the European Union in place before the UK’s exit”.
That is what it said and that is what we voted on, and we are clear in our commitment to doing just that.
The significance of the six times that the Minister’s hon. Friends asked questions of various witnesses last week was not lost on us—they wanted it clearly on the record that there is a desire for the continuity agreements to be concluded. We accept that, which is why we put it in our reasoned amendment. It is important that the Minister is under no illusion on that point. Our concern is that they are done properly, scrutinised effectively and that mistakes are not made, which is why we tabled these amendments.
The Bill has to go through this year. It was in the Government’s gift. They could have passed the Bill—or a very similar version of it—last year, as amended. They could have brought back that version, as amended, this year if it was so important to them. More than two years ago, we were in a nearby Committee Room having very similar debates on very similar amendments. The Government had the chance to do this. It is on them that there has been a delay in getting to this point. In some of the evidence sessions, we heard that, while the Bill is not perfect, the witnesses wanted it to go ahead. Last year’s Bill was not perfect either, but the Government could have brought it back and got it through earlier to address the witnesses’ concerns. It is important that these things are said.
The Minister distinguished between future trade agreements and existing ones. He tried to use some clever language right at the start of his remarks. He pointed out that the Bill, as drafted, does not cover free trade agreements with new trading partners. That is correct, although it has scope to do so, which is why our amendments are in scope. However, the Bill does cover new free trade agreements with existing trading partners, which is why our amendments are entirely appropriate in calling for scrutiny of the corresponding agreements.
The Minister used the phrase, “Parliament should be able to properly scrutinise trade agreements”, in the context of new trade agreements and the framework, and said that his door was always open. He did not say when we could expect to see that new framework. The United States agreement is already under way without that new framework. If not now, when? Why is that US trade agreement going through without that new framework in place, given that the Minister and the his colleagues deem it so important in enabling proper scrutiny? As he knows, the CRAG approach relies on the Opposition using one of their Opposition days within a 21-day period. There were occasions in the previous Parliament when there was not an Opposition day for a period of greater than 21 days. It is entirely dependent on the Government making time available in Parliament for CRAG to be applied. It is one of a number of flaws in our scrutiny process, and one of a number of reasons why changes are needed—because the Government are not addressing it at this stage.
I have no doubt that the Lords will table amendments similar to those tabled last time. The Minister’s colleagues in the Lords are going to have to face this question. The Government are going to win every vote in this House, but it could be a different story in the Lords. If not now, when? And why not take on board the scrutiny that we have suggested? Why not accept and retain the amendments from last time, including that dealing with the publication of reports?
My final point is that if it is the Government’s intention to always publish reports on the difference between the existing agreements and the new ones, why not keep that amendment in the Bill? At the moment, they have the option to not publish if they so choose or if a new Minister has a change of opinion. Given what the Minister has said, there are so many places in which what we have proposed has been justified, and the Government will need to consider them in the Lords even if they do not today.
Question put, That the amendment be made.
Gareth Thomas
I beg to move amendment 9, in clause 2, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Regulations under subsection (1) may make provision for the purpose of implementing a free trade agreement only if the other signatory (or each other signatory) and the European Union had ratified a free trade agreement with each other immediately before exit day.
(4) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement other than a free trade agreement only if the other signatory (or each other signatory) and the European Union had ratified an international trade agreement with each other immediately before exit day.”
This amendment would require previous ratification of a trade agreement before regulations could be made to implement it.
Amendment 9 excludes from the scope of clause 2(1) those international trade agreements agreed between the UK and a third country where the corresponding agreement between the EU and that third country has been signed, but not ratified, as of 31 January this year. My understanding is that this would apply to the EU-Vietnam free trade agreement and the EU-Canada comprehensive economic and trade agreement, or CETA. Both agreements merit further detailed scrutiny, even if only through the CRAG process.
The new UK-Vietnam agreement would be a treaty in its own right, legally distinct, and therefore should surely face proper scrutiny. Under the Bill’s terms, any future UK-Vietnam agreement would be counted as a roll-over agreement, because the EU signed an agreement with Vietnam shortly before we left the EU on 31 January this year. That EU-Vietnam agreement has not been ratified, and indeed the scrutiny processes in this House had not been completed by 31 January. A future UK-Vietnam deal could be hugely different from the EU deal, but it would none the less be covered by this Bill, with its minimal scrutiny arrangements.
Greg Hands
I was intrigued by the amendment, but let us pause for a moment on what it would do. Amendment 9 would stipulate that agreements are in scope of the clause 2 power only if the underlying EU agreement were ratified, rather than signed, by end of the transition period. For the benefit of the Committee it might be useful to explain the difference. Something can be signed—but the dates on which a trade treaty can be signed, come into effect and be fully ratified are three different dates. A trade treaty can come into effect—this is the way the EU does it—when a certain number of EU countries have ratified it. I forget what that number is, but if about half of EU countries have ratified the agreement it comes into effect. Those three things—being signed, coming into effect, and ratification—happen on three different dates. Under the amendment, the clause 2 power that we currently say must relate to an EU agreement signed before 31 January 2020 would relate to an EU agreement ratified before that date.
Opposition Members will realise—I think, to be fair, the hon. Member for Harrow West covered that in his speech—that the amendment would restrict the scope of agreements that we could implement using clause 2. It would make the scope much narrower. However, it would do so in an entirely unreasonable manner. Important agreements such as the Canada one that he has mentioned would be excluded, as CETA has not been fully ratified by each individual member state of the EU, despite having been in effect for some time now.
Development-focused agreements would be similarly affected. The important matter of international development has yet to feature in discussions of the Bill—with the exception of something that the hon. Member for Putney said about it in passing. However, many development-focused agreements—those important economic partnership agreements—have been signed but not yet ratified. One example, involving the countries of the Caribbean, is the CARIFORUM agreement. In 2017 I signed an agreement with the CARIFORUM countries. We all gathered together—17 countries, I think, which was basically CARICOM—plus the Dominican Republic. We gathered together in Brussels to sign a continuity agreement. The nations of the Caribbean recognise the importance of that trade agreement, and one thing that they mentioned was its importance not just to their citizens but to the Caribbean diaspora in this country.
Greg Hands
No, I am not going to give way.
I think that a Member with quite a big Caribbean community in his constituency has quite a lot of explaining to do about why he is now opposed to the CARIFORUM agreement. It is a great agreement that does major good work for international development in Caribbean countries. I represent a quite substantial Caribbean community. I think its members would be alarmed if they were to learn that the Labour party is opposed to that international development agreement, which does great work among our Caribbean friends.
Gareth Thomas
On a point of order, Sir Graham. As the Minister knows full well, we are not opposed to the agreement. We simply want better scrutiny arrangements. What arrangements are there for me to correct the record in that respect?
The Chair
Order. I think I have to respond to the point of order, in spite of the fact that it was not a point of order. As to what the hon. Gentleman asked about, as he knows, he has just done it.
Greg Hands
The point of the amendment is to rule out of scope agreements that have yet to be fully ratified, which includes not only the Canada agreement but the CARIFORUM agreement and important economic partnership agreements. The hon. Member for Harrow West was a DFID Minister, and I think that that might have been when some of those agreements were negotiated —with important countries such as Kenya, Côte D’Ivoire and Ghana. However, the incredibly important beneficial trade arrangements made for those countries could no longer be effective, for lack of the clause 2 power. The Opposition have a lot of explaining to do. Developing countries are as we know sometimes unable to ratify agreements fully before—
Bill Esterson
On a point of order, Sir Graham. The Minister has a number of times asked us to explain things and then refused to give way. Can you perhaps shed some light on how we might overcome that apparent stand-off?
The Chair
I think that the hon. Gentleman has been here long enough to know that these things happen.
Greg Hands
Truth be told, I was going to allow an intervention when I had fully laid out the case, and mentioned the number of people that the trade stance that the hon. Member for Harrow West is outlining today will irritate. I have only just got started on the agreements, and the apologies that the hon. Gentleman will have to make to his constituents, and, on behalf of the Labour party, to people the length and breadth of the United Kingdom.
Developing countries are sometimes unable to ratify agreements fully before they are brought into effect, often for procedural reasons in those countries, but that should not mean that we deny UK businesses the opportunity to continue trading with them, and I am sure Opposition Members would not wish to deny our world-class trade for development assistance to those states either.
Greg Hands
I will allow the hon. Gentleman to intervene. Perhaps he can explain and apologise for his position in relation to those countries.
Bill Esterson
The party that has just abolished the Department for International Development is not in a good place to be criticising anybody for their approach to international development. The Minister knows full well, as he did with the reasoned amendment, that we fully support international development—in a way that his party, apparently, does not. Perhaps, if this is a problem because of the drafting of our amendment, he will tell us that on Report he will come back with an amendment that deals with the problems that he is taking great pains to explain.
Greg Hands
I am certainly not coming back on Report with a drafting correction for the deficiencies in the hon. Gentleman’s amendment; that would be a novel approach to Parliament. The fact is that this amendment rules out of scope all these agreements for roll-overs. I have to say, in fairness to him, that some of these agreements were controversial; some people opposed these EU EPAs in the first place, and I imagined that it was the Labour party’s position that it opposed these EPAs. If we listen to one or two groups, for example, they think that the EPAs have been stacked too heavily in the EU’s favour.
However, I think the hon. Gentleman is now saying that actually that is not his intention, and that his intention was not to prevent their being rolled over. I think he is now saying he is suddenly in support of the continuity of these agreements, despite having voted against the Second Reading of the Bill and despite the fact that virtually every word that we have heard from the Labour Party in this Committee has been against these agreements and against these Bills.
Returning to my point about continuity, these agreements have been subject in this country to the full EU agreement scrutiny process. The delay to ratification is not in this country, but relates to individual country or state delays. There is no scrutiny gap.
Fleur Anderson
Returning to the issue of Canada and delayed negotiations, can the Minister confirm that if we do not secure the free trade agreement with Canada before 31 December, we will lose all the benefits of the current EU trade deal with Canada and revert to trading with it on WTO terms?
Greg Hands
I thank the hon. Lady for her intervention, because I thought the Opposition were opposed to the Canada deal, so if we were to fall outside the Canada deal, they should be celebrating that. The Labour Front Bench opposed Canada in 2017, and I think they have opposed it again today. We are in discussions with Canada and we believe that there is time to do a roll-over agreement, but to do that we need the powers in the Bill. Amendment 9, which I think the hon. Lady has co-sponsored, would delete Canada from the list of agreements subject to the power, so if she votes for this amendment—if indeed there is a vote on it—she will effectively be preventing the roll-over of the Canada deal.
I will come to a conclusion. I was very surprised by this amendment. I praised the shadow Minister, the hon. Member for Sefton Central, last week for the attention he had given to oral questions earlier that day, but now I am not sure whether he really paid enough attention. He may have missed hearing the shadow Secretary of State, the right hon. Member for Islington South and Finsbury (Emily Thornberry), say from a sedentary position that she is in favour of CETA, the Canada agreement, and that she voted for it at the time.
The right hon. Lady is absolutely right: she did vote for it at the time, and that is obviously the Labour party’s new position. We know that sometimes in political parties, particularly when we are in opposition, there can be a new position and it takes a while for that new position to filter out across the whole party, but I am a little bit surprised that the new position has not filtered down to her own Front-Bench team, let alone the whole party, because they are trying to say they do not want to roll over the Canada agreement for an agreement that their shadow Secretary of State was praising only last Thursday. I find that approach absolutely bizarre.
If amendment 9 were to be accepted, there would be no UK-Canada trade agreement to roll over in the scope of clause 2. Labour said one thing in the Chamber last Thursday, but is saying precisely the opposite in Committee. Our Canadian friends will look on askance, as will our friends from the Caribbean, Kenya, South Africa, Mozambique, Ghana, Cameroon, Ivory Coast and so on.
This is a continuity Bill. There is certainly continuity in the Labour party’s confusion on trade. When it came to the original Canada agreement in the vote of February 2017, Labour split three ways: 68 of its members followed the right hon. Member for Islington North (Jeremy Corbyn) in voting for the CT agreement; 86 broke with the right hon. Member for Islington North and voted with the right hon. Member for Islington South and Finsbury in favour of the agreement; and the rest abstained.
I think I heard the hon. Member for Harrow West then say that he regretted the fact that there had not been a debate about the Canada agreement on the Floor of the House. I spent a few years in the Whips Office. One of the first rules of being a Whip in Opposition is never bring a debate on which your own party is divided to the Floor of the House, let alone something where you are divided three ways and your leader is in the minority view. Now he is saying that he regrets that it was not brought to the Floor of the House.
We should vote down amendment 9, because it would rule out of scope Canada, the Caribbean and many other important trade agreements that the EU has negotiated. The UK was part of that negotiating team. They are very important trade agreements. We would like to see the continuity of those trade agreements, as do our constituents and UK businesses. I urge hon. Members to vote against amendment 9. Indeed, I hope the Opposition withdraw the amendment.
Gareth Thomas
The Minister has been at his most diversionary with that characteristically chutzpah-led speech. As he knows only too well, constitutionally, the Government are able to sign and ratify international agreements. He went on at some length in his winding-up speech on the previous group of amendments about how wonderful that process was.
The Minister does not need the Trade Bill to sign agreements with CARIFORUM, Canada or Vietnam. The powers are already there for the Government to do so. If Ministers think the provisions in the Bill relating to those clauses are so important, one wonders why they did not bring the Trade Bill back in the last Parliament. It fell because Ministers chose not to bring it back, not because of opposition from the Labour party.
There were genuine concerns about the future of a UK-Canada trade pattern. On this side of the House, we repeat our concern that if Ministers cannot agree to roll over a deal with one of our oldest allies where the Queen is Head of State, it prompts questions about the effectiveness of the Department for International Trade. This was a probing amendment, which we will not push to a vote. The point about scrutiny remains on the record. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 10, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with—
(a) the provisions of international treaties ratified by the United Kingdom;
(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;
(c) the primacy of human rights law;
(d) international human rights law and international humanitarian law;
(e) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to—
(i) the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and
(ii) the fundamental principles and rights at work inherent in membership of the International Labour Organisation;
(f) women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;
(g) children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and
(h) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
I will give my hon. Friend the Member for Harrow West a chance to rest his vocal cords. Amendment 10 is part of a run of amendments that get into the implications of domestic and international policy on everyday life here and abroad. Amendment 10 would ensure that regulations on an international trade agreement can only be made if the provisions
“do not conflict with, and are consistent with…Sustainable Development Goals…the primacy of human rights law…international human rights law and international humanitarian law;…obligations on workers’ rights and labour standards as established by but not limited to…the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and…the fundamental principles and rights at work inherent in membership of the International Labour Organisation;…women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;…children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and…the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
There are some things in there that sound very much like taking back control to me. They are very much about the rights of human beings here and abroad, whether workers, women or children. What is not to like? What is there not to support in the amendment? What is there not to support in getting behind sustainable development goals at every available opportunity?
In the previous debate, my hon. Friend the Member for Harrow West mentioned the difficulties in Vietnam. Trade unions and workers in Vietnam face a very difficult time. They face persecution and exploitation. A trade agreement with Vietnam should include labour provisions under the ILO, consistent with amendment 10. The measures in amendment 10 also protect UK businesses by avoiding undercutting.
For the sake of posterity, Sir Graham—I think that is the right way of describing it—I checked that the amendment is similar to one moved by your co-Chair two years ago. At the time, my hon. Friend the Member for Bradford South (Judith Cummins) spoke about the human rights of the Sahrawi people and Morocco’s attempts to include them in international trade agreements. She set out the need for the ethical dimension in international trade agreements and talked about how poorest are left behind. She quoted Paul Collier’s work on the bottom billion and described how international trade agreements all too often lock the poorest in the world into the natural resource trap rather than benefiting them through export diversification, as is sometimes claimed.
It was a good speech then, and the points that my hon. Friend made remain good points now. That is backed up by what we were told in written briefings from Amnesty, which makes the point about the current Bill’s lack of provision in those areas, saying that
“the Bill as currently framed, makes it possible to alter human rights and equality protections using secondary legislation, in order to comply with renegotiated trade deals.”
Here we are again with the problem of Ministers’ use of secondary legislation because of the inadequate provisions in the Bill. The briefing goes on:
“Such powers should not be necessary if existing EU trade agreements, which are the subject of the Trade Bill, are to be rolled over primarily to ensure continuity, as claimed by the government.”
As such, the Government should not object to amendment 10.
The briefing states that the Bill grants
“extraordinarily wide powers to Ministers to amend retained EU law - including the Equality Act 2010, the Modern Slavery Act 2015 and the Data Protection Act 2018 - leaving domestic rights protections open to alteration”
and that it lacks
“real parliamentary scrutiny and accountability throughout negotiations. This is essential because of the complexity and far-reaching implications of trade agreements for business and public policy”
in the areas of human rights. The briefing continues:
“Unlike the US and the EU, the UK looks set to conduct major elements of trade negotiations without any oversight role or negotiating mandate from Parliament.”
After the debates and votes that we have already had in this Committee, I think we can safely say that that is true.
Gareth Thomas
Does my hon. Friend agree that it would be sensible to include in the Bill a commitment to trying to achieve the sustainable development goals, as this amendment seeks to do, not least because with their decision to abolish the Department for International Development, Ministers have thrown away some of their soft power and global reputation for being good on development?
Bill Esterson
That is an incredibly important point. Given the Government’s previous apparent commitment to SDGs, one might have thought they would be open to such a suggestion. The EU conducts sustainability impact assessments of all new trade agreements to assess their the economic, environmental and social impact, including their impact on human rights and labour standards. That is a similar point to the one my hon. Friend just made.
Once in force, EU agreements include a commitment to assess the effects of the agreement on sustainable development. Although those sustainability impact assessments could go further in terms of detail, with sector-specific impact assessments on human rights or labour standards, they nevertheless provide a clear commitment to human rights and labour standards that the UK should replicate and improve on. I thought this was a continuity Bill—the Minister has told us that enough times—so why are the Government not doing the same thing with sustainability impact assessments?
There is no provision in the Bill for undertaking social and environmental assessments of prospective trade agreements, or for conducting related studies and surveys. Decision makers will be operating without the evidence base to take full decisions on complex instruments that will bind the UK for many years. Methodologies for this are well developed, and the Government should commit to undertake them in legislation and to make them public. If not now, when?
Gareth Thomas
One concern that led me to want the Bill to refer to the sustainable development goals is the fact that both Ghana and Kenya have not yet felt able to sign a continuity agreement with the UK. As I understand it, that is because of their concern that the tariff regime that Ministers are suggesting under such a continuity agreement would hinder the scope for regional integration in eastern and western Africa. Although I do not expect my hon. Friend to comment on it, perhaps my intervention might encourage the Minister to give some clarity on my genuine concern about those two continuity agreements.
Bill Esterson
I am glad my hon. Friend has raised the issue, and I hope the Minister can give clarity on those two continuity agreements. If the Minister missed the names of the agreements, I am sure my hon. Friend will repeat them for him. It appears that that may be necessary.
I turn to what the TUC has said to us. It has particular concerns about trade unionists. In its briefing for the Committee, the TUC refers to the lack of consultation on the text of the 19 continuity agreements that have been finalised so far. That has been a concern, because many of the deals that have already been signed are with countries where labour and human rights abuses are widespread. The TUC refers to Colombia and South Korea:
“In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights. Colombia, meanwhile, remains the most dangerous country in the world for trade unionists with around two thirds of murders of trade unionists taking place in Colombia.”
That is according to an ITUC report from last year entitled, “The World’s Worst Countries for Workers”. The TUC continues:
“Whilst the UK’s trade deals with South Korea and Colombia have commitments on paper to uphold ILO standards, similar commitments in EU trade deals with South Korea and Colombia have not been effective in improving rights as they have no mechanism for effective enforcement.”
We had that discussion with Rosa Crawford in the evidence session last week, and that is what she confirmed to me.
Compare that with what goes on elsewhere. The TUC states:
“Trade unions in a number of other countries are consulted routinely by their governments in the process of trade negotiations, such as the US, Austria and Sweden…The TUC believes it is crucial for trade unions to be consulted on the text of trade negotiations in order to ensure they have adequate provisions to ensure labour rights commitments are upheld, contain effective protections for public services as well as other social standards and do not contain Investor-State Dispute Settlement Courts that would allow foreign investors to sue governments for enacting policies for the public good”,
including in the areas of workers’ rights and human rights. The TUC continues:
“The TUC believes it is also crucial for MPs to be able to see and comment on the text of continuity deals so that negotiations are subject to proper democratic scrutiny.”
All that brings us back to the text of the amendment. If the Government are committed to upholding sustainable development goals and to supporting human rights, workers’ rights, women’s rights and the rights of the child, the amendment is an opportunity. If the Government do not support this amendment, they might, as I suggested to the Minister on another occasion, want to bring back their own drafting that civil servants can tell them is appropriate to deliver the goals that I have just set out.
Charlotte Nichols (Warrington North) (Lab)
Can I say what an honour it is to serve under your chairmanship, Sir Graham? In the context of the debates about racial inequality that are taking place around the world, and the Government’s announcement that they will seek to absorb the Department for International Development into the Foreign and Commonwealth Office, it is vital to ensure that we do not shy away from our international responsibilities. That includes ensuring that any future trade deals cannot be used as vehicles to undermine human rights and workers’ rights, either at home or abroad. The safeguards in the amendment are, frankly, common sense, and it should not prove any barrier to free trade agreements with a wide range of trading partners, as is the Government’s stated aspiration. However, it is important that those safeguards are explicit in the Bill.
To illustrate why that is the case, I will give an example. In the public evidence session, I asked the Digital Trade Network about the risk of the US exporting section 230-style provisions into trade deals. As members of the Committee will be aware, these provisions are pushed by the big technology firms, because they effectively restrict US trade partners from making domestic legislation that might introduce any regulation. Without the safeguards in the amendment, there is increasing concern that the UK will be bullied into accepting these provisions in the upcoming UK-US trade deal, which will gut the upcoming online harms Bill and its promise to increase protection for children online.
Ensuring consistency with children’s rights is essential, but the threat is not just to our children. The Community Security Trust’s report, “Hate Fuel: the hidden online world fuelling far right terror”, outlines the global threat of far-right terror, which has its own online language and subculture that are developed and sustained on these social media platforms. This material repeatedly and explicitly calls for Jews to be killed. Indeed, many of the most hateful things that I receive as a Jewish parliamentarian originate from the US and Canada.
Governments, law enforcement and technology platforms must co-operate internationally to combat the propaganda that fuels far-right terror, just as they have done previously to tackle the propaganda that encourages and promotes jihadist terrorism. Protecting the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law will ensure that this place does not have one hand tied behind its back in its efforts to do just that.
As we discussed at length in debates on earlier amendments, because there is limited scope for parliamentary scrutiny of new trade agreements and because the Minister is unable to give guarantees on this issue today, despite being given repeated opportunities to do so by diligent Opposition Members, building these safeguards into the Bill will make sure that they cannot be missed out and that the scrutiny is sufficient to prevent adverse consequences that could result in a breach of one of the regulations set out in the amendment.
The amendment would also benefit our continuity agreements. The Minister mentioned that some of the predecessor agreements had been signed when Labour was last in Government. I was a teenager when Labour was last in Government, and a lot has happened since then—not just that my hair has started to go grey. I cannot understand the reluctance to ensure that continuity agreements that we are trying to secure are consistent with and do not conflict with these safeguards, given many of the seismic shifts that we have seen in geopolitics over the last decade or so; things have moved on considerably in that time.
It is only right that we ensure that continuity agreements remain fit for purpose. If they do not meet the criteria outlined in the amendment, why have we endeavoured to keep them? If the agreements do meet the criteria, there is really no need to oppose the criteria.
Fleur Anderson
This is, at last, a very uncontroversial amendment. I do not think that any of us in this Committee would disagree with the idea of complying with agreements that the Government have already decided to comply with.
For example, trade agreements and the UK’s commitment to the sustainable development goals are completely inseparable. In September, there will need to be a post-covid global rethink about, and recommitment to, the sustainable development goals to make it clear that we still aspire to attain them, so we will need to have this approach baked in to our trade negotiations.
“Transforming our world: the 2030 Agenda for Sustainable Development” explicitly recognises international trade as an engine for inclusive economic growth and poverty reduction, and an important means of achieving the SDGs. Those goals include aims such as no poverty, zero hunger, gender equality, affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, reduced inequalities, responsible consumption and production, and climate action. All of these goals are intrinsically tied to trade. It is, therefore, worrying that the Bill contains no mention of the SDGs, and it is a relief to have the opportunity to vote them into the Bill with amendment 10.
More worrying still is the fact that while trade will be crucial in achieving these global goals, it can also act as a barrier to achieving them. The economic partnership negotiations in west Africa, for example, are very controversial because of the impact of packaging requirements, and the use of sanitary and phytosanitary standards as non-tariff barriers to trade and to an increase in industrial strategy that could lead to greater development and greater prosperity, both in west Africa and here.
Greg Hands
As we have heard, amendment 10 intends to prevent the clause 2 power from being used to implement agreements that do not comply with existing international obligations on human rights, the environment and labour rights. Let me be absolutely clear: our continuity programme is coherent with existing international obligations as it seeks to replicate existing EU agreements, which are, of course, fully compliant with such obligations. By transitioning these agreements, we reaffirm the UK’s commitment to those international obligations.
I have said it before, but I am happy to repeat it as often as the Committee would like: we seek to provide certainty and stability in trading relationships for UK businesses and consumers, not to modify or dilute standards. None of the 20 agreements already signed has reduced EU standards in any area. Committee members can consult the parliamentary reports that we publish alongside continuity agreements detailing any changes required to transition the agreement to the UK context. These will confirm precisely what I have said. We will continue to publish these reports for remaining continuity agreements, so that hon. Members can satisfy themselves that we have not defaulted on our commitment not to reduce standards. That includes the agreement with Vietnam.
I am happy to look into the specific complaints that some Opposition Members have made on labour rights, but it would be helpful for me to understand whether they are in favour of the EU-Vietnam agreement. That was not really clear to me. The Opposition keep wanting to have their cake and eat it, saying that they like EU agreements but then trying to pick holes in them and saying that we should not roll them over because of some of the arrangements within them. The EU-Vietnam agreement is scheduled to come into effect on 1 August, so UK businesses will be able to take advantage of that agreement from 1 August.
As the Prime Minister outlined in his Greenwich speech, the UK has a strong history of protecting human rights and promoting our values globally. We will continue to encourage all states to uphold international human rights obligations. The hon. Member for Harrow West asked for examples of primary EU law that will be transitioned as a result of using these powers. To be clear, we intend to use the powers only for a limited number of obligations, most principally in relation to fully implementing conformity assessments and procurement matters in domestic law via secondary legislation.
To be clear, the human rights commitments in the joint statement that we made with South Korea do not enable the suspension of any of those human rights dialogues that are under way. The Colombia agreement, which is part of the EU-Andean agreement that has also been signed, has seen no weakening of labour rights; there have been some technical changes to that agreement, but none relating to labour rights, so far as I am aware. The continuity agreements signed have not changed those in any way.
The hon. Member for Warrington North mentioned action against the far right and other hate groups preaching violence. I can tell her that the Government are wholly united in our approach to making sure that that is exactly the case, but it is worth reminding ourselves that we are talking about existing trade agreements with those counterparts, not a new agreement as such.
The hon. Member for Putney talked about the commitment to the sustainable development goals. The Government are absolutely committed to the SDGs, but again we are talking about existing trade agreements. I will plough on, because we do not have an awful lot of time. The hon. Lady and her colleagues need to work out what it is that they want. On the one hand they seem to strongly support the EU and perhaps want the UK to rejoin, but on the other she seems, by the sound of it, to oppose the detail of virtually every one of the EU’s trade agreements. Opposition Members need to get clear in their minds whether they are pro-EU—in which case they might be in favour of the EU’s trade agreements—or anti-EU. That was not clear to me at all.
The hon. Member for Putney rightly says that human rights clauses in international trade deals are very important. We agree, which is why we are preserving their effects in these roll-over agreements. The Government have been clear that any future trade deals must work for UK consumers and businesses, upholding our high regulatory standards. The UK will remain committed to world-class environmental product and labour standards. We will not weaken these protections after the transition period ends. Our continuity agreements will safeguard, not undermine, our international obligations. I therefore ask the hon. Member for Sefton Central to withdraw his amendment.
Gareth Thomas
I had not intended to speak and I will be brief. I wish to amplify and expand on the concern that I raised in an intervention on my hon. Friend the Member for Sefton Central regarding the continuity agreements for Kenya and Ghana. If those agreements are got wrong, they threaten the progress that both countries have made, and potentially that of other countries around them, in trying to achieve the sustainable development goals.
The concern is that what is currently being put to those countries by UK negotiators is a continuity agreement that requires them to sign up to something that risks regional integration in east and west Africa. Kenya and Ghana seek to work closely with the least developed countries that surround them as part of the trading blocs. Those LDCs want to continue to be part of a preference scheme, so Kenya and Ghana are caught in a trap between their desire to work very closely with their neighbouring countries and wanting to ensure that they can still trade on very good terms with the UK in, for example, bananas and cocoa.
Why is working with regional blocs so important? Because it is trade at a regional level in Africa that is likely to lead to faster development, more jobs being created, and, crucially, the development of more manufacturing jobs at a local level. When a no deal was about the happen last October, the UK Government proposed a transitional protection mechanism that would have included Ghana, Kenya and others in a similar position.
Greg Hands
I should apologise; I had not realised that the hon. Gentleman wanted to intervene on me on this issue. I undertake to write to him about Ghana and Kenya, and to copy in members of the Committee. The situation involving both those counterparts is complicated and would be best served not by a debate about this particular amendment, but more broadly were I to contact the hon. Gentleman.
Gareth Thomas
The Minister has made a gracious intervention and offer, which I am happy to accept. On that basis, I am happy to conclude my speech.
Bill Esterson
We had an excellent contribution from my hon. Friend the Member for Warrington North, whose points about safeguards were well made. It is entirely common sense that we support the provisions of the amendment, but they need to be explicit. The Minister confirmed why in his remarks. The use of trade provisions to promote online hate is, sadly, all too familiar to my hon. Friend and to many other people in this country, including some in this Parliament. She described that extremely well.
My hon. Friend the Member for Putney rightly made the case for the sustainable development goals and ensuring that we deliver on them. The fact is that they are tied directly to trade. That point was reinforced by my hon. Friend the Member for Harrow West, who spoke on the importance of the Kenya and Ghana continuity agreements and the impact that they have on the LDCs. It reminded me of the reference, which I quoted in my remarks, that my hon. Friend the Member for Bradford South made to Paul Collier’s book “The Bottom Billion”. I am glad that the Minister has offered to write to members of the Committee about those concerns.
I think the Minister used the word “replicate” regarding how the agreements are carried over from the EU. Unfortunately, the Bill allows for dilution and for weaknesses, such as those that I set out in the South Korean and Colombian agreements, to continue. Such weaknesses will not be addressed, and the question is: if not now, when? In the case of South Korea and Colombia, it is: if not then, when? Of course, we will have another go at South Korea, because it wants to renegotiate what has been passed already.
I am afraid that the Minister’s points about Colombia rather miss the point. The point I made, in reference to the International Trade Union Confederation report from last year, is that it is the most dangerous country in the world for workers. We cannot simply accept continuity without doing something about that situation. Such things need to be dealt with in international trade, as well as through the Foreign Office and other mechanisms of Government; otherwise the abuses will continue.
Bill Esterson
I beg to move amendment 11, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with the United Kingdom’s environmental obligations in international law and as established by but not limited to—
(a) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;
(b) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and
(c) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety.”
The Government say they are committed to addressing the climate crisis and to net zero by 2050, even though they have missed the targets set by the fourth and fifth carbon budgets and the gap is getting worse, and even though their own analysis shows that their spend on nuclear export finance for energy projects has favoured the fossil fuel sector substantially, to the point where 99.3% of that budget spend over a five-year period went to fossil fuel projects, including recently to Bahrain. There is no sign of a real and meaningful switch away from fossil fuels and to renewables.
The Government can say that they are committed to something, but unless something is in legislation and in writing, and unless there are meaningful commitments, the situation does not change. That is why it is important to amend legislation such that we confirm our commitments to the Paris agreement, the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity, including the Cartagena protocol on biosafety.
Matt Western
What was telling about the evidence sessions was how everyone—including the Institute of Directors, the CBI, ClientEarth, the TUC—agreed that this type of amendment should be at the heart of what we do, and that they were disappointed that it was not included.
Bill Esterson
My hon. Friend is absolutely right. The Bill really should be the framework for what a progressive international trade policy framework should look like. There was an opportunity. Given that the Government did not pass the Bill when they had the chance last year or the year before, they could have included the provision this time. This amendment would produce a framework of the order expected by the witnesses.
There are real problems in international trade that affect our ability to meet our climate obligations. Trade agreements are used to liberalise regulations, including environmental regulations. The Bill is an opportunity to redesign trade policy to support our environmental ambitions, as the Government set out. The target of net zero carbon emissions by 2050 and associated commitments are in our amendment. The opportunity is there for the UK to require trade partners to ratify and implement key climate change agreements, such as Paris, before entering into trade negotiations, and for us to suspend ISDS agreements.
Environmental policy has been the object of investor-state dispute settlement litigation. Companies that have fossil fuel interests have sued other companies’ Governments because of the impact of Government regulations and legislation on their interests. That undermines investment and support for the renewables sector, and efforts to decarbonise economies and meet our climate obligations. Similar points are made about the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity. If the Government want to address this agenda, they have an opportunity to do so with this amendment, and I hope they take it.
Given that the Bill is widely drawn and has the potential to address future trade agreements, let us look at what the US has been saying. This should worry us, given the damage that could be done by international trade agreements. In December, the US ruled out talk of a climate crisis in trade negotiations—yes, that is what trade representative Lighthizer said. He was categorical about that when the UK inquired—I am pleased that the UK did this—about the possibility of including reference to climate change in a future UK-US trade agreement, given that the UK has a strong historical stance on climate change and pushed strongly for the Paris agreement. The UK also highlighted in those talks the pressure for that that would come from civil society and non-governmental organisations. My hon. Friend the Member for Warwick and Leamington referred to the evidence that the Committee received.
What was the response from the US? It
“responded emphatically that climate change is the most”
politically sensitive
“question for the US, stating it is a ‘lightning rod issue’, mentioning that as of 2015,”
US trade representatives
“are bound by Congress not to include mention of greenhouse gas emission reductions in trade agreements. US stated this ban would not be lifted anytime soon.”
The US trade representative went further:
“we have an obligation to help real working people...there’s no point in being so ambitious we don’t end up with an agreement at all”.
The problem with that statement, of course, is that it is not one or the other. In the end, real working people need a planet that they can live on. They need the global temperature not to increase by more than 1.5°. They need the action on climate that will deliver that agenda. They need the jobs that will come from investment in low carbon industries now and in the future.
We should be worried about what the US is saying on this subject. We should take note of it and make sure that if the price of an agreement with the US is to oppose action on addressing the climate crisis, it is a price far too high for us to accept. I hope the Government will take the amendment on board, because there is nothing in it that is not in accordance with Government policy.
Fleur Anderson
Moving on from the sustainable development goals, and looking at the environmental regulations and the environmental issues that are baked into the Bill, we are already committed to climate action. The Minister has affirmed that we are and want to be compliant, and we aspire to see the achievement of the sustainable development goals. That means taking radical action and treating the climate situation as an emergency. To do that we need to add the amendment to the Trade Bill.
In doing so, we will be safeguarding life in water and on land. Earlier this year, the Prime Minister reaffirmed his Government’s commitment to achieving net zero by 2050 and boldly stated that “we will crack” the climate emergency. As a global leader on climate action, the UK must set an example to the rest of the world by honouring its international obligations under the Paris agreement and other multilateral environmental agreements. Trade policy is an integral part of that, so it should not be left out of the Bill.
Trade agreements can foster good climate action, but they can also impede Government implementation of climate commitments. They could threaten to increase fossil fuel use, for example, which we explicitly decided not to do in declaring a climate emergency. They could also hinder the sharing of green technology.
Trade agreements typically include national treatment for trade in gas, thereby locking in dependency on a fossil fuel with high greenhouse gas emissions, while incentivising increased fracking and fossil fuel infrastructure. We would not want continuity agreements that include those. The EU’s own impact assessment of TTIP—the EU-US trade deal—predicts that it would generate an additional 11 billion tonnes of carbon dioxide per year. That is fundamentally at odds with our international climate obligations, so we must bring our trade policies up to date with our environment obligations.
The dangers that trade deals pose to the environment can be clearly seen in the EU-Mercosur trade agreement currently under negotiation. A fortnight ago, the Dutch Parliament rejected the agreement, due to a lack of enforceable agreements on the protection of the Amazon or the prevention of illegal deforestation. Conducting trade negotiations without clear environmental red lines on the statute book—which this amendment would provide—with countries led by individuals such as President Bolsonaro, under whom deforestation of the Amazon has increased by 27% according to the NGO SOS Atlantic Forest Foundation, poses a huge threat to the Government’s international, climate and environmental obligations.
As the WWF has noted, rushing into trade deals with partners that do not share our ambitions could undermine UK leadership on positive environmental outcomes, by allowing imports from industrialised agricultural systems or through supply chains that promote deforestation. “Risky Business”, a report by the WWF and the Royal Society for the Protection of Birds, demonstrates that the UK is already moving backwards on reducing the UK’s overseas land footprint, which increased by 15% between 2016 and 2018, suggesting that we are increasingly offshoring our environmental impact. We need to do better.
To conclude, the Bill gives us an opportunity to ensure that our trade policy supports our environmental ambitions by explicitly putting them into the Trade Bill, including the target of net zero carbon emissions by 2050. Amendment 11 is a positive step towards that goal and is consistent with the Government’s own commitments and obligations, so everyone should agree to it, to ensure that the UK complies with international law and that we remain a world leader on climate action.
Greg Hands
As I have set out, the Government’s continuity programme is coherent with existing international obligations, as it seeks to replicate existing EU agreements to secure continuity for businesses and consumers. As I have made clear, we have no intention of lowering standards—environmental, labour or otherwise. The Prime Minister set out that commitment in his Greenwich speech and I have repeated it on many occasions, including today.
The UK has often led the way and exceeded EU minima on environmental issues, such as greenhouse gas emission reduction targets. I predict that we will continue to do so, thus making the amendment redundant. For example, the UK was the first country to introduce legally binding greenhouse gas emissions reduction targets through the Climate Change Act 2008. We were also the first major economy to set a legally binding target to achieve net zero greenhouse gas emissions from across the economy by 2050. We have cut our carbon emissions by nearly twice the EU average since 1990—by 42%.
Put simply, the UK has an extremely strong record on environmental action. I hope that the Committee will agree that the amendment is unnecessary, as we will be safeguarding and promoting, not undermining, our environmental obligations. Consequently, I ask that the amendment be withdrawn.
Bill Esterson
I thank my hon. Friend the Member for Putney: it is absolutely right that we set an example to the world by honouring our Paris commitments, and honouring them in primary legislation is a formidable way of doing that. I am glad that she reminded me about fracking. There is fracking a mile from my constituency, and it causes enormous problems. Its relevance to the amendment is that the same companies engaged in fracking are able, under ISDS provisions if they are in place, to take action against the UK Government to defend their fossil fuel interests, even if the Government do not want to support such an industry and want to pursue a renewable energy agenda, so it is an important consideration.
That is why the amendment or something similar—if the Minister wants to bring it back, I will be very happy to look at it on Report—is the way to deal with this matter. We need to ensure that it is there, specified and clear in primary legislation, as part of our international trade framework, which is what the Bill should be. It is great of him to reference the Labour Government’s Climate Change Act 2008, but it is time for this Government to put such things into law as well, and this is their opportunity. I will press my amendment to a vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 12, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not in any way restrict the ability—
(a) to make public services at a national or local level subject to public monopoly;
(b) to make public services at a national or local level subject to exclusive rights granted to private operators; and
(c) to bring public services at a national or local level back into the public sector for delivery by public sector employees.”
We have significant written evidence to support this amendment—from the TUC, the British Medical Journal and the Trade Justice Movement. It is about ensuring that international trade agreements do not undermine the ability of Governments at national or local level to run services in the public sector or in a public monopoly in the private sector. Importantly, it also has provision for bringing services that have been privatised back into the public sector—as we have just seen with the probation service—when they have failed after a botched privatisation. We have seen the desirability of doing that all too often with outsourcing, as more and more councils seek to bring services back in-house.
However, with negative lists, standstill clauses and ratchet clauses in international trade agreements, it is becoming increasingly difficult for Governments to do these things. Negative lists ensure that only those services that are specified can be considered in the public sector. Standstill clauses mean that services cannot be brought back into the public sector. Ratchet clauses mean that we see increasing privatisation, with no prospect of a reduction. Failure to abide by them enables overseas interests to take legal action against the Government in this country. The proposed provisions need to be included for those reasons; otherwise, we face real problems in our national health service and elsewhere in our public services.
The Conservative party pledged in its manifesto last year that the NHS would be off the table in a trade agreement, but the pledge did not specifically cover any of the aspects that I have just described, including negative listing and standstill and ratchet clauses. There is digital trade as well. I did not deal with digital trade in my earlier remarks, but it is important because it covers areas such as NHS data, including patient data, which is of great concern to many people.
There is an opportunity for Government Members to rectify that omission from their manifesto by voting for our amendment. If they are committed to the NHS and our other public services, they can support the amendment and ensure that the opportunities are available for the public sector to deliver public services in the public interest.
Andrew Griffith (Arundel and South Downs) (Con)
Will the hon. Gentleman give way on that point?
Greg Hands
Amendment 12 would mean that the power in clause 2 could not be used to implement agreements that might restrict the delivery of public services through public monopolies, exclusive rights or nationalisation.
The amendment is not necessary, because this is a continuity Bill. None of the agreements in question restrict our ability to deliver public services in that way. We have always protected our right to choose how we deliver public services in our trade agreements. Indeed, the UK’s public services, including the NHS, are often protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. No trade agreement has ever affected our ability to keep public services public.
Colleagues will observe from our record of the signed agreements that the continuity programme seeks to preserve current trading relationships and not to alter the way in which our public services are designed or delivered. The amendment is therefore unnecessary, and I ask the hon. Gentleman to withdraw it.
Bill Esterson
Again, through secondary legislation the Bill enables the Government to do some of the things that we have described. More to the point, however, this issue is important because of the nature of the continuity agreements that will be renegotiated. We have discussed the agreements with Canada, Japan, Mexico and Turkey. I do not know whether any of those agreements would do what I have described, but they could potentially do so because they are not just continuity agreements.
The Bill sets the framework for trade agreements, because the Government are not bringing forward a different framework or alternatives on how trade agreements will be scrutinised and how they will end up. The Government are not challenging what the United States might do. We know the concerns that exist about how the US has expressed in the past its desire to intervene in public services in this country. We should be concerned and we should put this kind of commitment into law as it relates to international trade. I will press the amendment to the vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 13, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations may only be made under subsection (1) if—
(a) the provisions of the international trade agreement to which they relate are consistent with standards for food safety and quality as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(b) the Secretary of State is satisfied that mechanisms and bodies charged with enforcement of standards for food safety and quality have the capacity to absorb any extra requirement which may arise from the implementation of the agreement;
(c) the provisions of the international trade agreement to which they relate are consistent with policy to achieve reduction in the risk of disease or contamination as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(d) the provisions of the international trade agreement to which they relate are consistent with achieving improvements in public health through any food policy priorities set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(e) the provisions of the international trade agreement to which they relate are compliant with policy to achieve targets for farm antibiotic reduction set by the Veterinary Medicines Directorate;
(f) the provisions of the international trade agreement to which they relate are compliant with retained EU law relating to food standards and the impact of food production upon the environment; and
(g) any food or food products to which the provisions of the international trade agreement apply meet standards of labelling, indication of provenance, and packaging specified by the Food Standards Agency or Food Standards Scotland.”
The amendment relates to food standards—food production standards and food safety standards. That is an important distinction, because the Secretary of State and the Ministers do not appear to appreciate that we are talking about both types of standards. We saw this during the latest International Trade questions, where the hon. Member for Dundee East and I both made a point that was about food production as well as food safety, but that seemed to escape the notice of the Secretary of State.
The reality is that the US Government have a rather different view of what is important. Their trade representative has told us that the US has the best agriculture in the world; he has also said that it
“has the safest, highest standards”,
and that we
“shouldn’t confuse science with consumer preference.”
One thing that worries me is that when the Paymaster General was answering questions on this topic in the House the week before last, she made the point that consumers will decide. That has made people on the Opposition side worried that perhaps the Government are not as concerned as about this as they might be.
Representative Lighthizer has also described chlorinated chicken as thinly veiled protectionism. He clearly wants that to be part of a deal—he has said so—and has told Congress that the American Government are looking for a comprehensive deal, not a more limited agreement. By “comprehensive deal”, they mean agriculture in a very significant way, with lower food production standards. He has expected a push for access to the UK market for American farmers, and he has said that on issues such as agriculture,
“this administration is not going to compromise”.
Mike Pompeo, the Secretary of State, has made similar points, saying that chlorinated chicken must be part of the deal.
What do American standards mean? They mean a chlorine or acid wash to kill the pathogens in chicken, but those pathogens only need to be killed because of the poor animal welfare those chickens experience throughout their life. Other animal welfare concerns exist elsewhere, including the use of the feed additive, ractopamine, in pig farming and the use of injected growth hormones in cattle. Both give rise to significant welfare concerns for the animals involved; both are banned by the EU, and have been banned by the UK up to this point.
However, this is not just about food production standards, but food safety. The United States has 10 times the level of food poisonings that the European Union does, and one of the reasons is the allowable defect levels it has. It has a defect levels handbook, which sets out the maximum number of foreign bodies—such as maggots, insect fragments and mould—that can be in food products before they are put on the market. Chocolates can have insects in them, or parts of insects; noodles can have rat hair in them; and orange juice can contain maggots.
Bill Esterson
Those are just some of the horrors that UK consumers could be forced to accept if this country signs the kind of wide-ranging deal that Mike Pompeo and representative Lighthizer seem to be implying. I take it that the hon. Gentleman accepts that these things have been said by Mr Lighthizer and Mr Pompeo.
Robert Courts
The Opposition made the point about orange juice in a debate on the Floor of the House some months ago. It has since been completely debunked. Instead of using scaremongering about the standards of American food, could the hon. Gentleman address the facts?
Bill Esterson
The hon. Gentleman may want to withdraw that comment. I am not sure whether it was a bit close to the mark, but I know it has not gone over the mark; otherwise, you would have pulled him up, Sir Graham. The problem with what the hon. Member has just said is that the defect levels handbook says that US producers are allowed to include up to 30 insect fragments in a 100g jar of peanut butter.
Bill Esterson
The hon. Gentleman needs to get used to the idea that when someone takes an intervention, they have to answer that intervention before they take another one.
US producers are also allowed to include 11 rodent hairs in a 25g container of paprika, and 3mg of rat or mouse droppings per pound of ginger. There are similar rules for cocoa beans, cornmeal, ginger, oregano and spices. I will give way if the hon. Member wants to tell me that is not what is in the defect levels handbook.
Lee Rowley
I am happy to explain what I think is the case. Those are the thresholds at which the United States undertakes automatic prosecution against companies. They are not, as he is describing, the thresholds for what the US necessarily accepts in its domestic food production. That is a misrepresentation, as my hon. Friend the Member for Witney suggested. If the Labour party wants to have a mature and open discussion about trade in the future, given that we have just got these competencies back from the European Union for the first time in 40 years, it would do well to acknowledge those key and important nuances, which it is currently glossing over.
Bill Esterson
What is interesting about that intervention is that the hon. Member is right to say there are prosecutions above those thresholds, because it is illegal to cross them. However, US producers are legally allowed up to those thresholds, which is one of the reasons why food poisoning is such a problem in the United States. The difference between the United States, the EU and the UK is that we do not allow any of them. We have zero thresholds in this country, and I want that to continue. I am sure that everybody in the Committee wants that to continue, but unless we take action to provide safeguards in the event of international trade negotiations, there is a threat that such changes can be implemented.
We heard oral evidence from the NFU and have received written evidence from the RSPCA and the British Poultry Council to back up what I have just said. British and European standards are the highest in the world.
Gareth Thomas
Is not the broader significance of the intervention by the hon. Member for North East Derbyshire, when he asked whether the Labour party wants a mature and open discussion about trade, that we absolutely do want that? It is his ministerial colleagues and his Government who are preventing that from happening by denying a proper scrutiny process of future free trade agreements, including with the US.
Bill Esterson
A number of times, my hon. Friend has effectively reminded the Committee, in response to interventions from Government Members, that scrutiny will ensure that we do not have those sorts of problems. They would do well to take on board his advice and expertise, which is driven by his experience in government of looking at such matters. I daresay that when the Bill goes to the Lords, their Lordships will do just that. We might end with some changes to the Bill, even if we do not make any changes in Committee or on Report in the Commons.
We would do well to look at the evidence that was given to us. We would do well to look at what was said during the proceedings on the Agriculture Bill. We would do well to remember that some Government Members were led to believe that there would be an amendment to the Trade Bill that gave protections against the sorts of problems that I have just set out. That is why we have tabled an amendment later in proceedings to ensure that we deliver exactly that.
For now, the Paymaster General wants to leave it to the consumer. I want to ensure that the consumer is not put in a difficult position because, whereas in this country and in the EU we require labelling on meat about where it was hatched, reared and slaughtered, the US repealed similar legislation in 2015. If we do not want to have problems over the safety of our food—I will mention GM and some of the problems with vegetables as well—I suggest we attach an amendment such as this one to the Bill, or do as Ministers told their hon. Friends on the Agriculture Bill, and pass that amendment when we get there, probably, on Thursday.
Fleur Anderson
I have a few short remarks to make about food standards, which are of huge concern to my constituents. More than 100 people have written to me in the past week or so calling for a food standards commission to be set up, and they are watching this amendment carefully. I am sure this is another in a series of amendments on which we will hear from the Minister how much he agrees with what we are saying, and then he will go ahead and vote against it.
If so, and if we do not have these amendments in the Bill to say what our standards are, where would we have them? We could just have a note from the Secretary of State saying, “I am getting on with the trade agreements; let me carry on.” But no, we have a Bill, so we can set out what we want in those trade negotiations. The past few months have served as a reminder to us all to value our food, to think about where it comes from, its safety and its traceability, and to value our farmers and growers who produce it.
In a post-Brexit world, liberalised trade could expose British agriculture and mean that our farmers would have to compete with products that would be illegal to produce here in the UK. Now is the time for us to be world leaders and use that position to increase the animal welfare and environmental standards of food production across the world, in the continuity agreements and in others.
The chorus of voices in the food sector who are concerned about the future of food standards in our trade policy is deafening. The NFU has expressed concerns, noting that in our current and forthcoming trade negotiations other countries will not only urge the UK to follow their own sanitary and phytosanitary standards arrangements, which in many cases diverge from current UK practice, but resist any suggestion that their own producers meet the production standards and additional costs required of UK farmers, who will then lose out.
That leads us to the conclusion that it is hard to see how trade liberalisation will not inevitably lead to an increase in food imports produced in ways that would be illegal in the UK. In addition, the British Poultry Council believes that if food produced to lower standards is allowed to enter the British market, it will create a two-tier food system, in which only the affluent can afford to eat British food grown to British standards. That is unacceptable.
Turning briefly to animal welfare standards, it is important to understand that this is not a mere ethical luxury or a nicety—a nice-to-have addition to the Bill that we could have or not. Friends of the Earth has pointed out that intensive farming with few welfare protections is associated with deforestation, local pollution, poor workers’ rights and high emissions.
The Government have repeatedly assured us that they do not want to see regression in this area, and I am sure we are about to hear that again. Michael Gove committed on multiple occasions to ensuring that the UK was a global leader on animal welfare. That promise was reiterated in the 2019 Conservative manifesto. However, Friends of the Earth is concerned that future trade partners will want to water down the UK’s very high animal welfare standards, and that free trade agreements, which are the subject of the Bill, could pose a serious threat to the Government’s existing commitments to maintaining and improving UK standards.
The most effective way to prevent a regression in food and animal welfare standards, which is a worry for many different groups, and for the Government to keep their word would be to enshrine these standards in primary legislation before entering trade negotiations, taking them off the table altogether and therefore agreeing amendment 13.
Contrary to some commentators’ views, the amendment is not incompatible with global trade rules. Trade rules enshrine the rights of nations to regulate to achieve public policy goals, and to require that goods and services reach specific standards to qualify for import, as long as those requirements are applied fairly. The amendment would achieve that, and ensure that we have good food standards.
The Chair
I remind the hon. Lady to refer to Members of the House not by name, but by their constituency. I call Matt Western.
Matt Western
Thank you, Sir Graham. Very briefly, we have heard from Members across the Committee about our constituents’ concerns, and those of last week’s witnesses. We have only to think back to some of the extraordinary campaigns by Jamie Oliver, Hugh Fearnley-Whittingstall and others, who highlighted some of the terrible practices that were going on in the food chain, to realise that the public are very much in favour of an organisation such as the food and farming standards commission that has been proposed by the National Farmers Union, to ensure that our farming standards and food standards are maintained at the highest level.
We have some of the highest standards in the world. We also happen to have some of the cheapest food prices, due to the competition that we enjoy in this country. The question is what we would gain from not adding such an amendment to the legislation, and not including a food and farming standards commission. It is very easy to talk about the United States in isolation, and the concerns that the public have over such things as hormone-treated beef or chlorinated chickens. As I mentioned earlier, producers in Australia also supply that market, and have industrial-scale battery caged hens producing vast quantities of eggs.
It is likely that in any UK-Australia trade deal we would lose at least 20% of our current market of eggs produced in the UK to Australian producers. That is the sort of impact that we need to understand. I think the farming community is beginning to understand it fully. Consumers need to understand it as well because, at the end of the day, it is this sector that will be sacrificed in any future trade deal.
Just look at the YouGov poll that I think was announced in the last 24 hours. Some 80% of consumers do not want chlorine-washed chicken. They appreciate and enjoy very high standards currently and they do not want to see such standards reduced in a future trade deal, whether with Australia, the US or anywhere else.
Charlotte Nichols
Very quickly, the provisions in the amendment could prove to be some of the most significant debated today, particularly proposed new paragraph (e) regarding antibiotics. We have seen that antibiotic resistance is one of the greatest threats—perhaps even an existential threat—facing humanity. It is as significant as the climate crisis. As we have seen with coronavirus, it would wreak not just a public health impact but an economic impact on our country.
When we discuss the food standards that are laid out in the legislation, it is not only what we eat that is important; the conditions in which animals are kept can often be breeding grounds for diseases that can spread to humans. Ensuring that antibiotics are used appropriately and in line with current regulations is of massive importance.
Greg Hands
As the Committee will know, the UK’s food standards for both domestic production and imports are overseen by the Food Standards Agency and Food Standards Scotland. Those agencies provide independent advice to the UK and Scottish Governments and will continue to do so to ensure that all food imports comply with the UK’s high safety standards.
Through the work of those independent organisations, consumers are protected from unsafe food that does not meet our high domestic standards. I reassure the Committee that all imports, whether under continuity agreements, most favoured nation terms or new free trade agreements, must comply with our import requirements and food safety standards. Countries seeking access to our markets in future will have to abide by those food standards.
Bill Esterson
I am grateful to my hon. Friends for their contributions, as ever. My hon. Friend the Member for Putney reminded us to value our food and its origins, and of the threat to farmers in the UK if they have to compete with lower-standard food. She was right to do so.
My hon. Friend the Member for Warwick and Leamington reminded us about the fact that the public are in favour of high animal welfare standards, as well as food standards. We have some of the highest standards in the world.
My hon. Friend the Member for Warrington North rightly raised the issue of antibiotics; the potential for diseases to jump species, in the context of covid-19; and why it is so important that we maintain not just food safety standards but food production and animal welfare standards, and that we do not allow imports of food that do not meet those high production and animal welfare standards. I noticed that the Minister referred to food safety in his answer. The Food Standards Agency and Food Standards Scotland do that job, but their remit is food safety, not how the food was produced or the animal welfare under which it was produced. The point about antibiotics should alarm us all right now, given the nature of the crisis that we are going through.
The Minister and his colleagues should keep the promise that was made to colleagues in debate on the Agriculture Bill about the inclusion of provisions in the Trade Bill. Colleagues were told that that would happen, which is why they did not pursue things in the Agriculture Bill. It is essential that we maintain standards—yes, in the continuity agreements, but in future agreements too. That is the relevance of the amendment. That should be the framework for all trade agreements, not just so-called continuity ones. I will press the amendment to a vote.
Question put, That the amendment be made.
Gareth Thomas
I beg to move amendment 14, in clause 2, page 2, leave out lines 27 and 28.
The amendment is designed to remove the Henry VIII powers from the Bill. In its write up of the Trade Bill, Linklaters noted that constitutionally, the Government are already able to sign and ratify trade agreements with minimal reference to Parliament. The Trade Bill is designed to shortcut this process and to authorise the Government to implement the new agreements directly, by Executive act. To help them to do that, the Government seek to use Henry VIII powers to enable them to amend various bits of EU legislation, as they think appropriate, using regulations.
Liberty and others have argued that that represents a fundamental breach of Parliamentary sovereignty. The Committee has already debated the considerable weaknesses in the Bill in terms of opportunities for scrutiny. It is true that in comparison with the previous Trade Bill, Ministers have made a minor concession and agreed to the use of the affirmative process, but we can see no reason for the scale of the power grab represented by the Henry VIII powers in subsection (6)(a), and our amendment seeks to take them out.
Greg Hands
I will now address amendment 14. As the hon. Gentleman has pointed out, the amendment would remove the power to modify direct principal EU legislation, or primary legislation that is retained EU law, in order to implement obligations arising from continuity agreements.
It is important for Members to understand that without this power, we would, unfortunately, be unable to implement our obligations and we would risk being in breach of international law. It would also mean that our agreements were inoperable, adversely impacting upon UK businesses and consumers. I feel reasonably sure, Sir Graham, that that is not something that any Member of this Committee would support.
In addition, not only is this power necessary, but it is proportionate and constrained, because it only allows for the amendment of primary legislation that is retained EU law. Since trade continuity agreements will have been implemented substantially through EU law, the power is necessary to implement any technical changes that keep the agreements operable beyond the end of the transition period.
The Government have constrained the power as much as possible while ensuring that it is still capable of delivering continuity in our current trading relationships, which benefit businesses and consumers in every constituency represented by members of this Committee. To provide reassurance to Parliament, we have added a five-year sunset provision, which we will turn to shortly, and any regulations made under the clause 2 power will be subject to the affirmative procedure.
I ask Members not to take my word for it, but to take the word of the Delegated Powers and Regulatory Reform Committee, who raised no issues with the delegated powers in this Bill, gave it a clean bill of health and praised the introduction of the draft affirmative procedure for any regulations made. I hope that, in the light of the explanation that I have given, the Committee is reassured that not only is this power necessary, but it is proportionate and constrained. As such, I ask the hon. Gentleman to withdraw the amendment.
Gareth Thomas
I do not intend to press the matter to a vote, in the interests of time. I am not convinced by the Government’s argument, and we may return to the matter at Report stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stewart Hosie
I beg to move amendment 8, in clause 2, page 2, line 33, at end insert—
“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.
(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.
(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.”
This amendment would ensure that the consent of a devolved government is required for regulations under section 2(1) if those regulations contain matters which are within the remit of the devolved government.
The Chair
With this it will be convenient to discuss the following:
New clause 16—Role of Joint Ministerial Committee—
“(1) The Joint Ministerial Committee is to be a forum—
(a) for discussing—
(i) the terms upon which the United Kingdom is to commence negotiations with respect to any international trade agreement;
(ii) proposals to amend retained EU law for the purposes of regulations made under section 1 or section 2;
(b) for seeking a consensus on the matters set out in subsection (1)(a) between Her Majesty’s Government and the other members of the Joint Ministerial Committee.
(2) Before Her Majesty’s Government concludes an international trade agreement, the Secretary of State must produce a document for consideration by the Joint Ministerial Committee setting out—
(a) Her Majesty’s Government’s objectives and strategy in negotiating and concluding an international trade agreement;
(b) the steps Her Majesty’s Government intends to take to keep the Joint Ministerial Committee informed of progress in reaching an international trade agreement;
(c) the steps Her Majesty’s Government intends to take to consult each member of the Joint Ministerial Committee before entering into an international trade agreement and for taking the views of each member into account.
(3) Before concluding an international trade agreement the Secretary of State must produce a document setting out the terms of the proposed agreement for consideration by the Joint Ministerial Committee.
(4) In this section, ‘the Joint Ministerial Committee’ means the body set up in accordance with Supplementary Agreement A of the Memorandum of Understanding on Devolution, between Her Majesty’s Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive Committee.”
Stewart Hosie
Although it was not my intention to press any of our amendments or new clauses to a vote, such has been the public support for new clause 12 on the NHS that it is my intention, if and when we reach that stage of the debate—perhaps on Thursday afternoon —to divide the Committee. I am sorry to leave it so late to advise the Committee of that, but this is the first opportunity I have had to do so.
Amendment 8 relates to the powers of the devolved Administrations, or, more accurately, the ability of the UK Government to make regulations under subsection (1), which makes provisions within devolved competencies, without the consent of Scottish or Welsh Ministers or a Northern Irish devolved authority. It certainly strikes us as fundamental that, if we are to respect the devolved settlement in the UK, Ministers must gain the consent of the devolved Administrations before making changes to regulations that directly affect them, possibly negatively or in a way that runs counter to their policy objectives.
I am aware that the previous Trade Bill from 2017 to 2019 made provision for regulation-making powers to be available to the UK Government and the devolved Administrations within areas of devolved competence. That version of the Trade Bill contained a provision that prohibited devolved Administrations from using powers to modify retained direct EU legislation or any EU law retained by virtue of section 4 of the European Union (Withdrawal) Act 2018 in ways that would be inconsistent with any UK Government modifications to retained direct legislation or EU law, even in devolved areas. As a result, the Scottish Government could not recommend giving consent to the previous Bill, and the Scottish Parliament’s Finance and Constitution Committee supported that position.
That Trade Bill did not complete its passage through the House, as Parliament was dissolved and the Bill therefore fell. The good news is that those provisions have been removed entirely from the reintroduced Trade Bill. However, there remains no statutory obligation for the UK Government even to consult, let alone to seek the consent of, Scottish Ministers before exercising the powers in the Bill in devolved areas.
During the partial proceedings on the previous Trade Bill, the UK Government made a commitment to avoid using the powers in devolved areas without consulting, and ideally obtaining the consent of, Scottish Ministers. The then Minister of State for Trade Policy at the Department of International Trade, the right hon. Member for Bournemouth West (Conor Burns), restated that commitment in a letter to Ivan McKee, the Scottish Government Minister, on 18 March, the day before this Bill was introduced. I asked on Second Reading whether those non-legislative commitments still stood, and I would be grateful if the Minister could confirm that today.
I know that the Minister is aware of those commitments, but I suspect that many other Committee members may not be. The non-legislative commitments I refer to are as follows. The first is that UK Government Ministers will not normally use the powers conferred by the Bill in devolved areas without Scottish and other devolved Ministers’ consent, and that they will never do so without consulting them. The second is that the UK Government will consult the Scottish Government and other devolved Administrations before extending the sunset for the power in clause 2—that is, before extending the period during which clause 2 powers can be used under the Bill.
The third is that in relation to the Trade Remedies Authority—the TRA—the Secretary of State will notify the devolved Administrations of decisions to initiate a trade investigation that will have a particular impact on the devolved nation. The fourth is that the Secretary of State will notify the devolved Administrations of the TRA’s recommendations to the Secretary of State at the same time as consulting other Government Departments, so that they can feed in their views. The fifth is that the devolved Administrations can proactively submit to the TRA any information that they consider relevant to an investigation. The final commitment is that the Secretary of State will seek the devolved Administrations’ suggestions on the optimal way of recruiting TRA non-executive members with regional knowledge, skills and experience.
I hope the Minister can confirm that those non-legislative commitments still stand. That would be particularly helpful. That would not remove the obvious need for an amendment of this kind, to ensure that devolved Governments have an input in statute to changes that directly affect them, and that, at the very least, consent is sought and received before such changes are proceeded with.
Gareth Thomas
New clause 16 would put on the face of the Bill a joint ministerial committee, and give it powers to discuss international trade issues with the devolved Administrations. The Labour party brought the devolution settlements into effect. It has continued to champion the rights of the people of Wales, Scotland and Northern Ireland, through the devolved Administrations, to use to good effect the rights and powers devolved to them under the settlements.
In the new world, post-Brexit, we need the devolution settlements to be slightly updated to reflect the significance of the international trade agreements that will be negotiated. Putting into statute the joint ministerial committee and effectively establishing a ministerial forum for international trade seems to us to be the most sensible way to lock in proper consultation between Whitehall and each of the devolved Administrations.
One area of potential future negotiations where discussions on trade at joint ministerial committee level might well be needed is that of geographical indications, given the significance to the Welsh economy of Welsh lamb, for example, and to the Scottish economy of Scottish salmon and Scotch whisky. One recognises that the Administrations will understandably want to make sure that those industries are properly taken into account in future trade agreements, given the considerable number of jobs dependent on them in those countries.
GIs raise a further issue—the question of who has the power to legislate on them during the implementation of a trade agreement. My understanding is that that remains an issue. The most recent Cabinet Office revised framework analysis, published in April last year, stated that Ministers believed there were four areas that were reserved but subject to continued discussion. Two of those seem to me to have strong relevance to international trade. One is state aid and one is food GIs. If the question of who has power to legislate on those issues has not yet been fully resolved, it is surely all the more important to establish a formal forum for serious discussions between Ministers in the devolved Administrations and the UK Government on what should or should not be in a future trade agreement.
I have some sympathy with the argument that the hon. Member for Dundee East has advanced, but one of the problems with his amendment was encapsulated in an exchange in the fourth sitting of the Committee on the previous Trade Bill, between the former Trade Minister Mark Prisk and the then Trade spokesman for the hon. Gentleman’s party—I believe that that was the hon. Member for Livingston (Hannah Bardell). In column 116 of that sitting, the then Minister asked whether the hon. Lady thought that Welsh Ministers should have the power to veto a deal that was hugely in the interest of Scottish whisky. As a result, I gently suggest to the hon. Member for Dundee East that when we seek to press new clause 16 to a vote—perhaps on Thursday—he may be open to supporting that as a sensible route to managing the inevitable slightly differing priorities of each of the devolved Administrations and, potentially, the UK Government too.
Greg Hands
I welcome the opportunity to discuss the important issues raised in the amendments, which I think are fundamentally on different topics from those that we have dealt with for much of today. There is significant common ground between the Government and the Opposition parties. I welcome the hon. Member for Dundee East to the debate, for his first contribution today. It was noticeable that he chose not to take part in the chaos that ensued earlier when the main Opposition party’s Front Benchers struggled with whether they are for or against the Canada agreement and so on. He wisely decided to sit that one out.
Under the UK constitution, the negotiation of international trade agreements is, as I have already made clear, a prerogative power of the UK Government. It is also a reserved matter, where the UK Government act on behalf of the whole UK. When exercising that reserved power, the Government have made clear that they will deliver trade agreements that benefit all parts of the UK—I have already referred to the scoping assessment for the US deal, showing that Scotland would be the nation or region of the UK that benefited most—unleashing the potential of businesses from all four countries of the United Kingdom.
I recognise the important role that the devolved Administrations can and should play in that endeavour, not only as representatives of their respective nations’ interest, but because we know our trade deals will interact with areas of devolved competence. As such, my Department has worked and will continue to work closely with the DAs on our trade policy.
Turning to new clause 16, I will explain why I think it is unnecessary and impractical, although the principle of engagement behind it is one that I share. The new clause seeks to create a statutory role for a joint committee of the UK Government and the devolved Administrations as a forum to discuss trade policy, but such an arrangement is already in place.
During the passage of the Trade Bill 2017-19, the previous Secretary of State for Trade, my right hon. Friend the Member for North Somerset (Dr Fox), committed to establishing a new bespoke ministerial forum for trade with the devolved Administrations, in recognition of the importance of this relationship. That forum had its inaugural meeting in January and meets regularly to discuss our approach to trade negotiations, including key areas such as our objectives for the US trade agreement.
I am also happy to put on record my commitment to continuing to work closely with the devolved Administrations at all stages of trade negotiations, not only through the ministerial forum for trade, but via bilateral ad hoc engagement to reflect the sometimes fast-paced nature of trade negotiations. Indeed, I spoke about the US free trade agreement with all my counterparts in the devolved Administrations last month and have also recently written about the Trade Bill and other trade policy issues.
My former ministerial colleague, my right hon. Friend the Member for Bournemouth East (Mr Ellwood) travelled to Belfast in February to meet colleagues in the Northern Ireland Executive to discuss trade policy. For the benefit of the hon. Member for Dundee East, I restate the commitments made by my right hon. Friend, when he was a Minister, in his March letter to the Scottish Minister Ivan McKee.
In short, we are already delivering the engagement envisaged by proposed new clause, and we have achieved that while continuing to observe the important constitutional principles enshrined in the devolution settlements. In contrast, this proposed new clause would give the devolved Administrations a statutory role in the reserved area of international trade negotiations, which would be constitutionally inappropriate.
Nor is this proposed new clause practical. It would lock us and the DAs into prescribed ways of working under the existing intergovernmental memorandum of understanding, a document last updated in 2013. It would constrain our ability to develop and adapt bespoke engagement mechanisms as we embark on negotiating our first UK trade agreements for more than a generation.
Turning to amendment 8, the powers created by this legislation will be used for the purpose of transitioning trade agreements with those countries that the UK had agreements with through its membership of the EU. That will ensure certainty, continuity and stability in our trade and investment relationships for businesses, citizens and trading partners in all parts of the UK.
As parts of these agreements touch on devolved matters, this legislation will create concurrent powers. We have sought to put in place concurrent powers to provide greater flexibility in how transitional agreements are implemented, allowing each devolved Administration to implement the agreements independently in some cases, while also allowing the UK Government to legislate on a UK-wide basis where it makes practical sense to do so. This approach permits greater administrative efficiency, reducing the volume of legislation brought through the UK Parliament and through the devolved legislatures.
I recognise that the devolved Administrations and members of this Committee seek reassurance that those powers will be used appropriately. The Government have already made clear that we will not normally use them to legislate within devolved areas without the consent of the relevant devolved Administration or Administrations, and never without consulting them first. I am, of course, happy to restate that commitment here.
It is not appropriate, however, to put that commitment on a statutory footing, as, like new clause 16, it would give the devolved Administrations a statutory role in the reserved area of international trade, undermining the important constitutional principles enshrined in the devolution settlements. We recognise that the technical implementation of international obligations in devolved areas is a devolved matter. However, as I have explained, the decision on which international obligations the UK enters into is a reserved matter and a prerogative power exercisable only by the UK Government. This rightly ensures that the UK Government can speak with a single voice under international law, providing certainty for our negotiating partners and the strongest possible negotiating position for the whole of the UK, for the benefit of all of the UK.
A statutory consent provision in the Bill would in effect give the devolved Administrations a veto over a reserved matter. This would be highly constitutionally inappropriate and could lead to a situation where international agreements applied in some parts of the UK but not others. This would be a fundamental weakening of our Union and the long-established principle that in the matter of international relations the UK Government negotiate for all parts of the UK.
Additionally, placing the commitment on a statutory footing could open us up to convoluted and lengthy procedures in which the courts were asked to determine in minute detail what was reserved and what was devolved. This is disproportionate and would create significant uncertainty for UK businesses, undermining the fundamental purpose of the Bill, which is to maximise certainty and continuity of trading arrangements. Our commitment to not normally legislate in areas of devolved competence without consent, and never without consultation, strikes the proper balance between providing sufficient reassurance to the devolved Administrations while preserving international relations as a reserved matter. It is a sincere commitment that we will honour, as we have honoured the commitments made to the devolved Administrations on the Trade Bill 2017-19.
For example, we committed to seeking suggestions from the devolved Administrations on the optimal way of recruiting non-executive members for the Trade Remedies Authority, which we will discuss on Thursday, with regional knowledge, skills and experience, and we fulfilled that earlier this year.
Our new independent trade policy absolutely calls for engagement with the devolved Administrations and respect for the important role that they can and should play, but it does not call for fundamental shifts in the nature of devolution or the weakening of powers that Parliament agreed should remain reserved to the UK Government. We have worked collaboratively with all the DAs to ensure that the Bill enables us to transition arrangements in a way that delivers for the whole UK. Our existing commitments, which I have restated today, provide sufficient reassurance to the devolved Administrations on the issues covered by the amendments. This is demonstrated by the fact that the Welsh Government have recommended consent to the relevant clauses of the Bill.
I hope I have been able to satisfy hon. Members that we have recognised and met their objectives in this amendment and that the hon. Member for Dundee East will withdraw it.
Stewart Hosie
I thank the Minister for reconfirming the non-legislative commitments made by his predecessor in his letter to Ivan McKee. That has genuinely helped. However, the Minister falls back on the argument that bespoke powers are better than a permanent credible structure. I disagree. I think a permanent credible structure provides more stability and certainty than the bespoke ad hoc use of powers and discussions from time to time. However, in the current devolved process, I recognise that international treaties are reserved matters. I absolutely understand and respect that, but he knows as well as anyone who might be listening that the interface of the intersection between an international trade treaty and a devolved competence might be fairly high. That is all the more reason for structured statutory formal engagement rather than an ad hoc bespoke process, which may or may not satisfy one or more parties, or one or more of the nations, in the UK about the Government’s actions over a given international trade agreement.
Although I do not intend to press the matter to a vote, and I thank the Minister sincerely for the commitments he has restated, there is a fundamental difference of opinion on the bespoke ad hoc approach being suggested and a formal statutory structure, and I am sure we will return to that theme on Report. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned.— (Maria Caulfield.)
Trade Bill (Seventh sitting)
Thursday 25th June 2020
(4 years, 10 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Chair
Good morning, everyone. Before we start, I remind everyone that the Hansard Reporters would be grateful if Members emailed electronic copies of their speaking notes to hansardnotes@parliament.uk.
I am aware that the room is very hot. Please do not hesitate to remove your jackets. We are getting somebody to come and open the windows. Please bear with us and try to make yourselves as comfortable as possible.
Clause 2
Implementation of international trade agreements
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 16, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of the period of five years beginning with IP completion day.”
This amendment would bar any extension to the five-year window for making regulations to implement EU rollover agreements.
The Chair
With this it will be convenient to discuss the following:
Amendment 17, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—
(a) the period of five years beginning with IP completion day (“the initial five year period”), or
(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (8).
(8) Regulations under subsection (7)(b) may not extend the initial five year period or any subsequent period beyond the day which falls ten years after IP completion day.”
This amendment would limit any extension of the window to a maximum of ten years.
Amendment 20, in clause 2, page 2, line 35, leave out “five” and insert “three”.
Amendment 21, in clause 2, page 2, line 36, leave out “five” and insert “three”.
Amendment 22, in clause 2, page 2, line 39, leave out “five” and insert “three”.
Amendment 23, in clause 2, page 2, line 41, leave out “five” and insert “three”.
Gareth Thomas
It is good to have you back in the Chair, Mrs Cummins. On Thursday afternoon, when you were not with us, we had one or two moments of light. The hon. Member for Stafford clearly began to feel nervous about whether the Bill was properly drafted, asking me to go into further detail about what was wrong with the Bill. The Minister helpfully confirmed that Command Papers published by his Department are not worth the paper they are written on once 12 months have passed and that there is absolutely no guarantee that the House will get either a debate or a vote on any future UK-US deal.
It is therefore a particular pleasure to have the chance to return to the subject of continuity or roll-over agreements and to speak to these amendments. As you will remember, Mrs Cummins, the Minister and his colleagues have presented the Bill as being purely about rolling over agreements already long since negotiated with the European Union. Effectively, they say, it is just a matter of changing “EU” to “UK”, putting a comma in a different place, dotting the odd i or crossing the odd t, or making some other little tweak—in practice, minor changes to deals that have already been done. Indeed, so confident was the former Secretary of State for International Trade about that, that he committed to get all 40 trade agreements with the European Union rolled over into UK-specific trade deals by March last year.
Imagine our surprise on seeing in the Bill clause 2(7), which suggests that a period of five years might be needed after implementation day, with the option to extend by another five years, to conclude those roll-over agreements. Bear in mind that we were told that deals such as the South Korea, Japan and Canada deals were going to be easy to complete and should be done by Brexit day—certainly, we were led to believe, by implementation day.
Matt Western (Warwick and Leamington) (Lab)
To elaborate on that very simple point, I recall very well that Lord Price even tweeted about this—it would be just a simple cut-and-paste job. We have all been misled, haven’t we?
Gareth Thomas
I am relatively new to the Trade Bill and am only catching up with the discussions that my hon. Friend and others have had about these continuity agreements. Something odd certainly seems to have happened. It is true that the Minister has managed to get a deal done with the Faroe Islands.
The Minister for Trade Policy (Greg Hands)
On a point of order, Mrs Cummins. I think that the hon. Member for Warwick and Leamington just accused Lord Price, a Member of the other House, of misleading people. I do not think that that is a permissible term to use in our debates. I invite the hon. Gentleman to withdraw that term.
Matt Western
I will certainly withdraw it; I recall that I used the word, now that the Minister mentions it. What I was trying to say was that Lord Price was suggesting that there was a simple procedure of cutting and pasting, and that was clearly not the case.
Gareth Thomas
It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.
Bill Esterson (Sefton Central) (Lab)
The point about Lord Price is that what he said has turned out not to be true; that is the reality. My hon. Friend mentions the agreements that have been concluded, but the one with South Korea, for example, is only a temporary agreement with notice for a renegotiation. Listening to what my hon. Friend is saying, I wonder whether the Government have reverted to the five-year period because they realise that they would quite like these provisions still to be in place for the South Korea deal when it comes back for the renegotiation.
Gareth Thomas
If my hon. Friend will forgive me, I will come to South Korea in due course.
The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.
The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:
“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.
Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:
“Turkey…probably will not be carried over, regardless of the Bill.”
He went on to say that the Bill would allow the continuity and trade agreement to happen,
“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”
He went on to underline a similarly important point:
“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]
We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.
Let us take the UK-Japan continuity agreement. Again, we are led to believe that this is simply a matter of two very close allies sitting down together briefly and changing the words “EU-Japan” to “UK-Japan”, as well as perhaps changing the odd comma here or there, and dotting the odd i and crossing the odd t. In practice, however, something very different appears to be taking place. Just on Tuesday, the Financial Times carried a story saying that Japanese negotiators have given Britain an ultimatum: “Do the deal with us in six weeks, or we will not be able to get it through our Parliament and there will be no continuity trade agreement in place by 31 December.”
Bear in mind that Professor Winters, in his evidence to the Committee on Tuesday 16 June, at Question 31, said in response to the probing of my hon. Friend the Member for Sefton Central that
“with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 26, Q31.]
Again, when the Minister gets to his feet, it would be helpful if he gave us a little more detail on the substance of what is going on in those negotiations. I thought we were told that when we left the European Union, we would stop being a rule taker any longer, and here it appears that Japanese negotiators are telling us: “Do a deal or you don’t get your trade agreement in time.”
Matt Western
My hon. Friend is making an extremely important point. Hiroshi Matsuura, the Japanese lead negotiator, is saying that their only focus for the next six weeks is the UK, whereas the UK is trying to negotiate with the US, the EU, Australia, New Zealand and so on. Yet we do not even have the full complement of Department for International Trade trade negotiators in the policy group: we are about 10% down on where we should be.
Gareth Thomas
My hon. Friend is right. Let us bear in mind another point before I come on to Canada. Negotiations are going on not only with the US in relation to the transatlantic partnership with the EU, but we still have not concluded a continuity trade agreement with Andorra, as I understand it. Presumably, one of the Minister’s civil servants is sitting in a room somewhere, worrying about what will be in the UK-Andorra agreement, when they could be properly deployed to trying to sort out whatever the problems are in the UK-Japan agreement. Again, I remind the Committee that we were told that that agreement would be incredibly simple to sort out. I think the Minister said it was just a continuity trade agreement or just a roll-over agreement.
Let us come to the UK-Canada talks—one of the great favourites of the Minister. He had a little fun with us, it would be fair to say, on Tuesday afternoon. Again, however, there does not seem to be any sign of the UK-Canada talks being completed by 31 December. The Minister has been at pains to sell us the great virtues of the EU-Canada deal, and presumably—I would ask him this—there will be similar virtues from a UK-Canada deal, but why is there no obvious sign of any progress towards a signing ceremony for a UK-Canada deal?
In the quote from the Canadian Government regarding why negotiations have not advanced at a more rapid pace, they made it very clear that they were waiting to see how EU-UK talks got on. One got the strong sense that Canadian negotiators are sitting out in the garden smoking a cigar and planning their holidays. They are in no rush whatever to complete a trade deal with the UK, notwithstanding the studiously unspecific comments the Secretary of State gave us at questions last Thursday about how good natured the conversations had been with whoever she had spoken to in the Canadian Government.
Bill Esterson
My hon. Friend is developing his point extremely well. I think it is fair to remind him that it is not just Canada that puts our deal with the EU ahead of its deal with us; Japan and Turkey want us to do a deal with the EU so that they can base their deal with us on the terms of trade that we have with the EU. That is a whole other set of complexities that go way beyond this being a simple matter of continuity and of changing the letters “EU” to the letters “UK”.
Gareth Thomas
Let me chide my hon. Friend for his negativity. We were told at the last general election that an oven-ready Brexit deal would come before us, with a wonderful new free trade agreement, easy to sign, with the European Union. Presumably the scepticism that I have allowed to creep into my remarks about whether the roll-over agreements will be signed by 31 December are entirely unreasonable, and the Minister will say that all the other 20, even the one with Andorra, will be done by 31 December.
I know that the South Koreans want to start completely fresh talks in about 18 months’ time, but surely that will not take five years, or 10 years to complete—or will it? I am an optimist. I take the Minister at his word. He has repeatedly said that roll-over agreements will be simply a matter of rolling over the EU agreements into UK agreements, changing some tiny details, and that they will all be done on time. One wonders, then, why we need the flexibility set out in subsection (7).
Let us remember when the previous Trade Bill was prepared and developed. It probably happened at around the time the right hon. Member for Maidenhead (Mrs May) took over as Prime Minister. Members of the Committee will remember that she decided to sack George Osborne, the then Chancellor of the Exchequer, for gross incompetence. One can imagine that the Cabinet Secretary got on the phone to the permanent secretary at the Department for International Trade and said, “There’s good news and there’s bad news. The good news is that the man who introduced austerity, destroyed our economy and damaged public services has finally left the Government. The bad news is that one of his chief cheerleaders is moving into your Department. Whatever you do, given the way in which they have messed up the economy, don’t let them mess up trade agreements. Write into the Bill a bit of extra time—five or 10 years, or perhaps even longer—so that we can get these trade agreements done.” The Minister may not share my assessment of how this provision got written into the Bill.
Bill Esterson
I have to take the opportunity to congratulate my hon. Friend on the moment in our deliberations. The lines he just delivered cannot be improved on, and I would not wish to do so. Does he remember Nick Ashton-Hart, in giving evidence to us this time, reminding us of his evidence to us last time that trade agreements inevitably take a lot longer than expected, and that trade agreements between parties fall in favour of the bigger party? We are now a smaller party than when, as part of the EU, we made agreements with all the countries he mentions. That is one reason why these things will take a lot longer—those countries want to renegotiate a better deal, which they think they can get because of the power they have.
Gareth Thomas
My hon. Friend has always grounded his remarks in reality. Let us remember that Conservative Ministers and Members have always wanted to present trade negotiations as a Christmas sale, where one just turns up and gets a shedload of lovely bargains. They have not, as yet, been open and honest with the British people about the trade-offs that trade negotiations inevitably bring, on which—I suspect this afternoon—more anon.
I gently suggest to my hon. Friend that we are likely to hear the Minister, in his wind-up speech, chastising us again for our lack of belief in the calibre of the Secretary of State himself and the Department to complete these UK-specific trade agreements. If the Committee remembers when the last Trade Bill was discussed, so confident were the previous ministerial team that this power was actually not quite as necessary as first appeared, they agreed to reduce the sunset period from five years to three years. One can only assume that the Cabinet Secretary got back on the phone after the current Prime Minister was selected and said, “I’m really sorry to bring you bad news, but one of the chief acolytes of the little-lamented George Osborne is back in your Department—”
Maria Caulfield (Lewes) (Con)
On a point of order, Mrs Cummins. While this is very entertaining, I am quite conscious that we are still not even past considering clause 2. We must get through the whole of the rest of the Bill this afternoon—there are 12 more clauses. May I ask your advice, Mrs Cummins, on how we can get through that when speeches are not necessarily referring to the Bill itself?
The Chair
I hear that point of order, and I am sure that Mr Thomas also heard it. I encourage him to perhaps drift closer towards the subject of the amendment.
Gareth Thomas
As ever, Mrs Cummins, I am grateful for your guidance. It will come as no surprise to you or the Committee that Labour Members are disappointed that the Minister has not at least stuck to the terms of the deal that he and the then Minister of State made with the hon. Member for Huntingdon (Mr Djanogly) to reduce the sunset clause from five years to three years, which is specifically relevant to amendments 20 to 23—just to help the Government Whip.
Again, one wonders if, by that point, there was growing fear in the Department that, despite the rhetoric of the Minister, there would be a series of challenges in completing these roll-over agreements. It is a surprise to us to see that sunset provision not included. What my hon. Friends and I have done—in a very generous way, I think—is provide a menu of options to the Minister to demonstrate his and his Department’s faith in their ability to complete these roll-over agreements. Surely, if it is that easy to get the roll-over agreements completed, they will not need to go beyond five years, which is the purpose of amendment 16. Perhaps, if they are feeling a little nervous, they might want to go for amendment 17 and have a limit of 10 years on the face of the Bill. If they are feeling very nervous that they will not get negotiations done with South Korea, Canada, Andorra, Japan or Turkey by the end of the implementation period on 31 December, perhaps they would want to put back into the Bill their own amendments, as encapsulated in amendments 20 to 23.
In our generosity, we have retabled the amendments 16 and 17 that were tabled to the previous Trade Bill in the names of my hon. Friend the Member for Brent North (Barry Gardiner) and my hon. Friend the Member for Sefton Central and others. We did that to help the Minister demonstrate his confidence in his ability to get all the trade agreements done, with his own wording on a three-year as opposed to a five-year sunset clause.
It might be worth, particularly for the Government Whip’s benefit—thinking about rebellions—to remember what the hon. Member for Huntingdon said. He pushed Ministers to go further to limit the powers in the Bill. He pushed them hard on Second Reading and, clearly, in private negotiations, to table their own amendments on Report, to limit the amount of overreach and potential abuse of the current weak scrutiny arrangements for trade agreements. On Report two years ago the hon. Gentleman advanced an entirely plausible argument, and talked about the possibility of a country where there is an EU trade agreement saying to us:
“‘Yes, we agree that you can roll over, but let’s face it, you are a market of only 50 million people rather than 500 million, so we’ll agree to roll over, but only on condition that we also get 50,000 visas a year.’” —[Official Report, 17 July 2018; Vol. 645, c. 274.]
Under the present Bill, that trade agreement could be pushed through the House of Commons with only a 17-member Committee talking for 90 minutes. That is hardly the sort of robust parliamentary scrutiny that such a trade agreement would deserve. On Second Reading of the present Bill on 20 May the hon. Member for Huntingdon repeated his criticism at column 621 and noted that not only might visas be an issue with respect to trade agreements; the country that wanted to roll over an agreement with us might also want military or intelligence provisions to be added in as part of a package.
Similarly, any slightly amended deals in five or three years’ time could also be covered, and could be used to implement such trade agreements with other wide-ranging implications and with minimal levels of scrutiny. So surely it is a sensible step to limit the Bill’s ability to help Ministers to bypass parliamentary scrutiny of the trade agreements they conclude, even in the small way that Ministers have previously advanced themselves of reducing the sunset period from five years to three years. If they cannot face the embarrassment of backing an amendment that was first tabled by my hon. Friend the Member for Brent North, perhaps they will show a little courage and back the amendments that they brought forward as a result of a deal with Tory Back-Benchers. If they do not vote for amendments 20 to 23, it will be further evidence that when Tory MPs do a deal with Ministers they cannot rely on it until it is written on the face of legislation.
The further we get from the point when the EU signed a deal with a third country, the more likely, surely, a UK-specific deal is to be significantly different from the deal that the EU negotiated. It is true, as my hon. Friend the Member for Sefton Central said, that South Korea has agreed a continuity deal, but only on the proviso that a new deal would be properly negotiated in 18 months’ time. The further away from the signing of the EU-South Korea deal and the UK-South Korea continuity deal, the more likely it is that the new deal will be very different. Therefore, more parliamentary scrutiny—even the limited parliamentary scrutiny that the Constitutional Reform and Governance Act 2010 provides—will be merited. Limiting the length of time that the Bill can be used to push that deal through with the minimal levels of scrutiny as it allows is even more necessary.
Greg Hands
It is a pleasure to welcome you to the Chair, Ms Cummins. I did not get the chance on Tuesday because the supergroup carried on for the entirety of the morning.
Amendment 16 seeks to remove the power to renew the sunset clause after five years, and I am afraid I cannot support it. It would undermine our ability to implement our obligations from trade agreements beyond the first five years, which risks putting us in breach of the agreements and could open us up to legal challenge. I am sure that is not what the Opposition are seeking to achieve.
Bill Esterson
If the Minister cannot support a change to the five-year sunset period, why did he support it in the previous Parliament, when it was three years?
Greg Hands
I think the hon. Gentleman’s timeline—or the timeline of the hon. Member for Harrow West—may be a little incorrect. As it happens, I left the Department on 21 June 2018, which predated that amendment being made. In any case, the context then, which I will explain, was rather different from the context now, and I think it is very desirable that it be five years, not three years, for the reasons that I am about to explain.
There is a fundamental misunderstanding in everything that the hon. Member for Harrow West just said. The power is in large part needed to make technical changes that ensure that the agreements remain operable. The fundamental misunderstanding on his part is that it is not five years extra to complete the negotiations, sign the deals or finish the negotiations—no. It is five years that is needed to make sure the agreements remain operable once they have been signed.
Before I come to the real detail, let me give the hon. Gentleman an update on some of the agreements he asked about. It was interesting to hear him focus on Andorra and San Marino. Those countries are, of course, in a customs union with the European Union.
We are in discussions with both countries, but in our view, they are largely dependent on what the future relationship between the UK and the European Union looks like, for those two countries are in a complete customs union with the European Union.
The hon. Gentleman asked for clarity about Turkey. I was surprised by that question, because I checked his Twitter feed, and he does actually follow me on Twitter, which I do not take as a compliment ordinarily. He must have seen what we put out three hours ago from my right hon. Friend the Secretary of State for International Trade:
“Great to see”—
UK and Turkey—
“trade talks progress today. Let’s build on our already strong trading relationship worth £19bn. We are working hard to ensure we can reach a UK-Turkey trade deal at the end of the transition period.”
He has it right in front of him on his own Twitter feed; I urge him to read it. People mock social media—I might have been critical of social media in my time—but they occasionally perform a useful function. Helping us to keep up to date with what is going on in the world is one of the most useful aspects. So there he has it from just three hours ago.
The hon. Gentleman asked about the so-called temporary agreement with South Korea. It is not a temporary agreement. The agreement includes a review clause after two years, which is a standard feature of many international trade agreements. The review clause states—I am paraphrasing slightly—that if the two parties do not believe it is mutually advantageous to continue the agreement, there is the option not to. That does not mean to say that it is a temporary agreement. All international agreements can be cancelled by one party or the other, if they feel the agreement is no longer mutually advantageous. Of course it leaves open the possibility of doing a more extensive agreement in the future, but that is the case with all trade agreements.
When a country signs an agreement, no one is saying that it will stay in place forever. There may be opportunities in future to extend it into areas of trade that had not been thought of when the original agreement was signed. That is an entirely normal phenomenon. For example, the EU and Mexico have done an enhanced agreement based on their original agreement, which dated from about 2000 or 2002, to bring it up to date. New things come along, such as e-commerce and so on, so of course trade agreements are updated, but it is wrong to describe that trade agreement as temporary.
We are in discussions with Canada, but I return to the points that the hon. Gentleman made on Tuesday. He is so against the Canada agreement that, if there were any delay in the discussions with Canada, he should be cheering that not condemning it, because he is opposed to the agreement in the first place. I thought that would update him on where we are with the agreement.
Let me describe what it is all about. In the case of a transition mutual recognition agreement, we may need to change secondary legislation after the point of signing, and after 1 January 2021, to update the names of awarding bodies and third countries so that UK businesses can continue to use such bodies legally. It is not extra negotiating time. It is extra time to ensure that the agreement remains operable.
Alternatively, where our trade agreements reference international standards, such as environmental protection, we may need to update references in domestic legislation to ensure that we remain in compliance with our international agreements. Equally, a potential use of the power could be to upgrade the list of entities subject to procurement obligations to reflect machinery of government changes.
I used the example last week of DCMS changing its name from the Department for Culture, Media and Sport to the Department for Digital, Culture, Media and Sport. That name change might need to be reflected to keep one of those agreements operable, so a change in domestic legislation would ensure that the procurement obligations in the agreement are kept operable. It is not extra negotiating time. The power could also be used to update the list of entities subject to procurement obligations, as I have said.
I think there is a misunderstanding of the nature of the power. If Opposition Members had expressed concerns about the breadth of the power—in other words, the ability to carry on amending legislation for many years afterwards—that would be a much more legitimate concern than the professed concern about extra negotiating time. The Bill has been scrutinised by the Delegated Powers and Regulatory Reform Committee. Its 33rd report on the 2017-19 Bill raised no concerns about the delegated powers in the Bill, including the sunset clause, and welcomed our move to introduce the affirmative procedure for any regulations made. I see no reason why it should reach a different conclusion on this Bill.
Matt Western
I just want to understand the point the Minister is making. I understand the importance of it, but does it not suggest that the three-year clause in the previous Bill showed a degree of naivety on the part of Government—that they would have sufficient time on the other side to negotiate further agreements with these countries?
Greg Hands
No, I do not accept that. It has nothing to do with the negotiations; it is all about keeping the agreements operable. It is a matter of judgment, and our judgment is that five years is a reasonable time. It is renewable by the affirmative assent of both Houses. We think that that is a reasonable time to keep these powers in place, so that we can then make further changes as needed to keep those agreements operable, and it is renewable by both Houses.
Gareth Thomas
Will the Minister support our amendment to reduce the sunset period from five years to three years, as his own Government did in the previous Bill, or is he determined to reject that suggestion?
Greg Hands
I have just explained that we think that five years, not three, is the appropriate time, so we will vote against the hon. Member’s amendment if he has the audacity to push it. Given that the fundamental premise is incorrect, I would be surprised if he were to push it to a vote, because it is based on a misunderstanding of what the power is all about.
The DPRRC report did not indicate any concerns about the Government retaining the power to renew this clause. Amendment 17 proposes to render the clause renewable only once and for not more than a period of 10 years after the end of the transition period, but that is unnecessary. The clause can be extended only with agreement from both Houses of Parliament and only for a period of up to five years at a time. If Parliament judges that our use of the sunset clause has not been appropriate, it has the power to vote against renewal. As I have stressed before, without the ability to renew the clause, we will not have the power to ensure that signed continuity agreements remain operable, which risks the UK’s ability to fulfil its international obligations. If we do not have this power, we will need to put in place other powers. We should not do tomorrow what we can do today.
Amendments 20 to 23 propose to shorten the sunset period from five to three years. I have already explained why we need the power and the changes the power would make. We believe that a five-year period strikes the right balance between flexibility of negotiations and constraints placed on the power. Our signed continuity agreements are evidence that this is a limited, technical exercise to replicate the effects of existing obligations. Seeking parliamentary permission to renew this capability every three years, rather than five, would be disproportionate and places an unnecessary burden on parliamentary time.
I repeat that the amendments, or at least the description of them, are based on a fundamental misunderstanding. The five years are not extra negotiating time. They allow technical changes to regulations on an ongoing basis, to keep operable agreements that have already been signed. I hope that that reassures the Committee, and I ask the hon. Member for Harrow West to withdraw the amendment.
Gareth Thomas
I enjoyed very much the answer that the Minister provided. In particular, it is a relief to hear that the Secretary of State has finally got round to launching negotiations with Turkey. I hope that those negotiations will be completed by 31 December, given the huge and dramatic impact that it could have on jobs and steel businesses in the UK. I gently remind the Minister of the considerable scepticism we heard from representatives of UK Steel that that would be achieved. It would be interesting to hear later in our proceedings whether Ministers have any sort of contingency plan for the steel industry, if negotiations cannot be completed in time to get a UK-Turkey deal through.
The Chair
With this it will be convenient to discuss the following:
New clause 18—Statement on equalities legislation—
‘(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1).
(2) Before a draft of the statutory instrument containing the regulations is laid before either House of Parliament, the Minister must make a statement as to whether the statutory instrument would, if made, modify any provision of equalities legislation.
(3) If a Minister expresses a view in a statement under subsection (2) that the draft statutory instrument would, if made, modify any provision of equalities legislation, the Minister must explain in the statement what the effect of each such modification would be.
(4) If the Minister fails to make a statement as required by subsection (2), the Minister must make a statement explaining why.
(5) A statement under this section must be made in writing and published in such manner as the Minister making it considers appropriate.
(6) In this section, “equalities legislation” means the Equality Act 2006, the Equality Act 2010 and any subordinate legislation made under either of those Acts.’
New clause 22—Trade agreements: approval—
‘A Minister of the Crown must not make regulations to implement an international trade agreement unless—
(a) a statement on the terms of the agreement has been approved by the House of Commons on a motion moved by a Minister of the Crown,
(b) a motion for the House of Lords to take note of that statement has been moved in that House by a Minister of the Crown,
(c) a motion relating to that statement has been approved by a resolution of the Senedd Cymru,
(d) a motion relating to that statement has been approved by a resolution of the Scottish Parliament, and
(e) a motion relating to that statement has been approved by a resolution of the Northern Ireland Assembly.’
This new clause would require the UK Government to secure the approval of both Houses of Parliament and the devolved Parliaments of Scotland and Wales, and the Northern Ireland Assembly before implementing any international trade agreement agreed after the passing of the Bill.
Gareth Thomas
I rise to move new clause 18 in my name and that of my hon. Friends, and I hope to say a few words about new clause 22. Clause 2 gives Ministers the authority to make any regulations they consider appropriate for the purpose of implementing an international trade agreement, including regulations that make provision for
“modifying…primary legislation that is retained EU law”.
We have had representations suggesting that “retained EU law” appears to include a very wide range of primary legislation that has an impact, potentially, on measures to improve equality in this country, not least the Equality Act 2010 and the Modern Slavery Act 2015. At the moment, there do not appear to be safeguards on the face of the Bill to prevent Ministers from using the power in clause 2 to erode previous rights on equalities granted by Parliament.
That excellent organisation Liberty has provided an example to the Committee, to give a little colour to this justified concern. The Government could in theory
“reach an agreement with a foreign state on the provision of services, such as transport, and”
make
“changes to the Equality Act”.
That
“could include removing the duty on service providers to make reasonable adjustments for people with disabilities, making access to transport more difficult for 1 in 5 of the UK’s population.”
If such a power were necessary at all, it is surely vital that safeguards are introduced in the Bill to ensure that human rights and equality laws passed by Parliament cannot be amended by Ministers whose key priority is to get a series of trade agreements signed off and locked into law. The way in which the Bill has been drafted does not include any restrictions on the use of delegated powers, as we touched on in a previous discussion.
As a result of those concerns, Members of the other place in particular, as well as a number of Members in this House, raised those points with Ministers. That led to what we Opposition Members thought was a very sensible amendment, tabled by the noble Baroness Fairhead, then a Minister of State in the Department, for the Government on Report in the House of Lords. I assume that she no longer fits the ideological bent of the current Government, and she is no longer there, which may explain why the amendment is no longer in the Bill. It seems to me that that is one further example of how this Bill is even worse in terms of parliamentary scrutiny than the Bill that had completed all its initial Commons and Lords stages in the last Parliament, only to be ditched by the Government.
According to the official record, the Government apparently worked very closely with the Equality and Human Rights Commission to produce the amendment that the Government originally tabled and that we are re-tabling, acknowledging that although they were not anticipating any need to amend equalities legislation, there was a possibility of the type of example that Liberty has advanced to us, and which I have given to the Committee: that trade agreements could potentially weaken protection against unlawful discrimination or lead to the diminution of equality rights.
The new clause provides for a ministerial statement to be made before any regulations are laid to implement a continuity trade agreement. The statement would outline whether those regulations modifying the provisions of the Equality Act 2006 and the Equality Act 2010 are set to happen. That provision was supposed to be in addition to the reports that Parliament would receive setting out the significant differences between continuity agreements and the original agreements. Given that those reports are also no longer guaranteed, it is a further indication that scrutiny—already poor of these trade agreements in a number of ways—is set to get even worse, unless Ministers are willing to put this sensible new clause into the Bill.
When she moved her amendment, which I read it again for the benefit of Members, Baroness Fairhead said:
“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]
What are we to believe now that it is not in the Bill? Inevitably, it is difficult not to feel that the Government do not want to be quite as transparent as they once claimed with Parliament, businesses and the general public about the so-called continuity trade programme. It is therefore not surprising that one comes back to the words of Professor Winters talking about the feedback he had had on how UK-Japan negotiations were going. He was very clear that they were being “studiously” vague. I once again urge Ministers, even at this late stage, to accept new clause 18.
New clause 22 would lock in the need for the consent of both Houses of Parliament, the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly before any trade agreement could be agreed. We on this side of the House have considerable sympathy with the idea that both Houses of Parliament should be required to approve any trade treaty before it takes legal effect. We think that the people of Wales, Scotland and Northern Ireland have as much right as the people of England to expect a say through their representatives in this House on whether trade agreements should be signed into law. We are clear, too, that the devolved Administrations must be properly consulted. Indeed, with new clause 16, which we will no doubt come to vote on this afternoon, we want to lock into law the guaranteed rights of the devolved Administrations to consultation.
Given the significance of trade agreements to the people of Wales, Scotland and Northern Ireland, I can well understand that the Senedd, the Scottish Parliament and the Northern Ireland Executive will at times want to comment on trade matters. One can understand why those who tabled new clause 22 decided to do so in the light of the fact that Ministers have decided to vote down every attempt to improve the scrutiny arrangements for future trade agreements and the so-called continuity trade agreements—many of which, as we know only too well, are not actually set to be continuity trade agreements at all.
Let me give just one example where the Senedd in particular might have concerns about trade agreements, which might have provoked the tabling of new clause 22. The Senedd, like the Welsh Government, will probably understandably have been very concerned about the future of the Port Talbot steelworks. If we had been given more detail about the nature of the UK-Turkey negotiations, rather than the studiously vague description that the Minister read out from the Secretary of State’s Twitter feed, there might not be the concern about the future of steel in Port Talbot and elsewhere in the UK that there understandably will be following Mr Warren’s evidence to the Committee.
The Chair
Thank you, Mr Thomas. I remind you that the debate is on clause 2 stand part. You can speak to new clause 18, but you are not moving it at this stage.
Stewart Hosie (Dundee East) (SNP)
I start by addressing new clause 22 in the name of my friends from Plaid Cymru. In one regard, it seeks to do something similar to our amendment 8, which the Committee has already debated: to lay down in statute respect for devolution. We witness that in (c), (d) and (e), which would require motions relating to a ministerial statement to be approved by the Senedd, the Scottish Parliament and the Northern Ireland Assembly prior to regulations being made to implement an international trade agreement. New clause 22 would also, at (a) and (b), empower Parliament by requiring a statement on the terms of such an agreement to be approved in the House of Commons and a take-note motion passed in the other place.
That is eminently sensible. However, I suspect that the Minister will say it is not necessary. He may suggest that it is not necessary because international agreements, including trade agreements, and the decisions to implement them are reserved matters. There is some merit in that. He may also make the case, as he did on Tuesday, that it is better if the UK speaks with a single, if not a united, voice in order to give our negotiating and trading partners certainty about what a deal may or may not deliver.
That, however, is rather to miss the point, as the hon. Member for Harrow West said. We know that some sectors or industries are disproportionately important to the economies of Northern Ireland, Scotland and Wales, compared with their importance to the UK economy as a whole. I cannot remember the precise numbers, but it has been suggested on multiple occasions that the white fish industry is 10 times more important to the Scottish economy than it is to the UK economy as a whole. There are clearly sectors that are vital.
It is equally the case—this is probably accepted now—that modern trade agreements are by and large not about quotas and tariffs; they are about regulation, conformance and product safety. They have the ability to impinge directly on the reserved competencies in Scotland, Wales and Northern Ireland. It is, therefore, sensible that we understand and respect why my friends from Plaid Cymru and others seek not just to empower both Houses of Parliament in the decision-making process on implementing an international trade agreement, but to give statutory voice to the devolved nations to ensure their legitimate interests are properly protected.
I turn to clause 2 stand part. I accept what the Minister said about the Bill being primarily about rolling over the pre-existing trade agreements that we had by dint of our very successful membership of the European Union, but I also take on board the serious point made by the hon. Member for Harrow West. He said that the Queen’s Speech described a Bill to facilitate trade, not just roll-over agreements. He also talked about the long title, which says that the Bill will
“Make provision about the implementation of international trade agreements”.
That is rather wider than negotiating and implementing roll-over arrangements only.
In the previous debate, we began to touch on some of the key flaws in clause 2 that run to the heart of this legislation. As I said on Second Reading and in my introductory remarks last week, clause 2(6)(a) allows for the Government to make provision
“modifying retained direct principal EU legislation or primary legislation that is retained EU law”,
which runs to the heart of people’s concerns. Even if I accept—and, by and large, I do—that the provision is designed to roll over our current deals, the ability to modify in that way may well mean that we end up with an agreement that is substantially different from the one we started with.
That is a concern to me. Although the Minister has said there are restrictions on how the modification process can be used, subsection (6)(a), (b), (c) and (d) allows for the modification of retained EU legislation or primary law. It confers functions on the Secretary of State or any other person, including conferring discretion. It allows for the delegation of function, and for civil penalties to be introduced for failing to comply with regulations. The only restriction in subsection (6) is the restriction on the power to make subordinate legislation. I will have to check Hansard carefully, because I think the Minister spoke about amending secondary legislation in the previous debate. That would not be possible under this restriction, but it is the only restriction in terms of the ability to modify.
That brings us to the other flaw in clause 2—namely, the five-year or 10-year limit. Subsection (7) says:
“No regulations may be made under subsection (1) after the end of…the period of five years”—
so far, so good—
“or…such other period or periods as are specified in regulations made…in accordance with subsection (8).”
Subsection (8) states:
“Regulations under subsection (7)(b) may not extend the initial five year period…by more than five years.”
This is not simply, as the Minister suggests, to ensure that regulations are up to date. This five-year period and the five-year extension—this 10-year period—actually allows for the modification of principal EU legislation or EU laws under subsection (6), with the exception of the power to make subordinate legislation. That is an extraordinarily wide power that the Government have given themselves—a 10-year period. While I accept that the Bill is principally about rolling over existing deals, the ability to modify in a fundamentally unrestricted way for a period of more than two full Parliaments is an extraordinary power for the UK Government to seek to give themselves.
On that basis, if there is a vote on clause 2 stand part, I will certainly vote against the extension of these discretionary powers to the Government.
Bill Esterson
It is a pleasure to see you back in the Chair, Mrs Cummins, and we shall continue to enjoy serving under your chairmanship for another 19 minutes. I thank you for your contribution as joint Chair of the Committee.
I rise to speak to new clause 16. I remind the Minister of the point touched on by my hon. Friend the Member for Harrow West on 13 March 2019, when the Minister’s then ministerial colleague—
Bill Esterson
Sorry, it is new clause 18 that I rise to speak to. I am grateful for the correction.
On 13 March 2019, an identical amendment was tabled by Baroness Fairhead in the House of Lords. I will just remind the Minister of what she said in her brief contribution:
“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]
She said that in good faith, because she wanted the amendment to be accepted. It was accepted by the House of Lords and became a substantive part of the Bill, and the Commons would have considered it had the Government brought it back in the time available. There was plenty of time to discuss it then. The Government Whip made a point of order earlier. If the Government have a real problem with timing today, they should think about the problem that was caused by their not bringing back the Bill at any time during the period after March 2019, when an identical amendment, tabled by the Government, was agreed. The Minister has to answer the question why, if this measure was good enough for the Government on 13 March last year, it is not good enough now.
Greg Hands
Over the past few days, I have outlined the Government’s position on our approach to clause 2 and I will not repeat that to the Committee. The general point about the continuity powers has been frequently made. I will focus my remarks on the Opposition amendments.
First, I must inform the Committee that the letter I promised the hon. Member for Harrow West on the position of Kenya and Ghana has gone out to all members of the Committee. I pledged that on Tuesday, so I think that is pretty swift. It should be in everyone’s inboxes.
Gareth Thomas
One thing the Minister can confirm, surely, is whether parts produced in other European Union countries will still count towards the value of the car or other parts that are being manufactured. That diagonal and horizontal cumulation is a standard feature of the rules of origin, and it might help to give some certainty to British car and car parts manufacturers that that flexibility in rules of origin will not be lost.
Greg Hands
I thank the hon. Gentleman for that; he makes a good point. I refer him to the deal that we have negotiated with South Korea and how it reflects on those rules. That negotiation has been completed. However, here, today, it is not my job to comment on live negotiations or discussions with our counterparts.
The hon. Member for Dundee East talked rightly about sectors that are important in different parts of the UK. He made a very fair point. He talked about the white fish sector being 10 times as important to the Scottish economy overall as it is to the UK. That makes me wonder why—if I understood him correctly—his party’s policy is to rejoin the European Union, where presumably the status of the white fish sector is even smaller than the one tenth it represents in the UK. That baffled me.
It is strongly in the UK Government interest to have good relationships with the devolved authorities on trade, which is a reserved matter, a prerogative matter. None the less, regulations interact with areas that are matters of devolved competence.
It is therefore perfectly proper both for the UK Government to have good relations and discussions with the devolved authorities, and for the UK Government to interact with sectors that are larger—I do not mean to say that they are disproportionately important—for certain devolved Administrations than others. That is one reason why I have gone out of my way since rejoining the Department to have meetings—I am checking my list of engagements—about Scottish smoked salmon, and with the Scotch Whisky Association, the Scottish Beef Association and other bodies in Wales and Northern Ireland, as well as in the English regions.
Hon. Members talked about the unrestricted nature of the power, but it is not quite right to say that this is unrestricted. Any changes made are subject to the affirmative procedure, and the power is only to amend secondary legislation that is direct retained EU law, again subject to the affirmative procedure. It is not as if that is an unrestricted power.
Returning to equalities legislation, I remind colleagues of constraints in the Bill, including the fact that the affirmative procedure is required for any statutory instruments made under the power in the clause. Parliament will rightly make its voice heard on regulations made, but as the Prime Minister outlined in his Greenwich speech, the UK will always be an open, equal and fundamentally fair country. That will remain true regardless of EU membership or any other international agreement. We have not needed the EU to tell us what is appropriate in the field of equalities. For example, the EU provides a minimum of 14 weeks’ paid maternity leave, whereas Britain offers up to a year’s maternity leave, 39 weeks of which are paid, and the option to convert it to shared parental leave. Moreover, UK workers can get statutory sick pay for up to 28 weeks, whereas the EU has no minimum sick leave or sick pay legislation.
Promoting respect for British values, including equality, the rule of law and human rights, is and will remain a core part of our international diplomacy. That is what our continuity programme provides, alongside certainty to business and consumers. It is not, and never will be, about undermining equalities legislation.
I turn to new clause 22, tabled by Plaid Cymru Members. For the benefit of Members who have not sat on a Bill Committee before, it is entirely possible for those who are not members of the Committee to table an amendment—I would not recommend that course of action for Government Members—as we see the hon. Member for Arfon (Hywel Williams) and his colleagues have done. On Tuesday, in a debate on similar issues, I set out that it is an essential principle of the UK constitution that the negotiation of international trade agreements is a prerogative power of the UK Government. The prerogative power serves a crucial role in ensuring that the UK Government can speak with a single voice under international law, providing certainty to our negotiating partners.
Of course, international negotiations are a reserved matter under the devolution settlements—an area in which the UK acts on behalf of all the nations of the UK. These important principles are complemented by the UK’s dualist approach to international law, which provides that international treaties cannot of themselves make changes to domestic law—I think we will return to that this afternoon. This approach ensures that where our agreements require changes to UK domestic law, the UK Parliament will scrutinise and pass that legislation in the normal way. Where that legislation is made by the devolved Governments, the devolved legislatures fulfil that role. It is right that Parliament and the devolved legislatures should have that role, which is why we have provided that regulations made under clause 2 will be subject to the affirmative procedure.
We have also committed ourselves to not normally using the clause 2 power to legislate in devolved areas without the consent of the relevant devolved Administration, and never without consulting them. Combined with the scrutiny mechanisms in the Constitutional Reform and Governance Act 2010, which the hon. Member for Harrow West was so enthusiastic about 10 years ago, those procedures will ensure that the UK Parliament can see exactly what we have negotiated, and if it does not agree with it, can take steps to prevent the Government from implementing and ratifying the deal. There are therefore already rigorous checks and balances on the Government’s power to negotiate and ratify a new agreement.
By giving Parliament an automatic veto over trade agreements, the new clause would cut across those procedures and undermine the important constitutional principle that it is for the Executive to negotiate and enter into deals, and for Parliament to scrutinise them. The new clause would also give the devolved legislatures an automatic veto over our agreement, which would be wholly inappropriate given that this is a reserved matter. On a practical level, a veto for the devolved legislatures would also lead to a situation in which one part of the UK could prevent the rest from benefiting from an agreement.
The Government recognise the important role that the devolved Administrations and the UK Parliament can and should play in our trade agreements, and I welcome the opportunity to put that on the record again. My Department works closely, as I have outlined, with the devolved Administrations and Parliament to deliver trade policy and trade agreements that reflect the interests of the UK as a whole, but we should do so in accordance with the long-standing principles enshrined in our constitution, rather than seeking to undermine them. I hope that reassures the Committee. I ask hon. Members not to press their new clauses, and to agree to clause 2 standing part of the Bill.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Maria Caulfield.)
Trade Bill (Eighth sitting)
Thursday 25th June 2020
(4 years, 10 months ago)
Public Bill CommitteesTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 18, in schedule 2, page 11, line 26, leave out from “section 1(1)” to the end of line 27 and insert
“may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
This amendment would specify an affirmative resolution procedure for regulations under section 1(1).
I am grateful for the opportunity to speak to the amendment in my name and those of my hon. Friends. Let me make it clear that we have tabled this amendment recognising that the affirmative resolution procedure is not a perfect process by any means. It is, nevertheless, better than the annulment procedure, which Ministers currently have locked into the Bill. An affirmative process is vital, as without it the Government will have carte blanche to introduce regulations to implement the obligations arising from our independent membership of the GPA—the agreement on government procurement—without the slightest hint of anything resembling parliamentary scrutiny.
The negative resolution procedure the Government propose for regulations under clause 1(1) is the least rigorous of all the parliamentary procedures for scrutiny available to the House. The main point of the negative resolution procedure is to allow the Government to have their way without any need to bother with parliamentary democracy. Indeed, I am told that the last time a negative instrument was successfully annulled in the House of Commons was the Paraffin (Maximum Retail Prices) (Revocation) (No. 3) Order 1979.
International treaties cannot be easily repealed, but domestic legislation can be repealed much more easily. If ever there were an example of secondary legislation crying out for proper parliamentary scrutiny and oversight, surely this is it. I remind the Committee of the evidence we heard from Rosa Crawford of the Trades Union Congress. In response to Question 70 from my hon. Friend the Member for Sefton Central, she pointed out:
“The GPA as it stands has no requirement for members to promote social standards in their tendering process.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 49, Q70.]
The TUC is worried that, once we leave any kind of relationship with the European Union and no longer have to rely on the EU’s contract regulations, the UK Government may well roll back on those commitments to promote social standards through the tendering process that are currently locked into our law by EU directives.
Opposition Members remember—indeed, Rosa Crawford reminded us all as a Committee—that the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights on working time and agency workers, and other important protections for workers’ rights. Not surprisingly, the TUC is worried that that may well be the direction of travel with procurement regulations in the future.
It is therefore sensible to make sure we have a proper parliamentary process that allows us to explore whether, under the cover of minor technical changes to the GPA—no doubt the Minister will suggest to the Committee that that is all he intends this process for—our contract regulations and the standards associated with them are gradually being undermined and a race to the bottom on standards is under way. We consider the affirmative resolution procedure to be more appropriate than the annulment process in the Bill. However imperfect the affirmative resolution process, it at least provides Members with the possibility of a debate and a vote, and it is then of course up to us to make proper use of that opportunity. That is the spirit of amendment 18.
The Minister for Trade Policy (Greg Hands)
I begin by welcoming you to the Chair this afternoon, Sir Graham. I appreciate the concerns that there should be adequate parliamentary scrutiny of regulations made under the clause 1 power. I am satisfied that that is the case, and let me explain why.
As I have said, the power is intended to allow the UK to make technical changes—for example, to reflect new parties joining the government procurement agreement or existing parties withdrawing from it. In the case of a new or withdrawing party, it is important that the UK is able to respond quickly and flexibly. Once a new party deposits its instrument of accession, there is, under the rules of the World Trade Organisation GPA, a period of only 30 days before that accession comes into force. The UK will then be under an immediate obligation to provide that new party with guaranteed procurement opportunities covered by the GPA, and of course vice versa. If the UK failed to offer the new party this guaranteed access, we would be in breach of our GPA commitments. Equally, a party to the GPA can decide to withdraw unilaterally. When a party notifies the Committee on Government Procurement that it intends to withdraw, it will cease to be a GPA member just 60 days later. It is therefore vital that we are able to react quickly to such a notification, either to join or to withdraw.
If the power to amend UK legislation to reflect a party’s withdrawing from the GPA were subject to the affirmative resolution procedure, we might not be able to legislate in time to remove the party within the 60-day time limit. This could result in UK contracting authorities continuing to give a party that has left the GPA—companies from that country—guaranteed access to the UK’s procurement market that it is no longer entitled to have. Furthermore, the former party would have no obligation at the same time to give UK businesses reciprocal access to its procurement markets. I am confident that Members will agree on the need to regulate quickly in these instances, both practically so that UK businesses are not disadvantaged and to show good faith to the other party.
Bill Esterson (Sefton Central) (Lab)
The Minister made great play two years ago of the idea that the affirmative resolution procedure takes 30 days longer than the negative resolution procedure. However, that is not an issue because the Government are notified months in advance that this is coming, and Government officials are able to put in place the necessary regulations, whether negative or affirmative. There is plenty of time to get ready to avoid the catastrophic outcome that the Minister describes.
Greg Hands
The hon. Gentleman makes a fair point. In fact, accession to the GPA typically take some years, so in that sense it would have been telegraphed quite far in advance—the most recent party to join is Australia. But it would be inappropriate for us to ratify someone joining the GPA in advance of them actually depositing the papers, so although joining is a lengthy process, the actual ratification process is very short. That is the key difference in this case.
The Delegated Powers and Regulatory Reform Committee’s report on the Trade Bill 2017-19 raised no concerns, nor made any recommendations, about the use of the negative procedure in relation to this power. However, let me clear: when new parties are seeking to accede to the GPA, we will ensure that Parliament is kept informed. Parliamentary scrutiny is more effective before an accession is agreed, because that is when the views of Parliament can be taken into account.
Where a WTO member is seeking to join the GPA, it is our intention to notify Parliament, to keep the relevant Committee—in this case, the International Trade Committee—informed as the negotiations proceed, and to allow further discussion where desired. That is the right time for Parliament to be actively involved in a debate, for example, on Australia’s accession to the GPA—although the case of Australia is backward looking, of course, to when we were covered by the GPA through our EU membership. If there were such a case going forward, the right time would be during the discussions to the accession, not after the accession had been agreed.
I remind Members that there has already been parliamentary scrutiny of the UK’s market access schedules and the text of the GPA, which were laid before Parliament in line with the Constitutional Reform and Governance Act 2010. That process concluded without objection in 2019. Any further changes to the GPA, including the UK schedules prior to our accession, will again be scrutinised in line with CRAG.
I hope my comments provide reassurance to the Committee. I ask the hon. Gentleman to withdraw the amendment and commend schedule 2 to the Committee.
Gareth Thomas
I was toying with being persuaded by the Minister until the intervention from my hon. Friend the Member for Sefton Central. Given what he said about the amount of telegraphing that Ministers will have about the changes and given the scale of scrutiny provisions that were included in the last Bill come the end of Report stage in the Lords and the Commons, which have now been taken out of the current Bill, I fear that on this occasion, I need to press the amendment to a vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 1, in schedule 4, page 15, leave out line 14 and insert—
“(a) a member to chair it, appointed by the Secretary of State with the consent of the International Trade Committee of the House of Commons,”.
This amendment would establish the requirement for Parliament, through the relevant committee, to give its consent to the Secretary of State’s recommendation for appointment to the Chair of the Trade Remedies Authority.
It is a pleasure to see you back for the final sitting of the Committee, Sir Graham.
I know that the Minister sometimes forgets what we said in our reasoned amendment, so in case he has forgotten again, I remind him that we recognised the desirability of—indeed, the need for—the UK to pass
“effective legislation to implement agreements”
and
“to set out the basis of a Trade Remedies Authority to deliver the new UK trade remedies framework”.
Yes, we do indeed support the creation of the Trade Remedies Authority. There it is again, for the avoidance of doubt, on the record. No doubt the Minister will claim otherwise, as he has done numerous times in the past two years.
Schedule 4 states that the Secretary of State will appoint the chair, who will in turn appoint the chief executive and non-executive members of the Trade Remedies Authority. The amendment is about how the appointment of the chair is carried out. The chair is appointed by the Secretary of State and in that process there is no recourse to Parliament or to other scrutiny of the appointment. The Secretary of State is therefore free to appoint someone in their own image, with the same political leanings and economic opinion—which is the more important point.
Indeed, although I have no idea of his politics, when Simon Walker gave evidence he gave every indication that he entirely agrees with the approach of the Secretary of State to trade remedies. I do not say that to denigrate Mr Walker. I have known him for a number of years and he is a well-travelled representative of business, who has had a number of different roles. The amendment is about not him as an individual, but the principle. It is about the opportunity to appoint someone with a particular approach to trade remedies and the appointment, in turn, of an unbalanced Trade Remedies Authority that looks only at the approach favoured by the Government.
The previous Secretary of State had advisers from Legatum and the Initiative for Free Trade. The current Secretary of State has an adviser from the Adam Smith Institute. It is clear what the main thrust of Government advice is on those matters.
Gareth Thomas
Has my hon. Friend seen the evidence from the British Ceramic Confederation, which thought there was already a very strong ideological view on tariffs, protectionism and dumping? It highlighted, for example, the recent UK global tariff announcement and suggested that the Government’s pre-eminent view was that all tariffs are protectionist.
Bill Esterson
I am familiar with the evidence that my hon. Friend cites. It reminded us that the Minister has previously said in meetings—I believe he has put it in writing, too—that experts on trade would be appointed to these roles on a non-ideological basis. Yet the evidence on how the people are appointed to the roles suggests that the Government have one single approach, which is as my hon. Friend indicated.
The British Ceramic Confederation has set out concerns that include how global tariffs have been implemented. The way in which the Government tariff schedules have been set out causes a problem for many of the confederation’s members because of the small margins involved in the industry and because even small differences in tariffs between different countries creates a difficult problem for competitiveness.
The Government’s ideological direction of travel is about supporting consumers. The Minister will probably say that the Opposition are against the consumer interest, that we do not support consumers and that we do not think they should have access to good quality low-price imports. But that misses the point. Of course consumers are one of the interests and should be supported. Of course they have every right to be included, but they are one—not the only—consideration in these matters.
Gareth Thomas
It is obviously important that we have the Trade Remedies Authority. Two industries particularly concerned to have it are steel and ceramics. Have there not been consistent concerns in the past about China and one or two other countries trying to dump steel products and ceramics into Europe for UK markets? We need someone robust enough to stand up to such practice, and perhaps only parliamentary scrutiny of that person will help tease that out.
Bill Esterson
My hon. Friend is right. We have discussed ceramics, and he has spoken in other debates about steel and how not having an international trade agreement with Turkey runs the risk, as we were told by UK Steel, of 15% tariffs being levied in one direction and creating a very uncompetitive situation in the streel industry.
However, this is a slightly different point. The point is about trade remedies and the example of steel. In the 2015 steel crisis, cheap imports of Chinese steel flooded the European market, often not of the same quality or standard, and our steel industry was in crisis. The steelworks at Redcar closed, despite the fact that it had world leading carbon capture and storage technology, which was lost for good. The international competitive advantage in that emerging technology has gone from this country, and the rest of our steel industry faced a very difficult time. There are difficult times again now, partly because of the covid crisis and because the Chinese economy has emerged more quickly. The Chinese went into it first and have come out of it first.
In the 2015 crisis, David Cameron’s Conservative Government were resistant to the use of trade defensive measures as part of the European Union. This country delayed the introduction of those measures and the lifting of the lesser duty rule, with the effect that we were very late to take the action needed. The loss of SSI at Redcar was one consequence. We took action too late and we did not take the same action as other countries, which were in a much stronger position to resist the dumping of Chinese steel as a result.
The Chair
Order. Before you make your intervention, Mr Thomas, I remind you that last time you very helpfully tried to bring your colleague back to the very narrow terms of the amendment, by reference to parliamentary approval for the appointment. I hope that you will do so again.
Gareth Thomas
Absolutely, Sir Graham. I was merely going to say that the need for parliamentary scrutiny of the chair of the TRA is surely even greater given the point my hon. Friend made about the risk of China perhaps again trying to dump steel or ceramic products into our markets. The Government have an appetite for joining the transatlantic partnership, which China also wishes to join—it has made that wish very clear. Does my hon. Friend not think that amplifies his point about the need for robust parliamentary scrutiny to check that we have a genuinely robust chair of the TRA?
Bill Esterson
Yes, that is absolutely right, and of course there must be a chair who balances interests in exactly the right way to do these things; in his evidence, Simon Walker said he hoped that would be the nature of the make-up of the Trade Remedies Authority.
However, hope is not a recipe for success and there must be parliamentary involvement to ensure that, whoever the chair is, they take measures when they are appointed, including receiving representations from across industry, employers and unions, consumer groups—I say to the Minister that we recognise the importance of consumers in these matters—and the devolved nations. My hon. Friend was right to raise this issue. That is why parliamentary scrutiny of the appointment of the chair matters; it is so that these points are picked up.
I will talk about the economic interest test: further evidence given to us by the British Ceramic Confederation. The confederation made the point to us that there is no explicit presumption in favour of adopting the measures in the European equivalent to the economic interest test. The European equivalent balances the interests of producer, worker, and regional and consumer groups; the problem with the economic interest test is that it looks at only one. The EU is cited:
“The need to eliminate the trade distorting effects of injurious dumping and to restore effective competition shall be given special consideration.”
That is what the EU says. There is the explicit reference to “special consideration”; that is the presumption in the EU model, which is not there in the UK equivalent. Currently, the Bill only infers this, which is why something on—
The Chair
Order. The hon. Gentleman knows that I try to be generous, but with the best will in the world this is a very long distance away from the very tight wording in the amendment. I ask him to come back to the precise point of the amendment or draw his remarks to a close.
Bill Esterson
Absolutely, Sir Graham; I do apologise. The point that I am making is that there is this request to go on the record, and the Minister indicated earlier that this was the opportunity to do that. Perhaps he can put something on the record for the British Ceramic Confederation of the nature that they have written to him about and that I have just referred to.
I bring the discussion back to the amendment.
Gareth Thomas
One of the issues that Parliament would surely want to scrutinise is the role of the chair of the TRA in the appointment of the other board members. Some of the evidence presented to us makes clear a fear that some of the trade remedy experts that a putative chair of the TRA might want to bring on board will not be enthusiastic about keeping competition fair. Rather, they might want to turn a blind eye to the dumping of products in the UK, to create unfair competition with British companies.
Bill Esterson
My hon. Friend is right, and that is what the amendment is about. It is about ensuring that, when cross-examined—presumably by the Select Committee—the chair is asked whether they will take a robust approach in their appointments to the Trade Remedies Authority, to protect British industries, including the steel sector, ceramics, dyers, chemicals and pharmaceuticals, all of which trade remedies are likely to be involved in. That is the basis for the amendment. I hope the Minister will deal with the point that the British Ceramic Confederation asked him to deal with. Fundamentally, this is about ensuring that the chair is scrutinised properly, to ensure that there is a balance in the competing interests.
Gareth Thomas
Another concern about trade remedies that it would be useful for Parliament to raise with the chair of the TRA is the chair’s attitude to the international dispute resolution process, because the TRA will not be acting in a vacuum—a case of dumping of products in the UK market might have to go up to the World Trade Organisation dispute resolution process, which is currently not functioning. Would it not be sensible to be able to hear from the putative chair of the TRA their view on the connection between the UK TRA and the WTO’s currently blocked dispute resolution process for dumping cases?
Bill Esterson
That is an excellent example of what a parliamentary hearing would be used for. The model that we seek to emulate is the one used for the Office for Students, although that is not the only example of where parliamentary hearings are used before a chair of a body of this nature is appointed. The Office for Students uses that exact process to ensure that the chair appoints people who have a wide range of interests, rather than a narrow approach. We advocate a model along those lines, with the chair interviewed by the Select Committee.
Gareth Thomas
Were I involved in such a parliamentary scrutiny process for the putative chair of the TRA, I would want to know, as I hope my hon. Friend would, the attitude of the chair to the EU-led multi-party interim appeal arbitration process, which is an attempt to get around Donald Trump’s blocking of the appointment of judges to the WTO dispute resolution process. That is surely a sensible scheme for the UK to join, and we would want to hear that the putative chair was supportive of it. The Minister has, again, been studiously vague on whether the UK would want to be part of such a sensible anti-dumping process.
Bill Esterson
It would be important to ensure that, in the absence of the WTO functioning properly, international alternatives were being considered. Asking the chair their view of those proposed measures and our attitude to international co-operation is extremely valuable. I am glad my hon. Friend raised that point.
Gareth Thomas
I hesitate to test my hon. Friend’s patience. Were I to catch your eye, Sir Graham, when schedule 5, on staff transfer schemes, is being debated, I would be interested to explore the scope for members of staff moving from the Department for International Trade to the TRA, to get some experience of both the WTO dispute resolution process and the new multi-party interim appeal arbitration process. Again, does my hon. Friend not think that we should find out the attitude of a putative chair of the UK TRA towards staff transfers so as to get such expertise before they need to deploy it in a UKTI context?
The Chair
Before you respond, Mr Esterson, I gently point out that we have had some wonderful illustrations of some of the questions that might be put to the putative chair of the TRA, should the amendment be passed. We have probably had enough to get an idea of the argument being advanced.
Bill Esterson
Sir Graham, I am guided by you. The Chair is always right and I completely accept your point. The Minister may choose to respond to the excellent suggestions that my hon. Friend the Member for Harrow West has made, but I think we have made the case that the chair of the TRA should be interviewed and there should be adequate parliamentary scrutiny of his or her appointment.
Greg Hands
I would like to start by repeating what I said in 2018 when I first took this clause through a Committee and what I and others have said since: this Government are committed to creating an independent and objective investigation process in which businesses and consumers will have full confidence and to setting up the Trade Remedies Authority with the right pool of skills, qualities and experience.
I recall that broad agreement was evident for the principle of an independent impartial body during the previous debate on the TRA during the Trade Bill’s 2017 to 2019 passage. Without wishing to linger on the point, my startlement that the Opposition are so opposed to this legislation increases, although they claim to support all its parts.
Many will know that the World Trade Organisation allows its members to take action to protect domestic industries against injury caused by unfair trading practices, such as dumping, subsidies or unforeseen surges in imports. Quite to the contrary of what I think the hon. Member for Harrow West said, nobody wants to turn a blind eye to dumping. It is quite the opposite, but we can only do that with a functioning and legally operating Trade Remedies Authority.
Where there is evidence that dumping is happening, countries are permitted to put measures in place to remedy the situation, hence the term “trade remedies”. Measures usually take the form of an increase in duty on imports of specific products following an investigation. Establishing an independent trade remedies function is integral to the UK’s new independent trade policy. We must get it right. Decisions on trade remedies cases can have profound impacts on markets and on jobs, and that is why we need to create an independent, objective investigation process that businesses can trust. We will be appointing the best people.
Gareth Thomas
The Minister is absolutely right. We need a functioning TRA and we need a functioning trade remedies system. However, decisions that the TRA makes can be challenged and taken up to the WTO. As he knows, there is not a functioning dispute settlement process at the WTO at the moment. Why is there still such resistance from the Minister to joining the multi-party system that the EU has proposed to try to get around Donald Trump’s objection to the WTO dispute resolution process?
Greg Hands
I hear what the hon. Gentleman has to say, and I think he is wrong to say that there is resistance, but I gently suggest that the matter is without the scope of the Bill, interesting though that topic and the future of the WTO might be.
We will be appointing the best people to the TRA, including the non-executive members of its board. As with any public appointments, the appointment of non-executive directors will be subject to the well-established rules that govern public appointments of this kind.
Amendment 1 seeks to give the International Trade Committee the statutory power to approve or veto the appointment of the TRA chair. It is established practice that decisions on public appointments are for Ministers who are accountable to Parliament and the public for those decisions. The Cabinet Office “Public Bodies Handbook” explicitly states that Ministers normally appoint the chair and all non-executive members for non-departmental public bodies.
Following the Liaison Committee’s report in 2011, further guidance was issued by the Cabinet Office setting out the tests for determining which non-departmental public body appointments should be subject to pre-appointment scrutiny. That guidance makes it clear that pre-appointment scrutiny should apply only in respect of three types of post:
“i. posts which play a key role in regulation of actions by Government; or
ii. posts which play a key role in protecting and safeguarding the public’s rights and interests in relation to the actions and decisions of Government; or
iii. posts in organisations that have a major impact on public life or the lives of the public where it is vital for the reputation and credibility of that organisation that the post holder acts, and is seen to act, independently of Ministers and the Government.”
In my view, none of those three requirements is met. The TRA is not a regulator, it does not protect or safeguard against the actions and decisions of Government, and, although we believe it is important for business confidence that it is seen as independent of Ministers, it is not an organisation that can be described as having a major impact on public life or the lives of the public.
I turn now to a few other points that cropped up. On EU remedy measures, we have been clear that we will transition appropriate measures into the UK. We have launched transition reviews of those, and we have consulted and will continue to do so. The economic interest test is a matter for the Taxation (Cross-border Trade) Act 2018, but there is of course a presumption in favour of measures in that Act.
On the engagement of trade unions, Simon Walker and the interim body—the Trade Remedies Investigations Directorate—met the Trades Union Congress yesterday and is engaging unions frequently. I remind the Committee that the board are not the decision makers on trade remedies; they set the strategy and hold the chief executive and the executive to account. There is no role for the TRA at the WTO or any involvement with the appellate body. I believe that I have responded to the British Ceramic Confederation letter, but I will study carefully what is in it.
Under the provisions of schedule 4, to which we will turn shortly, the TRA must produce an annual report, which the Secretary of State must lay before Parliament. The TRA will also be subject to the scrutiny of the National Audit Office and parliamentary Committees. In addition, complaints against it can be considered by the Parliamentary and Health Service Ombudsman, who may also share information with Parliament. I hope that that reassures the Committee that the amendment is not appropriate, and I ask the hon. Member for Sefton Central to withdraw it.
Bill Esterson
The Minister made a number of interesting comments. He talked about businesses and consumers having full confidence in the Trade Remedies Authority. He did not mention workers, and he did not mention the devolved Administrations in that statement at the start of his response. I am sure that causes concern.
The Minister spoke about the need to act independently and repeated the point about business confidence. He has also made the point that the TRA needs to be an organisation that business can trust. But if it is to be independent, there needs to be scrutiny of appointments. He said that a reason why it does not come under the code for appointments to be approved, other than by Ministers, is that it does not have a major impact. Trade disputes have major impacts. I mentioned the SSI closure; that was 5,000 jobs. I am shocked that the Minister does not regard that kind of incident as having a major impact. I am sure that workers up and down the country would share my concern on that point.
Greg Hands
I have checked exactly what I said. I said, “organisations that have a major impact on public life”. I did say that it would have a major impact on jobs, but I think “public life” would be considered more broadly than the immediate jobs of a particular workforce, important though they are. We are talking about the broader public.
Bill Esterson
The Minister is in danger of dancing on the head of a pin with his phrases. Honestly, 5,000 jobs is not a major impact on public life? I think the people of Redcar and the north-east would disagree with him strongly about that.
It is essential that we have this system of scrutiny in place. There are pre-appointment scrutiny sessions for many roles in public life. The Minister set out the rules—I think he set them out correctly—but he also gave us, in his description of what is independent, and in the phrase “major impact on public life”, an argument in favour of our amendment. For that reason, we will press it to a vote.
Question put, That the amendment be made.
Stewart Hosie (Dundee East) (SNP)
I beg to move amendment 35, in schedule 4, page 15, leave out lines 27 and 28 and insert—
“3 A person holds office as a member of the TRA for a fixed period of five years from the date of appointment.
3A A person is eligible for renewal of appointment for a further fixed period of five years upon the expiry of the first period.”
The Chair
With this it will be convenient to discuss amendment 36, in schedule 4 page 16, line 11, at end insert—
“10A A person shall be considered unable or unfit if the Chair is satisfied as regards any of the following matters—
(a) that the person becomes insolvent,
(b) that the person has been convicted of a criminal offence,
(c) that the person is otherwise unable or unfit to discharge the functions of a member or is unsuitable to continue as a member.”
Stewart Hosie
Amendment 35 would establish a fixed period of office for members of the TRA and make provision for one further period of office. The reason is rather obvious. Introducing a fixed term would give TRA members greater security of tenure and therefore reinforce their independence and impartiality, as their duration of service could not be—or certainly could not be perceived to be—at ministerial discretion.
Amendment 36 would insert wording stating that a person should be considered unable or unfit if the chair is satisfied regarding any of the following matters: that the member becomes insolvent, has been convicted of a criminal offence or is
“otherwise unable or unfit to discharge the functions of a member or is unsuitable to continue as a member.”
The effect would be to define, to a greater extent at least, the meaning of “unable or unfit” in paragraphs 9 and 10 of schedule 4. Introducing a definition of “unable or unfit” would provide greater legal certainty about the circumstances in which a person may be removed from office as a non-executive or executive member of the TRA.
In keeping with the amendments and new clauses that I have spoken to so far, I do not intend to divide the Committee on amendments 35 or 36, but I ask the Minister to consider carefully how the Government might bring forward amendments at a later stage to deal with the matters of a fixed term for, and legal certainty on dismissal from, the TRA. Doing so would remove the perception that a term on the TRA, or dismissal from it, might be based on any political consideration—a perception that would weaken the credibility of the TRA—and strengthen the independence of that body. That is vital, particularly as the TRA will be invited to consider the vexed issue of some questionable, and potentially illegal, trade practices. The TRA’s credibility will be incredibly important when that particular work is undertaken, especially in the absence of a fully functioning WTO appellate board.
The Government should look again, as the Bill progresses through the other place and on Report, at how a fixed term for members might be introduced and at how legal certainty on dismissal might also be written into the Bill.
Greg Hands
Clause 5 will allow the TRA to be established as a new non-departmental public body, and schedule 4 outlines its governance arrangements. Those include detailing how TRA members will be appointed and how the terms and conditions of their appointment will be established. Such provisions should be familiar to those with experience of working with similar bodies.
It is crucial that the right people are appointed as members of the TRA. We are committed to appointing on merit following fair and open competition. That is why we are following standard Cabinet Office guidelines on the appointment of members of the TRA, as set out in the “Governance Code on Public Appointments”, which states that it is usual for Ministers to decide on the length of tenure. The code also sets out
“a strong presumption that no individual should serve more than two terms or serve in any one post for more than ten years”,
other than in exceptional circumstances.
Appointments will be independently regulated by the Commissioner for Public Appointments to ensure that the rigorous principles of public appointments and the “Governance Code on Public Appointments” are applied. Beyond that, the Government and the TRA will have regard to the need to protect the resilience of the board and to ensure that there is a managed turnover of members now and in the future. That may mean, for example, that it is sensible to make some of the initial appointments to the board shorter than five years to stagger any turnover in membership.
Specifying those details in the contractual terms for each appointment is the best way to ensure the flexibility to get the organisation off to the best start. The role of the TRA chair designate is crucial in shaping and forming the board. It is therefore only right that the Secretary of State does that through the terms and conditions for each role in consultation with the chair designate, rather than binding their hands in legislation. We are working closely with the TRA’s chair designate, Simon Walker, to start the recruitment of the rest of the TRA board members in due course. We will specify the duration of appointments as part of that process.
By contrast, amendment 35 would replace the contractual terms for all TRA members with a fixed statutory period of either five or 10 years, with no provision for any other length of tenure. That would deny the TRA the flexibility that it needs, particularly now when we are trying to ensure the best possible start for the new organisation, but such a rigid approach would be detrimental to its good governance at any time.
Amendment 36 seeks to specify a number of criteria that would deem a member of the TRA board unfit to continue in their position. Schedule 4 already provides for the Secretary of State to remove non-executive members, and for the chair to remove executive members, from the board should they be deemed unable or unfit to carry out the functions of the office. That approach will be familiar to hon. Members from the legislation establishing organisations such as the Competition and Markets Authority.
As with all public appointments, the terms and conditions for the non-executive members of the TRA are being developed in line with the “Code of Conduct for Board Members of Public Bodies”, which clearly sets out the standards expected from those who serve on the boards of non-departmental public bodies. The code provides that members of the board must inform the sponsor Department of any bankruptcy, unspent criminal conviction or disqualification as a company director in advance of appointment, or should any such instances occur during the appointment.
The code does not expressly specify that those issues determine an individual’s fitness to serve on a board or that they should be regarded as grounds for terminating an appointment, but I assure the Committee that the Government consider that that should be the case. That is why the terms and conditions of Simon Walker, the TRA chair designate, provide that the Secretary of State may terminate his appointment in those circumstances. It is very much our expectation that the relevant terms of appointment for other non-executive members will follow a similar approach.
The appointment of executive members is a matter for the TRA chair. It is therefore appropriate that the terms and conditions of their employment are managed by the TRA in a way that enables flexibility, while holding its staff to the necessary standards of integrity and professionalism.
I hope that the demonstrates to the hon. Member for Dundee East that we are establishing the TRA in accordance with the existing codes and in line with the practices adopted in other such bodies. I therefore ask him to withdraw his amendment.
Stewart Hosie
I have no intention of pressing the amendments. I listened carefully as the Minister rattled through that answer. I have no doubt that, with the exception of the specific point he made about staggering five-year terms at the very beginning, things are being done in line with guidance that has been used previously. However, that does not really answer the point that, because of the ministerial discretion, particularly on the removal of a member, there may still be a perception, real or otherwise, that members can be removed for considerations that are political and nothing to do with their actual unfitness to serve.
While I will not divide the Committee on the amendment, notwithstanding that the Minister read his answer very quickly, the Government may want to seriously consider how these matters are addressed. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 2, in schedule 4, page 19, line 26, at end insert—
“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”.
This amendment would ensure that the Secretary of State must lay the annual report of the Trade Remedies Authority before Parliament within a reasonable time frame.
The Chair
With this it will be convenient to discuss amendment 3, in schedule 4, page 19, line 26, at end insert—
“Recommendation reports
31A (1) The TRA must prepare a report on each of the individual recommendations it makes to the Secretary of State in connection with the conduct of an international trade dispute.
(2) The report must accompany the recommendation submitted to the Secretary of State.
(3) The Secretary of State must lay the report before Parliament as soon as reasonably practicable, and not later than five days from the time it is submitted to the Secretary of State by the TRA.”
This amendment would ensure that Parliament is kept informed, in a timely fashion, of the individual recommendations made by the Trade Remedies Authority to the Secretary of State in connection with cases of dumping, foreign subsidies and import increases causing injury to UK producers.
Bill Esterson
As with amendment 1, it is the lack of scrutiny that we are opposed to, not the creation of the Trade Remedies Authority. That is the subject of amendments 2 and 3, which are particularly important—as my hon. Friend the Member for Harrow West reminded us in the debate on amendment 1—in the absence of an effective WTO and given the concerns about international co-operation and collaboration on important matters that can lead to damaging trade disputes.
The amendment requires that the Secretary of State lay the annual report of the TRA before Parliament
“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”,
and amendment 3 requires that a report is prepared for Parliament in a timely fashion on each recommendation made to the Secretary of State.
Parliament should be able to scrutinise the work of the TRA to ensure that it is working in the best interests of the UK economy and all of its components. Such requirements are nothing new in the realm of trade remedies. In the European Union, the Commission is obliged to report to the European Parliament. This is supposed to be a continuity Bill; the continuity in this case would be to apply equivalent processes in the UK to what we had in the EU.
The report to the European Parliament is obliged to give MEPs statistics on the cases opened and the number of measures adopted. MPs here should be given the same information by our TRA so that they may scrutinise its work. MPs should be able to look at the number of cases initiated and the number of measures adopted, and therefore be able to judge whether the TRA is taking measures to defend our industries and jobs, and is working with the devolved authorities—not just putting the consumer interest first, at the expense of producers, jobs, and the regions and nations of the country.
Industry would be more comfortable if there was a more rigorous approach for parliamentarians to get involved in the setting of the rules for the system—it is not just us saying this, but industry, and both sides of it. As in the rest of the Bill, the Government propose nothing on parliamentary oversight or scrutiny of the TRA. Yet again, they want to make decisions that will have profound impacts—on key sectors of industry, on thousands of jobs and on the regions and nations—behind closed doors, without scrutiny and without accountability to Parliament. Unless that scrutiny is there in law, there is no guarantee that it will happen.
Giving parliamentarians an oversight power over the work of the TRA would ensure proper scrutiny and accountability. A weak trade remedies regime is of benefit to nobody in our country. If anybody thinks that having a weak regime will open up trade opportunities with international partners, they are mistaken. Partner countries will take advantage of that, once again, and we will see the loss of jobs that we saw in the steel sector in 2015 and 2016. It is only right that this House gets to scrutinise the work of the TRA to ensure that it is doing its job properly.
Greg Hands
I recognise the desire of Opposition Members to ensure that our trade remedies system is impartial, objective and transparent. Those have been our guiding principles, too.
That is why we are establishing the Trade Remedies Authority as an arm’s length body and why we will require the TRA to produce a report on the performance of its functions during each financial year, which the Secretary of State must lay before Parliament. The Bill requires that to be produced
“as soon as reasonably practicable”
after the end of that financial year. That is in line with other arm’s length bodies, such as the Office for Nuclear Regulation and the Nuclear Decommissioning Authority.
Imposing a fixed deadline by which the TRA’s annual report must be laid before Parliament is unnecessary. Prioritising an arbitrary deadline over ensuring a full and detailed report for Parliament and businesses to scrutinise is in no one’s interests. I am sure that the TRA, like all other NDPBs, will use its best endeavours to publish the annual report as quickly as possible following the end of the financial year. It is of course possible that that could be within the timeframe suggested in the proposed amendment. However, the TRA statement of accounts must be certified by the Comptroller and Auditor General before being laid, and that reliance on processes outside the TRA’s direct control makes it unreasonable to set a deadline for publication in statute.
The TRA’s annual report will follow best practice on openness and accountability as set out in the Cabinet Office publication, “Public Bodies: A Guide for Departments”, which provides a clear structure of best practice requirements, although we recognise that these will not be specific to each organisation that they cover. As with all non-departmental public bodies, we expect the TRA to follow best practice for an organisation of its type and to include appropriate performance indicators, rather than that being set by statute. As a new organisation, it is important to ensure that the TRA has the flexibility to develop and adapt these key performance indicators as it settles into its functions and continues engagement with stakeholders.
Bill Esterson
The Minister has certainly given us some rationale. I take him at his word on the practical reasons why the amendments would not do what we intended. However, it is important that we scrutinise the TRA’s work on individual investigations in realtime. I am sure there are alternative ways of doing that in Parliament—bringing reports before Select Committees, for example, where there is need to handle scrutiny sensitively if commercially confidential information is involved. Perhaps the Minister can bring some of those back to us.
However, I take at face value what the Minister says, which will now be in Hansard, on what the Government propose to do around scrutiny. While I remain concerned that there is a gap, I do not intend to push the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Schedule 5 agreed to.
Clause 6
Provision of advice, support and assistance by the TRA
Bill Esterson (Sefton Central) (Lab)
I beg to move amendment 28, in clause 6, page 4, line 22, at end insert
“and
(c) analysis of the impact of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018 (as amended by section 94 of the Finance Act 2020) to vary an amount of import duty if he or she considers that it is appropriate to do so.”.
Amendment 28 would require an analysis of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018, which I assume will be amended when the Finance Bill achieves Royal Assent, to vary import duty as she—it is “she”, at the moment—considers appropriate. This is a move away from working within the rules-based system. I entirely accept that there is a challenge because of the situation with the WTO; my hon. Friend the Member for Harrow West and I raised this in relation to other matters to do with the Trade Remedies Authority. This is an enormous step, and a great deal of power that the Secretary of State is potentially granting herself, or being granted by the Finance Bill, assuming it goes through, and there is presumably a role for the Trade Remedies Authority in scrutinising that.
The Minister was telling us earlier how wonderful social media can be and how immediate its effects can be. I use it to look at the newspapers in the morning. The Financial Times and The Times reported a number of things today that were relevant to our proceedings. I confess that I do not always pick up what the Minister and the Secretary of State are saying on their Twitter feeds; one of the problems with Twitter is that people scroll down and miss what someone has said. I mention social media because this morning The Times reports:
“President Trump has revived his trade war with Europe”.
He is threatening tariffs on £3.1 billion of goods, including beer, whisky, which we know about, and biscuits—I knew that mentioning British beer would gain the attention of some hon. Members—as well as Spanish olives, French cakes and German lorries.
The Times states:
“The primary focus of Mr Trump’s ire over trading has been China, but his America First agenda has found little room for the country’s purported allies either”—
that is, us. It continues:
“One of his earliest actions as president was to slap tariffs on imports of steel and aluminium from the European Union”,
and our steel and aluminium sectors have suffered as a result. The Boeing-Airbus dispute has caused great problems for businesses and workers in this country. There is the 25% levy on Scotch and Irish whiskey; I raise these because they are real examples of where trade disputes need responses, robust analysis and the correct approach.
Charlotte Nichols (Warrington North) (Lab)
On a point of clarification, my constituency manufactures one fifth of the world’s gin. Would my constituents be impacted by the measures that my hon. Friend refers to?
Bill Esterson
I am glad that my hon. Friend has had the chance to put on record the fact that Warrington is home to a fifth of the world’s gin. I know that she has been looking for the opportunity, and she has found it. The Times does not record whether gin is in the sights of the President of the United States for increased tariffs, but it would not surprise me. The list of proposed tariffs includes cakes, vodka—it does not say gin—potatoes, chocolate and cheese. Some of those are from the UK, but all of them are from the UK and Europe together. The article states:
“The EU has accused the US of providing state aid to Boeing, the American aircraft manufacturer, and is seeking to apply tariffs on $11.2 billion of US goods.”
We await a ruling from the WTO. As we have discussed, that is not without problem, and the dispute over aircraft subsidies goes back over a decade.
I mention those examples because they show just why it is important to get this right. The proposed change to the cross-border trade Act is relevant to the Bill as well, because that Act created the powers of the Trade Remedies Authority that we are setting up belatedly in this Bill. A power is being created here to vary rates of import duty in an international trade dispute. As I have just described, that power is significant and of great concern. This needs to be done correctly, because once a trade dispute starts it can grow and become a much bigger problem. That is why the amendment proposes a role for the Trade Remedies Authority. It is entirely consistent with the Bill, which says that the Trade Remedies Authority’s responsibilities include scrutiny and advice. We are suggesting that advice be given to the Secretary of State before she uses the new power.
The Secretary of State can act if she considers that to be appropriate. That sounds enormously wide-ranging. I have concerns that, without adequate scrutiny and the involvement of the appropriate organisation, mistakes might be made. They might be made in good faith, but we want the best possible evidence base to ensure that trade remedies of the sort that these powers envisage are used in the right way.
In the Finance Bill Committee, the Treasury Minister was asked a number of questions, and I would like to ask some of them to this Minister, because he might have had a chance to look at them. The answers will inform our view on whether, through our amendment, we are seeking the right power. The Treasury Minister said that provisions in various international trade agreements allow the UK to vary the amount of import duty applied to goods in the context of a dispute. Will this Minister please tell us what those provisions are? That was not clear from what the Treasury Minister said in the Finance Bill Committee.
The Treasury Minister described the provision in the Taxation (Cross-border Trade) Act 2018. Will this Minister tell us why a provision that was included in legislation only two years ago has now been found to be inadequate? What has changed in two years? Some of these problems with the WTO were entirely apparent even in 2018.
Who is advising the Government that the legislation is inadequate, and that the Secretary of State needs this additional power? The Treasury Minister said that, in certain circumstances, countries are within their rights to impose additional tariffs quickly in response to the actions of other WTO members, and where necessary outside WTO proceedings. If that is the case, why is that not sufficient for what the Government are trying to achieve?
The Treasury Minister referred to the problems with the WTO appellate body, which he rightly said had stopped working. He neglected to say that that was the result of President Trump declining to appoint to it. Will this Minister say what the Government are doing to ensure that President Trump appoints to that body?
The Treasury Minister appeared to say that the problems with the WTO appeals system meant that the UK Government should operate outside the WTO. Is there not a danger of our further undermining the WTO if we are not careful in how we go about doing that?
In the Finance Bill Committee, the Treasury Minister said that the change to the Finance Bill was similar to one being proposed by the EU. Will this Minister give further details of what the EU has said and done to give itself such powers?
The Treasury Minister said that the Government recognise the importance of having regard to relevant international arrangements. Will this Minister tell us what those arrangements are, and how the new powers will be exercised in line with international law and our rights as an independent WTO member?
Will the Minister tell us what initiated this change in a law that was so recently passed? Was it the digital sales tax and fear of retaliatory action by the United States, for example? The Treasury Minister reiterated the Government’s support for the international rules-based system. We agree on its importance. He indicated that any changes in import duty would be made by statutory instrument. That is a familiar concern in our deliberations on the Bill.
Greg Hands
As we have heard, amendment 28 seeks to create a new role for the TRA in analysing the impact of retaliatory or rebalancing duties imposed by the Secretary of State as a result of an international dispute. We should perhaps remind ourselves of the roles and responsibilities relating to international disputes, and the purpose behind the provision in the customs Act—to give it its proper title, the Taxation (Cross-border Trade) Act 2018—which the amendment refers to, and which the hon. Member for Sefton Central has been referring to as well.
Before going into the detail, I will say a couple of things about some of the broader issues that the hon. Gentleman has raised. The Airbus-Boeing dispute is clearly not directly within the remit of amendment 28, but it is not, I suppose, so far from it. Let me be clear about today’s announcement. We oppose the tariffs coming from the US vigorously. We find them unnecessary and harmful to trade between the US and the UK. We have raised our opposition with the US trade representative in person in recent weeks. I confirm to the Member for Warrington North that my understanding is that gin is included. There is not a decision to impose tariffs on gin, by my understanding, but gin is one of the products they are actively looking at.
On the questions that the hon. Member for Sefton Central asked about the Finance Bill, I think I am best off offering to look at those, and the most appropriate Minister will respond to him. As a former Treasury Minister, I am slightly mindful that the questions are probably within the Treasury’s area, and it may be better for the Treasury to respond. I do not think that there will be time to respond before the sitting ends at 5 o’clock in any case. However, contrary to what he suggested, it is highly unlikely that a Treasury or other Minister has said that we should operate outside the World Trade Organisation’s rules in the cases that he raised.
Section 15 of the Taxation (Cross-border Trade) Act provides for the Secretary of State to change the amount of import duty that applies to certain goods as a result of an international dispute. There are several scenarios under which that could come about. The first is if the UK has successfully challenged trade-restrictive measures imposed by another WTO member under the WTO’s dispute settlement system. If the other member fails to comply with the WTO’s ruling in favour of the UK, the UK Government would be able to impose duties to redress the issue.
Secondly, if there is a dispute between the UK and one of our partners under the terms of a free trade agreement, the UK may be able to impose retaliatory duties. Thirdly, there is the possibility that the UK could be subject to a dispute in the WTO, or as part of an FTA, and be required to provide compensation to the relevant WTO member or FTA partner. That conversation could take the form of imposing lower duties on certain goods. I reassure Members that variations in import duties in response to trade disputes are intended to be temporary in nature, and will be removed when action has been taken by the country or territory in question to bring itself into compliance.
What is clear from all this, and what Parliament has already accepted in passing the Taxation (Cross-border Trade) Act, is that it is for the Government to decide whether it is necessary to change import duties as a result of a dispute. We should be clear, however, that the resulting duties, whether higher or lower, are not trade remedies measures. That is the problem with the amendment.
Although the Trade Bill enables the TRA to provide expert support to the Secretary of State in order to build the evidence base for decisions on international disputes where needed, as we have already discussed during our consideration of amendment 3, the TRA does not have a role to play in determining duties arising from international disputes, and those duties are not trade remedies measures. Interesting though they may be to the Opposition, that would expand the role of the TRA into areas for which it is not intended. The TRA will be the UK’s expert body on trade remedies—that is the reason we are establishing it. It will not have the wider remit that the amendment would confer on it. I hope the Committee will agree and I ask the hon. Member for Sefton Central to withdraw the amendment.
Bill Esterson
That was a quite remarkable finish. I think the Minister said that the TRA will be the UK’s expert body on trade remedies.
Bill Esterson
Yet it is not going to be able to get involved in helping the Secretary of State by advising her where she might vary import tariffs in the event of an international trade dispute. Clause 6(1)(a) refers to
“the conduct of an international trade dispute”,
which seems to be entirely the right place to be looking for support for the Secretary of State when she is being given remarkable and unusual powers. If that support does not come from the Trade Remedies Authority, the Treasury will be advising, but it is a role for the Secretary of State for International Trade, not for the Chancellor.
The Minister correctly said that aspects of what I have asked about are for Treasury Ministers, but this is a responsibility of the Secretary of State for International Trade. That is why it has come to this Bill Committee; there is not another opportunity to deal with this issue. It is entirely relevant to look at support from within the Department for International Trade, which is why we tabled the amendment. I am concerned that the Minister has not come back with an alternative to how this power might be used.
Greg Hands
I would not normally intervene on the hon. Gentleman’s summation, but I think he is confusing two things: he is confusing an international trade dispute, the result of which may be retaliatory tariffs or some kind of other tariff action, with a trade remedy, which is in place to prevent something like the dumping of products where the UK is a producer of those products. They are fundamentally different things. The Trade Remedies Authority is set up to deal with trade remedies, not per se with the subjects of international trade disputes.
Bill Esterson
Not per se. The clause states:
“The TRA must provide the Secretary of State with such advice, support and assistance as the Secretary of State requests in connection with—
the conduct of an international trade dispute”.
It is not just about prevention, but about the conduct of an international trade dispute. We will end up disagreeing on this issue. With the way that the Bill is crafted and the way that the Government are setting up the Trade Remedies Authority, this was an obvious place to be looking to give the Secretary of State support and advice. Given that that is one of the key functions of the Trade Remedies Authority, it would be wise for her to have support in making such decisions.
I will wait for the Minister’s response to my questions. I think the problem was that the Treasury Minister was not able to answer them because they are technically challenging. The questions he was asked were difficult, so I am not surprised by what he says about answering a little later. It is very important that we get this right. Perhaps he can come back with exactly how advice and support will be given to the Secretary of State. I gave the examples at the start because they are current and show just how serious these issues are, and it is really important that we get them right. So I will wait to hear back from him. In the meantime, we will test the will of the Committee.
Question put, That the amendment be made.
Stewart Hosie
I beg to move amendment 32, page 5, line 4, after “may”, insert
“, following consultation with relevant stakeholders,”
The Chair
With this it will be convenient to discuss the following:
Amendment 33, page 5, line 17, at end insert—
“(7) Nothing in any regulations made under subsection (3) may require the disclosure of information or the production of documents which are subject to legal professional privilege.”
Amendment 34, in clause 8, page 5, line 45, at end insert—
“(5A) Nothing in this section authorises the disclosure of information or the production of documents which are subject to legal professional privilege.”
Stewart Hosie
The amendment stands in my name and that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. It would impose a duty on the Treasury to consult relevant stakeholders when making regulations as specified. Those regulations are about the type of information that may be requested by HMRC and how the request is to be made. The reason for this consultation is that it provides an additional layer of scrutiny by stakeholders.
In imposing a duty on the Treasury to consult, we will ensure that any draft statutory instrument is exposed to critical comment from stakeholders in advance, which may improve an instrument and help to avoid future issues when it is going through Parliament. I think this is important, and I am sure that the Minister will recall him and his colleagues serving on many interminable Finance Bills in the days of the last Labour Government, when many people rightly criticised the additional burdens being put on businesses, particularly by the Revenue, to provide information.
If we are going to request information from businesses, trade groups or anyone else, let us ensure that we consult the relevant stakeholders first, to make sure that we are not requesting information that is not held, that we are requesting it in a way in which it is currently collected and that we are not adding an additional layer or an additional burden for business when it is, in some cases perhaps, simply unnecessary.
Amendment 33 is about protecting legal professional privilege. We are concerned that clause 7(1) grants HMRC a very wide discretion indeed to require information. The scope of this provision should be far more clearly defined, to give greater certainty about the extent of information, the anticipated frequency with which it may be requested and the method of data collection. Legal professional privilege and confidentiality are essential in order to safeguard the rule of law and the administration of justice. They permit information that may be communicated between a lawyer and a client without fear of it becoming known to a third party without the clear permission of that client. Many UK statutes already give express protection to legal professional privilege and it is vigorously protected by the courts.
It is also worth pointing out—I am sure the Minister knows this—that the iniquity exception alleviates concerns that legal professional privilege may be used to protect communications between a lawyer and client that have been used for a criminal purpose. Such a purpose removes the protection from communications, allowing them to be targeted using existing powers but not breaching legal professional privilege.
Greg Hands
It is important, as we turn to the data-sharing powers of the Bill, that the Government have a more comprehensive understanding of UK exporters so that our work to build and grow UK export capability is properly targeted at and tailored to those businesses where it will deliver the maximum benefit.
Clause 7 sets out the powers needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services, particularly smaller businesses and sole traders, who may not be readily identifiable from existing data, but who may need a helping hand from the Government to develop their export potential reaching into existing and new markets. The clause provides the ability for HMRC to collect relevant data by tick boxes on existing tax returns.
Amendment 32 would restrict the Government’s ability to implement new questions to gather data on exporters at speed, by requiring Treasury Ministers to seek further consultations with stakeholders after any necessary engagement has already concluded—it would be, if you like, an additional round of consultation, which we do not think is necessary. Such an amendment would duplicate the administrative burden on stakeholders and, more importantly, delay the availability of data and, by extension, the benefits to businesses.
Amendments 33 and 34 are closely related and concern legal professional privilege, which the hon. Member for Dundee East will know is a long-standing principle that protects the confidentiality of communications between lawyers and their lay clients, and vice versa. It enables lawyers to consult and advise their clients without clients fearing that their information will later have to be disclosed. Indeed, it is a matter of general interest that any person who wishes to consult a lawyer must be free to do so under conditions that ensure uninhibited discussion. That principle is recognised and protected under article 8 of the European convention on human rights.
I can provide an absolute assurance to the Committee that the Government have no intention, either now or in the future, of using these powers to seek or share information that is protected by legal professional privilege. For clause 7, the information that has been requested from exporters is for trade statistics purposes and will be provided voluntarily. The fact that the information is being provided voluntarily is perhaps an indication of the Government’s position in respect of minimising burdens and therefore not requiring privileged information to be disclosed.
Clause 8 allows for the sharing of data that is already held by HMRC for its administrative functions. We are talking about data to be shared that has already been collected. Such information cannot therefore be subject to legal professional privilege, as it has already been provided to HMRC.
I will take this opportunity to remind hon. Members that the clauses also provide significant assurances on the collection, handling and processing of information collected under the powers. The data-sharing powers in the Bill are permissive, so all instances of data sharing must be approved by HMRC, which acts as guardian of the data. There are criminal penalties for any unauthorised sharing of data under the existing Commissioners for Revenue and Customs Act 2005, which apply in respect to the data shared under clause 8. Nothing in the clause permits the disclosure of information that is not otherwise permitted in data protection laws, including the Data Protection Act 2018 and the Investigatory Powers Act 2016.
I hope the clarification and assurances given provide the hon. Gentleman with the reassurance he is seeking in respect of legal professional privilege. On that basis, I ask him to withdraw his amendment.
Stewart Hosie
I thank the Minister for his commitment in relation to legal professional privilege, confirming that information can be shared between a client and a lawyer and, unless in the course of a criminal investigation, is completely protected. That is a good commitment to receive.
I also understand what the Minister said about information being collected to provide trade statistics on a voluntary basis. That is helpful, but I was slightly concerned at the beginning when he spoke about trying to identify the number and identity of exporters—one would have thought that the Government already knew that, and it is slightly concerning if they do not. It might be useful to understand what gaps there are in the Government’s understanding of what organisations export, what they export and to whom, but that is for another day. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clauses 8 to 12 ordered to stand part of the Bill.
The Chair
We now come to the new clauses. New clauses 1 to 8, tabled by the official Opposition, have been debated but not moved.
New Clause 9
Import of agricultural goods after IP completion day
“(1) After IP completion day, agricultural goods imported under a free trade agreement may be imported into the UK only if the standards to which those goods were produced were as high as, or higher than, standards which at the time of import applied under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health.
(2) The Secretary of State must prepare a register of standards under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health
which must be met in the course of production of any imported agricultural goods.
(3) A register under subsection (2) must be updated within seven days of any amendment to any standard listed in the register.
(4) ‘Agricultural goods’, for the purposes of this section, means anything produced by a producer operating in one or more agricultural sectors listed in Schedule 1.
(5) ‘IP completion day’ has the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020.” —(Bill Esterson.)
This new clause would set a requirement for imported agricultural goods to meet animal health and welfare, environmental, plant health, food safety and other standards which are at least as high as those which apply to UK produced agricultural goods.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 11—Import standards—
“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the agreement—
(a) includes an affirmation of the United Kingdom’s rights and obligations under the SPS Agreement, and
(b) prohibits the importation into the United Kingdom of agricultural and food products in relation to which the relevant standards are lower than the relevant standards in the United Kingdom.
(2) In subsection (1)—
‘international trade agreement’ has the meaning given in section 2(2) of this Act;
‘relevant standards’ means standards relating to environmental protection, plant health and animal welfare applying in connection with the production of agricultural and food products;
‘SPS Agreement’ means the agreement on the Application of Sanitary and Phytosanitary Measures, part of Annex 1A to the WTO Agreement (as modified from time to time).”
This new clause would ensure that HMG has a duty to protect the quality of the domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.
New clause 17—Animal welfare and sentience—
“Regulations may only be made under section 2(1) if the provisions of the international trade agreement to which they relate are compatible with—
(a) any provision in UK law (including retained EU law) relating to animal welfare standards and the welfare of animals in the production of food; and
(b) any obligations relating to animal sentience by which the UK is bound, or any principles relating to animal sentience to which the UK adheres.”
Bill Esterson
New clauses 9 and 17 stand in my name and those of my hon. Friends. New clause 11 stands in the names of the hon. Member for Dundee East and the hon. Member for—
Bill Esterson
Inverness, yes. There we are. I knew that inspiration would be with me.
The explanatory statement shows that new clause 11 is entirely consistent with the other new clauses. It is about the protection of
“the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.”
Labour has tabled a new clause 17 on animal sentience. It is important that the Trade Bill is consistent with other pieces of legislation on animal sentience. The Government have agreed to introduce, under an animal welfare and recognition of sentience Bill, a process to ensure that any future legislation or policy is assessed against animal welfare standards. This should be recognised in the Trade Bill as one of the most important areas that could undermine animal welfare standards, and those standards should be outside the ambit of the trade negotiations.
We had a similar debate on Tuesday, but I will spend a few moments on this because a few things have happened since then, such as the Secretary of State appearing at the International Trade Committee yesterday. She said no, but what did she say no to? She did not say no to taking action on food standards, and the Minister did not say no on the same thing on Tuesday. They are very good at making it clear that food safety will not be affected, but they do not talk about food production standards. We have pride in this country in our high standards not only of safety, but of production and animal welfare as well, and those are the elements that have so far been missing in what Ministers have said.
In trade talks the more powerful side wins, and if that more powerful side wants a reduction in our food production standards, it is very difficult to resist if we want a trade agreement with it, and that is the problem. We have tabled a new clause very similar to one on the Agriculture Bill, and we have done so because Ministers told Back-Bench Conservative MPs that the Trade Bill was the place for such an amendment and for this to go into legislation, so we have done what the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Banbury (Victoria Prentis), told us we should do.
I wonder whom British consumers will believe. Will they believe Ministers who will not quite bring themselves to guarantee food production standards or take the action needed on animal welfare, or will they believe the British Standards Institution? Its chair, John Hirst, was quoted in The Times today, expressing fears over a potential American attempt to
“replicate the approach to standards”
agreed in its deal with Canada and Mexico, which President Trump’s officials see as a model for future accords. He says that such an accord would
“undermine our sovereignty over regulation”
by allowing the US to replace UK standards with its own. The Government should perhaps listen to Mr Hirst.
If the Government do not want to listen to Mr Hirst, they could listen to the executive director of Waitrose, James Bailey, who has said that a trade agreement with the US that loosened food standards—production standards—would amount to an “unacceptable backwards step”. He, very commendably, has said that Waitrose will never sell chlorinated chicken, hormone-treated beef or meat from animals subject to extensive use of antibiotics.
Gareth Thomas
Has my hon. Friend has seen the representations to the Committee from the British Poultry Council? That makes it very clear that the UK has multiple pieces of national legislation aimed at various aspects of animal welfare. For chicken alone, that includes on-farm catching, transport and slaughter. By comparison, the US has no national animal welfare legislation, particularly covering farm animal welfare. It is true that some states do have laws, but the three major chicken-producing states of Georgia, Alabama and Arkansas do not. Is that not at the heart of what his new clause seeks to do?
Bill Esterson
It is, and this lack of consistency in the US is one of the problems in doing a trade deal with it, because it has different standards in different states.
While my hon. Friend was speaking, the evidence from Which? came to mind. As we know, it represents consumers in the UK. It has cited consumers’ views on these matters: 79% would be uncomfortable eating beef produced with growth hormones, and 77% would be uncomfortable having milk from cows that have been given growth hormones. Giving antibiotics to healthy farm animals to promote their growth was of concern to 78%. It is not currently allowed in the UK, but it could be under a trade agreement if we give the Americans what they want. Seventy-two per cent. would be concerned about eating chicken treated with chlorine and 93% think it is important that UK food standards be maintained after we leave the EU. Nearly three quarters—72%—think that food from countries with lower standards should not be available.
Katherine Fletcher (South Ribble) (Con)
I welcome the hon. Gentleman’s clarification that while people have concerns about food standards the things he mentioned are not allowed in the UK at the moment. I noticed he said that sotto voce so I wanted to emphasise it for the record. They are not allowed, we are not going to have them, and it is not relevant to a continuity roll-over of a free trade agreement.
Bill Esterson
As we have debated many times, the Bill, with its long title, is a lot more than that.
Bill Esterson
The last Bill became an awful lot more after it was amended in the Lords, and I suspect that things are heading the same way. However, the hon. Member for South Ribble is right. Of course we have the highest food standards in the world. I say it already, and we have pride in those high standards. It is matter of safety, production and welfare, and all three of those have to be retained. I remind you, Sir Graham, that it was the US Secretary of State Mike Pompeo who confirmed that chlorinated chicken must be part of any post-Brexit trade agreement with the UK. That was confirmed by trade representative Lighthizer on many occasions, including when he said that on issues such as agriculture
“this administration is not going to compromise”.
Gareth Thomas
Further to the intervention by the hon. Member for South Ribble, my hon. Friend will be more than aware that a UK-Canada agreement is very much within the scope of the Bill. The Canadians have lower animal welfare standards and lower pesticide protections than we have in the UK. That is perhaps an even stronger rebuttal of the argument that the hon. Lady advanced, that the new clause is not relevant to the Bill. It is very relevant.
Bill Esterson
Of course my hon. Friend is right. It is not a question just about the US. It is about other countries with different food production, safety and animal welfare standards, where agriculture will be part of the agreements. I am grateful to my hon. Friend for reminding us that that is an important part of what we are discussing. You would of course have told me if I had been out of order, Sir Graham, and got me to sit down, but you did not, so I was not.
I remind the Committee again that there are real concerns about the impact on human health of using antibiotics and growth hormones. That is in addition to the impact on animal welfare, and the contribution that things such as antibiotics make to the potential for a growth in problems such as zoonotic diseases, and diseases crossing species—something we should all be extremely concerned about in the middle of a pandemic that probably results from exactly that.
The hon. Member for Tiverton and Honiton (Neil Parish) said in debate on the Agriculture Bill that he had been promised that the issue would be covered in the Trade Bill. He recognised that the Agriculture Minister who made the promise was possibly not in a position to make it. He said:
“We are being led down the garden path—we really are”.—[Official Report, 13 May 2020; Vol. 676, c. 300.]
Will the Minister tell us whether his hon. Friend has been led up the garden path? That is how it looks to most people out there, as well as to us in Committee.
Stewart Hosie
I want to speak to my new clause 11. Trade deals can put pressure on food standards and lead to the importation of food of a low standard. We know, for example, that the US Administration wants the UK to lower its food and animal welfare standards precisely to allow the export of products currently banned in the UK. The new clause includes a ban on the importation of food produced to standards lower than those currently applying in the UK.
The US and other countries have far lower animal welfare standards and adopt practices that are illegal in the UK for health and environmental reasons, such as the production of chlorine-washed chicken and hormone-fed beef; use various pesticides outlawed in the UK; and produce genetically modified crops, which are completely outlawed in Scotland. We believe that the quality of Scotland’s food and drink produce, and indeed that from elsewhere in the UK, as well as the standards of production, are essential to retaining our established international reputation in those products.
Drew Hendry
Is the new clause not an opportunity for the UK Government to do the right thing and prove to the public that they are not trading away food standards and Scotland’s international reputation to the highest bidder? If they do not accept it, will people not justifiably conclude that that is part of their plan?
Stewart Hosie
I think people are deeply concerned. No matter how many times Ministers give assurances from the Dispatch Box or elsewhere—Conservative MPs know this—because of what is said by our negotiating partners, there is deep concern among the public and, in particular, those who work in agriculture about standards that may be reduced. My hon. Friend is therefore absolutely right that by accepting various amendments or new clauses, the Government have an opportunity to cement our standards and rule out in negotiations the reduction of standards rather than simply by words in a speech.
New clause 12 in effect does two things: it affirms the UK’s rights and obligations under the agreement on the application of sanitary and phytosanitary measures in appendix 1A of the WTO agreement; and it prohibits the import of food into the UK if standards in the exporting country are lower than those in force here. I do not think there is anything contentious about that, nor do many people in the real world. I suspect the Minister will not be at all surprised that various campaign groups, including Global Justice Now and the Trade Justice Moment, support such objectives.
The list of supporters for such measures is deep and wide. Scottish Land & Estates said:
“Scotland’s producers need guarantees from the UK Government that domestic production and environmental standards are upheld as part of future international trade deals. Our extremely high environmental and food safety standards are amongst our key selling points, and this must be protected after we leave the EU to ensure we don’t find ourselves in a ‘race to the bottom’.”
As NFU Scotland has said that it is concerned that the UK Government’s approach to future trade policy creates the potential for the importation of agri-food into the UK produced to an inequivalent and uncompetitive standard of production, one would think the UK Government should listen. The new clause would ensure that the UK Government had a duty to protect the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are currently. I commend it to the Committee.
Greg Hands
I turn to new clauses 9, 11 and 17. I am aware of the strength of feeling from colleagues on both sides of the Committee on this important issue. I spoke about the commitments the Prime Minister gave in his Greenwich speech to upholding high standards, which were also in our manifesto.
Theo Clarke (Stafford) (Con)
I have received a lot of correspondence from local residents and farmers in Stafford who are concerned about food standards, with food having to be produced to very high standards in the UK. What assurances can the Minister give me that with the Bill we will be supporting and backing British farming?
Greg Hands
I thank my hon. Friend for that intervention. In the time she has been in the House, she has been a strong defender and advocate of her farming sector in and around Stafford. I can say that there will be no compromise on our standards on food safety, animal welfare and the environment, exactly as we laid out in the election manifesto that she and I were both elected on just six months ago, both collectively and individually.
This Bill is about ensuring continuity, particularly at this moment of unprecedented economic challenge posed by coronavirus. We need the power in clause 2 to replicate the effects of our current trading relationships and provide certainty to UK businesses. That includes the continuity agreements, including the Canada agreement, which the hon. Member for Harrow West has mentioned again today. I think there has been yet another shift in the Labour party’s position: last Thursday, we heard from the shadow Secretary of State that Labour was in favour of a trade deal with Canada, but now the hon. Member for Harrow West seems to be back to opposing that trade deal. There does seem to be some confusion, but the purpose of this Bill is not to sign new agreements or alter standards in any way. Without the Bill, we risk being unable to implement continuity agreements, resulting in disruption and uncertainty for businesses and consumers.
As the National Farmers Union confirmed to the Committee last week, the EU’s approvals regime for agricultural products is one of the most precautionary in the world. That regime will be transposed onto the UK statute book through the European Union (Withdrawal) Act 2018. I am pleased to say that the NFU has not expressed any concerns about the framework for mutual recognition in continuity agreements that this Bill provides, and I am grateful for the contribution of its expertise through our expert trade advisory group. As I have previously told the Committee, we have now signed 20 continuity agreements with 48 countries, replicating the terms that we had with them under EU trade agreements. Imports under continuity agreements must continue to comply with our existing import standards. None of these agreements has resulted in a lowering of the agricultural or other standards referenced in the agreement.
Gareth Thomas
For the record and for the avoidance of doubt, will the Minister confirm that he can see no way in which chlorinated chicken from the US will be allowed to be sold in British stores?
Greg Hands
That is absolutely correct. It is a point that we have made on numerous occasions, and I am happy to make it again today.
Although this Bill relates to continuity with existing trading partners, I recognise the concerns that colleagues have about future FTAs with new trading partners, as I said during Tuesday’s debate. As the Secretary of State, my DEFRA colleagues and I have told this House and the other place on many occasions, the Government will stand firm in trade negotiations. We will always do right by our farmers and aim to secure new opportunities for the industry. Returning to the point made by my hon. Friend Member for Stafford, we would like Stafford farmers to gain opportunities to sell their high-quality produce abroad by breaking down barriers, reducing or removing tariffs, and so on. That is also very important for our agriculture; in fact, the scoping assessment for the US trade deal showed that UK agriculture would be a net beneficiary of any such deal.
All imports under all trade agreements, whether continuity or future FTAs, will have to comply with our import requirements. In the case of food safety, the Food Standards Agency and Food Standards Scotland will continue to ensure that all food imports comply with the UK’s high safety standards, and that consumers are protected from unsafe food that does not meet those standards. Decisions on those standards are a matter for the UK and will be made separately from any trade agreements.
Matt Western
The Minister has said that UK farmers would be net beneficiaries of any trade deal with the US on exports, but I do not see how that can tally. If the United States’ No. 1 priority in any trade deal is agricultural products, is he saying that we will be exporting more agricultural products to the US than the US will be exporting to the UK?
Greg Hands
I am surprised by the hon. Gentleman’s apparent enthusiasm for Trumpian mercantilism, thinking that because UK agriculture might gain, that would somehow mean US agriculture would lose. Sir Graham, you and I both know that free trade does not work like that: there could be benefits for both sides in the trade agreement. For example, the US simply does not allow in British lamb, and currently puts very high tariffs—tariffs of between 20% and 23%—on British cheeses, including Cheddar, Stilton, and other high-quality British cheeses that we would like to sell to the United States. Of course there is an opportunity for British agriculture, and the scoping assessment that we published on 2 March shows that the UK agriculture sector has the potential to be a net beneficiary.
Matt Western
The Minister has very clearly said that UK farming will be a net beneficiary of a trade deal with the US. Is that correct?
Greg Hands
I refer the hon. Gentleman to the scoping assessment that we published on 2 March, where that is laid out in considerable detail. Of course, it is a scoping assessment; nobody knows yet exactly what will be in the deal, on which a lot will depend.
Stewart Hosie
The wording that the Minister uses is fascinating. We were talking about production standards. He spoke about production methods. Those are not the same thing.
Greg Hands
I am happy to have a debate with the hon. Gentleman about the difference between standards and methods, but I am not sure that the difference is that big.
The dictation of our domestic standards to our trading partners might well appear a laudable goal, but the new clause would require them to keep aligned with just seven days’ notice. Subsection (3) of the new clause states that a register
“must be updated within seven days of any amendment to any standard listed in the register.”
Our trading partners’ standards would therefore have to remain dynamically aligned to our domestic production standards with just seven days’ notice. That could have serious consequences for our existing trade flows, let alone anything negotiated in the future.
This is true for the developing world. The beans that we can buy at Waitrose in Fulham—I imagine that they are similar to the ones at Waitrose in Putney, for example—come from Kenya and Egypt. The last time I bought beans was at the weekend. Bananas from the Caribbean might not have production standards that are the same as those in the UK, but they can still meet our import standards.
Those markets would not be able to keep up with our changes. Given just five days’ notice, they would have to dynamically align with whatever the UK decided and, within seven days, make the changes to their domestic production standards. That strikes me as being wholly impractical. The impact of the new clauses could be severe on livelihoods in the developing world. I invite Opposition Members to go and see some of the Kenyan or Egyptian beans being produced and tell some of those workers that, as a consequence of new clause 9, they might well find themselves having to align with UK production standards in the future.
The new clauses might have been drafted with the US in mind, but this is UK law and it would apply to all our trading partners. These measures would likely render inoperable the very continuity agreements we have been discussing and, indeed, potentially prevent a deal with the EU itself. There would be an irony in the UK, through our domestic law, seeking the EU to dynamically align with our standards.
As I said on Tuesday, the UK banned veal crates some 16 years before the EU, and we can take great pride in that; it is a great achievement. The idea that the EU would sign a trade deal with us whereby it would have to commit to dynamic alignment with our standards with just seven days’ notice is highly questionable, to say the least. Members who want continuity with those 40 deals should not vote for these new clauses, nor should those who want a trade deal with the European Union.
New clause 9 would have the unwanted effect of discouraging partners with whom we are yet to sign a continuity agreement from negotiating with us. This Government were elected on a manifesto promise that, in our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards, and we will not. Parliament will have significant oversight of any regulations made under this power, and any statutory instruments brought forward will be subject to the affirmative procedure. Given our robust commitment to British food and farming, I ask the hon. Member for Sefton Central to withdraw the new clause.
Like new clause 9, new clause 11 stipulates that all food imported to the UK should be held to the same standards as that which is produced in the UK. The proposal stands in the name of the hon. Member for Dundee East, although I suspect he has the same intentions as the hon. Member for Sefton Central in tabling it. I have already provided assurances that EU import standards, praised by the NFU and others, will be replicated in domestic law at the end of the transition period. Our import requirements include a ban on using artificial growth hormones in domestic and imported products, and any changes to existing legislation would require new legislation to be passed by Parliament.
Given that we have high safety standards in place, and that the wider unintended consequence of the new clause would be to threaten both the resilience of our food supply chains and our opportunity to ensure that we secure continuity for British businesses and customers through our ongoing continuity negotiations, I hope that the hon. Member for Dundee East will not press the new clause.
New clause 17 stipulates that any animal welfare or sentience regulations arising from trade agreements must be aligned with existing commitments in UK and retained EU law. I can assure Members that our world-leading animal welfare standards are at the heart of our continuity negotiations. None of the agreements already signed with 48 countries is inconsistent with existing standards, as the parliamentary reports published alongside those agreements demonstrate. In fact, the UK has some of the most comprehensive animal welfare regulation in the world. We have introduced one of the strictest ivory bans in the world and we have a manifesto commitment to end excessively long journeys for slaughter and fattening. World Animal Protection rated the UK as having the joint-highest animal welfare standards in the world, tied with Austria, Switzerland, the Netherlands, Denmark and Sweden.
I share Members’ desire to ensure safeguards both for British consumers and for farmers. However, the protections we are already putting in place, coupled with the unintended consequences of the proposals, mean that these measures would be of no benefit. Our manifesto commitment is clear: the Government will stand firm in trade negotiations to support farmers, protect consumers and safeguard standards. I hope that that explanation, alongside the 20 continuity agreements that Parliament ratified, provides reassurance to the Committee that the Government’s commitment to maintaining standards is being delivered. I therefore ask hon. Members not to press their proposals to the vote.
Bill Esterson
That was really telling. It has taken until today for the Government to come up with a form of words to justify not supporting higher food production standards. The intervention, I think by the hon. Member for Dundee East, really did nail it. There is a world of difference between methods and standards, of course there is. How something is produced to a certain standard is one thing; the method used is entirely another. This is the point we have been making again and again in the proceedings of both this Bill and the Agriculture Bill. The Government have been pushing a defence of food safety, but not how it is produced, how animals are looked after or, indeed, how plants are protected. It is really telling that that is the defence being used and that it has taken them a while to get there. There can be and there are different methods of production all over the world, of course there are, but they can be to the same high standards. I am afraid that it did not work, and it will not work. It will not wash, unlike the chlorine the previous Secretary of State at one point said was perfectly safe and acceptable, before changing his mind when he realised it was not acceptable or palatable.
So, there are those differences and we should have concerns about hormones in animals. We should have concerns about the impact of antibiotics. We should have concerns about the impact on fruit and vegetables as well. As my hon. Friends have pointed out it is not just the United States, but countries that are directly a part of the continuity aspect of the Bill, that the Minister is so fond of reminding us about. It is Japan as well as Canada, by the way.
Charlotte Nichols
I recently took part in an update call with the Secretary of State about the progress of the UK-US trade deal. She made a very interesting point in answer to a question from the hon. Member for Wyre Forest (Mark Garnier) regarding food standards. He asked about outcome versus process and the technicality of that when it comes to animal welfare. The Secretary of State said that we had spelled out our red lines to the US in negotiations, but that the issue the Government had with the amendment to the Agriculture Bill on 13 May, which would have guaranteed high standards for food and drink entering the country post-Brexit, was to do with Canada not meeting our domestic standards. Could the Minister perhaps shed some light on that?
Bill Esterson
That is a matter for the Minister rather than me. Perhaps it is one he will take away and respond to in time, but my hon. Friend makes a very important point. It reinforces the argument we are putting and is part of the reason that we shall press the new clause to a Division.
The reality is that the Minister is relying on safety standards, saying, “A chemical wash at the end of the process is good enough and it does not matter how we get there if it produces cheaper food. If production is cheaper because there is less animal welfare, let’s not worry too much about it.” There are a host of problems with that relating to health, morality in the way that animals are treated, and the animal sentience amendment. Indeed, there are also grave concerns about the impact on human health over the longer term in areas such as the use of antibiotics—not just its impact on zoonotic diseases but the effect on human health of antibiotics and other chemicals getting into water courses.
So no, we do not buy it; we do not accept it. I think we will stick with what the hon. Member for Tiverton and Honiton said. We do think we are being led up the garden path. Getting on for 80% or 90% of the public agree with us and, frankly, so does the NFU. It wants to keep high production standards, whatever the Minister might have said in his response to the debate.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 13—International trade agreements: consent for provision of healthcare services—
“(1) A Minister of the Crown may not, under section 20(1) of the Constitutional Reform and Governance Act 2010, lay before Parliament a copy of an international trade agreement which makes provision for the supply or provision of healthcare services (including medicines and medical devices) unless each of the devolved authorities has given their consent to that agreement.
(2) ‘Devolved authority’ shall have the meaning given in section 4 of this Act.”
This new clause would ensure that HMG is not able to lay before Parliament a trade agreement which could have an impact on provision of healthcare services without the consent of the devolved administrations.
Stewart Hosie
New clause 12 would ensure that the UK Government had a duty to restrict market access to healthcare services, including medicines and medical devices. We tabled the new clause precisely because trade deals have the potential to negatively impact health services. Although the UK Government have repeatedly pledged that the NHS is not on the table in trade negotiations, leaked documents detailing conversations between UK and US negotiators reveal that health services have been discussed, including the US “probing” on the UK’s health insurance system—whatever that means—and that the US has made clear its desire for the UK to change its drugs pricing mechanism.
Drew Hendry
Is this not a similar situation to that in the previous debate on food standards? The Government could easily make a commitment to rule out these things—to do the right thing and show the public that the NHS and medicines are not at risk. They could reassure people by putting that in the Bill and ensuring it does not happen. Otherwise, they are just saying to the public, “This may well be part of the plan.”
Stewart Hosie
My hon. Friend is absolutely right. As in the previous debate, the Minister has said that there will be no compromise on standards. I do not doubt for one second his sincerity, but let us just put it in the Bill so that everyone is absolutely satisfied. In that sense, my hon. Friend is absolutely right—let us rule it out in legislation.
Andrew Griffith (Arundel and South Downs) (Con)
I would love the hon. Gentleman to expand on his theory of harm in respect of health services. If ever there was an example of the global effect of the law of comparative advantage, it is the advances in modern healthcare. There is a remedy available to him should he wish to remove himself from the benefits of diagnostics from Düsseldorf, biogenomics from Boston or pharmaceutical projects from Dublin. There is a mechanism known as a living will, whereby he can instruct his heirs and his family to ensure that he is at no point treated by any of those marvels of modern healthcare and that he can go back to experiencing the benefits of herbal potions and remedies and all those other forms of modern medicine that he would seem to prefer by cutting himself off from the benefits of free trade with the world.
Stewart Hosie
I have benefited from the national health service; indeed, it has probably saved my life on a number of occasions.
I have no doubt that some of the drugs purchased are still under patent by private companies. Some of the diagnostic testing machinery was made in Germany. Nobody, but nobody, is talking about restricting any of our health services in terms of purchasing. We are talking about marketisation, which has failed when it comes to the health service.
The new clause has a specific carve-out for the NHS and all health-relevant services regulation, making it illegal for the Government to conclude a trade agreement that altered the way NHS services are provided, liberalised further or opened up to foreign investment by dint of a trade agreement—not by a policy change, not by part of the NHS somewhere on these islands saying it would be a good thing to do, but by dint of a trade agreement being forced on us from somewhere else.
On negative listing, these clauses—we know this from other examples—require all industries to be liberalised in trade agreements unless there are specific carve-outs. The reason this is an issue is that it is not always easy to define what services count as health services and what are more general. For example, digital services may seem irrelevant to health, but NHS data management and GP appointments are increasingly digital. Negative lists therefore make it harder for Governments to regulate and provide health services for the common good. No-standstill clauses are ratchet clauses, because these provisions mean that after the trade deal has been signed parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature. That can make it difficult to reverse NHS privatisation.
Let me give an example of where had a standstill or ratchet clause been in effect, it would have caused real harm. In Scotland, cleaning in hospitals was historically carried out by private contractors, and the rate of hospital-acquired infections rose dramatically. The SNP Government took the decision to return it to NHS cleaners, and the rate of those infections fell dramatically. Imagine if an investor-state dispute settlement had been in place, if a ratchet clause had been in place—we would have been unable to do that, and if people had died from hospital-acquired infections because the Government were not allowed to take the public health measure of returning cleaning to the public sector, it would have been an absolute scandal.
I mentioned ISDS. There should be no ISDS clauses in trade agreements which only allow private investors to challenge Government policy when, for example, it affects their profits. Failure to abide by those clauses can result in legal challenge from trade partners or, if there is a separate ISDS clause, a challenge from private investors. I have used a number of examples on a number of occasions, and I will use another today very briefly. It is from April 1997. The Canadian Parliament banned the import and transportation of the petrol additive MMT because of concerns that it posed a significant public health risk. The Ethyl Corporation, the additives manufacturer, sued the Canadian Government under chapter 11 of the North American free trade agreement, an ISDS-type arrangement, for $251 million to cover losses of what it called the expropriation of both its production plant and its good reputation. That was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid that corporation $15 million in compensation. That was over a petrol additive that was deemed to have a negative impact on public health. We believe it is quite wrong for large corporations to use these ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of citizens or for simply enacting public health measures which they believe to be right and for which they may well have an electoral mandate.
The new clause also instructs that there should be no changes to drugs pricing mechanisms. We know that the US, for example, has stated that it wishes to challenge the drug pricing model which keeps prices low for ordinary people in the UK. This could also happen through intellectual property and non-patent exclusivities. We need to be very alive to that. It would be bad news for patients, taxpayers, health boards and trusts around the country. In our judgment, trade agreements should never be used to facilitate that.
Our new clause 13 is an adjunct; we simply sought to add a different degree of protection for the health services in the nations, and to ensure that the Government would not be able to lay before Parliament a trade agreement that would have an impact on the provision of healthcare services without the consent of the devolved Administrations. That is secondary to the substantial points we are trying to make and the protections that we wish to put in place with new clause 12.
Gareth Thomas
Given the extra protections that new clause 12 would lock into law to keep the NHS safe from future trade agreements’ effectively pushing higher pharmaceutical prices or further marketisation of the NHS, we will happily support the new clause tabled by the hon. Member for Dundee East. Indeed, his new clause supplements the protections that amendment 12, had it been agreed to earlier in our proceedings, would have put in place to protect our public services more generally.
We, too, are aware of the leaked documents that the hon. Gentleman referred to, revealing that discussions have already taken place in the UK-US trade talks about possible measures that the American pharmaceutical industry might want, clearly supported by Donald Trump’s chief negotiator, that would effectively push prices up. Given that we have substantially lower pharmaceutical drug costs than the US, the fact that the Americans are continuing to push such measures is profoundly worrying.
Ministers have said that the NHS is not on the table in the UK-US talks and, like the hon. Gentleman, I take that at face value, but it is worth saying that until the text of a trade agreement is published, we will have no way of knowing for sure what is in it. The precedent of the EU-Canada deal does not give reassurance in that respect, as it used the negative list approach to services liberalisation, to which he referred. The Minister will remember the considerable concern that Germany had chosen to add in carve-outs for the whole of its national health service, whereas the UK had not taken such a comprehensive approach.
The NHS Confederation and The BMJ have both published a series of concerns, setting out the ways the NHS could be undermined by a UK-US trade deal. One concern that is highlighted, which again the hon. Member for Dundee East referenced, was the use of ISDS—investor-state dispute settlement—provisions. Again, investor-state dispute settlement provisions were included in the EU-Canada deal, which Ministers count as a roll-over deal.
It would be helpful if the Minister would embrace the spirit of these new clauses, support new clause 12 being added the Bill and, in his wind-up remarks, confirm that he will not push a negative listing approach in a UK-Canada specific deal and that there will not be ISDS provisions in such a deal.
Greg Hands
I start by thanking Opposition Members for tabling new clauses 12 and 13, which provide me another opportunity to stress the Government’s position on the NHS and our trade agenda. The Government have been clear and definitive: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. No trade agreement has ever affected our ability to keep public services public, nor do they require us to open up the NHS to private providers.
We have always protected our right to choose how we would deliver public services in trade agreements, and we will continue to do so. The UK’s public services, including the NHS, are protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. The UK will continue to ensure that the same rigorous protections are included in future trade agreements.
As stated in our published negotiating objectives with the US, to which I referred the hon. Member for Warwick and Leamington, the NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table.
Those commitments are clear and absolute, but new clause 12 is unnecessary, however laudable the intention behind it is. It overlooks the fact that there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements. In particular, and as we discussed on Tuesday, the UK already has scrutiny mechanisms via the Constitutional Reform and Governance Act 2010 procedure that will ensure Parliament can see exactly what we have negotiated, and if it does not agree it can prevent us from ratifying the deal.
Stewart Hosie
When the Minister described the end of the Constitutional Reform and Governance Act 2010 process, it is a take-it or leave-it option, with no ability for Members to make amendments whatever. I do not think that is satisfactory, to be brutally honest.
As I have said before, I do not question the sincerity of this Minister. When he says that the NHS is not for sale, that no trade agreement has ever affected how the UK deals with its public sector, that the NHS is protected by carve-outs, and that drug pricing and other things are not on the table, I think he is being sincere. But if we put in place a mechanism whereby those protections are not in the Bill, it does not take a huge leap of imagination to imagine some Trump-supporting figure coming up through the ranks of the Tory party and sitting in a chair just like the Minister’s, and making rather different decisions.
So, on that basis, I am afraid that I have to press for a Division on new clause 12.
Question put that the clause be read a Second time.
Gareth Thomas
I beg to move, That the Clause be read a Second time.
I rise briefly to suggest to the Committee that once a free trade agreement has been signed in the future, it makes sense to have a point at which to assess the effectiveness of that agreement, perhaps to see how it has worked in practice in terms of British exporters being able to take advantage of it.
Labour Members remember only too well the Government’s decision to axe by some 60% the support to British exporters. So it will be interesting, five years down the line from the publication and signing of these continuity agreements, to see whether such a severe cut has actually meant that many British businesses have been unable to take advantage of the opportunities in a free trade agreement.
The new clause would also give us the opportunity, five years hence, to see whether the genuine concerns of many—both in this House and out—about investor-state dispute mechanisms, if they have been incorporated into agreements, have taken effect. We would be able to see the damage done to environmental protections, the health service, labour rights or human rights—any way in which they might have been affected.
Given the concerns expressed clearly to us about how many of the continuity trade agreements might actually work in practice, it is surely sensible to have the opportunity to review whether those concerns have been borne out in practice. One can think of the Norway continuity agreement, which still has no services provisions for British companies wanting to operate in service markets in Norway. That is still in some doubt, as only the goods part has been resolved. The situation is similar with Switzerland. We raised a series of concerns about the South Korea agreement and the extent to which some agricultural products, such as cheddar cheese and honey, have been affected by poor drafting of that agreement.
Given how we have thrown away some of the great advantages that Britain drew in terms of soft power from the Department for International Development being a stand-alone Department, again it will be interesting to see whether the Ghana and Kenya agreements—I thank the Minister for his letter—have been able to serve their purpose and support not only agricultural sales to the UK, but regional integration in west and east Africa.
For all those reasons, and given the huge concerns about some of the potential measures in free trade agreements, it makes sense surely—it certainly makes sense to us—to have a fixed point, five years down the line after a trade agreement has been signed, to have the opportunity for the Government to publish a full review looking at the impact.
Greg Hands
New clause 15 proposes a review, as we have heard, of free trade agreements every five years after entry into force. I have already drawn the Committee’s attention to the parliamentary reports that we have voluntarily published alongside every signed continuity agreement, outlining any significant differences between the signed agreement and the underlying EU agreement. I confirm that we will continue to do so for the remaining continuity agreements.
We have a meaningful and constant dialogue with several Committees in Parliament. Those may provide a more appropriate forum for reviews of our trade agreements and an assessment of the UK’s wider trade environment and relationships. We are keen for Parliament to make its voice heard during the negotiation of our continuity programme in a way that is proportionate and productive. I also draw the Committee’s attention to the fact that six signed continuity agreements have been subject to debate in Parliament without a single one carrying a motion of regret.
As I have said many times before, our objectives for the trade continuity programme are to replicate the effects of existing EU trade agreements, which have all been subject to comprehensive scrutiny at EU level. Given that scrutiny, the parliamentary reports we have committed to publishing and the other constraints contained within the Bill, we do not believe that an additional report in the future would be an efficient use of parliamentary time. Additionally, I argue that looking at each agreement in isolation from the wider trading situation of the UK at an arbitrary point in time risks rendering any such report at best incomplete and at worst meaningless.
As a Department, we have an ongoing obligation to provide meaningful and timely information to the public, businesses and other key stakeholders on our assessment of the UK’s trading relationships. Statutory obligations anchored in specific agreements in the manner proposed by the new clause could in fact act as a constraint to the Department providing that sort of information in a timely and impactful way. As such, I ask the hon. Member to withdraw his new clause.
Gareth Thomas
I have listened to what the Minister has said. He will understand that we remain concerned that this provision was put in the Bill by the Government on Report in the Commons, and it has been taken out. The Minister who gave the assurance in writing that such reports will continue is no longer in the Department. I think we would still prefer to see the commitment in the Bill, and as a result, I intend to press the new clause to a vote.
Question put, That the clause be read a Second time.
Gareth Thomas
I beg to move, That the clause be read a Second time.
We have left the European Union and await the oven-ready Brexit deal that the Prime Minister promised the British people in December—it does feel as though it is in the slow cooker as opposed to the microwave. Nevertheless, our proximity to other European nations inevitably means that our trade, as well as much else, will continue to require significant co-operation with our allies in European capitals and, indeed, in Brussels. Surely, we should not put ideology before common sense but should consider sensibly which EU agencies that impact on trade it is worth maintaining a particularly close relationship with and, indeed, where continued membership is worth seeking. We suggest in the new clause that we should seek continued membership of the European Medicines Agency, the European Chemicals Agency, the European Union Aviation Safety Agency and the European Maritime Safety Agency.
If we are not members of the European system run by the European Chemicals Agency, there is a risk of divergence in chemicals regulation. That may just sound like a concern about red tape. However, if we are not members of the European Chemicals Agency, there is a risk of, for example, the EU27 saying that chemical x is not safe to use but our own new national system telling us not to worry about it and that it is safe. If UK and EU decisions on chemicals start to diverge, that will put pressure on UK chemicals companies to decide whether to stay in the UK or to leave and base themselves in the bigger market of the European Union. I am sure that all Members of the House would want to avoid that.
It is difficult to see how access to the REACH database can be achieved without membership of the European Chemicals Agency. Ian Cranshaw, who spoke to us on behalf of the chemicals trade body when we heard witness statements, made clear how difficult it appeared to be to continue to have access to the REACH database without, effectively, membership of the European Chemicals Agency. He went on to set out how membership of the REACH database is the gold standard for chemicals regulation and how important it was for British firms to continue to have access to it.
The European Medicines Agency is critical to ensuring that medicines for humans and animals are safe. It helps to foster innovation and the development of new medicines across the European Union. By ensuring cross-European collaboration, it has helped to bring down the cost of medicines through its policing role in respect of the single market for medicines. Every month, the UK-EU trade in pharmaceutical products is huge; upwards of 70 million packages move between the UK and the EU every month. The UK pharmaceutical industry is very heavily regulated, and it is heavily regulated because it is an integral part of Europe’s medicines regime. It surely, therefore, makes sense to remain a member of that agency.
The European Union Aviation Safety Agency has responsibility for civil aviation safety across Europe, but it also has a series of critical trade-related roles, including being responsible for much of the airworthiness and environmental certification of all aeronautical products, parts and appliances that are designed, manufactured and maintained in Europe. It negotiates international harmonisation agreements with the rest of the world and concludes technical agreements with other countries, such as with the US Federal Aviation Administration. Continued membership of the European Union Aviation Safety Agency would give the UK access to a global industry leader, in terms of standard setting for trade in aviation. Surely, we should continue to belong to it.
Greg Hands
On new clause 21, regarding the parameters of the UK’s future relationship with the EU, the Government have made it clear that our priority is to ensure that we restore our economic and political independence on 1 January 2021. The approach to the future relationship with the EU has already been extensively discussed not just in the previous Parliament but in this one, particularly during the debates on the European Union (Withdrawal Agreement) Act 2020. During those debates and subsequently, the Government have been clear that we want a relationship with the EU that is based on friendly co-operation between sovereign equals and centred on free trade. That is what Taskforce Europe, working with the Prime Minister, is pursuing.
The UK published its approach to the negotiation of a future relationship with the EU on 27 February 2020. Our approach builds on the EU’s offer of a Canada-style deal. It reflects the type of free trade agreement that should be achievable between sovereign states that respect each other’s independence, as the EU has done in the past. We will discuss with the EU how to manage our friendly relations, but any solution has to respect our legal and political autonomy. Members will be aware that there are very limited options for third-country membership of EU bodies. We have been clear that we will be operating on the basis of existing precedents and no acceptance of the European Court of Justice.
However, I acknowledge that members of the Committee are looking for reassurance about the Government’s approach to negotiations with the EU in relation to the four bodies listed in the new clause. On the European Medicines Agency, we have stated that the UK-EU FTA should include commitments to co-operate on pharma co-vigilance, and to develop a comprehensive confidentiality agreement between regulators, in line with agreements between the European Medicines Agency and Swiss, US and Canadian authorities. The UK’s published response in respect of the European Chemicals Agency states that the UK-EU FTA should include a commitment to develop a memorandum of understanding to enhance co-operation further, similar to the MOUs that the European Chemicals Agency has agreed with Australia and Canada.
On the European Union Aviation Safety Agency, the UK’s published position is that we have proposed a bilateral aviation safety agreement that will facilitate the recognition of aviation safety standards between the UN and the EU, minimising the regulatory burden for industry. On the European Maritime Safety Agency, the UK is discussing with the EU how best to manage our friendly relations, but any solution has to respect our red line of no commitments to follow EU law, and no acceptance of the ECJ.
It is important to be clear that, in our negotiations with the EU, we are not asking for a special, bespoke or unique deal; we are looking for a deal like those that the EU has previously struck with other friendly countries such as Canada. I hope the confirmation of the Government’s approach to the four agencies mentioned in the new clause has reassured the Committee, and I ask the hon. Member for Harrow West to withdraw the new clause.
Gareth Thomas
Although it has been useful to hear the reassurance that the Minister has attempted to provide, we still think that seeking membership of those four specific agencies makes sense. I intend to press the new clause to a vote.
Question put, That the clause be read a Second time.
Greg Hands
On a point of order, Sir Graham, I thank you, Ms Cummins, and everybody involved in the Bill for all your hard work in Committee. Once again, I am both pleased and privileged to have been able to engage in a thorough debate on the contents of the Bill, which bears an uncanny resemblance to the Trade Bill in the last Parliament. I have been in and out of the Department for International Trade, but on returning to the Department, I found the Bill looking more or less the same as when I left the Department in June 2018.
I thank the Committee for engaging with the issues in a positive and constructive way; we have had some real insight, not only into trade policy overall, but into how opposition parties deal with trade policy. I will not dwell further on that, because I have made a few points already, but it is good to see that the approach patented by the hon. Member for Brent North (Barry Gardiner)—with the Opposition’s trade policy a moving feast—lives on today in his absence.
We have had a great debate, carried out in a good spirit, during our two-week immersion in trade policy. I think that, no matter which party one belongs to, a full two-week immersion in trade policy is a great thing as we move forward towards our independent trade policy, effective from 1 January 2021. We can all only benefit from such an immersion.
My thanks also go to the Government and Opposition Whips, who have ensured that the Committee has run smoothly and effectively, and to you, Sir Graham, and Ms Cummins, for being exemplary Chairs. I am very grateful for your guidance during our deliberations. I pay tribute to the usual channels for their help and guidance throughout; to Hansard for their diligence in recording all that we have said for posterity; and to the Clerk for his advice.
I also thank my team of officials for their support in undertaking box duty without ever entering the Palace of Westminster; I do not think that is a good thing overall, as I always encourage civil servants to come into Parliament as often as possible. It is very important for civil servants to understand how Parliament works but, given the current circumstances, I am fully understanding of the Department’s procedures for the scrutiny of the Bill.
The last time I stood here, I said that this was the first ever piece of legislation from the Department for International Trade. It is still our first Bill. I am confident that this legislation will now make its way on to the statute book and will be all the better for the work of the Committee.
Bill Esterson
Further to that point of order, Sir Graham. I add my thanks to you and your co-Chair, Ms Cummins, for your diligent and considerable efforts to ensure order during our deliberations. I thank the witnesses who gave evidence, the Clerk, all the officials and Hansard. As the Minister said, it is a challenging time for all who are involved in making sure that Committees operate effectively.
I thank the Whips. The Government Whip was entirely fair in her criticisms of the Opposition, as she raised the same number of points of order about my hon. Friend the Member for Harrow West and me—fair play to her for her fairness. The Minister described the Bill as a continuity Bill a number of times, and he has been the continuity Minister on the continuity Bill. He is nothing if not consistent, because he gave exactly the same answers as he gave last time around. I hope that this time we will make some progress on the Bill and see the end result. I dare say that we will return to some of these arguments on Report, and that the Lords will have their say.
The Minister mentioned my hon. Friend the Member for Brent North. Where would we be without the hon. Gentleman? At least this time we did not have to resort to making up fictional names for countries to make our points. There will have been no Xanadu in Hansard until now.
I thank hon. Members on the Government Back Benches for bearing with us—it is a thankless task. I hope one day to be on the Government side, although I do not know whether I would hope to be a Government Back Bencher. Being a Government Back-Bencher in Committee, where they take a vow of silence, is undoubtedly a thankless task, but most of them managed to perform their duties diligently. One or two found it impossible, but I understand that. With that, I thank everyone for their contributions.
The Chair
I thank the hon. Gentlemen for their points of order. I add my thanks to Hansard and in particular to the Clerk, given that we go back to the Education and Employment Committee in the 1997 Parliament. I have been well served and well advised by this Clerk for many years.
Question put and agreed to.
Bill accordingly to be reported, without amendment.
Trade Bill
Monday 20th July 2020
(4 years, 10 months ago)
Commons ChamberTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 July 2020 - (20 Jul 2020)
21:00 - The House divided: - Ayes: 263 / Noes: 326 - Question accordingly negatived.
21:14 - The House divided: - Ayes: 251 / Noes: 337 - Question accordingly negatived.
21:28 - The House divided: - Ayes: 251 / Noes: 340 - Question accordingly negatived.
21:44 - The House divided: - Ayes: 244 / Noes: 345 - Question accordingly negatived.
22:01 - The House divided: - Ayes: 335 / Noes: 243 - Question accordingly agreed to.
The Minister for Trade Policy (Greg Hands)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss the following:
Government new clause 6—Offences related to disclosure under section (Disclosure of information by other authorities).
New clause 1—Report on proposed free trade agreement—
“(1) This section applies (subject to subsection (2)) where the United Kingdom has authenticated a free trade agreement (“the proposed agreement”), if —
(a) the other party (or each other party) and the European Union were signatories to a free trade agreement immediately before exit day, or
(b) where the proposed agreement was authenticated by the United Kingdom before exit day, the other party (or each other party) and the European Union were signatories to a free trade agreement on the day the proposed agreement was authenticated by the United Kingdom.
(2) This section applies only if the proposed agreement is not binding on the United Kingdom as a matter of international law unless it is ratified by the United Kingdom.
(3) Before the United Kingdom ratifies the proposed agreement, a Minister of the Crown must lay before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the proposed agreement, and
(b) the trade-related provisions of the existing free trade agreement.
(4) Subsection (3) does not apply if a report in relation to the proposed agreement has been laid before Parliament under section [Report to be laid with regulations under section 2(1))2].
(5) The duty imposed by subsection (3) applies only at a time when regulations may be made under section 2(1)(see section 2(7)).
(6) In this section a reference to authenticating a free trade agreement is a reference to doing an act which establishes the text of the agreement as authentic and definitive as a matter of international law.
(7) In this section—
“the existing free trade agreement” means the free trade agreement referred to in subsection (1) (a) or (b);
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
This new clause reinserts a Government amendment made to the Trade Bill in 2018 and requires a Minister to lay a report before Parliament before the UK ratifies a new free trade agreement with a country that (before exit day) had a free trade agreement with the EU. The report must explain any significant differences between the proposed new agreement and the existing agreement with the EU.
New clause 2—Reporting requirement not to apply in exceptional cases—
“(1) Section [Report on proposed free trade agreement] does not apply to a free trade agreement if a Minister of the Crown is of the opinion that, exceptionally, the agreement needs to be ratified without laying before Parliament a report which meets the requirements of subsection (3) of that section.
(2) If a Minister determines that a free trade agreement is it be ratified without laying before Parliament a report which meets the requirements of section [Report on proposed free trade agreement] (3), the Minister must, as soon as practicable after the agreement is ratified, lay before Parliament—
(a) a report which meets those requirements, and
(b) a statement indicating that the Minister is of the opinion mentioned in subsection (1) and explain why.”
This new clause provides that the reporting requirement under section [Report on proposed free trade agreement] would not apply if a Minister takes the view that, exceptionally, the agreement should be ratified without the reporting requirement being met.
New clause 3—Report to be laid with regulations under section 2(1)—
“(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1) for the purpose of implementing a free trade agreement to which the United Kingdom and another signatory (or other signatories) are signatories.
(2) A draft of the statutory instrument containing the regulations may not be laid before Parliament unless, at least 10 Commons sitting days before the draft is laid, a Minister of the Crown has laid before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the free trade agreement to which the United Kingdom and the other signatory (or other signatories) are signatories, and
(b) the trade-related provisions of the existing free trade agreement.
(3) Subsection (2) does not apply if, at least 10 Commons sitting days before a draft of the statutory instrument containing the regulations is laid, a report in relation to the agreement has been laid before Parliament under section [Report on proposed free trade agreement](3).
(4) In this section—
“Commons sitting day” means a day on which the House of Commons begins to sit;
“the existing free trade agreement” means the free trade agreement to which the European Union and the other signatory (or other signatories) were signatories immediately before exit day;
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
This new clause reinserts a Government amendment made to the Trade Bill in 2018 and requires a Minister to lay a report before Parliament at least 10 Commons sitting days before regulations implementing a new free trade agreement are laid in draft under clause 2(1). The report is required to explain any significant differences between the new agreement and the existing agreement with the EU.
New clause 4—Parliamentary approval of trade agreements—
“(1) Negotiations towards a free trade agreement may not commence until the Secretary of State has laid draft negotiating objectives in respect of that agreement before both Houses of Parliament, and a motion endorsing draft negotiating objectives has been approved by a resolution of both Houses of Parliament.
(2) Prior to the draft negotiating objectives being laid, the Secretary of State must have—
(a) consulted with each devolved authority on the content of the draft negotiating objectives, and
(b) produced a sustainability impact assessment including, but not limited to, an assessment of the impact on food safety, health, the environment and animal welfare.
(3) The United Kingdom may not become a signatory to a free trade agreement to which this section applies unless a draft of the agreement in the terms in which it was to be presented for signature by parties to the agreement has been laid before, and approved by, a resolution of both Houses of Parliament.
(4) Before either House of Parliament may be asked to approve by resolution the text of a proposed free trade agreement, the Secretary of State must—
(a) consult with each devolved authority on the text of the proposed agreement, and
(b) lay before both Houses a report assessing the compliance of the text of the proposed agreement with any standards laid down by primary or subordinate legislation in the United Kingdom including, but not limited to, legislation governing or prescribing standards on food safety, health, the environment and animal welfare.
(5) In this section—
“devolved authority” has the meaning given in section 4(1) of this Act, and
“free trade agreement” means any agreement which is—
(a) within the definition given in section 4(1) of this Act, and
(b) an agreement between the United Kingdom and one or more partners that includes components that facilitate the trade of goods, services or intellectual property.”
New clause 7—Import standards—
“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the agreement—
(a) includes an affirmation of the United Kingdom’s rights and obligations under the SPS Agreement, and
(b) prohibits the importation into the United Kingdom of agricultural and food products in relation to which the relevant standards are lower than the relevant standards in the United Kingdom.
(2) In subsection (1)—
“international trade agreement” has the meaning given in section 2(2) of this Act;
“relevant standards” means standards relating to environmental protection, plant health and animal welfare applying in connection with the production of agricultural and food products;
“SPS Agreement” means the agreement on the Application of Sanitary and Phytosanitary Measures, part of Annex 1A to the WTO Agreement (as modified from time to time).”
This new clause would ensure that HMG has a duty to protect the quality of the domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.
New clause 8—International trade agreements: public health services—
“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 if any provision of the agreement—
(a) would have the effect of, or could reasonably be expected to have the effect of, altering the way in which a service is provided by a specified body,
(b) would have the effect of, or could reasonably be expected to have the effect of, opening any part of a specified body to foreign investment,
(c) would open part or all of a specified body to market access but without any accompanying provision for the UK Government to reduce the level of market access in future,
(d) does not specify sectors or subsectors of a specified body to which the agreement would enable market access,
(e) includes investor-state dispute settlement mechanisms in relation to a specified body, or
(f) includes changes to mechanisms for the pricing of medical or pharmaceutical products for purchase by a specified body.
(2) The specified bodies, for the purpose of subsection (1), are—
(a) NHS England,
(b) NHS Wales,
(c) a health board in Scotland, a special health board in Scotland or the Common Services Agency established by section 10 of the National Health Service (Scotland) Act 1978, and
(d) HSCNI.
(3) In subsection (1), ” international trade agreement” has the meaning given in section 2 of this Act.”
This new clause would ensure that HMG has a duty to restrict market access to healthcare services, including medicines and medical devices.
New clause 9—International trade agreements: climate and environmental goals—
“(1) An appropriate authority may not take action in relation to an international trade agreement unless nothing in the international trade agreement restricts the ability of that or any other appropriate authority to take action in pursuit of the UK’s climate and environmental goals.
(2) In subsection (1) “action in relation to an international trade agreement” means—
(a) laying the agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 (treaties to be laid before Parliament before ratification),
(b) making regulations under section 2 for the purposes of implementing or facilitating the implementation of the agreement, or
(c) making subordinate legislation under any other enactment for those purposes.
(3) In subsection (2) “laid”—
(a) where the appropriate authority is a Minister of the Crown, means laid before Parliament;
(b) where the appropriate authority is the Scottish Ministers, means laid before the Scottish Parliament;
(c) where the appropriate authority is the Welsh Ministers, means laid before Senedd Cymru; and
(d) where the appropriate authority is a Northern Ireland department, means laid before the Northern Ireland Assembly.
(4) In conducting trade negotiations and in other related activity a Minister of the Crown—
(a) must give priority to nations that are fully implementing relevant multilateral environmental agreements; and
(b) must take all reasonable steps to facilitate the achievement of the UK’s climate and environmental goals (including, in particular, by pursuing where appropriate the introduction, amendment or application of rules within the World Trade Organisation and other international trade forums).
(5) In subsection (4) “trade negotiations” means—
(a) negotiations with a view to entering into an international trade agreement; or
(b) negotiations in connection with the implementation or alteration of an international trade agreement, or otherwise connected with international trade.
(6) In subsection (4) “relevant multilateral environmental agreements” means, so far as geographically applicable, any of—
(a) the United Nations Framework Convention on Climate Change done at New York on 9 May 1992 and Paris Agreement done at Paris on 12 December 2015,
(b) the United Nations Convention on Biological Diversity done at Rio de Janeiro on 5 June 1992 (including its protocols),
(c) the Convention on International Trade in Endangered Species of Wild Fauna and Flora 1973,
(d) United Nations Convention for the Law of the Sea 1982,
(e) the Aarhus Convention 1998,
(f) the United Nations Economic Commission for Europe Convention on Long-Range Transboundary Air Pollution 1979,
(g) the Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR) Convention 1992, or
(h) the Basel Convention 1992.
(7) The Secretary of State must lay before Parliament in each financial year a report about compliance with subsection (4).
(8) In this section “the UK’s climate and environmental goals” means—
(a) the target of achieving net zero carbon emissions by 2050;
(b) any other target set under or for purposes connected with any enactment (including devolved legislation and retained EU law) relating to the environment or climate change;
(c) any target to which the UK is committed by virtue of being party to a relevant multilateral environmental agreement; and
(d) the United Nations Sustainable Development Goals.”
This new clause aligns the UK’s trade policy with the UK’s climate and environmental agenda. It would ensure that the negotiation of trade agreements facilitates the achievement of the UK’s domestic climate and environmental goals and would help prevent trade agreements from restricting action in pursuit of these goals.
New clause 10—Availability of agreement texts—
“(1) The text of any proposed international trade agreement which is being negotiated shall, so far as it is agreed or consolidated, be made publicly available within ten days of the close of each round of negotiations.
(2) Every—
(a) document submitted formally by the United Kingdom government to the negotiations, and
(b) agenda for each new round of negotiations
shall be made publicly available by the Secretary of State.
(3) All other documents relating to the negotiations and not falling within the descriptions provided in subsections (1) and (2) shall be made publicly available by the Secretary of State, subject to subsection (4).
(4) The Secretary of State may withhold from publication any document of a kind falling within the description in subsection (3) but must publish a statement of the reasons for doing so.
(5) In the case of any document withheld under subsection (4), the Secretary of State shall provide full and unfettered access to that document to—
(a) any select committee of either House of Parliament to which, in the opinion of the Secretary of State, the proposed agreement is relevant, and
(b) any other person or body which the Secretary of State may authorise.
(6) In the case of a document to which access is provided under subsection (5), the Secretary of State may specify conditions under which the text shall be made available.
(7) The Secretary of State shall maintain an online public register of all documents published under subsections (1), (2) and (3) or withheld under subsection (4).”
This new clause would give select committees access to more confidential negotiating documents and would provide a process for further transparency of negotiating texts beyond that.
New clause 11—Import of agricultural goods after IP completion day—
“(1) After IP completion day, agricultural goods imported under a free trade agreement may be imported into the UK only if the standards to which those goods were produced were as high as, or higher than, standards which at the time of import applied under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health.
(2) The Secretary of State must prepare a register of standards under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health
which must be met in the course of production of any imported agricultural goods.
(3) A register under subsection (2) must be updated within seven days of any amendment to any standard listed in the register.
(4) “Agricultural goods”, for the purposes of this section, means anything produced by a producer operating in one or more agricultural sectors listed in Schedule 1.
(5) “IP completion day” has the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020.”
This new clause would set a requirement for imported agricultural goods to meet animal health and welfare, environmental, plant health, food safety and other standards which are at least as high as those which apply to UK produced agricultural goods.
New clause 12—Review of free trade agreements—
“(1) The Secretary of State shall lay before Parliament a review of the operation and impacts of each free trade agreement to which this Act applies.
(2) Each such review shall be laid before Parliament no later than five years from the day on which the agreement comes into force.
(3) A further review of the operation of each agreement shall be laid no later than five years after the day on which the previous such review was laid before Parliament.
(4) Each review shall be conducted by a credible body independent of government and shall include both qualitative and quantitative assessments of the impacts of the agreement, including as a minimum—
(a) the economic impacts on individual sectors of the economy, including, but not restricted to—
(i) the impacts on the quantity and quality of employment,
(ii) the various regional impacts across the different parts of the UK,
(iii) the impacts on small and medium-sized enterprises, and
(iv) the impacts on vulnerable economic groups;
(b) the social impacts, including but not restricted to—
(i) the impacts on public services, wages, labour standards, social dialogue, health and safety at work, public health, food safety, social protection, consumer protection and information, and
(ii) the government’s duties under the Equality Act 2010;
(c) the impacts on human rights, including but not restricted to—
(i) workers’ rights,
(ii) women’s rights,
(iii) cultural rights and
(iv) all UK obligations under international human rights law;
(d) the impacts on the environment, including but not restricted to—
(i) the need to protect and preserve the oceans,
(ii) biodiversity,
(iii) the rural environment and air quality, and
(iv) the need to meet the UK’s international obligations to combat climate change;
(e) the impact of any investor-state dispute settlement which forms part of the agreement;
(f) the impacts on animal welfare, including but not restricted to the impacts on animal welfare in food production, both as it relates to food produced in the UK and as it relates to food imported into the UK from other countries; and
(g) the economic, social, cultural, food security and environmental interests of those countries considered to be developing countries for the purposes of clause 10 of the Taxation (Cross-border Trade) Act 2018, as defined in Schedule 3 to that Act and as amended by regulations.
(5) The elements of the review to be undertaken under (4)(f) must be sufficiently disaggregated so as to capture the full range of impacts on different groups of developing countries, and must include both direct and indirect impacts, such as loss of market share through trade diversion or preference erosion.”
This new clause would introduce a review of the functioning of each FTA to which the UK is a signatory to be brought forward after five years and again after a further five.
New clause 13—Role of Joint Ministerial Committee—
“(1) The Joint Ministerial Committee is to be a forum—
(a) for discussing—
(i) the terms upon which the United Kingdom is to commence negotiations with respect to any international trade agreement;
(ii) proposals to amend retained EU law for the purposes of regulations made under section 1 or section 2;
(b) for seeking a consensus on the matters set out in subsection (1)(a) between Her Majesty’s Government and the other members of the Joint Ministerial Committee.
(2) Before Her Majesty’s Government concludes an international trade agreement, the Secretary of State must produce a document for consideration by the Joint Ministerial Committee setting out—
(a) Her Majesty’s Government’s objectives and strategy in negotiating and concluding an international trade agreement;
(b) the steps Her Majesty’s Government intends to take to keep the Joint Ministerial Committee informed of progress in reaching an international trade agreement;
(c) the steps Her Majesty’s Government intends to take to consult each member of the Joint Ministerial Committee before entering into an international trade agreement and for taking the views of each member into account.
(3) Before concluding an international trade agreement the Secretary of State must produce a document setting out the terms of the proposed agreement for consideration by the Joint Ministerial Committee.
(4) In this section, “the Joint Ministerial Committee” means the body set up in accordance with Supplementary Agreement A of the Memorandum of Understanding on Devolution, between Her Majesty’s Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive Committee.”
This new clause would put on the face of the Bill a joint ministerial committee, and give it powers to discuss international trade issues with the devolved Administrations.
New clause 14—Animal welfare and sentience—
“Regulations may only be made under section 2(1) if the provisions of the international trade agreement to which they relate are compatible with—
(a) any provision in UK law (including retained EU law) relating to animal welfare standards and the welfare of animals in the production of food; and
(b) any obligations relating to animal sentience by which the UK is bound, or any principles relating to animal sentience to which the UK adheres.”
This new clause would ensure that any animal welfare or sentience regulations arising from trade agreements are aligned with existing commitments in UK and retained EU law.
New clause 15—Statement on equalities legislation—
“(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1).
(2) Before a draft of the statutory instrument containing the regulations is laid before either House of Parliament, the Minister must make a statement as to whether the statutory instrument would, if made, modify any provision of equalities legislation.
(3) If a Minister expresses a view in a statement under subsection (2) that the draft statutory instrument would, if made, modify any provision of equalities legislation, the Minister must explain in the statement what the effect of each such modification would be.
(4) If the Minister fails to make a statement as required by subsection (2), the Minister must make a statement explaining why.
(5) A statement under this section must be made in writing and published in such manner as the Minister making it considers appropriate.
(6) In this section, “equalities legislation” means the Equality Act 2006, the Equality Act 2010 and any subordinate legislation made under either of those Acts.”
This new clause would oblige the government to publish a statement outlining whether any equalities legislation would be modified by the proposed regulations.
New clause 16—UK participation in EU and EEA organisations—
“(1) The Secretary of State must seek to negotiate an international trade agreement with the EU which will enable the United Kingdom to continue to co-operate closely with the bodies listed in subsection (2).
(2) The bodies are—
(a) the European Medicines Agency;
(b) the European Chemicals Agency;
(c) the European Aviation Safety Agency;
(d) the European Maritime Safety Agency.”
This new clause would oblige the Secretary of State to negotiate close cooperation with the four mentioned agencies.
New clause 17—International trade agreements: health or care services—
“(1) Regulations under section 2(1) may make provision for the purpose of implementing an international trade agreement only if the conditions in subsections (2) and (3) are met in relation to the application of that agreement in any part of the United Kingdom.
(2) The condition in this subsection is that no provision of that international trade agreement in any way undermines or restricts the ability of an appropriate authority—
(a) to provide a comprehensive publicly funded health service free at the point of delivery,
(b) to protect the employment rights or terms and conditions of employment for public sector employees and those working in publicly funded health or care sectors,
(c) to regulate and maintain the quality and safety of health or care services,
(d) to regulate and control the pricing and reimbursement systems for the purchase of medicines or medical devices, or
(e) to regulate and maintain the level of protection afforded in relation to patient data, public health data and publicly provided social care data relating to UK citizens.
(3) The condition in this subsection is that the agreement—
(a) explicitly excludes application of any provision within that agreement to publicly funded health or care services,
(b) explicitly excludes provision for any Investor-State Dispute Settlement (ISDS) clause that provides, or is related to, the delivery of public services, health care, care or public health,
(c) explicitly excludes the use of any negative listing, standstill or ratchet clause that provides, or is related to, the delivery of public services, health care, care or public health,
(d) contains explicit recognition that an appropriate authority (within the meaning of section 4) has the right to enact policies, legislation and regulation which protects and promotes health, public health, social care and public safety in health or care services, and
(e) prohibits the sale of patient data, public health data and publicly provided social care data.
(4) For the purposes of this section—
“negative listing” means a listing only of exceptions, exclusions or limits to commitments made by parties to the agreement;
“ratchet” in relation to any provision in an agreement means any provision whereby a party, if (after the agreement has been ratified) it has unilaterally removed a barrier in an area where it had made a commitment before the agreement was ratified, may not reintroduce that barrier, and
“standstill” in relation to any provision in an agreement means any provision by which parties list barriers which are in force at the time that they sign the agreement and undertake not to introduce any new barriers.”
This amendment would aim to protect the NHS and publicly funded health and care services in other parts of the UK from any form of control from outside the UK.
New clause 18—Trade agreements: approval—
“A Minister of the Crown must not make regulations to implement an international trade agreement unless—
(a) a statement on the terms of the agreement has been approved by the House of Commons on a motion moved by a Minister of the Crown,
(b) a statement on the terms of the agreement has been approved by the House of Commons on a motion moved by a Minister of the Crown,
(c) a motion relating to that statement has been approved by a resolution of Senedd Cymru,
(d) a motion relating to that statement has been approved by a resolution of the Scottish Parliament, and
(e) a motion relating to that statement has been approved by a resolution of the Northern Ireland Assembly.”
This new clause would require the UK Government to secure the approval of both Houses of Parliament and the devolved Parliaments of Scotland and Wales, and the Northern Ireland Assembly before implementing any international trade agreement agreed after the passing of the Bill.
New clause 19—Involvement of judicial systems in trade disputes—
“(1) The United Kingdom may only become a signatory to an international trade agreement if the condition in subsection (3) is satisfied.
(2) The Secretary of State may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the condition in subsection (3) is satisfied.
(3) Legal proceedings brought against the United Kingdom under investment protection provisions included in an international trade agreement must be heard by the courts and tribunals system of the United Kingdom.”
This new clause would provide protection for UK firms, public bodies and the Government in the event of proceedings under investment protection provisions such as the Investor-State Dispute Scheme (ISDS).
New clause 20—Multilateral investment tribunal—
“(1) The United Kingdom may only become a signatory to an international trade agreement if the condition in subsection (3) is satisfied.
(2) The Secretary of State may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the condition in subsection (3) is satisfied.
(3) The condition under this subsection is that an international trade agreement must include a commitment by all parties to the agreement to pursue with other trading partners the establishment of a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes.”
This new clause would ensure that a multilateral investment process would be used to adjudicate on investor disputes.
New clause 21—Human rights and economic impact assessments—
“(1) Before laying a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010, the Secretary of State must lay before Parliament an impact assessment taking account of short and long-term human rights and economic impacts of that agreement on different sectors including, but not limited to—
(a) gender,
(b) age
(c) race and
(d) class.
(2) The Secretary of State must lay before Parliament reviews of each international trade agreement which has come into effect from January 2021.
(3) A review under subsection (2) must include an assessment of short and long-term economic and human rights impacts on different sectors including, but not limited to—
(a) gender,
(b) age
(c) race and
(d) class.
(4) Reviews under subsection (2) must be laid within two years of the day on which the agreement to which they relate comes into effect, and at intervals of no more than two years thereafter.”
This new clause would ensure that the HMG has a duty to commit to undertaking human rights impact assessments of all trade deals before and after implementation, taking account of short and long-term economic impacts across different sectors, including but not limited to gender, age, race and class.
Amendment 11, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
This amendment would require the Secretary of State to enter into negotiations to secure greater labour rights in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.
Amendment 12, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater environmental exceptions and carbon considerations in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
This amendment would require the Secretary of State to enter into negotiations to secure greater environmental protections in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.
Amendment 13, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater scope for UK small and medium-sized enterprises in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
This amendment would require the Secretary of State to enter into negotiations to secure greater access for SMEs in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.
Amendment 14, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing improvements to public health as a consequence of any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
This amendment would require the Secretary of State to enter into negotiations to secure improvements to public health in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.
Amendment 1, in clause 2, page 2, line 10, leave out “is a signatory” and insert
“was a signatory on 31 December 2019”.
The most recent EU FTA which was rolled over, was in December 2019. This amendment would provide that any further FTA entered into would not come under the EU FTA roll over provisions of Clause 2.
Amendment 29, page 2, line 14, at end insert—
“(2A) Regulations under subsection (1) to make provision for the purpose of implementing an international trade agreement may only be made if—
(a) the requirements under subsection (3) and under paragraph 4(1) to (1D) of Schedule 2 have been met;
(b) the requirements under subsection (4) and under paragraph 4(1) to (1D) of Schedule 2 have been met; or
(c) the provisions of section [Parliamentary approval of trade agreements] have been complied with and the requirements under subparagraphs 4A(1) to (1D) of Schedule 2 have been met.”
This amendment would put in place a structure for greater Parliamentary scrutiny of proposed international trade agreements.
Amendment 15, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to a free trade agreement immediately before exit day.
(4) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing an international trade agreement other than a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day.
(4A) Paragraph 4A of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing any international trade agreement not falling within subsection (3) or subsection (4) above.”
This amendment would apply the provisions of the Bill to trade agreements other than EU rollover trade agreements, allowing the Bill to act as a framework for a future trade policy.
Amendment 16, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Regulations under subsection (1) may make provision for the purpose of implementing a free trade agreement only if the other signatory (or each other signatory) and the European Union had ratified a free trade agreement with each other immediately before exit day.
(4) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement other than a free trade agreement only if the other signatory (or each other signatory) and the European Union had ratified an international trade agreement with each other immediately before exit day.”
This amendment would mean that a trade agreement would need to be ratified before regulations could be made to implement it.
Amendment 17, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with—
(a) the provisions of international treaties ratified by the United Kingdom;
(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;
(c) the primacy of human rights law;
(d) international human rights law and international humanitarian law;
(e) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to—
(i) the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and
(ii) the fundamental principles and rights at work inherent in membership of the International Labour Organisation;
(f) women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;
(g) children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and
(h) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
This amendment would ensure that regulations made under the Bill can only be made if the trade agreement which the regulations would implement does not contravene the UK’s international commitments with specific reference to human rights and related treaties, and must respect the sovereignty of parliament.
Amendment 18, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with the United Kingdom’s environmental obligations in international law and as established by but not limited to—
(a) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;
(b) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and
(c) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety.”
This amendment would ensure that regulations made under the Bill can only be made if the trade agreement which the regulations would implement does not contravene the UK’s environmental obligations.
Amendment 19, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not in any way restrict the ability—
(a) to make public services at a national or local level subject to public monopoly;
(b) to make public services at a national or local level subject to exclusive rights granted to private operators; and
(c) to bring public services at a national or local level back into the public sector for delivery by public sector employees.”
This amendment would ensure that regulations made under the Bill can only be made if the trade agreement which the regulations would implement does not contravene the ability of a UK government to take public services back into public ownership.
Amendment 20, page 2, line 23, at end insert—
“(4A) Regulations may only be made under subsection (1) if—
(a) the provisions of the international trade agreement to which they relate are consistent with standards for food safety and quality as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(b) the Secretary of State is satisfied that mechanisms and bodies charged with enforcement of standards for food safety and quality have the capacity to absorb any extra requirement which may arise from the implementation of the agreement;
(c) the provisions of the international trade agreement to which they relate are consistent with policy to achieve reduction in the risk of disease or contamination as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(d) the provisions of the international trade agreement to which they relate are consistent with achieving improvements in public health through any food policy priorities set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(e) the provisions of the international trade agreement to which they relate are compliant with policy to achieve targets for farm antibiotic reduction set by the Veterinary Medicines Directorate;
(f) the provisions of the international trade agreement to which they relate are compliant with retained EU law relating to food standards and the impact of food production upon the environment; and
(g) any food or food products to which the provisions of the international trade agreement apply meet standards of labelling, indication of provenance, and packaging specified by the Food Standards Agency or Food Standards Scotland.”
This amendment would ensure that regulations made under the Bill can only be made if the trade agreement which the regulations would implement enshrines UK standards in legislation and adheres to UK standards of food production and food safety.
Amendment 21, page 2, leave out lines 27 and 28.
This amendment would remove Henry VIII powers from the Bill.
Amendment 10, page 2, line 33, at end insert—
“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.
(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.
(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.”
This amendment would ensure that the consent of a devolved government is required for regulations under section 2(1) if those regulations contain matters which are within the remit of the devolved government.
Amendment 22, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of the period of five years beginning with IP completion day.”
This amendment would bar any extension to the five-year window for making regulations to implement EU rollover agreements.
Amendment 23, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—
(a) the period of five years beginning with IP completion day (“the initial five year period”), or
(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (8).
(8) Regulations under subsection (7)(b) may not extend the initial five year period or any subsequent period beyond the day which falls ten years after IP completion day.”
This amendment would limit any extension of the window to a maximum of ten years.
Amendment 2, page 2, line 35, leave out “five” and insert “three”.
This amendment reinserts a Government amendment made to the Trade Bill in 2018. It proposes to reduce, from five years to three, the time period during which a) EU FTAs can be rolled over and b) previously rolled over FTAs can be reamended.
Amendment 3, page 2, line 36, leave out “five” and insert “three”.
Amendment 4, page 2, line 39, leave out “five” and insert “three”.
This amendment reinserts a Government amendment made to the 2018 Trade Bill in 2018. If the Government decides to extend the period to make regulations under Clause 2, any such period should not be more than three years.
Amendment 5, page 2, line 41, leave out “five” and insert “three”.
Amendment 27, in clause 4, page 3, line 26, at end insert—
““international agreement that mainly relates to trade, other than a free trade agreement” means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
This amendment defines what is meant by international agreement that mainly relates to trade, reducing ambiguity.
Amendment 28, in clause 6, page 4, line 22, at end insert “and
(c) analysis of the impact of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018 (as amended by section 94 of the Finance Act 2020) to vary an amount of import duty if he or she considers that it is appropriate to do so.”
This amendment would oblige the TRA to give advice on the impact of the Secretary of State’s actions in reducing import duty under the powers in the current Finance Bill.
Government amendments 6 to 9.
Amendment 24, in schedule 2, page 11, line 26, leave out from “section 1(1)” to the end of line 27 and insert
“may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
This amendment would specify an affirmative resolution procedure for regulations under section 1 (1) (Regulations relating to the UK’s membership of the GPA).
Amendment 25, page 13, line 25, at end insert—
“4A (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which does not meet the criteria under section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1A) to (1D).
(1A) The Minister shall lay before Parliament—
(a) a draft of the regulations, and
(b) a document which explains why the Secretary of State believes that regulations should be made in terms of the draft regulations.
(1B) The Minister may make an order in the terms of the draft regulations laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft regulations are laid, no committee of either House of Parliament has recommended that the regulations should not be made, and
(b) after the expiry of a period of 60 sitting days after the draft regulations are laid, the draft regulations are approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that the regulations should not be made, the Secretary of State may—
(a) lay before Parliament revised draft regulations, and
(b) after the expiry of a period of 40 sitting days after the revised draft regulations are laid, make a motion for a resolution in each House of Parliament for approval of the revised draft regulations.
(1D) If a motion under subparagraph (1C)(b) is approved by a resolution of each House of Parliament, the Secretary of State may make the regulations.”
This amendment would establish a form of super-affirmative procedure for scrutiny of regulations implementing all trade agreements covered by the bill. The procedure would apply to agreements other than EU rollover trade agreements if amendments extending the application of the bill were agreed to.
Amendment 26, page 13, leave out lines 33 to 35 and insert—
“(3) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(3) or section 2(4) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(3A) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(4A) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4A.”
This amendment would extend the super-affirmative procedure under Amendment 25 to regulations where the Minister was acting jointly with a devolved authority.
Amendment 31, page 15, line 21, leave out subsection (3) and insert—
“(3) No person may be appointed as a non-executive member of the Authority under subparagraph (1)(b) unless—
(a) the Secretary of State has first consulted the Chair of the Authority on the proposed appointment, and
(b) the International Trade Committee of the House of Commons has consented to the appointment.”
This amendment would establish a procedure for appointing non-executive members of the Trade Remedies Authority other than the Chair.
Amendment 30, page 15, line 22, at end insert—
“(3A) In making any proposal under subparagraph (3), the Secretary of State must ensure that there is on the Authority a representative of—
(a) producers,
(b) trade unions,
(c) consumers, and
(d) each of the United Kingdom devolved administrations.”
This amendment would ensure that the Trade Remedies Authority includes, among its non-executive members, representatives of stakeholder bodies potentially affected by its recommendations.
Greg Hands
It is a pleasure to open consideration on Report of the Trade Bill and to speak to new clause 5. This is all legislation that contains key measures that will deliver for UK businesses and consumers across the country, providing continuity and certainty. Amendments have been tabled by the Government and from across the House, and with the permission of the House I will outline the Government’s position on these more than 50 different amendments, and on other amendments tabled, before we hear from hon. and right hon. Members.
On Government new clauses 5 and 6, together with amendments 6, 7 and 9, the Government have been consistently clear that the priority for the UK’s existing trade relationships as we leave the EU is continuity. Our partner countries are clear on that too, and this Bill is about continuity. But it is about more than simply transitioning agreements. It is about ensuring that businesses—UK and partner-country businesses—can continue to benefit from smooth-operating borders once we have become a wholly independent trading nation at the end of the transition period.
The Government have set out our ambition to have a world-leading border by 2050. This will support our aim to make the UK a globally attractive place to do business as we move forward. To achieve that ambition, the Government need to make better use of the data we currently hold, and new clauses 5 and 6 are aimed at doing just that. Unlocking the full potential of the data, without placing any additional burden on businesses, will not only allow us to achieve our vision for the future, but benefit those business and consumers who depend on a frictionless border to ensure continuity of our trading relationships today. The smooth flow of traffic, goods and trade after the end of the transition period and during the introduction of import controls will support the manufacturing sector, especially those using the just-in-time methodology and individuals who enjoy using the online sector.
New clause 5 creates a new legal gateway so that Government data can be used, first, to ensure continuity of trade by safeguarding existing trading relationships in countries both in the EU and in the rest of world so they are not frustrated by friction at the border for goods and services at the end of the transition period; secondly, to provide better services to UK businesses and consumers by supporting the effective management of the end-to-end border process; and, thirdly, to underpin the delivery of a world-leading border—protecting the UK, protecting revenue and growing international trade.
This is an amendment that external border industry stakeholders are very supportive of; indeed, they have been calling for exactly this type of action for a long time. I want to be clear to the House on a number of important issues in relation to the new clause. First, this all relates to existing data; there are no new powers for data collection in these Government amendments. Secondly, it is discretionary and specific: it does not create a data-sharing free-for-all between public authorities. The new clause is carefully drafted to limit the data that can be shared to only that related to trade functions. These are functions that, in the main, are the responsibility of the Secretary of State for International Trade or the Minister for the Cabinet Office. If the information is not required for trade functions, it cannot be requested under the gateway. Before any data can be disclosed, the public authority making the disclosure must also be satisfied that it has complied with its own existing data protection obligations—most notably under the Data Protection Act 2018 and the General Data Protection Regulation.
The Government recognise that there may be concerns about what happens to the data once it has been passed to the Cabinet Office, the Department for International Trade or other Departments. I want to assure all Members of the House that no data will be made available or sold to third parties outside Government—a concern which I know a number of colleagues have raised in the past —nor will it be used to monitor citizens or businesses, or to target individuals to be stopped at the border. These measures are, as I have said, about making sure that border flow is maintained, and that traffic, goods and services are free to flow with as little friction as possible.
Furthermore, new clause 6 makes it an offence to disclose unlawfully any personal data shared under the amendment. The Government have also tabled amendments 6 to 9, which make minor changes to the existing clause 8. These amendments are to enable Her Majesty’s Revenue and Customs data to be shared with all Ministers of the Crown, where HMRC is satisfied that the data may be shared for the Minister’s functions relating to trade. The current drafting enables HMRC to share data with the Secretary of State for the same purpose. The practical effect of the amendments is to enable HMRC to share data with the Cabinet Office, which is not headed by a Secretary of State.
New clauses 1 to 3 seek to replicate the effects of Government amendments brought forward to the 2017-19 Trade Bill. Over the course of this legislation, and its 2017-19 version, I have had constructive discussions with my hon. Friend the Member for Huntingdon (Mr Djanogly) regarding the purpose of the Government’s continuity programme. I would like to thank him for his work and the interactions he has had with me, particularly on the important issue of transparency. His efforts have directly changed the Bill through inserting the use of the affirmative procedure when exercising the power in clause 2, and ensuring that Parliament has transparency in relation to continuity agreements through the laying of parliamentary reports, alongside signed agreements setting out significant changes with the underlying EU agreement.
As Members across the House know, the purpose of our continuity programme is to provide certainty to businesses and consumers by retaining the preferential trading arrangements from which the UK benefits as a signatory to trade agreements that the EU had signed with third countries before exit day. That is why we have now concluded 20 continuity agreements with 48 countries, accounting for £110 billion of UK trade in 2018, which represents 74% of the trade with countries with which we were seeking continuity before the withdrawal agreement was signed. Each of those agreements has been accompanied by a parliamentary report, and I can confirm that we will continue to publish reports for all continuity agreements yet to be signed. As those parliamentary reports make clear, our continuity programme has remained true to its mandate: replicating our existing trade relationships. Let me repeat that standards have not been lowered in these 20 agreements. Unsafe food will not be entering our market, and our right to choose how we deliver public services has been protected.
Mr Jonathan Djanogly (Huntingdon) (Con)
I thank the Minister for his earlier comments. He talks about continuity agreements, but are they still continuity agreements? For instance, the agreement with Japan looks like it will be very different from the one that the EU had, and Canada is saying that it is not going to have the same agreement; it wants to see what we get with the EU first. Why does he still call them continuity agreements? Is this clause not looking at a position that we had two years ago? Should we not now move on?
Greg Hands
Let me be clear: we are talking about continuity. My hon. Friend can judge us not just by what I say but by our actions. Of the 20 reports that we have published, five have been called for debate in the other place, and not a single one of those debates has resulted in a motion of regret. He is right about one thing, and that is on Japan. I will come on to examine this shortly, but Japan is different. We have been clear that that will lead to an enhanced free trade agreement based on the original EU agreement, which is why we have put in place different and more considerable scrutiny arrangements for the Japan agreement than for the rest of the continuity programme.
We want continuity agreements to enter into force on day one to avoid a cliff edge for both businesses and consumers. I remind colleagues that all continuity agreements will be subject to the CRAG—Constitutional Reform and Governance Act 2010—ratification procedure. That already provides for a period of 21 sitting days in which agreements, and the parliamentary reports and explanatory memoranda published alongside them, can be scrutinised by parliamentarians before they are formally ratified. I will now address amendments 1 to 5 in the name of my hon. Friend the Member for Huntingdon, as well as amendments 22 and 23.
Greg Hands
I will give way to the hon. Member for Brent North (Barry Gardiner)—it is great to see him back in trade.
Barry Gardiner
The Minister talks of CRAG as if it is a process under which this Parliament has any power. He knows that it is the Government who enable Parliament to have a debate whereby it could vote against what is tabled under the CRAG process. He must look again at the way in which real scrutiny and accountability can be brought to bear in the way that the hon. Member for Huntingdon suggests.
Greg Hands
It is good to see the hon. Gentleman back. I remember that he was originally a Blairite Minister in Tony Blair’s Government, and it has been really instructive to see the journey that he has been on over some time. I saw him take the seat in the extreme corner of the Chamber earlier and thought, “Not only has he taken on the views of the right hon. Member for Islington North (Jeremy Corbyn), but he has now even taken his previous seat.” The hon. Gentleman voted for CRAG in 2010, as did I. [Interruption.] We both voted for CRAG in 2010. CRAG allows Parliament to block a trade deal. It allows Parliament to block international treaties. That was the intention—his Government designed it in that way to give Parliament the ability to block an international agreement, and that remains the case today.
Several hon. Members rose—
Greg Hands
I will make a little bit more progress.
As I have said, the other place has held debates on six of the agreements, and not one carried a motion of regret. We have also retained the affirmative resolution procedure for regulations that are required to implement single agreements. The Government recognise that there may be concerns that the power in clause 2 could be used to implement completely new agreements with continuity countries, both now and in the future, with inadequate opportunity for parliamentary scrutiny. In Committee we heard suggestions that some of the upcoming continuity agreements, such as those with Canada and Singapore, will go beyond continuity, and will therefore require a more comprehensive scrutiny process—my hon. Friend the Member for Huntingdon made that point.
Let me reassure hon. Members that we view the underlying EU agreements as sufficient, and we are not seeking to enhance those deals or go beyond continuity. These will be technical changes to make the agreements function in a UK-specific context. The Government acknowledge that the UK-Japan agreement, although based on the EU’s existing agreement with Japan, will be an enhanced agreement, and that is an exception.
Jonathan Gullis (Stoke-on-Trent North) (Con)
With ceramics being the fourth largest export to Japan and its industry, does the Minister see an enhanced trade deal with Japan as an opportunity, rather than listening to the doomsayers on the Opposition Benches?
Greg Hands
My hon. Friend is absolutely right. All my interactions, and those of the Secretary of State, with the ceramics industry and with MPs who represent key ceramics constituencies, indicate that the Japan deal is extremely important for this country. I am disappointed that the Opposition parties seem to have no enthusiasm for the continuity of our trade with Japan, or its enhancement.
Greg Hands
I will not give way just now. We are committed to additional scrutiny arrangements for any deal with Japan. We believe that the current sunset provisions in the Bill strike the right balance between flexibility for negotiators and the ability to keep agreements operable, and that they provide sufficient constraints and scrutiny to Parliament.
The Government are aware that during the 2017-19 Trade Bill there was uncertainty and concern in Parliament about the nature of the Government’s continuity programme—indeed, I can testify to that, because I was the Minister at the time—and that is why we have tabled a number of amendments to the Bill. There is, however, a crucial change in circumstance since the previous Bill, because Parliament can now see that we have not strayed beyond our mandate to deliver continuity. The transition agreements have not resulted in new or enhanced trading obligations, standards have not been reduced in any way, and our right to choose how we deliver public services has been protected.
Richard Fuller (North East Bedfordshire) (Con)
In that context, I understand why there is limited scrutiny for small trade deals, and the Minister has spoken about enhanced scrutiny for the Japan deal. He will know, however, that for many constituents, the US trade deal and the China trade deal will raise the most concerns. Can he give us some assurance that the process of increased scrutiny in Parliament will be higher for those deals than for the ones mentioned earlier?
Greg Hands
I absolutely give my hon. Friend that assurance, and I will come on to discuss those deals in a moment, although they are not within the scope of the current Bill.
My hon. Friend the Member for Huntingdon has tabled new clause 4 on new trade agreements, and that gives me the opportunity to stress the importance that the Government place on parliamentary scrutiny, and the commitments we have made in that space. The House will know that the negotiation and entering into of international agreements is a prerogative power of the Executive. The new clause would give Parliament veto rights over our negotiating objectives.
The Constitution Committee in the other place reported on that issue in 2019, and stated:
“This would impinge inappropriately on the Government’s prerogative power and limit the Government’s flexibility in the negotiations.”
I agree, and as the House will know, there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements through the Constitutional Reform and Governance Act 2010. [Interruption.] The right hon. Member for Islington South and Finsbury (Emily Thornberry) is fond of heckling, but she voted for that Act.
Aaron Bell (Newcastle-under-Lyme) (Con)
I concur entirely with what the Minister is saying. Is it not the case that if we allow further parliamentary scrutiny, we will not get the best deal from these negotiations, and that at present this is the Westminster-style democracy with the greatest parliamentary scrutiny of trade deals?
Greg Hands
My hon. Friend is absolutely correct that our scrutiny offer compares very favourably with Australia’s and New Zealand’s and is at least equal to Canada’s. He is right in other regards as well. Some of these amendments would obligate the Government to publish the text after the end of each negotiating round. At the moment, we publish a written ministerial statement. The idea that we publish the interim text with the United States so that Australia, New Zealand, Japan and all our partners could see it when this Government—this country—are undergoing simultaneous negotiation with different partners is not a sensible way of proceeding.
Greg Hands
I am going to make more progress.
This Government understand the desire of Parliament to have effective scrutiny of our FTA programme. That is why we have gone above and beyond the baseline provided by CRAG in committing to publishing comprehensive information ahead of entering into negotiations with partner countries. We have already done this—
Several hon. Members rose—
Greg Hands
I am going to make progress.
We have already done this for the US, for Japan, for Australia and for New Zealand. This has included publishing negotiating objectives and initial economic assessments. We have also committed to laying final impact assessments once negotiations have concluded and we know the content of the proposed agreement in its entirety.
Several hon. Members rose—
Greg Hands
I am going to make some more progress.
In addition, the Government have committed to providing regular updates to Parliament on the progress of negotiations. We have already adopted a similar approach for Japan, because that is an enhanced agreement. There is an important distinction that new clause 4 does not make, requiring, as it does, the roll-over agreements not yet signed to be subject to the same scrutiny as new agreements, even though the original EU-third party agreement has been subject to both EU and UK scrutiny.
Greg Hands
I am going to make more progress.
For new trade agreements, the Government have already committed to working closely with the relevant scrutiny Committees in both Houses throughout negotiations. This includes providing confidential briefings, as appropriate, to keep them apprised. This approach is in line with the recommendations of the former Member for Blackburn, Jack Straw—who served in government with the hon. Member for Brent North (Barry Gardiner). He said in his evidence to the Lords Constitution Committee that
“it should be for the negotiators to decide how much privacy and confidentiality there should be”
during negotiations
“and certainly not others”.
Finally, when negotiations have concluded, we will work with the relevant Select Committee to ensure, where practical, that there is time for the Committee to produce a report on the final agreement before it is laid in Parliament under CRAG.
Greg Hands
I am not going to give way further during this section of my speech.
Similarly—this is an important point—if the Committee were to recommend a debate on an agreement prior to ratification, the Government would of course consider that request, subject to parliamentary timetabling. Taken together, this means that Parliament will have comprehensive information, including economic assessments, on our agreements prior to negotiations commencing, at key points during negotiations, and at the conclusion of talks.
Finally on this point—this is extremely important—international agreements cannot themselves alter domestic law, and any changes to UK legislation would need to be scrutinised by Parliament in the normal way. We are strongly committed to transparency, as demonstrated by the steps we have taken to provide comprehensive information to the public and Parliament at the start.
Tim Farron
I just want to make a point about the nature of the scrutiny. A few weeks ago, the Government rightly came forward with the Trade and Agriculture Commission to add weight to the scrutiny of trade deals with regard to animal welfare, environmental standards and labour standards. What can the Minister do to give more assurance to farmers, in particular, that these deals will not lead to an undermining of their business and their standards, and put that into the Bill to ensure that those cannot then be let down?
Greg Hands
I thank the hon. Gentleman for that intervention, which allows me to say that the National Farmers Union has been incredibly welcoming of this proposal. Minette Batters said that it is
“a hugely important development in ensuring UK farming’s high standards of animal welfare and environmental protection are not undermined in future trade deals.”
There are three crucial things. First, we have a strong manifesto commitment to have no compromise on Britain’s standards of animal welfare, food safety and the environment. Secondly, we are transposing the EU rules into UK law to take effect on 1 January. The third thing is simply this: it would be for Parliament, if it so wanted, to block any such changes—if anybody thought they would introduce any of these controversial products, Parliament would be able to block that.
Greg Hands
No, I will make some progress. The Government are strongly committed to transparency, as demonstrated by the steps we have already taken.
New clause 12 proposes a review of free trade agreements every five years after entry into force. We have already established regular dialogue with the International Trade Committee, and that is perhaps the best forum to provide information and assessment of the UK’s wider trade environment and trade relationships to Parliament.
New clause 18 seeks to give Parliament and the devolved legislatures binding votes on, or vetoes over, international agreements, which would be to fundamentally undermine the royal prerogative and, worse, limit our flexibility to negotiate the deals that will best serve the interests of UK consumers and communities.
Sammy Wilson (East Antrim) (DUP)
I accept the Minister’s point that for devolved Parliaments to be able to undermine a national trade deal would be wrong. However, will he give us some guidance on the position for Northern Ireland? We may find ourselves having not continuity deals, but new deals, and we could be excluded from some of the benefits of those deals. How will he make an assessment? How will he enable the devolved Administration to have an input into decisions made on those deals if we find that we are disadvantaged by being excluded from them?
Greg Hands
I thank the right hon. Gentleman for that intervention. The first thing to say is that I have regular dialogue with his colleague the Minister for the Economy. I am meeting her tomorrow—indeed, I am meeting her twice—to talk about these issues. I reiterate that Northern Ireland remains part of the UK customs area and will benefit from UK free trade agreements. We have been absolutely categoric on both those points. As I say, new clause 18 seeks to give Parliament a veto over those arrangements and to ensure that the Government seek approval from the devolved legislatures on the final agreement. I am in regular contact with the Ministers for the devolved Administrations on these issues.
I will now address new clauses 7 to 9, and others in relation to standards. In answer to the intervention from the hon. Member for Westmorland and Lonsdale (Tim Farron), let me say that we have already given cast-iron commitments, during debate on this Bill and the Agriculture Bill, that we will not be diluting standards in any area, or in any way, following the UK’s departure from the EU.
Peter Aldous (Waveney) (Con)
I acknowledge the undertakings that the Government have given on agriculture and food production, but will the Minister also assure me that future UK trade policy will be fully aligned with our climate change and environmental policies? Will he also assure me that in striking new trade deals we will, at all times, promote low-carbon industries such as offshore wind and will not undermine UK businesses that are working hard to lower their own carbon footprint?
Greg Hands
I absolutely give my hon. Friend those assurances. The Government’s climate change agenda—indeed, the whole country’s agenda—is incredibly important for us at the Department for International Trade. We have put a lot of time and effort into promoting our capability and capacity in things such as offshore wind. I am regularly saying to international investors and trade partners that the UK now has the largest offshore wind capacity in the world. This is something we are seeking to export and it is something trade agreements can be helpful in. We are working with some of our key partners on these aspects of trade agreements, but they can also be something that the whole of government can work together on.
Greg Hands
I am going to make some progress. Let me address matters related to animal welfare, food standards and food safety. I recognise the strength of feeling that those issues generate among colleagues in all parts of the House, but as I have told the House on many occasions, as have the Secretary of State and my Department for Environment, Food and Rural Affairs colleagues, this Government will stand firm in trade negotiations. We will always do right by our farmers and aim to secure new opportunities for the industry, and we will not dilute our high environmental protection, animal welfare and food safety standards.
Steve Brine (Winchester) (Con)
There is not just concern on both sides of the House; my right hon. Friend knows that there is a lot of concern out there among the public and our constituents. We have heard commitments from the Front Bench, and when I was food safety Minister I gave those commitments too, around domestic food standards. Many people want it set out in black and white in the Bill. I suspect that the Minister will go on to say why he will resist new clause 7, for instance, so what assurance can he give me, my constituents and many others who will be listening to the debate that that is not necessary because those standards are protected in law, not just in word?
Greg Hands
I thank my hon. Friend for that intervention, which allows me to explain the difference. Some of the amendments seek to dynamically align other people’s methods of production with those that we use in the UK. Yes, we will have, and maintain, exceptionally high standards of domestic production, domestic products and import controls, and we can influence our trading partners.
However, I cannot put into legislation a dynamic regulatory alignment playing field for our trading partners. That would be impractical and it would render inoperable most of our existing trade agreements, and potentially render impossible doing a future trade agreement with the European Union. If all these trading partners had to sign up to dynamically aligning their standards with the UK, that would make it extremely challenging not just to keep our existing trade agreements but to do trade agreements with partners in the future.
Mr Deputy Speaker (Mr Nigel Evans)
Order. May I assist by indicating that so many people want to take part on Report that those who have indicated that they wish to speak and are on the call list should be thinking about four minutes? I call the Minister.
Greg Hands
I have much more to say, in relation to 50 different amendments, but I appreciate that there are a large number of other speakers, so I will call it a day there in order to allow other people their say. I think I have covered the main areas, outlining why we have the requirements in new clauses 5 and 6 on data, why we are confident of our robust approach to parliamentary scrutiny, using the CRAG process and enhanced things that we have introduced to ensure that Parliament gets the information and has the say that it needs, and finally our absolute commitment to not compromising on standards for food safety, animal welfare and the environment.
Bill Esterson (Sefton Central) (Lab)
International trade has rarely been more important. It is critical as we forge a new place in the world outside the European Union. It is also critical to how we recover from the pandemic, as it has the power to deliver prosperity at home and abroad, especially in the developing world as we aim towards the sustainable development goals. We will support the Government where they are right and challenge where they are wrong.
There are three key areas to which our amendments to the Trade Bill refer: social, environmental and democratic. First, on social, the Bill has profound implications for workers’ rights, human rights, public services and the economy. Secondly, on environmental, as my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) reminded us on Second Reading, international trade agreements have a massive impact on our ability to tackle the climate and environment emergency. Meanwhile, food production and animal welfare standards are matters of enormous concern to farmers and consumers alike. Thirdly, on democratic, the complete absence of scrutiny runs like the Sant Andreas fault through the Bill. [Hon. Members: “San Andreas.”] Thank you—the San Andreas fault.
Craig Williams (Montgomeryshire) (Con)
Will the hon. Member give way on that point?
Bill Esterson
I will give way in a moment. Our amendments attempt to rectify the Bill’s serious shortcomings and the lack of accountability. We were promised a modern framework for international trade negotiations in the Queen’s Speech. The Bill was supposed to be the opportunity to deliver that framework. It does not. The Bill gives Ministers powers to make changes to retained EU law upstairs in a Committee of 17 MPs after a maximum debate of 90 minutes. These powers are retained for up to 10 years. That is quite some grab by the Executive—and it is far from the whole story, either.
The final text of an agreement depends on the Government granting debates to the Opposition during a 21-day period: something that did not always happen in the last Parliament. It relies on the Opposition using their limited opportunities to determine the agenda for such a debate. The Government should be holding the debate and a vote in both Houses as a matter of course. New clause 4 is an opportunity to address some of the democratic deficit in the Bill.
Only half of the 40 agreements covered by the Bill have been signed. We are told by the Minister that they have already been scrutinised by the European Union. But these are not the simple matters of continuity that the Minister would have us believe. Only three out of 20 existing mutual recognition agreements have been signed with Switzerland, our third largest non-EU trading partner. South Korea has only signed a temporary agreement and wants to start again, and a number of the remaining 20 are going to be completely new. Japan—new agreement; Turkey, our 10th largest non-EU trading partner is in a customs arrangement with the EU and is waiting for the UK to sign a free trade agreement with the EU. Canada is in no hurry to negotiate at all. As I said, these are far from being simple matters of continuity, which is why they need proper scrutiny.
Barry Gardiner
Does my hon. Friend share with me the sense that the Government have told us that they needed the Bill to be able to produce these roll-over agreements? Yet the Minister has stood at the Dispatch Box today and said that we have concluded 20 of these roll-over agreements. In fact, they have managed to do that without this Bill having passed into law. Is not what he is saying absolutely relevant? It is these future agreements that we need legislation for, and it should be proper legislation that sets out the framework under which this Parliament scrutinises what is going on.
Bill Esterson
My hon. Friend is absolutely right, and I pay tribute to his time as the shadow Secretary of State and the work he did on scrutinising and opposing this Bill first time around. He is also absolutely right to say that what we have heard already from the Minister just bears out everything that we have been saying for the past three years.
As I say, these are not simple matters of continuity. That is why we need proper scrutiny. The problems do not end there. The Bill will put in place the framework for a new generation of new agreements, including those with the United States and Australia, and the controversial so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership: CPTPP.
Bill Esterson
The hon. Gentleman has been very patient, so I give way to him.
Craig Williams
I thank the shadow Minister for giving way.
I am a member of the International Trade Committee, which of course has cross-party membership; I wonder why the hon. Gentleman cheapens that Committee by saying that there is no scrutiny. I welcome the involvement from the Government to date. I ask the hon. Gentleman directly: prior to the CRAG protocol Act, how many trade deals did this place vote on while the power rested in Brussels?
Bill Esterson
As the hon. Gentleman knows from being on the International Trade Committee, CRAG was part of the process that we had as EU members. I will come to that in more detail a bit later.
Caroline Lucas
I just note that, as a member of the European Parliament’s trade committee, I had far more powers of scrutiny over trade agreements as an MEP than I have ever had as an MP here. However, does the hon. Gentleman share my concern that the Government’s refusal to bar imports from producers that produce to lower environmental or animal welfare standards spells real disaster for our farmers? If they are going to get undercut by cheaper produce that does not meet the same standards, how on earth can they make a living if they have to meet higher standards, and therefore probably higher costs as well?
Bill Esterson
The hon. Lady anticipates some things I am going to say a bit later. What she says is entirely consistent with what I said about the environmental aspects of the Bill.
There is widespread recognition across society that parliamentary scrutiny is essential in international trade agreements. The hon. Member for Huntingdon (Mr Djanogly) and his colleagues deserve credit for their sterling efforts to build consensus. Their new clause 4 has many elements of good scrutiny practice that a modern, confident, outward-looking country should want to adopt: scrutiny of, and a vote on, the negotiating mandate; assessment against domestic standards; consultation with the devolved Administrations; and a vote on the deal by both Houses. These are a good place to start. We can also learn from good practice elsewhere. For example, a very different approach is taken in the United States, where advisory committees have access to negotiating texts, trade unions are represented as well as employers and confidentiality agreements ensure that consultation is at an appropriate level. The result is that agreements can be amended, as with the recent United States-Mexico-Canada agreement, of which a strengthening of the labour chapter is intended to end union busting in Mexico.
How do we compare? Oh dear. So-called expert trade advisory groups—ETAGs—in this country are completely different. The Government do not tell us the criteria for membership or who the members are, and trade unions are excluded from a number of groups that were not set up to scrutinise trade deals. Talk now of a room-next-door approach has raised concerns because of the over-restrictive nature of the non-disclosure agreements, which, as drafted, would prevent sensible consultation and analysis of the text, even by the existing self-selecting and very limited memberships of the ETAGs.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend accept that we can learn through failure as well? One reason that the Transatlantic Trade and Investment Partnership failed was the lack of involvement of trade unions, industry and a number of different partners until right at the last minute, when people were asked to vote on something that they had not been brought along with.
Bill Esterson
My hon. Friend is absolutely right. I shall come to TTIP as an example of how not to carry out scrutiny and of why it is so important to have that wider engagement.
Bill Esterson
I will give way a little later, if the hon. Gentleman does not mind, because a lot of Members are waiting to speak. This talk of a room-next-door approach has raised concerns because of the over-restrictive nature of the NDAs. The chaotic way in which the Government plan to create their room-next-door system sounds more like a sketch by Mr Michael Spicer than how a responsible Government might engage with scrutiny.
Emily Thornberry (Islington South and Finsbury) (Lab)
On the Michael Spicer point?
Bill Esterson
I do not know if Michael Spicer is talking to the hon. Gentleman or not; we will find out in a moment.
Jonathan Gullis
The shadow Minister talks about scrutiny and refers to trade unions. However, if we have trade unions at the table, who will scrutinise the trade unions to ensure that they are not pushing their own agenda from their own sector on a UK-wide deal? How will we ensure their impartiality if they are beholden to a militant number of members? As we know, not every trade union member is politically motivated or engaged.
Bill Esterson
It is a shame that the hon. Gentleman has taken up other hon. Members’ time in the debate with such rubbish. The Constitutional Reform and Governance Act 2010 is the only formal parliamentary process in place for agreements not covered by the Bill, including with the United States. That is not scrutiny, is it?
Matt Western (Warwick and Leamington) (Lab)
Just to backtrack a moment, I remind my hon. Friend of the claims made by the Minister in his opening remarks, when he claimed we would enjoy better scrutiny than countries such as Australia and New Zealand, which I think is disputable. There was an exceptional omission, which was the United States. Should that not concern everyone?
Bill Esterson
Absolutely. We compare very badly with the scrutiny in the United States, some of which I have already described. My hon. Friend is right to make the comparison. Is it not ironic that we are in the middle of trade talks with the United States, where they have full scrutiny and we do not? While we are stuck with CRAG, in the United States debates and votes will take place in Congress, alongside the engagement with business and the unions that I described earlier.
Let us remind ourselves that CRAG was introduced as part of our scrutiny process while we were EU members, because trade agreements were an EU competence. The process included full scrutiny in the European Parliament —scrutiny that has not been replaced by an equivalent system. The hon. Member for Brighton, Pavilion (Caroline Lucas) reminded us of her experience performing exactly that role.
The Minister wrote to MPs last week. I think he read out quite a lot of his letter in his speech. He told us last week that legislation will be debated and scrutinised by Parliament in “the usual way”. The usual way? There is no “usual way”, because the usual process only worked alongside the scrutiny carried out for us in the European Parliament. Despite what the Minister says, CRAG on its own makes no sense unless the Government wish to avoid scrutiny.
Today’s amendments to the Bill are similar to those passed in March 2019. The Minister is fond of telling us how vital it is that the Bill passes, so why did the Government not accept the amended Bill last year? It could have saved a lot of trouble.
Bill Esterson
And time. What possible reason can the Government have for wanting to avoid scrutiny, and why on such important areas? Perhaps there are some clues in the topics covered by the various amendments. The threat to our NHS is right at the top of the list. Investor-state dispute settlement was a scandal that came to prominence during the TTIP negotiations. Let us look at some examples of the threat posed by ISDS. The Portuguese Government were sued using ISDS when the Lisbon metro was returned to public ownership. ISDS clauses in bilateral investment treaties are being used now to prepare a series of cases against the UK Government for pausing construction contracts during the pandemic.
ISDS is not the only issue. Standstill clauses prevent Governments from returning privatised public services to the public sector. Ratchet clauses require further services to be privatised. Then there are negative lists, which require Governments to specify exactly which services are to be exempt from privatisation, with everything else up for grabs. The Prime Minister told us he favours a social insurance system in his Daily Telegraph article, so when Ministers tell us not to worry about the NHS, it simply will not wash.
Statements alone are worthless. It is very simple: the detailed text of all agreements must include cast-iron commitments, because it is not just the Prime Minister who wants to hand over our NHS to the healthcare corporations; it is his friend the US President, and it is in the US negotiating objectives, which refer to
“full market access for US products”.
They want access to NHS medicines and more, and they are not shy about saying so.
Scrutiny matters, nowhere more so than in the protection of our NHS in international trade agreements. That is why our new clause 17 is so important. Ministers say that they want export opportunities for our farmers in the United States and Australia. Export opportunities? Really? Ministers are missing the point. Farmers have to survive first. If food imports are allowed with lower production, welfare standards and costs, farmers will struggle to stay in business. They will be undercut. As trade representative Lighthizer warned us, on issues such as agriculture
“this administration is not going to compromise.”
There is no ambiguity in Mr Lighthizer’s commitment not to compromise, is there? The idea that farmers will make up for domestic sales by exporting more is a fantasy. The magical thinking of Ministers will not stand up to scrutiny—that is, of course, if scrutiny is ever allowed.
Jim Shannon (Strangford) (DUP)
Northern Ireland producers in the agrifood sector export 75% of their products, so it is really important for us to have more markets and more markets will come across the world. Mash Direct, in the agrifood sector in my constituency, already exports its various vegetable and potato products to the United States. So there are markets that we can grab and take forward to get more jobs and employment. Northern Ireland will do better because of that.
Bill Esterson
I am grateful to the hon. Gentleman for raising that point about Northern Ireland. When the Bill was published, the Government were sticking to the mantra that there would be no border. How the new arrangements will operate in Northern Ireland and the impact on the UK is exactly why there needs to be proper scrutiny of the agreements and their impacts.
The Trade and Agriculture Commission is advisory, not regulatory. It has no teeth. It is not representative. It does not report to Parliament. It cannot enforce import standards and it will be gone again in six months’ time anyway. It cannot stop changes to food standards if the Government agree them in a trade deal with the US because it does not have any teeth. The hon. Member for Tiverton and Honiton (Neil Parish) said that he had been led up the garden path by the Government on the Agriculture Bill. The Government should lead him and his colleagues back down again, accept his new clause 4 and our new clause 11, and guarantee them in primary legislation. Mega-farms in the United States and Australia stand to benefit from any lowering of animal welfare and production standards. When we banned sow stalls in the UK, we had to admit pork from countries that had not caught up with our standards. What happened? Half our pig farmers went bust. If we were to accept chemical-washed chicken, our poultry industry would go bust, too. It must not happen again.
Public health, animal welfare and food production are inextricably connected. Hormones in animal feed may cause cancer in people. Industrial farming techniques affect the environment and global warming. In the middle of a global pandemic, minds should be concentrated. The use of antibiotics in farming is linked to the ability of diseases to jump between species. A coalition of businesses, unions, consumers, environmentalists and civil society is warning of a democratic deficit. The coalition is headed by the International Chamber of Commerce, which states:
“We no longer live in a world where trade can be treated separately from our international commitments on issues such as climate action, digitisation or building a more resilient health system. The public need to feel confident that trade decisions and processes are working for them and the Bill is a good opportunity to embed a more transparent, consensus based, democratic approach that clearly demonstrates a net benefit to all. It’s an opportunity to set a new gold standard.”
Bill Esterson
I am not going to take any more interventions because I am about to finish.
I said at the start that the Bill is really about social responsibility, environmental protection and democracy. The lack of scrutiny threatens to leave the NHS wide open to pharmaceutical giants and to undermine farmers and consumers. Chemical washes of chicken, hormones in beef, ractopamine in pork and GM crops are banned in the UK. What is wrong with keeping it that way? If the Government are saying, “We are going to do it anyway”, what is the objection to putting it all in primary legislation? The trouble is that we all know what is really going on here: they do not want to put protections for our NHS farmers and consumers in law or take the action needed on the climate crisis, because they have no intention of keeping their promises.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. In case the House is not already aware, after the next speaker, we will have a time limit of four minutes on Back-Bench speeches, which, of course, does not apply to Mr Stewart Hosie.
Stewart Hosie (Dundee East) (SNP)
There are four significant flaws with this piece of legislation: the absence of devolved consent, real protections for the NHS, the preservation of food standards and meaningful parliamentary scrutiny. I believe that our amendment 10 and new clauses 7 and 8 deal with the first three, and that new clause 4, tabled by the hon. Member for Huntingdon (Mr Djanogly), deals with the final issue.
I wish to speak to amendment 10 and new clauses 7 and 8, which are in my name, and I will start, slightly in reverse order, with amendment 10. It relates to the powers of the devolved Administrations, or as I said in Committee,
“more accurately, the ability of the UK Government to make regulations under subsection (1), which makes provisions within devolved competencies, without the consent of Scottish or Welsh Ministers or a Northern Irish devolved authority”––[Official Report, Trade Public Bill Committee, 23 June 2020; c. 237.]—
granting consent. It strikes me as fundamental that if we are to genuinely respect the devolved settlement in the UK, Ministers must self-evidently gain the consent of the devolved Administrations before making changes to regulations that directly affect them, possibly in a negative way, or in a way that runs counter to those Governments’ policy objectives.
I am aware that in the previous Trade Bill, under consideration between 2017 and 2019, there was a problematic provision for regulation-making powers to be available to the UK Government, but the good news is that those provisions have been removed from this Trade Bill. It is the case, however, that there remains no statutory obligation for the UK Government to even consult, let alone seek the consent of, Scottish Ministers before exercising the powers in this Bill in devolved areas.
I know that the Minister has said that these powers would not normally be used without seeking consent, and his predecessor did offer a number of a non-legislative commitments to the Scottish Trade Minister Ivan McKee in March. I am genuinely pleased that the Minister, during the Bill Committee, committed to honouring those non-legislative commitments. He said:
“I restate the commitments made by my right hon. Friend, when he was a Minister, in his March letter to the Scottish Minister Ivan McKee”,
and that is genuinely very welcome. However, he went on to say, in opposing what was then amendment 8 and similar Labour new clauses that dealt with the same issues:
“In short, we are already delivering the engagement envisaged by proposed new clause, and we have achieved that while continuing to observe the important constitutional principles enshrined in the devolution settlements.”––[Official Report, Trade Public Bill Committee, 23 June 2020; c. 240-241.]
I disagree. Giving the UK Government the ability to directly effect devolved powers without the statutory requirement to even seek consent is not observing the devolved settlement.
Jim Shannon
Our trading ability is something that concerns each and every one of us across the whole United Kingdom of Great Britain and Northern Ireland. Would the hon. Gentleman be prepared to support new clause 4, which would give the authority to the devolved Assemblies and the Scottish Parliament, and further, would mean that proposals came to the Floor of the House for ratification? Surely supporting new clause 4 would be a step to making that happen.
Stewart Hosie
I am more than happy to support new clause 4, not least because I have signed it, but it is a slightly different thing. Ensuring parliamentary scrutiny, about which I shall say a little more later, is important, but it is different from the seeking of consent from those Administrations whose policy direction may be affected by a UK Government decision.
When we debated the identical new clause in Committee, the Minister went on to say that
“this proposed new clause would give the devolved Administrations a statutory role in the reserved area of international trade negotiations, which would be constitutionally inappropriate.”––[Official Report, Trade Public Bill Committee, 23 June 2020; c. 241.]
He was partly right, in that it would give the devolved Administrations a statutory role, but only in so far as the provisions of a trade deal affected devolved competences. That is not constitutionally inappropriate; it is a matter of good administration and respect.
The Minister’s key argument against what was proposed was that it was not “practical”. He said:
“It would lock us and the”—
devolved Administrations—
“into prescribed ways of working under the existing intergovernmental memorandum of understanding, a document last updated in 2013.”––[Official Report, Trade Public Bill Committee, 23 June 2020; c. 241.]
Well, that may be an argument for revisiting the MOU, and it might also be an argument to say that the Government should adhere to the terms of the MOU under any circumstances, but it is a strange argument for opposing this amendment. Surely it is better to base negotiations on an agreed framework, or better still an agreed statutory framework, rather than to leave them to chance, make up the rules on the hoof and give an impression of UK Government acting in an arbitrary way.
The Minister’s key argument was as follows:
“As parts of these agreements touch on devolved matters, this legislation will create concurrent powers. We have sought to put in place concurrent powers to provide greater flexibility in how transitional agreements are implemented”.
So far so good; however, he went on to say:
“This approach permits greater administrative efficiency, reducing the volume of legislation brought through the UK Parliament and through the devolved legislatures.”––[Official Report, Trade Public Bill Committee, 23 June 2020; c. 241.]
It cannot be right that the UK Government intend to legislate, or can legislate, in areas of devolved competence for the sake of administrative efficiency. There are far bigger and wider principles at stake than that.
Let me turn to new clause 7, tabled in my name. We know that trade deals can put pressure on food standards and lead to the importation of low-standard food. For example, the US Administration has made it clear that they want the UK to lower its food and animal welfare standards. The new clause includes a ban on the importation of food that is produced to standards lower than that in the UK. We know that the US and other countries have far lower animal welfare standards and adopt practices—including chlorine-washed chicken, hormone-fed beef and the use of various pesticides and GM crops—that are illegal in the UK for health and environmental reasons. None of that is a great surprise to anyone in the House. We believe that the quality of Scotland’s food and drink produce and, indeed, of food and drink produced elsewhere in the UK, and the related standards, are essential to the maintenance of our established international reputation in those areas.
Steve Brine
I wonder whether the people in Scotland, like the people in England and in my constituency in Winchester, might not be way ahead of the politicians. Ultimately, will not the consumer decide? Just recently, we heard Waitrose make it clear that it would not be selling any imported product that was produced to a lower standard than we currently enjoy in this country, with its new boss citing chlorine-washed chicken. I just wonder whether the public might be ahead of us on this already.
Stewart Hosie
I want to be careful in how I answer that. I hope the hon. Gentleman understands that perhaps those who can afford to shop in Waitrose—the Minister boasted in Committee that he was Waitrose fan—have a choice; perhaps somebody who is counting every penny and does not have access to anything other than the cheapest food is not in the position to make the same choice.
In effect, new clause 7 would do two things: it would affirm the UK’s rights and obligations under the SPS agreement—that is, the application of the sanitary and phytosanitary measures in annex 1A of the WTO agreement; and it would prohibit the import of food into the UK if standards in the exporting country were lower than those in force in the UK. I do not think there is anything contentious about that.
It is not just campaign groups like the Trade Justice Movement that back this. It is not just Scottish Land and Estates and the National Farmers Union that back measures like this one. The British Medical Association has weighed in, saying:
“The Bill presents an opportunity for the UK to present itself as a global leader on standards on food imports for the benefit of human, animal and plant health, and the environment. To fulfil this opportunity, it is vital that our current high standards are upheld and protected in any trade deals.”
It suggests that new clauses 7 and 11 should be backed in order to achieve that.
It is also necessary to have this on the face of the Bill because the Government’s approach to protecting food standards is slightly confused. In Committee, the Minister said:
“This Bill is about…continuity… Imports under continuity agreements must continue to comply with our existing import standards.”
I welcomed that. However, he added:
“Decisions on those standards are a matter for the UK and will be made separately from any trade agreements.”––[Official Report, Trade Public Bill Committee, 25 June 2020; c. 305-6.]
There is the point of concern, right there. The UK could, if it wished, lower standards, opening the door to all sorts of imports. Let us make sure that that is not possible, at least in the roll-over arrangements, by including the UK’s obligations under the WTO phytosanitary agreement in the Bill. That is important because although the purported objectives of the Bill are about roll-overs, the definition of “trade agreement” is very wide and the long title does not restrict its use only to roll-overs.
New clause 8 would ensure that the UK Government have a duty to restrict market access to healthcare services, including medicines and medical devices. We tabled the new clause precisely because trade deals potentially have a negative impact on health services. While the UK Government have repeatedly pledged that the NHS is not on the table in trade negotiations, leaked documents detail conversations between UK and US negotiators and reveal that health services have been discussed, including the US probing the UK’s “health insurance system”, and the US has made clear its desire for the UK to change its drug pricing mechanism. The new clauses therefore include specific carve-outs for the NHS, all relevant services and regulation, meaning that it would be illegal for the Government to conclude a trade agreement that altered the way that NHS services are provided, or liberalised further, or opened up to particular sorts of foreign investment.
There could be no use of negative listing because such clauses require that all industries are liberalised in trade agreements unless there are specific carve-outs, and it is not always easy to define what services count as health services. For example, digital services may seem irrelevant to health, but NHS data management and GP appointment systems are increasingly digitised. There could be no standstill or ratchet clauses, because these provisions mean that after the trade deal has been signed, parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature.
There are many examples of real-world potential impacts; I will give just one. The Scottish Government had private cleaners in the NHS and quite a high degree of hospital acquired infection. The private cleaners were replaced by NHS cleaners, and the level of hospital acquired infection fell dramatically. Had a ratchet been in effect, let alone ISDS, it might not have been possible to do that, with detrimental mortality and morbidity consequences for real patients. The clause also states that there should be investor-state dispute settlement clauses in trade agreements. They only allow private investors to challenge Government policy when it affects their profits. The BMA piled in to this debate, as well, saying:
“The Bill must rule out Investor Protection and Dispute Resolution mechanisms which undermine the supremacy of UK courts and risk deterring, delaying or blocking public health improvement measures.”
We have seen examples around the world of where that has happened. It is fundamentally quite wrong for large corporations to be able to use ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of their citizens, or for enacting public health measures that they believe to be right and for which they may well have an electoral mandate.
Barry Gardiner
The hon. Gentleman is making a fine speech. Does he agree that it seems a considerable irony that those Government Members who were so determined that this country should not be subject to any supranational court system should hereby, in an ISDS clause, enable our Government to be sued by foreign companies in specialist supranational courts in a way that is not even accessible to our own domestic companies?
Stewart Hosie
Yes, and I made that point. It is wrong for these provisions to be available only to investors in the way that has just been described. If we want a supranational body that adjudicates, arbitrates and works, let us have the UK Government put some pressure on their friends in the United States and get the WTO appellate body back up and running and functioning again. That would be the best thing for trade around the world.
New clause 8 would also instruct that there should be no changes to drug pricing mechanisms, which could also happen through intellectual property and non-patent exclusivities. That would be bad news for patients, taxpayers, health boards and trusts around the country, and our view is that trade deals should not be used to facilitate it.
In opposing a new clause like this one in Committee, the Minister said that
“the NHS is not, and never will be, for sale to the private sector”.
Fine. He said:
“We have always protected our right to choose how we would deliver public services in trade agreements, and we will continue to do so.”
Fundamentally, his argument was that “however laudable” the new clause was, it was “unnecessary”. He went on to explain that the UK already had
“rigorous checks and balances on the Government’s power to negotiate and ratify”
trade agreements
“via the Constitutional Reform and Governance Act 2010”.––[Official Report, Trade Public Bill Committee, 25 June 2020; c. 315.]
There are two big issues that jump out, given what the Minister said—and I have it in full if he wants to re-read it. First, there is absolutely no practical reason why protections for the NHS demanded by the public should not be included in the Bill. Secondly and more importantly, because the so-called “rigorous checks and balances” in CRAG amount to little more than a take-it-or-leave-it choice at the end of the negotiations, the need to protect the NHS from the outset in legislation is paramount.
I commend amendment 10 and new clauses 7 and 8 to the House, and I hope—time permitting—that we can press new clause 7 and amendment 10 to a vote.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We now have a time limit of four minutes.
Theresa Villiers (Chipping Barnet) (Con)
I rise to support the Bill because I believe that removing unnecessary barriers to trade can boost jobs and growth, but I hope that the Minister and the Government will consider seriously whether changes can be made to strengthen parliamentary oversight, whether via the amendments we are considering today or in the other place.
I was one of 18 Conservative MPs to back new clause 2 of the Agriculture Bill. I did so because I believe our trade policy should be consistent with our values. The Government were elected on a manifesto with stronger commitments on the environment and animal welfare than any of their predecessors, but maintaining our domestic rules on animal welfare and environmental stewardship of land will have less and less real-world impact if more and more of our food is imported from countries with lower standards and fewer qualms about these matters than we have.
I would therefore like to hear the Minister confirm this evening that the Government will keep in place the import ban on chicken washed in disinfectant and will not at any stage ask this Parliament to remove it from the statute book. I hope that he will say the same about the ban on beef from cattle whose growth has been artificially boosted by hormones. We know that in the United States, many of them are intensively reared on feedlots containing thousands of animals fed off soy production, contributing to deforestation in the Amazon basin.
The reality is that more or less every country in the world reflects sensitivities over food in its approach to trade policy for the good reason that food security is crucial to any society. I warmly thank the Minister and the International Trade Secretary for agreeing to establish a commission to consider how we can secure the economic advantages of free trade agreements without undermining our world-class food standards. Those standards would be undermined if we allowed an unrestricted tariff-free influx of food produced using methods that would be illegal in this country. A good deal with the United States, a mutually beneficial deal, could see tariffs coming down even in sensitive sectors such as beef so long as incoming food complies with animal welfare and environmental standards that are equivalent to our own. Many US producers are perfectly capable of doing that, and it should not be beyond the wit of man to develop a certification and compliance system.
Contrary to what some have claimed, this is not a rerun of the debates on the corn laws, and it is a caricature to suggest that those of us raising concerns have somehow been captured by producer interests as our Victorian forebears in this House were. All I am asking is that we do not sell ourselves short in this country. The UK is the third biggest market for groceries in the world. Even conditional access to that market is a valuable prize. Just because we would like a trade deal with the US does not mean that we should give it everything that it wants. There is so much that we can offer our trading partners in the US and in other countries, and is it so unreasonable to say that, when it comes to food, there are limits to liberalisation?
Fleur Anderson (Putney) (Lab)
This Trade Bill is fatally flawed. It could have been a bold statement about our future trade deals in which we used our independence from the EU, whatever we feel about it, to build in high environmental and food standards, workers and consumer rights, and commitments to achieving sustainable development goals and human rights and to modernise our trade rules in conjunction with constructive, modern, democratic scrutiny. Instead, this Bill is stripped of any of those. I urge Members to vote for new clause 4, which will enable the people’s elected representatives here in this House and in the devolved Administrations to say what is important for the British people.
High standards should be written into trade agreements from the start to the finish of negotiations and ensure that, for example, secret deals do not end up with selling off the NHS to the highest bidder. Chlorinated chicken could be just the start. These are not the words of doomsayers or baseless concerns; more than 400 NHS and senior public health professionals have signed an open letter, demanding legal guarantees in post-Brexit trade legislation to provide specific protections for the health service in any future trade negotiations, such as those with the US. US trade deals are already under way in secret, but even in the US both Houses of Congress get a guaranteed vote on trade agreements, and America’s process for public consultation prior to negotiation is impressively far-reaching in contrast with this Bill. The British public are being sold out by this Bill. What are the Government afraid of? What are the Government planning to do? What desperate deals will be struck to get a deal done, but on worse terms?
In my own constituency, 39% of jobs are in sectors identified as being severely impacted by a no-deal Brexit, or a bad deal with the EU. I am extremely angry, as are my constituents that, as an MP, I will have very little say over preventing this. Food standards are also a very huge concern to my constituents who are deeply worried that decades of progress in animal welfare, hygiene, husbandry and environmental management are going to be stripped away. Farmers and consumers will be worse off.
I am very disappointed that the Bill went through several days of scrutiny in the Committee, which I was a member of, without any changes whatsoever, and today we have just a few minutes of parliamentary debate starting in the late afternoon on only one day before the Bill goes to the next stage. In Committee, we heard evidence about how much stronger our trade negotiators could be if they had the backing of parliamentary red lines written into our legislation, but we were told over and over again by the Minister that proposals for parliamentary scrutiny of food standards, environmental standards and workers’ rights were not necessary.
Fleur Anderson
I only have a few seconds left.
If the planned negotiations will include all those rights and standards, that should be guaranteed by being written into parliamentary legislation. If the Government are planning to agree a bargained down, watered down race to the bottom, I can see why they would reject these amendments. That is why we should all be very worried about our future and about this Trade Bill.
Robert Courts (Witney) (Con)
It is a great honour to speak in this debate, having spoken briefly on Second Reading and sat on the Bill Committee and being a member of the International Trade Committee. We had a wide-ranging, well-informed and constructive debate in Committee, and it is good to see so many of its members speaking in the debate.
I would like to address a number of points, including the clauses relating to the NHS and to scrutiny, but because of the time limit, I will confine myself to just one, which is standards, and in particular new clause 11. Simply put, new clause 11 would allow the import of agricultural goods into the UK
“only if the standards to which those goods were produced were as high as”
the standards that apply under UK law. On the face of it, that sounds reasonable because it just seeks to ensure what we already have. Nobody has any difficulty with that—everybody here wants to maintain the high production standards, animal welfare standards and environmental standards that we have. That is why the Government have been absolutely clear that they will do precisely that. That is why the Minister stood on a manifesto commitment to do exactly that. That is why I stood on a manifesto commitment to do exactly that, as did all my hon. Friends.
There are a number of misunderstandings, which I will briefly address. We have already heard a number of times from Opposition Members about chlorine-washed chicken and hormone-treated beef, and I am sure we will hear about it again before the end of the debate. Those are already illegal in UK law. They are illegal because they are in European Union law, and European Union law is put into UK law by the terms of the withdrawal agreement. When Opposition Members plaintively say, “Why won’t the Government just put this in primary legislation?” the answer is because it is already there. If it were to be removed, the Government would have to bring something to the House and get us to vote on it—they would have to change the law, and we have all expressed our view about that. That prohibition is already there, so new clause 11 is simply unnecessary.
New clause 11 seeks to go further than maintaining our high import standards. It is crucial that we distinguish between import standards, which is the safety of food brought into this country, and safety standards, which is the way that they are produced domestically. The new clause seeks to have us say to all our trade partners, “We want to go further than ensuring that we import safe food. We want to reach into your domestic legislation and tell you exactly how you produce that food.” No self-respecting independent country will want to do that.
Barry Gardiner
That is patently false. All the new clause does is to say, “If you want to produce food to export into our market, it must be produced to these standards.” It does not in any way seek to impose legislation in the United States or anywhere else that would govern the way in which they can produce food.
Robert Courts
I do not agree with the hon. Gentleman on the wording of the new clause. It talks about
“standards which at the time of import applied under UK law”,
which means that the same standards have to apply in the foreign law, so it goes far further than what is intended by the Bill. No country is going to accept dynamic alignment imposed on it by us, any more than we would accept it. We cannot say to Mr Barnier, “We do not want to accept dynamic alignment from you, but by the way, we want you to accept dynamic alignment from us, because you’ve got to mirror the standards we have in our domestic legislation.”
Caroline Lucas
It is extremely interesting to follow the hon. Member for Witney (Robert Courts), who seems to be labouring under a completely false set of perceptions. First, the standards referred to in new clause 11, and indeed in many of these amendments, are the standards for products exported from country A to us here in country B. We are not making any comment about the products that are circulating within that country. We are simply saying that, if we want our farmers not to use sow stalls, for example, it makes no sense not to apply such conditions to the imports of food coming from countries that are using those standards. If our standards imply higher costs and we do not have some way of moderating the goods coming in from countries that are not imposing those standards, our farmers will be undercut. I really wish he would get his facts straight before standing up and saying that these amendments do not make sense, because they do.
I stand to speak to new clause 9, tabled in my name. New clause 9 stipulates that no international trade agreement may be ratified or implemented if it restricts the UK’s ability to pursue its climate and environmental goals. It requires the Government to make full implementation of multilateral environmental agreements by all participating nations the priority during trade negotiations, and to prioritise facilitating action to that end at the World Trade Organisation. It requires regular reporting on compliance with the above. Overall, it would ensure that the Government’s trade policy is in line with their international climate obligations and domestic environmental targets.
The Trade Bill should have been an opportunity to provide a clear direction of travel on the UK’s new trading status. It should have set out a democratic, environmentally and socially just framework for a new, pioneering and independent trade policy. The Conservative election manifesto promised that the Conservatives would not
“compromise on our high environmental protection, animal welfare and food standards.”
Yet, as we have seen, the gap between reality and rhetoric is a yawning gulf. We do not want yet more warm words and nice rhetoric. What we want are some red lines in the negotiations, and the way to get them is to write them into this Bill. That is all that those on the Opposition side of the House are asking for.
Instead, what we have with this Trade Bill is the same rehashed, controversial proposal from before the general election. It is one that fails completely to take account of the long-standing climate and nature crises or, indeed, of the covid-19 pandemic that has happened since. The UK’s objectives for trade deals must change to keep up. They must prioritise action to tackle the climate crisis, sustainable food supply chains, decent work and, as has been so sharply highlighted, universal and affordable access to medical supplies.
As it stands, this Bill risks undermining the UK’s social, labour, environmental and agricultural standards. It fails to ensure that imported products adhere to at least equivalent standards. I therefore welcome all the amendments that have the same objectives as my new clause 9, which would provide us with a framework for protecting the standards that keep us safe. This is not an academic discussion, as we know. We know that the US Administration have made it very clear that they want the UK to lower its food standards to allow the export of products currently banned in the UK, and that is why we need to be on our guard.
Steve Brine
I am listening to the hon. Member carefully, as I always do, but we are dealing in facts. She said, following my hon. Friend the Member for Witney (Robert Courts), that we should deal in facts; for the record, I thought he dealt in facts beautifully. Does she accept the point that the Food Standards Agency, for which I used to be responsible as a Minister, would have to propose any change in lowering regulatory standards—let us say, for instance, in how one washes chicken. It would have to propose such a regulatory change, which would have to be bought through these Houses of Parliament. Does she accept that as a fact?
Caroline Lucas
I am happy to accept that as a fact, but does the hon. Gentleman accept that the unwillingness of this Government to put their objectives into the Bill is causing massive concern? Thousands of people are writing to the Minister to say that they are deeply, deeply concerned, so why not put them in the Bill? Unless they are there, we are not going to take them seriously. [Interruption.] I am sorry; I just do not think that people are going to believe warm words; they want such things in the Bill.
We need to be listening to those people who are contacting the Minister. That includes, as we have heard before, not just the National Farmers Union, but many other organisations and many people from civil society. We also need to be listening to the science.
I want to end by speaking to the issue of climate change and the fact that all our policy arrangements going forward need to be aligned to the essential fact of not exceeding the threshold of 1.5°. This year, 2020, is on course to be the warmest ever. Aligning trade policy with environmental and climate objectives is not just something that would be good to do; it would be reckless and perilous to do anything else. Despite the hype of a brave new post-Brexit world, this Trade Bill perpetuates the status quo. It is totally unfit for purpose from the point of view of standards; democratic scrutiny; secret courts that can also undermine values of the kind we want enshrined in trade Bills going forward.
Craig Williams
It gives me great pleasure to rise in this debate and I welcome the fact that the Minister sailed the Bill through Committee unamended. I say to the hon. Member for Brighton, Pavilion (Caroline Lucas) that the rhetoric, facts and a couple of other statements that she made simply all mix together and I am afraid that I agree fundamentally with my hon. Friend the Member for Witney (Robert Courts). The fact that she wants something in the Bill that is already the law of the land gives excellent credence to what rhetoric is.
Caroline Lucas
One of the reasons that I want things in the Bill is that they might otherwise be changed through statutory instruments, which might not even see the sides of this Chamber. We want them in the Bill so we can have the debate here in this Chamber.
Craig Williams
The hon. Lady, I know, understands the process of this House probably better than me, and a statutory instrument sailing through this place without a vote on the Floor would mean a dereliction of duty by those on the Opposition Benches. I know as well as she does that it would be easy to facilitate such a vote. Not only that, but those on the Treasury Bench have been absolutely clear.
In the short time I have, I want to echo my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), with whose thoughtful contribution at the start of the debate I agreed very much. I also pay tribute to my hon. Friend the Member for Tiverton and Honiton (Neil Parish), the Chair of the Environment, Food and Rural Affairs Committee. I think he is the grandfather of the commission we now have for trade and agriculture, although I do not want to age him. My hon. Friend did more to engage me with my farmers than the National Farmers Union has done in a decade. I suspect that was done in 10 minutes amending the last Bill, rather than what the NFU tried to do in an ongoing dialogue.
Fay Jones (Brecon and Radnorshire) (Con)
My hon. Friend and constituency neighbour mentions the commission. We were lobbied by many of our farmers who urged us to set up that commission. The Government have listened. Does he agree that that is evidence of this Government listening to farmers and upholding our manifesto commitment?
Craig Williams
I dare not disagree with my parliamentary neighbour. I very much welcome the commission and I say to those on the Treasury Bench that it is welcomed by my farmers and my agricultural community. The membership of that commission gives a certain amount of comfort to the farmers I engage with daily in representing one of the largest agricultural communities in this country.
I want to focus for a second on what my hon. Friend the Member for Witney said around the subject of chlorinated chicken, which has become a lightning rod, a focus stone. I re-emphasise that there is an import ban in place; there is a law of the land in place that that cannot be imported into this country, and it would be an incredibly brave Government, Treasury Bench and Chief Whip who ever brought that issue to this House.
It seems to be Opposition Members, over and over again, who are trying to charge the whole debate emotionally with that product, despite the full knowledge that it is illegal to import it into this country. That brings shame on them for trying to whip the issue in such a fashion.
Charlotte Nichols (Warrington North) (Lab)
The horsemeat scandal revealed significant vulnerabilities in the traceability of our food supply chain. Given that pork and horsemeat found their way into what was meant to be beef, does the hon. Gentleman not accept that we risk a similar scandal in future if additional protections for consumers against chlorine-washed chicken and hormone-fed beef are not written into the Bill?
Craig Williams
I have won the argument on chlorinated chicken and we have moved on to another product. I say to the hon. Lady that working with the Government, as I am with the Secretaries of State for both DEFRA and International Trade, on traceability, accountability and labelling, is the right thing to be doing—not making cheap political points in what is one of the most essential debates and Bills for this country right now.
I was trying to get to a point about the scrutiny in this place. As a member of the International Trade Committee, I commend our illustrious SNP Chair, who has brought real teeth and scrutiny to the process. The willingness of the Secretary of State and our negotiators to brief the Committee in private session has been extremely welcome.
The fact is that we have the CRAG procedure, which has been talked about at length—I see some Members starting to smile on the Opposition Benches. It would be an Opposition who really could not use the process to full advantage who could not bring a vote against any kind of trade deal that came forward. For anything to be able to be snuck through, there would have to be a complete dereliction of the Opposition’s duties—never mind the Back Benchers on the Government side, who will hold our Government to account, as is our job.
Having spoken to the Minister on the Treasury Bench at length on these issues, I feel safe in the knowledge that the trade deals that we are doing will be welcomed in my farming and agricultural community. The deals will open up not just markets that that community wants, such as lamb to the United States of America—the second largest importer of that meat in the world. They are already opening up the beef market, which has been lying dormant for so many decades and they will enable the import of products of a reasonable standard. Consumers in my constituency and across the United Kingdom can take huge comfort from the import bans in place in the law, which will not be removed.
I know that there is a time limit and that other Members want to speak. I commend the Treasury Bench for their engagement with our farming community, with me and with the International Trade Committee. I commend the Bill unamended.
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow my constituency neighbour, the hon. Member for Montgomeryshire (Craig Williams). I begin on a point of consensus, for I fear that we might diverge a little as I proceed.
I am sure that the hon. Gentleman will agree with me that trade is an important part of the Welsh economy. It was worth £17.5 billion in 2019 alone. While the Government pursue trade deals across the world to explore new opportunities, the hon. Gentleman will also agree with me, I think, that they should not squander the opportunities on our doorstep. Although Wales is a proud global partner, we cannot escape the fact that at present more than 60% of Welsh exports are destined for our friends—and, hopefully, our continued close trading partners—in the European Union. I hope that negotiations with the EU will conclude without there being new barriers to that trade or additional costs for our businesses.
I am certain, however, that the UK’s approach to trade with other members of the global community must champion the interests of each of the UK nations—an objective far more likely to be realised successfully if all four Governments of the UK play a role in formulating trade mandates and scrutinising negotiations as well as ratifying agreements.
I commend the remarks of the hon. Member for Dundee East (Stewart Hosie), who eloquently detailed the Bill’s deficiencies in this regard; I add only that the Government should guarantee the democratic rights of the devolved Administrations in the Bill as well as offering legal protections to our public services and strengthening some of the safeguards when it comes to parliamentary scrutiny of standards.
Unfortunately, as it stands, the Bill in my opinion denies the role that the Welsh Parliament has in articulating Wales’s interests. That is why Plaid Cymru has tabled new clause 18, to ensure that all four nations must consent to any trade deal struck in their name. We will also be supporting new clause 4, in addition to the amendments tabled by the hon. Member for Dundee East, which would ensure not only that that deficiency is addressed, but that UK parliamentary oversight is strengthened.
Katherine Fletcher (South Ribble) (Con)
I say to the hon. Member for Ceredigion (Ben Lake) that it is a pleasure to follow such a thoughtful contribution—indeed, let me say diolch yn fawr to all three Welsh MPs who have just spoken.
I rise to add my voice to calls for more trade and more opportunities for business in global Britain, especially those close to my heart in South Ribble and wider Lancashire. This Bill allows for more than 40 existing trade agreements with other countries to be kept in place, for us to access a £1.3 trillion global procurement market and for us to protect vital industries from product dumping by overseas actors. Finally, we clear up the rules on sharing data in customs environments, all of which are vital to the health of our domestic and export businesses. This useful and practical Bill tidies up the details on laws currently with the EU and adding them to the UK’s statute book.
I also rise to put to rest the concerns I have heard from many of the good people of South Ribble who have been worried by some of the noise and misunderstandings around the Bill.
Marco Longhi (Dudley North) (Con)
Does my hon. Friend agree that Opposition Members wish simply to sow doubt among the public about the NHS? We have had 10 years in which to privatise it, but we have not done so. The last time it was privatised was in 2006, with Tony Blair’s independent sector treatment centres. Does she agree that there is a certain amount of hypocrisy coming from those on the Opposition Benches?
Katherine Fletcher
My hon. Friend is entirely correct on that. Having been part of the Bill Committee in the past weeks, I have had the opportunity to hear at length the arguments made on this Bill and on today’s amendments. I have listened hard to the details and drawn my own judgments. The advocacy for new amendments is strong and their proponents on the Opposition Benches articulate them well. They express fears that, at first glance, seem reasonable, but they are fears and not realities. I worry that Opposition Members are seeking to conflate what is actually in the Bill with fears about what could be in the Bill and wider conversations about trade. I know I am relatively new to this House, but that does not make sense to me. So what are the actualités of this piece? There is much noise about Parliament voting on future trade deals—we can do that, more so than is the case in other countries such as Australia and New Zealand. The CRAG process allows us to vote on trade deals and if we change our own law on trade, we will vote on that in this place too.
In reference to new clause 4, I must draw on my business background. As anyone who has negotiated any type of deal before knows, if you are at a table and have to say, “I agree but I have to get 650 other people to agree”, it rather ties your hands in the negotiation. Let us trust our elected Government to act in the best interests of global Britain, and as hon. Friends have mentioned, trust those on these Back Benches to hold them to account. Should it be needed, there is still a backstop. If we, as a Parliament, need to block a trade deal after negotiation, we can. If it changes our laws, it will need a vote in this place, and FTAs cannot, by their nature, unilaterally change UK law. This is similar to Canada’s system, and it is forging on with trade deals and doing all right.
I have had much correspondence from the people of South Ribble raising concerns about our farmers and their wonderful, quality produce. People say, “You need to reassure constituents. There is concern that if a clear and explicit Government commitment to uphold food standards is not included in the Trade Bill, existing food law, including retained law, could easily be changed.” If I were in their shoes listening to that, I would be worried too. Let me put their fears to rest. We will not remove the UK’s current food standards. For example, hormones and chlorine in food are banned now and will remain banned—full stop. The current standards are in EU law and will be rolled over when we leave the transition period. We have promised to keep import standards in place, and we will. For those concerned about having a say, should they ever be changed, that will be voted on here in the UK Parliament.
If we put food standards rules into this Bill and ask those overseas to adhere to them, then we are asking those abroad to abide by our law. That is something we would not and do not accept from other countries, and our friends abroad will almost certainly say, “No thanks. That will put a restriction on trade that will hurt us—let’s not.” To put it another way, putting food standards regulation into a Bill rolling EU law into UK law is a bit like putting a frock on a frog: it will look more than a bit out of place down at the negotiating pond, and people will be disappointed when they kiss it and it does not turn out to be a protectionist princess. There is a right place to protect the UK’s food standards when products are imported, and we will, but it is not this Bill.
Sarah Olney (Richmond Park) (LD)
It is always a pleasure to follow the hon. Member for South Ribble (Katherine Fletcher), as I recall I did when she made her maiden speech. I rise to speak in support of new clause 4 tabled by the hon. Member for Huntingdon (Mr Djanogly), who I know is scheduled to speak immediately after me and will doubtless give a detailed account of the reasons for it. In anticipation of that, I wish to set out why the Liberal Democrats support it.
From 1 January 2021, the UK will be setting out on its own for the first time in nearly 40 years in developing its own independent trade policy and negotiating its own trade agreements. The implications of this step on everyday life in the UK are huge, and possibly not yet fully appreciated. Trade negotiations are complex and delicate. Securing access to international markets for one sector may mean conceding international access to our domestic markets for another. Securing preferential treatment on tariffs for some of our goods may mean relaxing import controls on something else.
We have a complex economy currently disrupted by the need to beat the coronavirus, and on the verge of major change as we transition away from carbon-emitting activity. Technological change offers both threat and opportunity. We must also consider that our economy is imperfect in its distribution of wealth and opportunity, and look for ways to address this challenge. Increasingly, the UK is being called on to stand up for the defence of fundamental human rights and liberal democracy and use the powers at its disposal to effect change internationally. Our trade policy and agreements touch on all those urgent challenges. How can we best leverage our economic advantages to deliver current and future prosperity for UK citizens and influence peaceful progress abroad?
To determine that those decisions are best made behind closed doors without consultation or discussion is an assault on our very idea of what Parliament is for. We need to balance all the competing pressures from different economic sectors and geographical regions, fully considering the impact on different groups of workers, and determine whether we prioritise climate commitments over economic growth. How can that be done effectively without recourse to Parliament? The British people deserve to have their interests properly represented when these questions are being asked and for the answers given by Ministers to be put on the public record and judged accordingly.
I also speak in support of new clause 9 tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) and supported by the Liberal Democrats because we recognise the urgency of taking action against the very real threat of climate change. It is essential that we enshrine that urgency in our trade legislation, so that negotiating partners know, before the first papers are exchanged, that they must comply with our environmental goals. Our economy is transitioning away from carbon emissions, in accordance with the democratic mandate to achieve net zero carbon by 2050, and that progress must be underpinned in every trade agreement we negotiate. Our commitment to net zero cannot be traded away in pursuit of other goals.
The Liberal Democrats have also tabled amendments that relate to dispute resolution and human rights. Dispute resolution is fundamental to ensuring that democratic decision-making that relates to the expenditure of taxpayers’ money, or regulation of food standards, cannot be undermined by law suits from foreign corporations. At this stage, the UK Government should rule out any use of investor-state dispute settlement procedures from UK trade deals, to safeguard our ability to determine our own regulatory environment, without the threat of sanction from foreign investors. That is fundamental to ensuring that our NHS remains free at the point of use for all UK citizens, and that we set our own standards on animal welfare and food quality.
Earlier I referred to the UK’s powers to effect change internationally, and to how we can use our trade agreements as leverage. We have been forcefully reminded of our need to use those powers to influence foreign partners to respect human rights, thanks to recent events in Hong Kong and China. It would send a powerful message to the Chinese regime, and to others around the world who hope to trade with us, if we enshrined in law our commitment to upholding human rights as a non-negotiable element of our trade deals. That message will be compelling only if we lead by example, and that example starts with parliamentary oversight of negotiating mandates and trade deals. I implore colleagues to support new clause 4 this evening.
Mr Djanogly
I speak to the new clauses tabled in my name, and those of others, concerning the scrutiny of free trade agreements. Simply put, today the House must address the question of whether, post Brexit, the UK will have less scrutiny of free trade agreements than we had before Brexit. That is the current Government proposal, which I suggest flies in the face of the claim that we leave the EU to take back control. The Government have split FTAs into two categories. First, and in the Bill, are all trade agreements that the EU signed with third countries before Brexit, which the Government wish to roll over to become agreements with the UK. Secondly, and not in the Bill, there are FTAs with any other countries, such as the US.
New clause 4 suggests a new scrutiny process for all FTAs. It will still be the Executive that negotiate FTAs, but Parliament would get a yes/no vote on the negotiating objectives and, importantly, on the final draft agreement, as happens in the US and Japan. Not only has such a provision not ended up in the Bill, but the Government’s position has seemingly reverted to us having less scrutiny than we had as a member of the EU. For the past 40 years, the EU has negotiated our trade deals, and as part of the EU scrutiny process, a yes/no vote would be taken by the EU Parliament on the draft FTA, prior to signature.
Neil Parish (Tiverton and Honiton) (Con)
Does my hon. Friend welcome the commitment from our Government on welfare and the environment, and all the conditions in the Bill? Does he find it somewhat confusing that the Government will not accept new clause 4? Surely scrutiny is fine, because they are going to do exactly what they said they will do.
Mr Djanogly
I absolutely agree. In January 2018, on Second Reading of the 2017-19 Bill, the then Secretary of State stood up and said that he would be looking for a new approval process and take soundings on that, but that has simply not happened. As things stand, there is no longer a parliamentary veto, and no formal scrutiny committee has yet been established, despite US negotiations having started.
The important point of a parliamentary veto is not that it is often used, but rather, as seen in other Parliaments, that it encourages the Executive to seek consensus on their negotiating mandate, and keeps legislators in touch during negotiations through regular discourse and discussion. A wise Executive will naturally wish to avoid an unnecessary bust-up just before signing an FTA. Of course, that is where it all went wrong with the TTIP negotiations between the US and the EU, because the US Congress and the EU Parliament were disclosing information to their respective elected representatives that was not provided to UK parliamentarians.
Richard Fuller
My hon. Friend is mentioning very large trade deals. Does he mean that the crux of this oversight is really required with those big trade deals, such as those with the US, China, and the Trans-Pacific Partnership?
Mr Djanogly
New clause 4 does deal with all trade deals, but obviously the amount of scrutiny would be proportionate.
Catherine West
I rise to speak to new clauses 17 and 11, and on the principles of workers’ rights, national health service protection, and environmental and human rights. First, in relation to workers’ rights, we could not imagine a trade deal with such a country as Colombia when we know that the International Trade Union Confederation rates it as the most dangerous place to be a trade unionist. That means that the lives of many Members in the Chamber, who may be members of a trade union, could be at risk. To begin a trade deal with such a country without even mentioning workers’ rights seems to me to be absolutely ridiculous.
The problem with the Bill is how silent it is. It is silent on workers’ rights, as I have said. It is silent on the real protection of the NHS. We have had some reassurance on the NHS, but in particular I am worried about medicines and the cost of medicines, and about our data. We know that the national health service, unified as it is, provides the most fantastic data for research and for pharmaceutical companies. My fear is that, if we do not have more protection in the Bill, it will be open to those companies, through whichever country they are based in, to have a kind of values-free trade negotiation, which we as MPs will not be able to scrutinise effectively, and they could end up using our data, which, given the extent, longevity and detail of that data, is probably the best health data in the world. I therefore seek reassurances from the Minister on that specific point.
On environmental concerns, in leaving the European Union, we are leaving the gold standard of environmental protections, but it would be easy to write that protection in and lead on that in this Bill. Instead, the Bill is almost values free in terms of the importance of the environment. After covid, climate change and dealing with the climate emergency are probably the biggest concerns of our generation.
Many Members have mentioned the gold standard of food. I would also say that not everybody can afford to shop at Waitrose, which is the supermarket that has said that it will not buy low-quality goods. Many people will not be able to afford not to buy the cheapest food, particularly following the economic crash we are entering, the worst recession for 200 years, so we have to see the Bill in that context.
Barry Gardiner
Does my hon. Friend agree that many people who go to restaurants or to fast-food outlets will have no way of knowing the provenance of the food that they are consuming? It is not simply a matter of labelling in the supermarkets.
Catherine West
My hon. Friend makes such an important point. It is one that I will not repeat.
On the question of our role in this place, surely the past four years have taught us that people want us to be here to make these decisions. Tucking away a bit of legislation in the Library for 21 days is not what we are here for, and nor is running upstairs to an SI when we are in the middle of all-party group and all the rest. We need to have proper scrutiny in this place and the Select Committee needs to have an enhanced role. Having enjoyed my time on the International Trade Committee, I feel very strongly that it should have a key role in ratifying the role of the Trade Remedies Authority Commissioner. If that six-month commission continues, the Committee should also have a role in appointing its head. I will be lobbying very hard with colleagues who represent very rural seats—unlike Hornsey and Wood Green, which is one of the most urban seats—to have a proper commissioner continue in that role. Why have it for six months; let us have it forever. Let us have the International Trade Committee ratifying those two appointments. Let us also have a trade union voice and an industry voice on the TRA. If there is one thing that we have learned from covid, it is how well the TUC has worked and how well the CBI has worked together. They have led our Government and told them what to do on covid. Why cannot they do that with the Trade Bill?
We can get on. We can move forward together, but we must try to militate against this strong executive model that we have been saddled with by having these other checks and balances in place. We can do that through this Bill tonight and by supporting the sensible cross-party clauses, which share a lot of support. Let us try to enjoy that consensus building because we are in a new chapter. Let us not spoil it by having an inferior Trade Bill that is silent on the key issues of the day that concern us, be they human rights in China, environmental standards, which we have had a legacy of from our 40 years in the European Union, or the important question of what we are doing here as MPs.
Paul Girvan (South Antrim) (DUP)
It is an honour to follow the hon. Member for Hornsey and Wood Green (Catherine West). The Bill is an opportunity for us to take a nimble approach to doing business for the future for our country. I say an “opportunity”. In listening to some Members tonight, I see it as probably a hindrance, because they will seek every opportunity to frustrate the Bill and to make it more difficult to drive it through. There is talk of reporting back on every single deal that is being done. I am not an advocator of playing cards or anything like it, but definitely that is showing your full hand, which is not a wise thing to do. I am not saying that you should be playing poker, but I have been in business and I know what it is like: you do not let your enemies, or those with whom you are doing business, know what you are doing, and you can work out a deal every way.
However, we have concerns about many areas. We have had a very strong lobby in relation to our agrifood and agricultural industry, especially from those involved in the fishing industry.
Jim Shannon
Does my hon. Friend agree that our fishing industry similarly needs the Trade Bill, to show our strength of purpose and ability to stand outside EU rules and regulations and stand upon the quality of goods and services we are ready, willing and able to provide throughout the world? The fishing sector can grow if it is given the opportunity.
Paul Girvan
I agree with my hon. Friend about our fishing industry. We have a fantastic product. I have eaten in many countries around the world, and I understand why they would want to buy Northern Ireland produce—it is the best in the world. You will know that if you have had a soda farl from Northern Ireland; I know of some previous Secretaries of State who can bear that out.
We have had the agrifood sector lobbying us. Many in our farming sector lobbied us about changes that they wanted to be made to the Agriculture Bill, which went through the House recently. We see this as a second opportunity to give protection. I understand that some say we already have protection within legislation. I do not always say that it is important to gold-plate things, but sometimes we have to reinforce the stance that we are taking. That has to happen, and it is important that we support our farmers.
Carla Lockhart (Upper Bann) (DUP)
Does my hon. Friend agree that the devolved Administrations play a key role in any future trade policy, and that given Northern Ireland’s dependence on agriculture, it is vital that this Government listen to the devolved regions?
Paul Girvan
I am a great Unionist. I believe that we are part of the United Kingdom and we should be working together to ensure that we get the best bang for our buck, to use an American term, as a United Kingdom. That is vital.
We already have protection in some areas. I come from an engineering background. We lead the world in electrical standards. Many other countries manufacture a lot more, but we lead in electrical safety. We set those safety standards. We make sure that goods coming into our country are made to those standards. Sony makes the monitors that we have in the Chamber. It makes specific monitors that are only for the UK, because we have such stringent electrical standards. It has the flexibility to do that. There are farms in Europe and throughout the world that make food to sell into our market that is bespoke, just to suit our market. That can be done, and it is being done. I want to make sure that we give our farmers and our industry an opportunity to export on to the world stage, so that our product is sold. We can use this Bill to do that.
Sammy Wilson
Northern Ireland farmers export to 70 countries in the world, many of which have lower standards than the rest of the United Kingdom. The goods are valued because of the standard of the product. Apart from the fact that there will be a requirement to change primary legislation, is that not yet another indication that there is no incentive for us to lower standards, because we would lose those markets that we are exporting to?
Paul Girvan
I agree with my right hon. Friend. We do not want to lower our standards. We do not want a race to the bottom. We want to bring others up to the standard that we have set. We have set the bar fairly high, but by setting the bar so high, we have additional cost, which makes it more difficult for us to compete on the world stage. It is vital that we address that through whatever measures we have to put in place, with subsidy for our farming, to ensure that our product is still viable and economically possible for the housewife to buy—I used the wrong term; I apologise. We have to ensure that those who are buying their basket of fruit in a supermarket will be able to get the best value for it.
I support the Bill, but I also support new clauses 4 and 7, because they address some of the concerns that we as a nation have and Northern Ireland in particular has.
Neil Parish
It is a great pleasure to speak after the hon. Member for South Antrim (Paul Girvan). Agriculture and fisheries are very important in this country, including in Northern Ireland, and as we go forward and do trade deals, family farms and family fishing are important.
Anna McMorrin (Cardiff North) (Lab)
The standards, protections and rights that we have all come to enjoy are put at risk by this Bill. The rules that govern trade must strike at the heart of the values that we expect of ourselves and each other. Trade policy must therefore be transparent and subject to thorough parliamentary scrutiny, and it must respect all the nations of the UK. On that, the Bill fails.
Now more than ever, as this country builds back better, we must ensure that the health of people and the planet are protected; that standards, workers’ rights and welfare rights are raised; and that our society becomes more resilient and sustainable. There can be no rolling back of rights, no undercutting of protections, no selling-out of our values and no compromise on standards.
At a time when we face so many crises—on three fronts: health, climate and the economy—all aspects of Government policy must be aimed at mitigating and eradicating those crises. However, despite the rhetoric, the Government yet again fail. Neither the environment nor climate are even mentioned in the Bill. The world’s poorest already bear the heaviest burden of climate breakdown. Trade policy must be rebalanced, putting justice and fairness at the heart of future agreements. There must be recognition from the Government that their lax approach on the environment in trade policy will lead to the promotion of cheaper but drastically higher-carbon and poorer-quality imported goods. That is bad for business, bad for people and bad for jobs, with UK producers, creators and innovators being undercut, and it will be a disaster for our environment.
First and foremost, the UK’s future trade agreements must be compatible with our commitment to keep global warming to a maximum of 1.5°C by the end of this century. Trade policy must have embedded at its legal core the Paris climate agreement and the UN sustainable development goals. Only then can we guarantee a base commitment over trade policy that will be legally binding and will work progressively towards the kind of high recovery that we desperately need.
The Bill is also detrimental to food standards, the future prosperity of the UK’s agriculture sector and animal welfare rights. This is the week of the Royal Welsh show, when farmers and food experts come together in Llanelwedd to celebrate our great produce. Those farmers have really helped to put food on our tables during this crisis, but the Bill does nothing to help them—it will only weaken them. Despite UK Government promises to farmers and food producers that we would accept no watering down of standards, the Government continue to pursue the prospect of agricultural market access for the United States, where we know quality falls well below that of the UK. A selling-out of our farmers and appeasement over action—that is what we get with this Government.
This is window-dressing scrutiny while Government machinery continues to proceed down the same calamitous path. Far from handing power to Wales, the Bill will hollow out the right to regulate the standard of goods.
Anthony Mangnall (Totnes) (Con)
It is always unsettling when I speak in the Chamber and my colleagues seem to leave and the Whips come in. I reassure them that I am on their side this time. I commend the Bill in its entirety.
I listened carefully to Members from across the House as they raised concerns over food standards and scrutinising the quality of our trade deals, but we must take the Bill alongside the Environment Bill and the Agriculture Bill, and the Fisheries Bill when it comes through this place. The Agriculture Bill took the steps that many in this House and in this debate have been calling for. On welfare standards, the Government have moved to a position where they are performing a consultation on labelling, which I assure hon. Members does not yet go far enough for me; I will be hot on their heels in making sure that we have an extensive labelling system for agricultural produce that is sold in the UK and that goes through restaurants and supermarkets.
However, the Government have also committed to a commission—I agree with my hon. Friend the Member for Tiverton and Honiton (Neil Parish) that its six-month remit should be extended—which actually gives us the opportunity to scrutinise and to uphold the standards of our food and the welfare standards of our imports. That is important, and I do not think it can be expressed enough. It is what the NFU called for and it is what the NFU got, which we should be very clear about. That commitment is there in black and white in the Agriculture Bill, and it is exactly what the Opposition want, so to keep going on and on that we are lowering our standards is a fallacy.
Ladies and gentleman—sorry; Members, if I may—
Madam Deputy Speaker (Dame Eleanor Laing)
I think the hon. Gentleman means “Madam Deputy Speaker”.
Anthony Mangnall
I beg your pardon, Madam Deputy Speaker.
Reading the Bill and looking at the amendments, I see that one of the benefits is recognising the export potential. We are trying in my constituency to take the benefits of Brixham fish or oceanographic technology manufactured in Totnes and export it across the world and open up new markets for it. The Bill allows that.
I am afraid that my colleagues from Northern Ireland pipped me to the post by mentioning the fishing sector, but there is a huge opportunity in the Bill. We can now open up new markets in the far east. The Bill allows us to do that, and we must support it in its entirety. I should also add that in doing so, we can start allowing ourselves to strengthen the Union.
I have listened to Members from Wales, Scotland and Northern Ireland talk about their produce and exporting it around the world, and it is time to revamp and strengthen the Board of Trade, listening to what is the best of each of those areas and then helping export it to the international community. That will not only strengthen the Union, which I am sure all Members of the House will agree about, but allow us to be able to reach those markets.
Anna McMorrin
Does the hon. Gentleman believe that weakening devolution and taking back powers from the devolved Administrations means strengthening the Union, because I do not?
Anthony Mangnall
That is exactly why the Board of Trade was reintroduced by my right hon. Friend the Member for North Somerset (Dr Fox). When he reintroduced the Board of Trade, it was about enhancing and developing a conversation with the devolved Administrations to make sure we were listening to what was in their areas and taking them forward to the international markets. It is no good turning around and saying we are not listening and not working together, because that is exactly what we are doing.
The Bill covers a number of significant areas where we will be able to reopen and reinvigorate our export markets. Through that, we will be able to reinvigorate those sectors that we hold dear in this country and uphold the standards that are so important. I commend the Bill.
Mary Kelly Foy (City of Durham) (Lab)
This Trade Bill is deeply flawed. I have been contacted by countless constituents and campaigns, each highlighting a different failing of the Bill. It seems that everyone is opposed to it, except for the Government.
While the Government may argue that the Bill simply allows for continuity, the reality is that it sets a precedent for future trade legislation. Its main failing is the lack of parliamentary scrutiny of trade deals. That the Bill is essentially designed to allow for a new trade framework after we leave the European Union makes that failing deeply ironic. When people voted to take back control, I suspect they meant for the people and Parliament, not Ministers and unelected advisers. To be honest, the idea that we should trust the power to approve trade deals to Ministers is laughable.
Last month, we debated the Secretary of State for Housing, Communities and Local Government having overruled his own inspector in favour of his friend and party donor, despite admitting an apparent bias. On top of that, we have Government contracts seemingly being handed out to businesses with links to Ministers and advisers. Parliament has a right to scrutinise and debate every aspect of government, especially in matters as important as trade deals. The fact that Government Members do not appear to agree with that is deeply worrying, although not surprising.
However, it is not just the lack of scrutiny that is the problem, but the lack of protections. It is no secret that the US Government want a trade deal where the NHS is on the table along with our higher food standards. It is also no secret that there are those in government who would sell off our NHS as soon as they thought they could get away with it. These past few months, the NHS and its staff, along with other key workers, have been all that have stood between Britain and complete devastation. They have given their energy, their health and, in some cases, even their lives. Rather than thanking them with applause and praise, let us start by having a Trade Bill that ensures the NHS is off the table by enshrining that measure in law.
Then there is the issue of food standards. My inbox is full of constituents worried that this Government are so desperate for a US trade deal that they will water down food standards, allowing for chlorine-washed chicken and hormone-treated beef to be sold on the shelves of British shops. No doubt the Government will say that is scaremongering, but I ask them to explain to the farmers and voters in my constituency why they will not place food standards guarantees into the Bill. Finally, the Bill lacks any guarantee of workers’ rights, human rights or environmental protections. They are vital to protecting our planet, and to improving living and working conditions across the world. They must be a condition of any trade deal and must be included in the Bill.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. After the next speaker, the time limit on Back-Bench speeches will be three minutes. That does not apply to Kate Osborne, who has four minutes.
Kate Osborne (Jarrow) (Lab)
Thank you, Madam Deputy Speaker.
Ahead of today’s debate, and like my hon. Friend the Member for City of Durham (Mary Kelly Foy), I received hundreds of emails from constituents asking me to ensure that the NHS is kept off the table in any trade negotiations. I share their concerns. We know that the United States and Donald Trump expect a trade deal very much on their own terms. We also know that for the President of the United States the interests of corporate America come first and that he will demand that the NHS pays higher prices for US drugs in a trade deal with the UK.
Over 60% of my constituency of Jarrow voted in favour of leaving the European Union in 2016, but they did not expect it to lead to our NHS being controlled from outside the UK. Over the past few months, the NHS has coped tremendously throughout the peak of the coronavirus pandemic, even though it has not been properly funded for years—over 10 years—owing to the Government’s unnecessary and unwelcome programme of austerity. The coronavirus pandemic has demonstrated the importance of healthcare being accessible to all. However, as the Bill currently stands, it gives no protection to our NHS. We know that our NHS has already been turned into a market, making services vulnerable to being included in the deal unless they are clearly and comprehensively excluded. I can see no evidence so far that the Government want to ring-fence the NHS and keep it out of trade discussions.
The Bill also gives no role for Parliament to review or oversee trade agreements, weakening parliamentary democracy. Those on the Government Benches argue that the UK has taken back control of its trade policy, but do they not find it ironic that, compared with what is being proposed now, there was more parliamentary scrutiny and democratic oversight of trade policy when we were part of the European Union?
We also need to ensure that both public health and social care data relating to UK citizens are protected. Research by Global Justice Now concluded that the United States wants its companies to have unrestricted access to UK data, including NHS health records. The value of that health data is estimated to be about £10 billion a year. The Bill in its current form gives free rein to UK data being moved to servers in America. That could mean that the NHS would be unable to analyse its own health data without paying royalties and could find itself buying back, at considerable expense, diagnostic tools, medical technologies and expertise, even when they have been created from freely exported NHS data.
It is not just the NHS that is at risk. The Bill, as it currently stands, says nothing about climate change, human rights or workers’ rights. We need to ensure that any Bill passed protects the employment rights or terms and conditions of employment for public sector employees and those working in publicly funded health or care sectors. Failure to protect our NHS will be yet another broken promise from Boris Johnson that insults us all, but particularly the sacrifices made by our wonderful NHS and care staff. Failing to protect our NHS will mean that instead of a pay rise and a stronger NHS, we will get more US companies profiteering from our ill health. However, it is not too late to put in place strong protections for our NHS, and I call on the Government to commit to protecting our health service so that it cannot be subjected to yet more privatisation through trade deals.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Members might wonder why I am persistently calling those on the Opposition side of the House and no one on the Government side of the House. I will pre-empt a point of order by explaining that because of the rigid system that we are currently operating, when someone pulls out of speaking, I have no flexibility to go on to the next person on the other side of the House. Therefore, we will have another speaker from the Opposition—I call Navendu Mishra.
Navendu Mishra (Stockport) (Lab)
Thank you, Madam Deputy Speaker. With Britain heading out of the EU on 31 December, it appears that the Government are determined that everything must go in their post-Christmas sale, from food standards to our environmental commitments. This should be an opportunity to improve and strengthen existing trade deals and use them to provide an even better return for this country. Instead, we are faced with the prospect of everything being on the table and sold to the highest bidder, as President Trump stated on his visit to the UK last year. As we know from the leaked documents that the Labour party was able to obtain last year, the US is seeking full market access to even the jewel in Britain’s crown: the national health service—and that is just what we know from the papers that were not heavily redacted.
Food standards should be sacred. We do not want chlorine-washed chicken in a can or, for that matter, meat treated with growth hormones, or pork from animals that have been injected with drugs to make them leaner. We should also reject the long list of foods being produced in the United States by dangerous and cruel methods, regardless of whether higher taxes are applied to them, because even those tariffs will be scrapped within just 10 years, as the International Trade Secretary has stated, further enabling the US to secure comprehensive access to our food markets while at the same time achieving the ultimate goal of “reducing or eliminating tariffs”.
More than a million members of the public have signed a petition to protect food standards, but to date it appears that the Government have taken little notice. It is little wonder, therefore, that they are now facing the rebellion by their Back Benchers. There must be proper scrutiny of this process and Parliament should have a veto on any trade deal. Both this place and the other place should have a say over whether to approve any new deal that is agreed with any other country. Why should we leave ourselves at the mercy of the word of this Government, who cannot be trusted to deliver anything, without legislative guarantees and beholden to US food trade associations, which have enormous lobbying power and one goal in mind—profit? It should not be left to big business to challenge laws and regulations simply because they inhibit foreign investment.
Like human rights, the issue of climate change should be central to our future considerations of trade policy, but worryingly there is no mention of it in the Trade Bill, and the record for different countries, when it comes to environmental protections, is not suggested as a consideration in negotiating future trade agreements with them. New trade agreements must be compatible with our commitment to stop global warming passing the point of no return. We cannot simply trade away our commitments on climate change in pursuit of trade deals. Indeed, it should be quite the opposite: trade agreements should be used to improve environmental standards abroad and ensure that climate justice and fairness are at the heart of future trade deals. The Government must think again before selling their standards for a quick buck.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
As three Government Back Benchers in a row have failed to appear in the Chamber, we will go straight to Carla Lockhart.
Carla Lockhart (Upper Bann) (DUP)
Thank you, Madam Deputy Speaker. It is vital that as we shape our future trade policy, we do it in a way that maximises the benefits of our new-found independence but does not sacrifice key industries in the UK. In the context of an economy facing the greatest challenges in my lifetime due to covid-19, we are certainly not in a place where we can sacrifice any industry, let alone the backbone of our economy: our agriculture industry.
It is not too long ago that the Agriculture Bill was debated in this House. In my contribution to that debate, I made clear the importance of protecting British farming and the high standards that it upholds in any future trade agreement. The opportunity to enshrine all that is good about our agriculture industry in that Bill was not taken at that time. That was deeply regrettable and caused much concern among my constituents.
In this Bill we have another opportunity—an opportunity to make it clear to the farmers and agri-food businesses that have been an essential component of the national effort against coronavirus that they will not be sacrificed in any future trade agreements. Indeed, we ought to be exploring how we can help the industry to thrive in coming years and to share in the benefits of life outside the EU. To do that, the fundamental building block is standards. In the context of our agriculture industry, future trade policy must respect the high production standards in terms of animal welfare and environmental protection to which our farmers adhere. We know that comes at considerable cost to local farmers and that overseas farmers have significant cost-of-production advantages due to lower regulatory requirements. In simple terms, if the UK market is flooded with substandard products, it will result in the demise of the industry.
To that end, the establishment of a trade and agriculture commission is very welcome, and I thank the Secretary of State for Northern Ireland for ensuring that the voice of Northern Ireland is heard on the commission by appointing Mr Victor Chestnutt, the incoming president of the Ulster Farmers Union. In addition to that forum, however, we need to ensure that Parliament has a strong voice and a meaningful say in the shape of future trade agreements in relation to mandating, negotiating principles and approval of any such deals. Our role should be proactive, not passive. That is why we support new clause 4. Parliament’s role must be enhanced ahead of negotiations; it should be for Parliament to scope out the critical negotiating objectives; to ensure that the interests of all parts of the UK are actively considered and prioritised, the devolved Administrations should also have a meaningful role.
We recognise the important provision the new clause makes for sustainability impact assessments, such as of environmental effect, the impact on animal welfare and health concerns. That ensures compliance with current—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady has exceeded her time by quite a long way. I call Antony Higginbotham.
Antony Higginbotham (Burnley) (Con)
It is a pleasure to follow the hon. Member for Upper Bann (Carla Lockhart). Having spoken on Second Reading and been a member of the Public Bill Committee on the Bill, it is a pleasure to speak today. I intend to speak mainly about new clause 4, but first I want to say that it is worth the House remembering that this is a continuity Bill, designed to give confidence and continuity to the hundreds of thousands of businesses in this country that export to many, many countries, from Switzerland to South Korea to Chile, that they can continue to do so. I also want to voice my agreement with everything my hon. Friend the Member for Witney (Robert Courts) said about how many of the amendments tabled, particularly those to do with standards, are actually anti-trade measures that will do nothing to support our exporters and everything to kill off trade.
In relation to new clause 4, it is important that we remember and that our constituents are aware that Members of Parliament already have and will continue to have the ability to scrutinise international treaties that the Government negotiate. The Constitutional Reform and Governance Act gives all Members of Parliament those powers, so under the law as it already stands, if we are not happy with the contents of an international treaty, it will not be ratified. Also, I cannot subscribe to the view that Parliament needs to be more involved in negotiations, because I, like all of my constituents in Burnley and Padiham, watched the scenes in this place not that long ago when Parliament tried to be involved in negotiations, and instead of helping, it hindered them. This place was paralysed and the country was paralysed. Votes held on options were not helpful at all. I do not want to see that happen again, and in December my constituents voted to end the paralysis and embrace the new opportunities that are available to us.
When we were a member of the European Union, no MP in this place was involved in trade agreements, but since January the Secretary of State for International Trade and all her ministerial team have made sure that we are involved, with consultations on the parameters of free trade agreements and objectives published in advanced. Members of this House have engaged not just through parliamentary questions but directly. I have been able to speak to Ministers about the objectives we have, the benefits they will bring to my constituents and where my concerns are, and I have every intention of continuing to do so.
I will support this Bill and vote against the amendments. We need to embrace the opportunities and move with speed if we are going to embrace the new world.
Deidre Brock (Edinburgh North and Leith) (SNP)
I rise to speak in particular to SNP amendment 10 and new clause 7, in the name of my hon. Friend the Member for Dundee East (Stewart Hosie). I cannot quite work out whether the Government have not noticed the potential problems with the quality of imported foods or whether they just do not care. Frankly, having listened to this debate, I think it is the latter.
We hear so many platitudes, but when the chance to do something concrete came up during the Agriculture Bill, Ministers turned it down. Yes, pressures from farmers after that led to a commission to advise on a food imports framework of sorts. The hon. Member for Montgomeryshire (Craig Williams), who is no longer in his place, said its membership provided comfort to his farmers. That commission, though, has among its members Shanker Singham, a former lobbyist and favourite of various Ministers who is on record arguing that we should accept chlorine-washed chicken, hormone-injected beef and genetically modified crops from the US.
Mr Singham is not the only representative of the Institute of Economic Affairs on the commission; Lockwood Smith is also part of the IEA. That is important because the IEA is in favour of a hard Brexit and of lowering food and environmental standards to satisfy countries such as the US, China and India in trade deals. We know that because it published a paper on it in 2018 and got censured by the Charity Commission for its trouble.
Then there is the chair of the commission, Tim Smith, a former Tesco employee who said shortly after he was appointed that concerns about food standards were alarmist. I was alerted to that by the Department for International Trade; astonishingly, its Twitter account was used to publicise a link to the article. There are some who do not think the commission is there to provide safeguards for our food standards. They worry it is there to draw a veil of decency over the indecency of the Government’s position.
We were told during the Agriculture Bill that the proper place for provisions on the quality of imported food would be the Trade Bill, yet here we are debating the Trade Bill and the Government are intent on throwing those safeguards out of the window rather than enshrining them in legislation. Those are actions in bad faith and they should not be allowed to stand.
In Committee, the Minister said that Food Standards Scotland and the English Food Standards Agency will ensure that food imports comply with our standards. How? How will they do that? Will they have teams inspecting the production chains in other countries, as the EU does? How will the animal husbandry and production standards of other nations be monitored to prevent unsuitable food from ending up on our plates?
The White Paper on an internal UK market shows that the Government have no intention of letting Scotland, Wales or Northern Ireland do anything to protect their people. Under those plans, lower standards introduced by England’s Government will have to be swallowed by the rest of us. Frankly, I do not fancy swallowing anything they offer.
Professor Michael Keating of the Centre on Constitutional Change makes it clear in his response to the White Paper that he considers it a power grab from the devolved Administrations for the purpose of negotiating low-standard international trade deals. The Minister underlined that when he said that involving the devolved Administrations in trade deals would be “constitutionally inappropriate”. I disagree.
Greg Smith (Buckingham) (Con)
I start by declaring an interest: my wife’s family are farmers. I have listened carefully to the debate and studied all the amendments, and I feel that there has been significant mission creep among the amendments. As my hon. Friend the Member for Burnley (Antony Higginbotham) said a few moments ago, people seem to have forgotten what the Bill is actually about. The Bill is about those all-important continuity trade agreements that are vital for British farmers, British exporting businesses and the United Kingdom as a whole. The Bill categorically is not about new free trade deals, important as those are—and I am delighted to see colleagues from the Department for International Trade busy negotiating them.
When it comes to scrutiny, I very much welcome everything that my right hon. Friend the Minister said in opening the debate about the lengths to which the Government have gone to ensure that differences in any continuity agreements are laid before Parliament and how, likewise, where trade deals are likely to be different—where the Government have an ambition to get a better deal, such as with Japan—greater lengths are taken.
On farming, agriculture and our food standards, I cannot put it better than my hon. Friend the Member for Witney (Robert Courts). He pointed out to this House that, as we leave the European Union, those all-important food standards will be transferred from EU law into British law, and the only way that that law could be changed is by this House. So it is a false argument to suggest that there needs to be an amendment to this Bill to change fundamentally what this Bill is about to secure the standards that the Prime Minister has committed to and that were in the manifesto that I and all Members on the Government side of the House stood on. My right hon. Friend the Minister has repeated that on many occasions, as indeed did my right hon. Friend the Member for Bournemouth West (Conor Burns), who did so much to get this Bill back before the House of Commons.
When I heard the Opposition spokesman, the hon. Member for Sefton Central (Bill Esterson), who is not now in his place, talk about this earlier, I felt he had a very one-sided view of the argument, in that it was all about protectionism and the domestic market. Of course, the domestic market is important to all our farmers, but there are opportunities for international trade out there, such as the lifting of the ban on British beef into America, which is worth £66 million. Through trade, our farming can be assured and prosperous for the future.
Liz Twist (Blaydon) (Lab)
I have a sense of déjà vu, because it is just under 18 months ago that we had a debate in this Chamber on future trade agreements—there were a lot fewer of us in here then. We discussed the very issues that we are talking about today, and it seems that the Government have not listened substantially to the concerns that were raised then. In the time I have available, I want to talk briefly about a number of those concerns, because hundreds of my constituents have written to me about them over the last few days, and they have written to me about them time and again.
The first is the NHS and the need to ensure that it is protected from international competition. I will be supporting new clause 17, because it is essential that our NHS remains our NHS and we are able to protect it from competition. We already have some competition, and we need to make sure that the NHS is not open to the highest bidder. People actually want that written into the Trade Bill to ensure that that cannot happen.
The same goes for environmental and food safety standards. We have talked about chlorine chicken and we have heard something about the environment, but there are a whole range of issues. Animal welfare issues are at the heart of these concerns. It is not just about chlorine-washed chicken or more detail; people are concerned also about the impact of trade deals on the environment. This Bill is a lost opportunity. We could be using this Bill to be creative, and to ensure that we safeguard our environment. For example—an issue I have raised in other places sometimes—there is the issue of deforestation and ensuring that we can protect the forests through our trade deals. The hon. Member for Winchester (Steve Brine), who is not in his place, said earlier, “Aren’t the public ahead of us on this?” Indeed, the public are ahead of us on consumer protection, and they are saying to us that these safeguards need to be written into the Bill.
Finally, we have talked a bit during the debate about labour standards, and I am particularly concerned that in this Bill the Government should be protecting the trade and agreements we have with less developed countries and ensuring that fair trade and other trading agreements with them are safeguarded as an important part of their development.
On scrutiny, a great deal has been said. I certainly will be supporting new clause 4. There is huge concern—and people should not underestimate this—that deals will be signed off behind closed doors. Frankly, statutory instruments—and we have all been in loads of those Committees in recent days—are not the answer. We need proper debate and scrutiny. These are the concerns that Members have raised, and this is a missed opportunity.
Jo Gideon (Stoke-on-Trent Central) (Con)
I am excited by the possibilities for our future as an independent trading nation, and I support the Bill and our listening Government in taking us forward. The Bill is about necessary data gathering for future improvements, cheerleading, safeguarding and the effective communication of helpful information. It is not about protectionism or feather-bedding. The balance is to enable British exports that can compete against the world marketplace for goods and services to do so on a level playing field.
I believe that the Bill helps to get the balance right. For example, it is quite right that the Government intend to join the Agreement on Government Procurement as an independent party on substantially the same terms as we had under EU membership. The GPA provides UK businesses with access to public procurement opportunities worth some £1.3 trillion per year—opportunities for which they are willing and able to compete fairly. Of course, GPA partner access to UK public contracts will ensure taxpayers and consumers get the best value for money on major contracts, which in turn maintains the imperative for UK firms to stay innovative and competitive.
An important part of the balance is to ensure opportunities for small and medium-sized enterprises, not just the mega companies. The UK rightly pursues an active SME participation procurement policy, and as an independent party in the GPA we will have the opportunity to engage others on sustainable procurement, social value and workforce considerations.
When exporters do everything right, and when they produce great goods and services at the right price and in accordance with all the relevant rules, the last thing they want to face is competition that has circumvented the rules and is artificially supported, so another part of getting the balance right is to ensure that remedies are available when needed. I welcome the Trade Remedies Authority, which will have important work to do in ensuring continuity of remedial action, not least for Stoke-on-Trent’s ceramics.
I applaud the Department’s determination to secure an ever-increasing number of continuity agreements. It is important for business confidence that we make as seamless a transition into becoming an independent trading nation as possible, while signposting that the door is open to better trade agreements with various partners in the years to come. The Bill provides both continuity for agreements and remedies inherited from our membership of the EU and for the future independent free-trading policy that we wish to strike. The Bill protects our national standards for our workforce, animal welfare, the environment, our NHS and our SMEs. It is a solid first step into the world for global Britain. I will be pleased to support it tonight.
Ruth Cadbury (Brentford and Isleworth) (Lab)
When I spoke in an earlier debate on global Britain, I was accused of
“supping from the cup of pessimism”—[Official Report, 30 January 2020; Vol. 670, c. 1035.]
when I spoke about Britain’s future outside the European Union. Yet what Members from both sides of the House want is what is best for our country, our economy, our environment, and the safety and wellbeing of everyone living and working here. Many of my constituents have written to me about those concerns, but they also expect me, as their elected representative, to be in the Parliament that has a say, with full accountability—not merely to receive a report once a deal is done. As the Lords EU Committee has warned,
“mere accountability after the fact”
does not make for meaningful parliamentary scrutiny. There is parliamentary scrutiny in the US, Germany, Australia and New Zealand, and we will have less control than we had as members of the EU.
Oversight is not merely a lofty concept; it has real-world implications. Others have mentioned threats to the NHS, food safety, environmental standards and so on, and I share those concerns, but I will give another example: car safety standards. A major reason that the US has triple the number of road deaths per million compared with the UK is because as EU members our cars are safer than those sold in the US. Our cars have front and side impact T-bone protection, which gives protection for car occupants. We also have requirements for much safer car fronts. Remember bull bars? We are not allowed to have them anymore. They are still prevalent in the US, killing and maiming children, pedestrians, cyclists and so on. New cars sold in the EU will have collision avoidance systems, to further protect pedestrians and cyclists. This Trade Bill risks cars imported from outside the EU presenting serious risks to the safety of UK road users. Can the Minister guarantee that no vehicles will be imported into the UK after these trade deals are done unless it meets recently agreed EU vehicle safety standards?
Investor-state dispute settlements have been used by corporations to get rid of plain packaging on cigarettes, scrap bans on fracking, overturn bans on certain medications and stop compensation payments after oil spills. Without transparency, those with the deepest pockets win, we lose our consumer, environmental and social rights and our planet is further threatened. Will the Minister confirm that there will be no ISDS clauses in any trade deal signed by the UK?
Ben Everitt (Milton Keynes North) (Con)
This Trade Bill represents a unique opportunity for us in the challenging circumstances that we face as a country due to the global pandemic and its economic impact. The only way to put it in context is to say that these are the most challenging circumstances we have faced in the last three quarters of a century, but we will come out of this, and we will come out it stronger. We cannot deny that we are entering a period of unprecedented economic disruption, not just here but around the world. We came together to protect our NHS and save lives, but now we must expand our reach to protect jobs, livelihoods and our economy. We must look beyond our borders.
I back British businesses. In the UK, we have a reputation for high-skilled, high-tech jobs. We can put ourselves in the global fast lane. We can be the most productive and the most innovative nation on earth. The deals enabled by this Bill will be great for Great Britain. There are fantastic opportunities ahead of us, not only in markets that we have explored but in new and fast-growing markets around the world. For example, through the comprehensive and progressive agreement for trans-Pacific partnership, we can look at markets that are growing more quickly and more explosively, doing fantastic things with data, robotics and technology—things that we cannot do now and through which we can leverage our exit from the European Union to propel the UK on to the global stage.
This is our call to arms. This is our opportunity to seize the chances of being an independent, sovereign nation. We can go global with this Bill. We can stand by and back our local businesses to really make an impact on the global scale.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
Today will be a historic day that we can hopefully look back on and say, “As a Parliament, we did the right thing.” Today we have the opportunity to vote to protect our food standards and farming industry, to prioritise the environment and animal welfare, to stand up for workers’ rights and to safeguard our NHS from future trade agreements. Perhaps the Government think that the public are not interested in trade negotiations or are willing to just take the Government’s word that the NHS will be protected and that workers’ rights will not be undermined in future. I can confirm that the public are indeed interested and are not willing to accept any lowering of standards in future trade agreements.
A huge number of my constituents have contacted me in the last few days to voice their concerns over the Trade Bill. The main concern raised by constituents is the lack of oversight that Parliament will have of future trade agreements if the Bill is to pass in its current form. One constituent asked me, “Why should our nation be faced with this democratic deficit?”
I thank the hon. Member for Huntingdon (Mr Djanogly) for tabling new clause 4, which will ensure proper parliamentary scrutiny of trade deals. I am pleased that he has recognised the flaws in his party’s Bill, as well as the importance of parliamentary scrutiny as we leave the EU and forge new deals with different countries. However, other areas of the current Bill are not fit for purpose, and it must be amended to offer security for workers in my constituency, to address the concerns of businesses that will be impacted, and to give the wider public confidence that the Government are serious about tackling climate change.
With the Government currently in talks with the US regarding future trade negotiations, my constituents are rightly concerned that UK food and animal welfare standards are at risk. The Government have said that our current standards will not be undermined by future negotiations, and if that is the case, I urge Members to protect standards by voting for new clause 11. That new clause will ensure that agricultural goods imported to the UK under a free trade agreement must meet the standards applicable under UK law. That will include meeting UK standards on animal health and welfare, the protection of the environment, food safety, hygiene, traceability and plant health. The new clause will give the public confidence that agricultural products must meet hygiene and welfare standards, and ensure that the British agricultural industry is not undermined by lower quality international imports.
The Government have said that the NHS is not for sale, and that the public should not be worried about the security of our NHS in future trade deals. Unfortunately, however, the Government’s word is not enough for my constituents. I ask Members to think about today, and be able to say that they did all they could to protect high standards and the public health service that we treasure.
Theo Clarke (Stafford) (Con)
I had the privilege of sitting on the Committee of this historic Bill, and I have scrutinised it line by line. I believe that new clauses 5 and 6 strengthen the Bill, as they create the right balance by allowing trade to be conducted efficiently, as well as providing my constituents in Stafford with the protections they deserve. Trade is not an abstract concept; it affects our daily lives. International supply chains are important for so many of the products that we use every day, which is why it is crucial to get the Bill right.
From the Perkins engines made in Staffordshire to the generators produced by General Electric at its sites in Stafford, such factories are a vital link in international supply chains, and they provide jobs in my constituency that are reliant on trade. We must not forget JCB, whose site at Hixon helps to produce the instantly recognisable yellow tractors that are found on so many sites all over the world, not only contributing to the British economy, but helping to promote British businesses and our expert engineering overseas.
The Bill, including new clauses 5 and 6, provides a framework for more prosperous long-term trading opportunities, and it also gives us short-term certainty—something we are all looking for in these unprecedented times. The Secretary of State for International Trade recognises how important trade is for the farming sector, and I am grateful that she was kind enough to visit me in Stafford early this year, and take part in a roundtable with my local farmers. Now that Britain has the opportunity to create its own trade policy, it is vital that we strike the balance between encouraging imports of goods that we need, while also incentivising manufacturing and production on home soil, to sell in Britain and export across the globe.
Britain has some of the highest food standards in the world, which we should be proud of from both a farming and animal welfare perspective. Many of my constituents contacted me to say that they are extremely concerned that the Bill potentially allows for food standards to be lowered, and I recognise why some Members of the House will support new clause 4. Having sat on the Bill Committee, however, I was able to raise that matter directly with the Minister, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), and I was grateful for his personal assurances that there will be no compromising of our standards on food safety, animal welfare, and the environment. Combined with the new trade and agriculture mission that the Secretary of State and the Department for Environment, Food and Rural Affairs have set up to support the NFU, I am reassured that the Government are upholding their manifesto commitment on food standards.
Sammy Wilson
I know that I have a very short time so I just want to make one point very quickly. I am disappointed that the Government could not find any place in this Bill to give a written assurance that Northern Ireland will be able to participate fully in the international trade deals that we will strike across the world when we leave the EU. That is because they cannot give the assurance that the Northern Ireland protocol will not stop us benefiting from goods that will come into the United Kingdom as a result of trade deals or, indeed, will not make the process of selling abroad so expensive that it puts us at a disadvantage when it comes to selling in other parts of the world. We believe that we have an economy that is competitive, but it is not competitive, because we are tied through the Northern Ireland protocol to the single market and to the European customs territory, and therefore treated differently from the rest of the United Kingdom. The assurances that the Minister gives verbally cannot, unfortunately, override the compelling legal commitments in the withdrawal agreement.
Greg Hands
With the leave of the House, I would like to respond to what has been a wide-ranging and often well-informed debate.
This Bill is mainly about continuity, but also about sending a clear message that we welcome traders—that we are network Britain, not fortress Britain. On standards, I remind the House that none of the 20 continuity agreements that Parliament has ratified has eroded standards in any way. Not one domestic standard in relation to animal welfare, the environment, human rights or labour has been eroded by any of those agreements.
Let me try to deal quickly with four of the myths propagated by the Opposition. First, on ISDS and protection for investment, this is in the UK’s interests. The UK has never lost a case in any of these tribunals, but for 40 years UK companies, with jobs at stake, have brought these cases. Eighty of the cases—about 1,000 overall—were brought by UK companies and UK investors directly, with UK jobs at stake. That is why this can be very important for UK business and for the jobs of our constituents in making sure that businesses operating abroad are protected.
The second myth relates to devolution. We have been clear that we would not usually legislate in devolved areas without the consent of devolved authorities and never without consulting them. The hon. Member for Dundee East (Stewart Hosie) referred to convenience. If it is more convenient for the UK to legislate for all four nations, then that is a sensible thing.
In terms of standards, we have seen new clause 11, and new clause 7 is even more extreme. New clause 11 wants to make sure that no goods can enter the UK unless they have been produced at standards
“as high as, or higher than, standards which at the time of import applied under UK law”.
That could have massive unforeseen consequences. The Opposition think they are talking about chlorinated chicken and hormone-treated beef, but are they actually able to look people in the eye and say that cocoa from the Ivory Coast has been produced to at least as high environmental standards as in the UK? Are they able to say that beans from Egypt are being produced to at least as high labour standards? Are they able to say that tea from Sri Lanka comes with the same high labour standards? I think they are putting a lot of this country’s existing trade at risk.
The fourth key myth is about the NHS. The NHS remains protected and will never be on the table at any trade deal, and that includes the prices we pay for drugs.
We have had excellent speeches from my hon. Friends the Members for Tiverton and Honiton (Neil Parish), for Totnes (Anthony Mangnall), for Burnley (Antony Higginbotham), for Buckingham (Greg Smith), for Stoke-on-Trent Central (Jo Gideon), for Milton Keynes North (Ben Everitt) and for Stafford (Theo Clarke), from my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), and from my hon. Friends the Members for Witney (Robert Courts), for Montgomeryshire (Craig Williams), for South Ribble (Katherine Fletcher) and for Huntingdon (Mr Djanogly). I thank them for their contributions and the Opposition for theirs.
The Bill is very important in securing the continuity of up to 40 EU trade agreements, the establishment of a Trade Remedies Authority to protect UK businesses and jobs from unfair trade practice, and access to the £1.3 billion global market in Government procurement.
We should accept new clause 5 and related amendments to allow better sharing of data. We should reject the other amendments, which are either unnecessary, such as new clause 4, or, in cases such as new clauses 7 and 11, potentially deeply damaging for this country’s economy.
Question put and agreed to.
New clause 5 accordingly read a Second time, and added to the Bill.
Trade Bill
Tuesday 21st July 2020
(4 years, 10 months ago)
Lords ChamberTrade Bill 2019-21 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 20 July 2020 - (20 Jul 2020)
Trade Bill
Tuesday 8th September 2020
(4 years, 8 months ago)
Lords ChamberTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 July 2020 - (20 Jul 2020)
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con) (Maiden Speech)
My Lords, it is a great honour to open this debate and indeed to address this House for the first time. I realise that many noble Lords will want to contribute to this very important debate, so I will set an example by keeping my opening remarks concise and to the point.
I start by paying tribute to the extraordinary people throughout our country who are tackling the coronavirus outbreak. We owe them all a great debt of gratitude.
I thank all those who have extended me help, advice and friendship since I joined your Lordships’ House—in particular, my two supporters, the noble Baroness, Lady McDonagh, and my noble friend Lord Blackwell. I also give my sincere thanks to the doorkeepers, the Clerk of the Parliaments, parliamentary staff, Black Rod and the police officers, who have all explained the procedures of this House and, more importantly, have sometimes prevented me getting totally lost. I should also give a special thanks to my noble friend and Whip Lord Younger, whose knowledge and support has been invaluable.
Finally, I must thank my partner, my family, my friends and all those who have helped make me what I am today. My faults are entirely of my own making.
I am an ordinary person from an ordinary family, brought up in Croydon and fortunate to have been given a council scholarship to Whitgift School, from whence I went to Merton College, Oxford. As Private Secretary to the noble Lord, Lord Owen, when he was Minister for Health, and later at HM Treasury, where I helped oversee more than 25 privatisations working for my noble friend Lord Lawson of Blaby, I got my first taste of politics.
I then became a banker at Schroders, travelling to around 50 countries exporting the skills of the City. This taught me that globalisation, trade and investment are the best routes to prosperity and peace, and that no matter what our race or creed, or whether we are rich or poor, we are all the same. The only difference is whether we have been given opportunity.
During two decades spent serving on 20 boards of major companies around the world, including chairing two of the UK’s largest financial services institutions, I learned the benefits of good governance, clear thinking and decisiveness. As the first non-military member of a front-line command board when I joined the board of the Royal Air Force’s Strike Command in 1999, and then proudly serving as the lead non-executive for six Defence Secretaries, I gained the utmost respect for our Armed Forces.
I am proud to have been asked to serve this House and our country, and I will do it to the best of my abilities. I thank noble Lords for listening to me and I am mightily relieved that that is my maiden over.
Turning to today’s business, I am honoured to move that this Bill be read a second time. As the Minister for Investment since March, I have had around 250 ministerial engagements, meeting virtually with hundreds of people from companies big and small. I have also held a number of briefings for Members of your Lordships’ House on trade matters, all of which have made me realise the vast experience and knowledge that there is in your Lordships’ House and how much I have to learn.
Above all, it has impressed upon me how the Covid-19 pandemic has impacted businesses at an unprecedented speed and scale. To me, that truly highlights the importance of trade: to keep supply chains open and to ensure that we have all the vital equipment we need. In the longer term, it has shown that building resilience and strengthening the rules-based trading system will be crucial to our recovery. That means maximising the economic benefits of trade and ensuring that all parts of the UK, and companies of every size, benefit from it, especially SMEs, the backbone of British business. It means increasing the diversity of our trade—that is, both imports and exports—and reducing our exposure to future economic shocks. Now that we have left the EU, we have the opportunity to do just that: to determine our rules, defend our national interests, and champion free, fair, rules-based trade globally.
This Bill, like its predecessor, the 2017-19 Trade Bill, is about continuity and certainty—continuity of the existing trade agreements that we had in place through membership of the EU, and the certainty that continuity offers for our businesses and trading partners, plus giving the Government the vital tools that they need to secure our future as an independent trading nation.
I turn to the main elements of the Bill. First, it allows us to implement the UK’s obligations arising from the trade agreements that we are transitioning from the original EU/third country agreement, such as those with South Korea, Chile and Switzerland, thus allowing trade to continue to flow freely with our established partners. The Government have already signed 20 continuity agreements with 48 countries, representing 74% of the trade with countries with which we are seeking continuity. Every single one of these agreements illustrates the Government’s commitment to maintaining our high standards, whether in relation to the environment, animal welfare, workers’ rights or human rights.
My noble friend Lord Lawson of Blaby once wrote:
“The NHS is the closest thing the English … have to a religion.”
I am sure that he meant no offence to the Lords spiritual, but he captured the importance of the NHS to the people of this country, and to this Government. We have been clear: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic.
I know that a lot of concern has been raised about the trade deals and how they will impact our hard-working farmers. I can reassure your Lordships’ House that this Government are committed to upholding our world-class food safety and animal welfare standards. Food imported into or produced in the UK will always be safe. Chlorinated chicken and hormone-injected beef are not permitted for import into the UK. The independent Food Standards Agency and Food Standards Scotland make sure that all foods comply with our existing standards. I make it absolutely clear that decisions on these standards are separate from trade agreements.
Not only have the Government put farmers and other businesses at the very heart of our negotiations but we have listened to the concerns of Parliament. We have launched the independent Trade and Agriculture Commission with representation from farming unions across the UK that will make policy recommendations to the Government. We have launched an agri-food trade advisory group to provide the Government with strategic insight and expertise throughout our FTA negotiations. I am pleased that its members include the National Sheep Association, the NFU and the International Meat Trade Association, among others. We are committed to a serious examination of what can be done through labelling to promote high standards and high welfare across the UK market. We have also published an agri bounce-back plan that will provide unprecedented help for SMEs and allow them to capitalise on the trade agreements being negotiated with the US, Australia and New Zealand.
I should like to make it clear that this Government and I are committed to transparency around the trade continuity programme. We have published voluntarily, and will continue to do so, parliamentary reports outlining significant differences between the original EU/third country agreements and the new UK/third country agreements. Regulations implementing these agreements are subject to the affirmative resolution procedure. I note that the 21st report from the Delegated Powers and Regulatory Reform Committee made no recommendations on the delegated powers in the Bill.
I recognise that there has been concern that upcoming continuity agreements with countries such as Canada or Singapore will go beyond continuity. Let me reassure noble Lords that this is not our intention. Where we have set out to achieve an enhanced agreement, as in the case of Japan, we have committed to additional scrutiny arrangements that closely mirror those we have put in place for new FTAs.
Secondly, the Bill allows the UK to implement our obligations under the WTO Agreement on Government Procurement, or GPA, once we accede as an independent party. As noble Lords will be aware, the GPA is an agreement seeking to mutually open up government procurement markets among its 20 parties. Acceding to the GPA in our own right will guarantee British businesses continued access to this £1.3 trillion a year market. That is so important. We intend to accede to the GPA on broadly the same terms as our current membership through the EU. I want to be crystal clear: becoming an independent GPA party does not restrict government from deciding how to deliver health services in the best way for the UK.
Thirdly, the Bill establishes the independent Trade Remedies Authority to protect our businesses against injury caused by unfair trading practices, such as dumping or subsidy, or unforeseen surges in imports. The TRA will deliver an independent investigation process that businesses can turn to when others are breaking the rules, and will recommend appropriate measures where necessary.
Finally, the Bill provides for the use of data to enable government to discharge its trade-related functions now that we are no longer members of the EU. It gives HMRC powers to share data with other public bodies to fulfil its trade-related functions, such as in relation to trade disputes. It provides for a data sharing gateway between departments and specified public bodies to safeguard existing trading relationships by helping ensure that trade flows freely across our borders.
Let me also be clear what this Bill is not about. It is not about implementing those FTAs we are seeking with new partners around the world, such as the United States, Australia and New Zealand. The implementation of such agreements will be subject to separate scrutiny arrangements, and, in line with provisions included in the amendment relating to scrutiny passed during debate on the 2017-19 Trade Bill, the Government will publish their negotiation objectives, voluntarily publish impact assessments before and after negotiations, and keep Parliament updated. At the end of negotiations, treaties will be subject to the usual ratification procedures. Parliament will retain, through the CRaG process, the right to block any treaties from being ratified.
FTAs cannot change UK law; as noble Lords know, only Parliament can do that. Parliament will retain the right to reject any domestic implementing legislation necessary for a trade deal. By blocking any legislation, should it be required, Parliament can also block ratification. This is in line with similar systems, such as Canada’s, and goes further than those in countries such as Australia and New Zealand, where parliaments cannot directly block ratification of a trade treaty.
The International Trade Committee in the other place has proposed to the Secretary of State a structure for providing scrutiny. The department is taking this very seriously and we will be working with it, and the International Agreements Sub-Committee, on developing this. I very much welcome this. These committees do an excellent job and I intend to maintain a close relationship with the IAC and its chairman, the noble and learned Lord, Lord Goldsmith; I know that my right honourable friend the Trade Secretary will be doing similarly in the other place. As part of this, we are committed to ensuring that committees are able to scrutinise trade deals on an ongoing basis, and, where possible, we will share information with those committees on a confidential basis.
Nor is the Bill about negotiations with the European Union on our future relationship. That too will be subject to separate scrutiny arrangements. This Bill is solely concerned with ensuring we have the right tools in place to implement obligations from trade agreements with countries that the EU had an agreement with before 31 January.
The unprecedented economic challenge of coronavirus makes the need for this Bill clearer than ever. It will ensure continuity through powers to implement trade agreements with partner countries which previously applied under the EU; it will secure continued access for UK businesses to the vitally important global public procurement market; it will establish an independent body to provide our businesses with the protection they need from unfair trade practices; and it will ensure that we have the necessary data to offer the best possible support for businesses to trade and to help their goods flow seamlessly across our borders.
In conclusion, as we recover from this economic crisis, providing certainty and predictability in our trading arrangements will be vital to securing the interests of businesses and consumers, and to fulfilling this Government’s mission to unleash the potential of, and level up, every region and nation of our United Kingdom. This legislation will provide us with the tools to do precisely this, and I commend the Bill to the House.
Lord Stevenson of Balmacara (Lab)
My Lords, first, I congratulate the noble Lord on his maiden speech. He has had to wait a long time to make it in these extraordinary times, but that has not stopped him performing, as he shared with us, dual responsibilities in both DIT and BEIS for the last few months. As we have just seen, the noble Lord has become rather a seasoned performer, and I am sure your Lordships will recognise that he is more than ready to take on his responsibilities with this Bill. We also look forward to the maiden speech of the right reverend Prelate the Bishop of Blackburn, and to further contributions from both.
We have more than 75 names listed for the debate today, which shows the increased level of interest in trade matters right across your Lordships’ House. We welcome this and look forward to the many and varied contributions from noble Lords.
I thank the Minister for the many virtual meetings and discussions we have had since the Bill was introduced in the other place and since he took up his position. It is possibly based on a shared background of reading chemistry at Oxford, but we have been able to develop what I hope he would agree is a good working relationship. This will be of value as we deal with some of the difficult issues raised by the Bill and as we go through its various stages during the next few months.
In his speech, the Minister spent quite a lot of time trying to persuade us that this was a simple continuity Bill, limited in scope to ensuring that we continue to benefit, after 31 December 2020, from the free trade agreements negotiated by the EU since 1972. I should warn him: his predecessor tried this argument last time round; it did not work then, and it will not work now. The arguments have not improved with time.
On the one hand, if the Bill receives Royal Assent in its present form, our trade policies will be determined within a structure with far fewer opportunities for scrutiny and debate inside and outside Parliament than are available within the EU at present. Civil society, consumer groups, worker representatives and many others—now largely excluded from the list of consultees—all had the opportunity to submit views and attend meetings and to influence the way in which the EU Parliament took its decisions.
Committees in the EU see draft mandates, receive regular reports on discussions and have the power to approve the final deals. Recent trade agreements proposed by the EU such as TTIP and the Canadian Free Trade Agreement have had material changes made to them because of input from elected Members. Because we have no existing responsibilities for trade and hence, nothing set out in current legislation, unless we amend the Bill, Ministers will be free to negotiate future trade deals using archaic royal prerogative powers, almost entirely avoiding accountability to Parliament.
No other major trading country actively prevents its elected representatives having a say in shaping, reviewing and agreeing its trade policies, and there is no other area of public policy in the UK which is off limits in the way that trade will be to both the House of Commons and the House of Lords. This is not acceptable. Why, when our democratic system depends largely on checks and balances on the Executive being exercised through scrutiny and review by both Houses of Parliament, are the Government trying to pretend that there is no need for this in current and future trade agreements? Volume of consultation is not a replacement for active participation in Parliament.
Our approach to the Bill is consistent with the approach we took in 2017-19, which found favour right across the House. We want to ensure that, as the UK regains responsibility for its own trade policies after five decades, we have an Act in place that sets out our long-term vision for trade—something absent from this Bill—and our plans and detailed policies to secure growth, protect rights, safeguard supply chains and tackle global challenges such as climate change and pandemics. Doing so will not only show clearly our intent and purpose but will help to build public and market confidence, which matters even more than usual in these uncertain times. This is particularly important given that questions about how we will shape our new, post-Brexit trade policies and ensure that we maintain the high standards we currently enjoy have been gaining traction among the public in recent months, not least because of concerns about lowering standards of food imports and the impact of Covid-19. Ministers can carry on claiming that this Bill is nothing more than a technical measure but they are, once more, out of step with the public, who understand that it goes to the heart of what we are as a nation and how we engage with the world.
I turn to the Bill itself. Our key amendment is based on the belief that the Government need to establish appropriate parliamentary scrutiny of trade deals, be they significant changes to existing EU deals or new, freestanding FTAs. We would like to build on the first steps taken by the Government, which we welcome—they represent a change of heart—but we believe they need to go further. We will suggest that the International Trade Select Committee and the Lords’ new EU International Agreements Sub-Committee should have early access to, and the power to propose changes to, negotiating mandates, receive ongoing negotiation reports and have the power make recommendations about whether Parliament should approve trade treaties and agreements.
The current arrangements under CRaG 2010, which the Minister explained in some detail, provide only for retrospective approval, and only if the Government allow that, since they control the time in which these debates can take place. Using the negative procedure is ineffective in practice and inappropriate for such a key area of public policy.
We must also ensure that consumers, trade unions and wider civil society are fully engaged in trade policy. The new trade advisory groups, with their restricted memberships and non-disclosure agreements for those who serve, have been widely criticised, and rightly so. As presently constituted, they cannot provide the wide range of views the Government say they need —and how can they, when they do not even include consumer or worker interests?
The meretricious persiflage surrounding the new appointment to the Board of Trade, complete with its single Privy Council member and strictly limited set of advisers, is surely modelled on a comedy penned by WS Gilbert. In any case, it is no answer to the broader point about lack of parliamentary scrutiny.
Given that certain trade policy issues are not reserved, we need to ensure that the devolved nations and regions of the UK have the powers they need to deliver their responsibilities and that proper mechanisms are in place to respect the constitutional settlement, including a robust dispute resolution mechanism, should there be disagreement. Of course, this is not an issue limited to trade but, even so, the status quo is completely unsatisfactory and needs to be addressed. In this respect, the Northern Ireland protocol to the withdrawal agreement and its implications for customs and tariffs across the new border in the Irish Sea needs detailed further examination; we will be raising this in Committee.
Turning to other areas of the Bill, your Lordships’ House will recall that, when considering the predecessor Trade Bill in 2019, your Lordships’ House made some 30 amendments to it. Some of the key ones covered employment rights, food, environmental standards, custom arrangements and future EU collaboration. As the then Minister put it,
“no legislation passes the scrutiny of the House without being improved … this is unquestionably true here.”—[Official Report, 6/3/19; col 615.]
Yet these changes have been stripped out of the current Bill. Even the Government’s own amendments on gender equality and reports to Parliament have gone.
During the Commons debate on the current version of the Bill, our Labour Front-Bench colleagues proposed amendments to protect current import standards in respect of animal welfare, the environment and food quality, to guarantee rights and protections for working people and to fully protect the NHS in future trade negotiations. Ministers rejected all these amendments and more, but we will be challenging these decisions again in Committee.
On other sections of the Bill, we will probe how the government procurement agreement will work in practice. At the same time, we have to make sure that UK firms can compete for the procurement opportunities on offer in signatory countries on a fair and equitable basis. I agree with the Minister that we need to strengthen the independence and integrity of the Trade Remedies Authority. The TRA cannot be effective if it is simply another non-departmental public body under the control —or, perhaps, the thumb—of the Secretary of State.
The UK is, and always has been, a strong trading nation. Labour believes strongly that trade will play a vital role in our economic future, not least as we struggle to recover from the devastating effects of Covid-19. The Government should welcome the wider interest now being shown in how we develop our trade policy, and recognise that encouraging Parliament, the devolved Administrations and wider society to play a constructive role not only strengthens their own hand in negotiations but is the right thing to do.
Baroness Kramer (LD) [V]
My Lords, I join in the welcome to the noble Lord, Lord Grimstone; he brings great experience to our House.
This Bill is a successor to the Trade Bill passed by this House last year, but significant elements have now been stripped out—primarily, the amendments agreed in the Lords. It is a Bill that reaches into the DNA of my party, as free, open and fair trade is the bedrock of our political movement. We will defend those principles as we engage with the Bill. The Bill is also about much more than continuity agreements, as the Government themselves have demonstrated in data-sharing clauses. My colleagues and I will follow the Government’s lead and use the Bill to address UK trade issues more broadly.
The amendments made by this House last year were necessary then and are necessary now. They remain crucial to underpin transparency, the devolution settlement, the future of the NHS, the Northern Ireland border, the movement of people, minimal trade barriers and, above all, safeguarding the status of Parliament with regard to treaties. Given the Government’s negative attitude to international development and aid, development issues will need to be considered in this Bill process, as will regulatory standards, climate change and sustainability, given the alarm bells that have sounded in the Government’s shaping of the Agriculture Bill.
Speaking personally, the issue that exercises me most is Parliament’s role—or the lack of it—in making trade treaties. Trade now shapes much of the economy of this country, yet, under the Government’s plans, Parliament’s role in this key area is largely reduced to that of a talking shop and bystander. When we were a member of the EU, people and organisations in the UK concerned with matters of trade and its impact could follow the negotiations in some detail because of high levels of transparency. Even more importantly, they could turn to elected representatives to challenge and change the negotiating mandate and the final treaty; that was parliamentary democracy. Now, both continuity agreements and new trade agreements will be subject only to the procedures in the Constitutional Reform and Governance Act—CRaG—which the Lords Constitution Committee has described as “anachronistic and inadequate”. In the Lords, this is a particularly weak power without the capacity to delay ratification; in both Houses, of course, it prohibits amendment. Ironically, it also weakens the UK’s ability to negotiate. The USA constantly refuses trade concessions, saying, “We can’t get that concession through Congress”. UK negotiators must have that same leverage.
I particularly express my respect for the Conservative MPs in the House of Commons—notably the Member for Huntingdon, Jonathan Djanogly—who stood up for Parliament and democracy. I hope Members across all parties in the Lords will have that same courage.
Let me say a few words on the trade remedies authority. Why it will get the name “authority” I simply do not understand, because authority is precisely what it will not have. An advisory body is not a regulatory body. It also means that in any dispute the UK position will be seen as politically tainted and not the work of an independent objective body testing against clear criteria. I hope that at the very least in the course of the Bill we will get some illumination on that process.
Those discussions will also help us to understand the implications of the Government’s state aid position. I belong to a free trade party very concerned about the use and distortions of state aid, except in instances of market failure. European rules have provided a constraint on inappropriate state aid. The failure to find a common state aid standard between the EU and the UK will trigger a new wave of competitive state aid and everyone will lose.
We had the bluster on Monday from the Prime Minister announcing that no FTA with the EU would be a “good outcome” for the UK. I am sure that business across the country shuddered. Then came the leak revealing that the internal market Bill will eliminate the legal force of parts of the withdrawal agreement in full cognisance that this will breach international law. I notice the Minister talking about the importance of a rules-based trading system and, frankly, I begin to wonder how those two actions are squared. To me, it sounds as if we are reaching some new low.
Trade is critical to the UK economy so we have to get these deals right, but more is at stake. If the Government set Parliament aside, it will diminish this country and in the end we will all lose.
Viscount Waverley (CB) [V]
My Lords, this self-styled continuity Trade Bill is a building block. However, in its current form it does not contain all the necessary components. The Bill is also being brought forward in an environment of a moving target, with a degree of despondency over the Brexit endgame process now setting in, not so much because of the exiting itself but because of the manner in which we appear to be doing so. Departure on bad terms would present a Brexit double jeopardy, which is no panacea and certainly not a long-term solution. At some point the UK and the EU must and will enter into a trade deal, but at what cost and when remain in question. My single focus, together with geopolitical positioning and the upholding of British standards, is to assist in making global trade a success. I offer four observations, some good, one not so.
I returned last night from Turkey and have listened carefully to the Minister’s remarks on FTA scrutiny. However, I wish to illustrate that country as a positive example. Turkey has all the potential ingredients of a strategic relationship for the UK, one that includes a broad range of sectors and industries, ranging from energy to manufacturing and from banking to services, and includes a large domestic market with large near-neighbourhood possibilities. It is a G20 economy with a large and young population of 82 million. I am also informed that, given our good political relations, we are well-placed to expand trade and investment in both directions. We would, without reservation, be pushing at an open door—exactly the indicators we should be looking for in a global Britain. It would be helpful if the Minister had time to inform us of the status of the FTA discussions.
What is not such good news is that elsewhere—the name of the country itself is not important—a Secretary of State refused to take a Zoom call to explore a relationship with a certain Deputy Prime Minister on multiple attempts, to which there was zero response. It was one where a major British entity is present and, I am sure, would welcome a boost. This, to my mind, is unacceptable. Additionally, Whitehall does not even have the good manners to properly manage that request, so nul points on that one. In a new era of post-Brexit Britain, surely one advantage must be that we remain agile and open.
I shall conclude on two possible initiatives. First, I am instrumental in the formation of a new APPG for chambers of commerce and trade associations. Both sets of multipliers need to be a focus of attention post Brexit to make them more effective. My purpose is to draw attention to their importance and their need to assist in the UK’s trading endeavours. The Government must look beyond the narrow confines of Whitehall, build a formal process for engaging with stakeholders and ensure that trade opportunities are distributed equally across our regions, utilising local expertise to close on opportunities. We must be innovative in our approach, ensuring that the UK maintains its position on the global stage and furthering our place as a motivator for business.
Secondly, in a declared initiative to serve the UK’s interest, I have developed a trade and network platform for emerging markets, SupplyFinder.com, which provides practical tools and increases bilateral trade with solutions to serve SMEs globally for 224 countries in 14 regions, introduced in eight languages.
I wish the Minister well. There is certainly much to do, and I look forward to the opportunity of engaging on the Bill and other aspects in due course.
Lord Astor of Hever (Con)
My Lords, I welcome my noble friend the Minister to the Dispatch Box for his first Bill and congratulate him on his maiden speech. I agree with him that trade is the best route to prosperity. I wish him well with the Bill and will support him when I can.
I declare an interest as president of the Thai-UK Business Council and as the Prime Minister’s trade envoy to Oman. In that role, I am hugely grateful for the outstanding support that I receive from the DIT team in Muscat and here in London. I also pay tribute to the UKEF. Major trade deals often flounder due to a lack of funding but UKEF has been hugely supportive of the work that I have done in Oman.
I think the trade envoy initiative has been a success. I understand that a list of newly appointed trade envoys was due to be announced, and some countries, including Thailand, are waiting impatiently for that announcement. Can the Minister say when that might be? Asia will drive the global economic growth of the future, and the DIT’s vision statement for Asia Pacific is
“to support UK business to take advantage of the scale and breadth of opportunity in the region—promoting it as the region with the greatest potential for economic growth.”
Thailand has the second-largest economy in south-east Asia, and there are a huge number of export opportunities there for British companies. It really needs a trade envoy from this country as soon as possible.
I welcome the Bill, which introduces sensible provisions to ensure continuity and certainty for British business. I welcome the fact that the Bill will not be used to reduce standards. Our high domestic standards for labour, environmental protection and food safety will continue to apply, and imports from trade partners will continue to be required to meet those standards. None of the continuity agreements erodes any domestic standards of the NHS.
I also welcome the fact that the Bill prevents disruption to UK business and consumers by creating powers to make regulations, if needed, to assist in implementing trade agreements that will transition with existing third-country trade partners. This will help to ensure the continuity of existing trade and investment arrangements across the UK, providing certainty to workers, consumers, businesses and international trading partners.
Lord Adonis (Lab)
My Lords, I strongly welcome the Minister to the House and I entirely endorse the three principles of good public policy that he set out in his speech: good government, clear thinking and decisiveness. Alas, they entirely refute the trade policy that the Government are following, which does not observe any of these three principles. This is because by far the best trade policy for this country is membership of the European Union, the second best is membership of the single market and customs union and the third best is membership of the customs union with the best deal we can get in terms of access to the single market and services.
The first policy—membership of the European Union—was the policy of every Prime Minister of every party and Government from Harold Macmillan in 1962 through to David Cameron in 2016. The third of those policies—membership of the customs union—was effectively the policy of Theresa May, and we have come to this pass because of the collapse of successive waves of good government, clear thinking and decisiveness.
However, we have to make the best that we can of the dire situation. I will make two comments on the situation in which we currently find ourselves. The first is to do with the wider trade negotiating strategy of the Government with the European Union because, with all due respect to the noble Lord, Lord Astor, it accounts for half of our trade and dwarfs all the other potential trading partners.
If it is true, as reported this week, that the Government are proposing to unilaterally withdraw from the withdrawal agreement and the Northern Ireland protocol that was agreed last year, not only would that be a major issue for the Government in terms of their breach of international law—we have seen that the Government’s chief legal adviser has resigned today because he is not prepared to implement that policy—it would also be a very big issue for this House. When the legislation comes to us, we will be invited to agree to a course of action that is, frankly, unconstitutional. It is also a clear breach of the Salisbury convention, which states that, in respect of major, controversial policies, Governments should abide by their election manifestos, and the Conservative Party’s manifesto pledged to implement the withdrawal agreement and the Northern Ireland protocol.
Therefore, it is my view, on reading about our present constitutional arrangements, that we should reject outright a Bill that involves Her Majesty’s Government abrogating the withdrawal agreement and the Northern Ireland protocol agreed by Boris Johnson last year.
In respect of the wider trade negotiations taking place at the moment, the two key sticking points appear to be fishing and state aid. Obviously, we want the Government to get the best deal they can in terms of fishing quotas. On state aid, the Minister said that he was the private secretary of Nigel Lawson, who would be absolutely aghast at the Government’s proposal to cast all current state aid restrictions to the winds so that they can follow a new interventionist industrial policy.
As it happens, I am to the left of the Minister and I actually support a more active industrial policy, but everyone who deals with trade and industry knows that, before you can get to a decent industrial policy, you have to have a stable economic policy, an open trading system, a stable exchange rate and clear, effective and understandable rules for takeovers and acquisitions. All of these are at stake in the Government’s Brexit policy and their trade policy in particular. I greatly regret that the Minister’s speech did not in any way reconcile the high aims and ambitions he set out at the beginning with the actual policy of Her Majesty’s Government.
Lord Oates (LD)
My Lords, I congratulate the Minister on his maiden speech and first time at the Dispatch Box. In the short time available, I will address two issues: first, the critical role that trade agreements can play in tackling the global climate emergency and, secondly, the vital role of effective parliamentary scrutiny in ensuring that trade agreements meet our climate ambitions.
It is not so long ago that Brexiters such as Michael Gove were making lavish pledges about the role that the UK would play in pursuing an ambitious environmental agenda, freed from what they saw as the shackles of the European Union. What a distant memory that all seems now, replaced by the reality of the arch-climate-sceptic Tony Abbott’s appointment as trade adviser to the Government. When asked at a speaking event in London last week, his top tip on how to achieve success in trade negotiations was that trade negotiators needed to be encouraged
“not to be held up by things that are not all that important, and not be distracted by things that are not really issues of trade but might be, for argument’s sake, issues of the environment.”
Contrary to the assertion of the former Australian Prime Minister, the environment is both critically important and a key issue for trade agreements. As the 2019 International Chamber of Commerce report, Climate Change and Trade Agreements: Friends or Foes?, noted:
“If the world is to restrict global warming to 1.5°C, trade must be a central part of the solution… it will be impossible for countries to meet their ambitious Paris Agreement targets without strong and coherent trade and environmental policies.”
It is, therefore, very depressing that this Bill has nothing whatever to say on the subject when there is so much that we could be doing.
First, Liberal Democrats believe that we should not seek free trade agreements with any country that is not a signatory to the Paris Agreement. This means that the Government should halt negotiations on a US FTA unless and until there is a US Administration in place who are willing to play their part in combating the global climate emergency. However, given the contempt the Government apparently have for the agreements they have already signed, it may be the United States that decides that concluding an agreement with such an unreliable partner is simply not worth the candle.
Secondly, we should make it a requirement in law that all new trade agreements explicitly enshrine the right of the UK to improve environmental standards and commit parties to binding non-regression clauses.
Thirdly, we need to adopt appropriate and transparent dispute resolution mechanisms to ensure that the UK’s right to regulate in the environmental sphere cannot be curtailed in secretive investor-state dispute proceedings.
Lastly, the UK must use its seat at the WTO to reinvigorate the WTO’s efforts to pursue climate and environmental goals. In all of this, parliamentary and stakeholder scrutiny of our trade approach will be critical.
Time does not allow me to say much more, so I will conclude by endorsing the comments of other noble Lords about the need for Parliament to have much stronger powers to scrutinise and, if necessary, reject trade agreements. Only then will we be able to ensure that UK trade policy can live up to its environmental ambitions rather than descending into Mr Abbott’s environmental abyss.
Lord Risby (Con)
My Lords, it gives me the greatest pleasure to welcome my noble friend Lord Grimstone to today’s proceedings, bringing as he does immense experience and a distinguished business career. He will certainly add greatly to the proceedings of your Lordships’ House.
The purpose of this Bill arises directly out of our departure from the European Union, but we debate this in the disturbing context of fissures that have developed in international trade, which are potentially very damaging and which all British Governments, over many years, have sought to heal while promoting free trade. Like my noble friend Lord Astor, I have been one of the Prime Minister’s trade envoys since the role was introduced. This is part of a genuine attempt to improve our export and investment performance, which is now professionally organised and focused on by the Department for International Trade.
This Bill offers continuity to our businesses and consumers and builds on our excellent bilateral relationships. There are two areas that I will refer to in particular. During the dreadful appearance of Covid-19, we witnessed some unacceptable practices by some other countries. This is why the role of the Trade Remedies Authority has special resonance.
Undercutting subsidies, hidden or otherwise, quite simply harms our domestic businesses. The Government should be commended for the speed at which the TRA is being assembled, and it is encouraging that a third of the staff are now in post, having completed the comprehensive technical training programme. Will my noble friend reassure the House that the Government will continue to prioritise skills development in this important area?
What we have also learned during the past few months is the indispensable and enhanced role of technology. I therefore greatly welcome that HMRC will be able to collect and share trade-related data with the Department for International Trade, leading in turn to information sharing across all government departments—this is a really welcome development. Securing business continuity and countering the strains in global supply chains must be at the heart of our pursuit of a successful and independent trade policy.
I add one thought in conclusion: as the noble Lord alluded to, the WTO needs to be re-energised. It is very important that it plays a central and powerful role in protecting and encouraging free trade. I hope, therefore, that somebody who is very committed to this and has the evidence to show it—namely, the right honourable Liam Fox—secures the role of director-general in the future.
The Lord Bishop of Blackburn (Maiden Speech)
My Lords, I am extremely grateful for the warmth of the welcome that I have received in my Introduction to your House. When I told my elderly father in 2013 that I had been appointed to serve as the next Bishop of Blackburn, many miles away from his home in Sussex, he was very quiet and somewhat disappointed that my wife and I would be living so far away, but then a light came into his eyes and he asked, “Does that mean you may be invited to enter the House of Lords?” When I replied in the affirmative, he said very quickly, “Well, then, that makes it all right.”
I come, first and foremost, as a Christian who will seek opportunity to support the convictions and values foundational to our faith in Jesus Christ, and to draw attention to those many today, around the world, who are persecuted for their faith in him, and then to advocate for the right for all to enjoy freedom of speech and belief, wherever they may live, and to do so in peace.
As my accent betrays, I come also as a southerner, having worked in London, Sussex and Surrey, but for the last seven years in the north-west, serving most of the red-rose county of Lancashire. Lancashire is remarkable for the diversity of its communities and achievements, past and present, boasting that significant role in the cotton industry; a strong connection with Her Majesty the Queen as the Duke of Lancaster; the vision of George Fox on Pendle Hill; the name “sirloin” beef from Hoghton Tower; the annual shield-hanging ceremony in Lancaster Castle, which goes back to Richard the Lionheart; and, of course, the beautiful Trough of Bowland. Lancashire’s glory is not just in the past: the north-west is the home of graphene, that new super-material; of the well-known golf course at Lytham St Annes; for some, not so excitingly, of “Strictly Come Dancing” in the iconic ballroom at Blackpool Tower; and of nearly 200 clearly and distinctively Christian Church of England schools and three universities. Also, 18 million tourists visit Blackpool each year for its different attractions.
Yet Blackpool includes one of the most deprived wards in the country, and it is for that fact that I wish to speak in this debate, to urge the Government, if this Bill grants them the powers they seek, to hear and to heed the voice of the north. This House may not be relocated to York during the refurbishment period, but its eyes and ears must not be blind or deaf to the needs of the poorest and most vulnerable communities in the north of our country. Talk of a northern powerhouse must not be allowed to fade away into the history books, but must energise the commitment to improve the infrastructure and economy of the north. Better transport links around the north are long overdue and would have a transformative impact on the local economy.
The impact of Covid-19 has only exacerbated and increased the inequality between rich and poor. Blackburn has an unemployment rate of almost 6%. This is much higher than the national average and, according to a recent Lancashire Telegraph article, it could be as much as 18% when hidden unemployment is included. More than 11% of Blackpool’s population is claiming support through welfare payments, the highest proportion in the country. Statistics such as these require the powers granted by the Bill to be exercised with wisdom and skill, as new trade agreements are put in place for the post-Brexit era.
As the Bishop of Blackburn, I hope to speak in this House for the great people of the north of our country and, as a Christian, to speak for the human right to believe and express that belief in public without fear or favour. Good trade arrangements can be a way to achieve prosperity for all, as has been indicated already in this debate, as well as to develop relationships with our global partners which will allow us to act as a critical friend when human rights are ignored. I hope the Bill will assist us in both these noble goals.
Lord Alton of Liverpool (CB)
My Lords, the House has heard a thoughtful and exemplary maiden speech from the right reverend Prelate the Bishop of Blackburn. All of us who, since his appointment in 2013, have witnessed his outstanding pastoral work in the north-west of England will not be surprised by that. Rooted firmly in the evangelical tradition of Wilberforce and Shaftesbury, he and his wife Heather have, with great commitment, actively engaged with the region’s social and spiritual challenges. On appointment to his vibrant and diverse diocese, he pledged himself to promote respect for people from differing faiths and the right of all to freedom of religion or belief. In a part of the country that often feels overlooked by institutions, by elites and by government, he has said that his experiences in Lancashire, on a wide variety of issues, will inform his contributions to your Lordships’ House. On the basis of today’s curtain-raising maiden speech, those are contributions to which we will look forward with great anticipation.
I want to talk briefly about national resilience and our human rights obligations in future trade deals. Following exchanges and a meeting with the noble Lord, Lord Grimstone, whom I also congratulate on his maiden speech today, I gave him the Henry Jackson Society report Breaking the China Supply Chain. That report finds that in 229 separate categories of goods, the UK is strategically dependent upon China for our supplies. Equally troubling is that 57 of these categories involve critical national infrastructure, including computers, technology, telephones, antibiotics, painkillers such as aspirin, anti-viral medicines, PPE and industrial chemicals. It recommends that we conduct a national review of the industries dependent on China; make reducing dependency on China—and, indeed, other human-rights-abusing states—an aim of new trade deals; and campaign for the withdrawal of China’s “developing nation” status at the WTO. We must move the United Kingdom away from a position in which its economic dependency can be weaponised to discourage the UK from championing human rights or the rules-based order, which the Minister referred to in his speech.
Concerns, and the need for concerted action by liberal democracies, have only grown stronger following the way in which the Chinese Communist Party has tried to deploy economic coercion against Australia following its calls for an inquiry into the origins of Covid-19. What is the Minister’s view about a comprehensive review of national resilience? And what of human rights? In 2015, the UK enacted the Modern Slavery Act; yet over recent months, we have seen reports suggesting that many UK-based and UK trading brands are benefiting from the forced labour of Uighur Muslim communities in China. A recent report by the Australian Strategic Policy Institute estimates that some 80,000 Uighurs are working in factories in the supply chains of at least 82 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen. Some of the same companies also turn a blind eye to the use of child labour in lethal conditions in Congolese mines.
Cross-departmental action is needed. If the Bill were amended to incorporate concerns about egregious violations of human rights—something I know is close to the heart of the Opposition Front-Bench spokesman—as I suggested in a letter to the noble Lord and to Ministers involved with telecommunications Bills, it would address the matters raised by Members of both Houses; not least by those who, like the noble Lord, Lord Stevenson, supported my amendment to the Telecommunications Infrastructure (Leasehold Property) Bill. I hope we will return to these questions at a later stage of the Bill.
Lord Bruce of Bennachie (LD) [V]
My Lords, I also congratulate the Minister and the right reverend Prelate on their maiden speeches. I am sure we all look forward to hearing their future contributions.
However, I am sorry to say that, in this Bill, I believe parliamentary democracy and our trade interests have parted company. For more than 40 years, Britain’s trade arrangements have been negotiated by the EU, with the detail subject to scrutiny by the European Parliament. Now the Government wish to negotiate trade deals in secret and ratify them without reference to any of our democratic institutions, using the powers of an absolute monarchy.
The UK is launching itself on the world with no track record of negotiating modern trade deals and, worse than that, from yesterday’s announcement it appears that the Government think they can unilaterally rewrite signed treaties and expect to be trusted as they try to negotiate new ones. However, congressional leaders have already indicated that they will block any free trade negotiations with the UK if the Good Friday agreement is undermined, as the Government’s position would certainly achieve.
Britain has a consistent balance of payments deficit on manufacturing, which even a substantial surplus on services cannot close. Yet we are giving up our privileged access to the EU market for services, knowing that free trade deals generally do not cover services. The Government seek a trade deal with the US, knowing that the EU could not achieve one, when we are in the middle of a damaging trade dispute that is seriously undermining our Scotch whisky industry.
A President who puts America first will extract a high price for access to EU markets. Jacob Rees-Mogg has boasted many times that Brexit will deliver cheap food, but we know that this will be of a lower standard than the UK currently enjoys, in spite of the Minister’s assertions. Maybe the US will play whisky against beef, poultry and even our NHS. The threat to Scotch shortbread and cashmere saw Tory MP Douglas Ross writing in our local paper of the damage it was doing to his constituents, but that was, of course, before he suddenly became leader of the Scottish Tories. The failure of the Trade Secretary to end the damaging whisky war does not bode well for our negotiating power.
Scotland has the biggest financial services sector outside London, and a significant part of that is focused on dealing with the EU. Replacing that will not be easy, and non-EU markets will not be as easily replicated. The economic balance varies across the components of the UK; concessions on trade agreements will therefore have different impacts. Big companies can adapt to changes on terms of trade by takeover, relocation or disinvestment. Small and medium-sized enterprises do not always have such luxury.
Under the Government’s trade plans, people may not know the impact of any trade deals until after the event. That is why our Parliament should be involved in agreeing the terms of trade. If the European Parliament, the US Congress and other national Parliaments can scrutinise trade deals, why not us? Is this not what “taking back control” was supposed to mean? Or was it always going to be a cabal and cosy clique of the Brexit faithful? Is there anyone left in the Tory party, apart possibly from Jonathan Djanogly in the Commons, willing to speak up for parliamentary democracy? I believe our House owes it to them to give them another chance.
Lord Balfe (Con)
I also congratulate the Minister and the right reverend Prelate on their maiden speeches, which gave us a taste of what is to come—something we can look forward to, I think.
Like some noble Lords, I am sorry that we need this Bill at all. Our trading arrangements have been well looked after by the system we have followed for the last 40-plus years. As someone who has had a little to do with the European Union, I reflect that there is much higher democratic oversight by the European institutions of the trade agreements as they are negotiated, and a far greater opportunity for the European Parliament to intervene, approve and—crucially—amend and deal with these things as they are negotiated.
One of the weaknesses of the Constitutional Reform and Governance Act is that it was not passed for this purpose. It was passed at a time when withdrawal was not even on the distant agenda, and it is not fit for purpose for what we want to do. The time limit of 21 days is frankly not only woefully inadequate but the wrong way of going about things. Parliament should be involved as treaties develop, not presented with them at the end.
If you read the Government response to the reports we debated yesterday in Grand Committee, you will see the number of times that the Government said that they “may” take account and “could” envisage looking at—but there were no firm commitments to Parliament at all. Of course, we also have four bodies of Parliament—the International Trade Committee, the Joint Committee on Human Rights, the Constitution Committee and our own EU Committee—all of which have severe reservations about this procedure. We are not in a good place.
When we talk about Australia and the United States, people have said that the Government of Australia have stronger powers, but they are much more beholden to what is called the trade committee of the Australian Parliament. We have no equivalent of this committee. Robert Lighthizer wants us to follow the science, as he says, but the United States Senate and the House of Representatives do not follow the science; they follow the democratic wishes of their constituents, and good for them. We need to look a lot more firmly at what we are dealing with.
Finally, I shall say a word about the National Health Service. I do not go along with the shroud-wavers who say we are going to have a US system. I have said many times, “Of course we’re not”, because the Conservative Party relies on the votes of the aged. However, we must have structures in place which do not let investor protection and dispute resolution procedures override the democratic will. We cannot have NHS price control mechanisms undermined. We need a clear defence of the NHS and, frankly, we need it in the Bill. I challenge the Minister to bring something forward that will achieve that objective.
Baroness Boycott (CB)
My Lords, it is always a pleasure to hear two maiden speeches. I particularly appreciate the speech from the right reverend Prelate, who pointed out the yawning gaps of inequality of this country.
Trade affects us all, and I believe the Government will be taken aback by the power of public opinion in the next few months, as campaigns are unleashed in which people say that they do care about what they buy and where it comes from. As a nation we import a great deal—several billion pounds more each month than we export. Therefore, what we buy in the shops is down to all of us, and we care about it.
I appreciate that it is important to have as many agreements as possible in place by the end of the year, but it is crucial that these do not result in an increase in our global emissions. We face a particular risk here as the biggest net importer of CO2 emissions per capita in the G7—it makes up 43% of our emissions. If we are to reach net zero, we have to do more than just think about it. We must take active steps; we cannot load other people with this problem. As has been noted, the appointment of Tony Abbott to his job is not a good sign in this direction.
I welcome the announcement the other day by the noble Lord, Lord Goldsmith, of a review of diligence in terms of deforestation; this is a good thing. The lungs of our planet have been considered fair game by us all for a long time—a free for everybody type of parking space. However, this due diligence needs to extend to a full sustainability impact assessment across all international agreements. If we can do that, the points mentioned by my noble friend Lord Alton would also get picked up by Parliament.
Only with a sustainability impact assessment will Parliament be able sufficiently to scrutinise trade deals against our current obligations made under the Paris Agreement and the Climate Change Act. These are not notes on the back of a postcard; they are agreements to which we have signed up. We have to do this; we cannot fudge around. SIAs will also create really good incentives for countries that wish to trade with us, so that they too stop turning a blind eye to production methods directly and indirectly accountable for high emission levels.
If we have good SIAs, we would be able to incentivise all carbon-neutral trade through tariff systems which recognised these benefits. We all know that, in the long term, low-carbon products work out cheaper. They are cheaper financially, and they are cheaper and better for all of us.
To quote a recent report by the Aldersgate Group:
“Long term certainty that the UK’s trade policy will be coherent with the net zero emissions target”
is essential to attract private investment. That is true, and this is our golden opportunity to do it.
We led the world in the Industrial Revolution, and we must lead the world in this green revolution. It is not just that our children will love us for it—they will hate us if we do not.
Baroness Quin (Lab) [V]
I congratulate the Minister on his appointment and on his willingness to take on—and even bravery in taking on—such a role at this time. The details of the Bill will be considered at a later stage, but I agree with the overall assessment of my noble friend Lord Stevenson that this is not a simple continuity Bill; it raises many important matters that should be the subject of amendments. I also agree with others who expressed concern about the Government’s overall trade policy priorities. There is a lot of confusion about the Government’s intentions in their trade policy. Recently, Michael Gove visited Northern Ireland and said, “You are having the best of both worlds because you have access to the EU single market as well as the UK’s internal market”. We could all benefit from access to the EU single market if the Government simply changed their approach to their trade policy. There are huge issues of concern to Northern Ireland and it will be desperately important both politically and economically that these get resolved properly.
The Government have also been criticised by the Road Haulage Association for inadequate preparation. It is extremely worried and alarmed at the prospect of no deal—unlike the noble Lord, Lord Frost, who was introduced today. In response, the Transport Secretary, Grant Shapps said, “Well, we’ve dealt very well with the supply chain during the Covid crisis, so there won’t be any problem in future”. However, at the moment we are still in the EU and benefiting from those trade flows and supply chains.
The Government have talked a lot about sovereignty, and it is true that we will be a sovereign country, able to do trade deals. In any trade deal, however, there are two sovereign partners, so there must be respect and a willingness to compromise in the overall interests. I am worried by the false patriotism in the Government’s approach; it is acting against our true interests, which is to have a close trading relationship with our biggest market and nearest neighbours—a market, incidentally, we had a key role in creating and the rules of which we have hugely influenced in recent years.
I would like the Government to rethink this Bill and their trade policy, before this country has to pay an unacceptable price, both economic and political.
Lord Clement-Jones (LD)
My Lords, I add my own welcome and congratulations to the Minister and to the right reverend Prelate. I share all the concerns expressed by my noble friends and many noble Lords about the lack of proper scrutiny provisions in this Bill. Global digital trade is increasingly important in the post-Covid world. Its rules must be established, however, through bilateral and multilateral trade agreements.
Two areas where special scrutiny is required, particularly their place in the global digital and creative economy, are intellectual property protection and data transfer. It is crucial in future FTA’s negotiated by the UK that we do not concede or dilute our IP standards as part of trade negotiations. Indeed, they should be enhanced. These core protections include—it is quite a list—adherence to international treaties related to copyright, trademark, design and other intellectual property rights by our trading partners; maintenance of the UK’s “no fault” injunctive relief powers; robust enforcement measures for IP rights and infringement; strong design rights, particularly regarding unregistered designs; balanced copyright exceptions that uphold standards such as the Berne three-step test; no broadening of any liability shields for online platforms; retention of sovereignty over exhaustion rights and no shift to an international exhaustion regime; retention of artist resell rights; reciprocal rights of representation; reciprocal public performance rights for all music rights holders for their works, recordings, public performances and broadcasts; no mandatory transfer of source codes, algorithms or encryption keys as a condition of market access; and support for the development of AI through aligning text and data-mining rules with our own.
On the second major issue, data transfer, we need to ensure that data can flow across borders. It is essential for digital trade, particularly e-commerce, supply chains, data collection and data analytics through the Cloud. We have discussed the need for data adequacy in this House many times. In a significant ruling last month, in the case of Schrems II the European Court of Justice ruled that the privacy shield framework which allows data transfers between the US, the UK and the EU was invalid. Cloud services and data exporters from the EU will have to rely on standard contractual clauses. The UK will need to develop its own regime, similar to the EU’s adequacy framework, to ensure that personal data transfers to third countries outside the EU are protected, in line with the principles of the GDPR. We also need to ensure there is no enforced localisation of data or separate treatment for cross-border flows of financial data, as the Minister will understand only too well.
I look forward to the Minister’s response on these issues and how scrutiny will be guaranteed in the future.
Lord Wigley (PC) [V]
My Lords, I salute the noble Lord, Lord Clement-Jones, in covering so many issues so quickly, and I congratulate the Minister and the right reverend Prelate the Bishop of Blackburn on their maiden speeches.
After 40 years of leaving trade negotiations to the European Commission, the UK Government are now discovering that trade is an emotive and difficult subject which depends on defined interests, respect and enforceability. All three elements require consent, most obviously delivered through our democratic institutions. The Welsh Parliament is responsible for articulating Wales’s interests, supporting its economy and enforcing its laws, yet this Trade Bill largely ignores these responsibilities, as if devolution never happened. The UK Government require the Welsh and Scottish Governments to enforce trade deals decided in secret which they had no part in formulating. All four nations must surely be required to consent to trade deals struck in their names. Such deals must be subject to parliamentary approval in Cardiff, Edinburgh, and Belfast, as well as Westminster.
Trade is the life blood of the Welsh economy, worth £18 billion last year. While Wales is a proud global partner, the fact is that over 60% of our exports goes to the EU. Welsh food and drink exports were directly worth over £530 million in 2018, without adding any economic multiplier. This underpins Wales’s rural economy, and agriculture is a devolved competence of the Welsh Parliament. It is therefore vital that food production standards are enshrined in legislation and in any trade deals that follow, and that this is safeguarded by the necessary consent of all four Parliaments.
While I welcome the Trade and Agriculture Commission, giving it a six-month remit was farcical; it should be permanent. If we are to secure trade agreements to replace the European markets we now stand to lose, the Government must work for, and with, all four nations of these islands, not just the City of London. They must guarantee the democratic rights of each nation, provide legal protections for our public services, including the NHS, and make binding commitments to maintain standards. We must reform the investor-state dispute mechanism, not least to deal with the global socioeconomic consequences of Covid-19. I welcome the moves by the European Commission to consider a new multilateral investment court to replace the flawed ISD system. I hope the UK Government will engage positively with that proposal.
We now face a no-deal Brexit, which the Prime Minister sees as a good outcome. However, he would never have secured his general election majority on that basis. Last year, MPs voted to reject a no-deal Brexit in any circumstances. The original trade Bill assumed that we would get a deal. The Government are now prepared to renege on the international treaty they signed on Northern Ireland. Is Britain’s word worth nothing? The Bill should not pass until the Government have made fully transparent their plans for further trade legislation relating to Northern Ireland, have clarified how that Bill might impact on the Trade Bill, and have committed to working in partnership with the Parliaments of all four nations of these islands.
Baroness Altmann (Con)
My Lords, I warmly welcome my noble friend to his position on the Front Bench and commend him on his maiden speech to the House. We very much look forward to his contributions to the House. Equally, I welcome the excellent maiden speech of the right reverend Prelate the Bishop of Blackburn.
The Bill is about trade agreements. They influence the standards, protections and regulations that shape the kind of society we live in, which is why it is so important for Parliament to have a greater say than is provided for currently. Publishing objectives, keeping Parliament updated and allowing Parliament to block treaties are not the kinds of powers that the British people would expect us to exercise over issues that are so fundamental to the type of country in which we live.
I support the setting up of the Trade Remedies Authority to protect businesses against others who break the rules—which brings me to the issue of rules. I hear my noble friend talk about our high standards on the environment, workers’ rights, human rights and so on, but successful international co-operation surely requires compromise and the acceptance of others’ standards, too. However, so far, it seems that the Government believe that only our own rules count. That way lies conflict. Posturing, threatening or bluffing are not normally the way to achieve successful outcomes in an international sphere.
My noble friend outlined objectives that I fully support: maximising the economic benefits of trade, especially for small businesses; reducing exposure to economic shocks; defending our national interests; and continuity and certainty. To be frank, as an economist, I still struggle to understand how leaving behind the free trade we have as an EU member can possibly maximise the benefits of trade. Brexit is about politics, not business or trade, but I am delighted that we have agreed 20 continuity arrangements for those deals that we already enjoyed as an EU member. Could my noble friend let the House know how we are progressing with future arrangements with countries such as Canada, Singapore and Turkey, which have not yet been ratified?
I echo the concerns about the NHS and standards, and look forward to debating the Bill further as we go through its process.
Lord Whitty (Lab) [V]
My Lords, I welcome the Minister to his place in the House. I also welcome his maiden speech and that of the right reverend Prelate the Bishop of Blackburn, who gave a rather more convincing advertisement for Lancashire than the Minister did for the Bill.
I recognise that, in the circumstances, some of the Bill is necessary, but it is largely defined by what it omits, starting with parliamentary scrutiny. Yesterday, we were pressing for at least the equivalent scrutiny given to all treaties, particularly trade treaties, by the European Parliament—as the noble Lord, Lord Balfe, has just explained. But the new Bill omits much more than constitutional issues and parliamentary scrutiny. There are, in effect, no provisions for the protection of our food standards, which means that future trade deals could undermine the high standards of UK agriculture and the health of our nation and animal population.
There are other provisions that ought to be part of our approach to trade in the new circumstances. There are no provisions on employment standards—not even commitments to basic ILO conventions on workers’ rights or even protections against slavery. No consideration of basic human rights is included at all, yet it is in many extant EU trade agreements. We have to recognise that some of the countries that the Government are targeting for future trade agreements, such as China or Brazil, have regimes whose contempt for human rights and environmental protection is blatant. Ministers will of course say that the Bill relates only to continuity agreements, but even in that context some of the arrangements with the EU also raise issues of human rights—take the case of Turkey as an example. The Bill is not just a continuity Bill; it sets the tone for our approach to trade much more widely.
We know that the big prize for the more extreme Brexiteers is a trade agreement with Trump’s America. Frankly, that prospect raises deep anxieties about food standards, animal welfare and US pharma companies’ ambitions for the National Health Service market and the provision of healthcare. The Bill will protect us from none of that.
I hope that the Minister listens to the House and tells his colleagues that at least some of these provisions need to be introduced to the Bill before it ends its process through Parliament.
Lord Bilimoria (CB) [V]
My Lords, the UK is one of the greatest trading nations in the world. It is an open economy and one of the largest recipients of inward investment, often in the top two in the world. The Bill is extremely important to maintain that. First, I welcome my noble friend Lord Grimstone. We have known each other for many years, and I congratulate him on his excellent maiden speech.
There are those who wish that the Bill had been wider in scope and said more about trade strategy, linking to other policy areas and to sustainability, with maybe more consultation. On the other hand, we recognise that time is limited and that there is more work to be done. It is essential that trade defence measures are in place and that we are in a position to roll over a trade deal.
I am president of the CBI and our members have expressed concerns around the scope of the NDAs, which seems to go far wider than just texts for negotiating—perhaps the Minister could comment on that. There are also concerns about the restrictions on sharing information outside the UK, the length of application, and obligations for organisations to ask for confidentiality clauses with employees. On rollover and replicate, the issue is not the Bill but the real-world challenge of negotiating trade agreements—these still have to be negotiated. The DIT has negotiated a number of trade deals—I believe up to 20 now—but some still need to be completed.
Then there is the aspect of business involvement. There should be more explicit language about consultation. While the Government have been keen to roll over some trade deals, in some cases rolling over is difficult; for example, in matching EU deals. Would the Minister comment on a country such as Switzerland, for example? Business basically wants continuity of trade; we do not want a cliff edge, in any way. So far as the Bill does that, we wholeheartedly support it.
We welcome the setting up of the Trade Remedies Authority. The role of business is to submit benefits of experience and to have an integrated view. Will the manufacturing sector and others be represented on the TRA to build confidence and widen the circle of expertise?
We can make international comparators. Many countries, such as Australia and the United States, give clearly defined roles to their legislatures as part of the process of negotiating and concluding treaties, whereas the UK Parliament provides nothing near that.
The CBI has developed 10 recommendations on how to build a world-leading UK trade policy: build a strong mandate underpinned by business engagement; secure comprehensive buy-in for the negotiations by publishing mandates; set up a high-level Strategic EU Trade Advisory Group (SETAG); establish a series of thematic working groups to tackle cross-cutting issues; expand the remit of ETAGs; appoint a new chief business trade envoy to co-ordinate the gathering of business intelligence, ensure coherence of policy, and provide businesses with a single point of contact; take business delegations to negotiating rounds to strengthen the UK’s presence and give negotiators easy access to technical expertise; publish proactively the membership of advisory groups; release summaries of negotiating rounds as they are completed; and use non-disclosure agreements only when essential.
Lord Shipley (LD) [V]
My Lords, I welcome both maiden speeches this afternoon. I understand the need for the Bill to ensure the proper functioning of the Government’s procurement, to enable the rollover of EU trade agreements and to allow HMRC to have access to detailed trade data. I understand too the reasons for the new Trade Remedies Authority to advise on the conduct of international disputes and unfair trading. However, the Bill cannot just be technical. What is in the Bill and what is missing from it will be highly relevant to our consideration as it progresses. This should include food standards for imported agricultural goods and the exclusion of publicly funded health and care services from trade agreements. It should also include issues related to climate change and regulatory co-operation, and ethical considerations related to third countries.
I hope the Minister will clarify three specific issues. First, our Parliament should surely have the power to agree the Government’s negotiating objectives in any new trade agreement. It should also have the same statutory powers as exist in many other countries to scrutinise and ratify a finalised agreement. Secondly, there is also a need for better scrutiny of the Trade Remedies Authority. There seems to be a lack of accountability to Parliament in its structure and functions. At the very least, it should report annually to Parliament. Thirdly, could the Minister explain, in the context of the Agreement on Government Procurement, how it fits with the Government’s plans to enhance state aid within the UK and for the Government’s levelling up agenda, which will require very substantial public investment? What consideration have the Government given to areas of potential conflict in procurement?
Finally, do the Government accept the need to honour geographical indicators in future trade agreements? I ask because, in their agreement with the EU, the Government have rightly committed themselves to them “unless and until” there is a new trade agreement in place. But, if there is no trade agreement with the EU, we must continue to honour geographical indicators, which, in itself, is good news. But what discussions have there been with US negotiators on this matter, since it appears that they do not wish to be bound by them? Will we continue to honour our current agreements on geographical indicators, or will the Government give priority to securing a US trade agreement?
Lord Naseby (Con)
My Lords, we have heard two excellent maiden speeches this afternoon, from my noble friend on the Front Bench and from the right reverend Prelate the Bishop of Blackburn. I thank them both; they were very moving and very effective. Of course, that is not surprising, when this is the most vital Bill that this country has faced for many a long year. It is all about the sovereignty of the United Kingdom.
I had the privilege of working for the Reckitt & Colman (Overseas) group for a fair number of years, in Calcutta, where I covered the whole of eastern India, and in Colombo, which was of course then Ceylon, trying to learn the language—I got O-level Hindi. I did it in depth. If you are going to export, you have to do it in depth. Subsequently, I became a director of one of the largest advertising agencies, responsible in particular for clients who were involved in exporting.
I look at the list of countries in the continuation agreement area, and I am sorry to say that I do not see much of the Commonwealth. I see discussions on Singapore, but that is almost about it apart from part of the Caribbean. I therefore say to my noble friend on the Front Bench—I declare an interest as president of the All-Party Parliamentary Group on Sri Lanka and as active in all the south Asian countries—that that area is hugely friendly to our country. They want to be involved. I say that as one who goes regularly every year, as far as I can, to that part of the world. They are anxious to enter into agreements. I suggest to my noble friend on the Front Bench that we have to have very senior people in our embassies and in our high commissions who are well briefed on what the opportunities are and who can see the possible opportunities. For my money, I would like to see the deputy high commissioner or the deputy diplomat in those and other countries being appointed from senior businesspeople.
As someone who has been in the world of advertising and marketing, I know that the promotion of exports is not new. In the old days, we used to have the British National Export Council, then the British Export Corporation, which was talked about, with, potentially, an international exhibition centre at London airport.
The mention of London airport brings up two issues: the air freight and airline business is absolutely paralysed at the moment, and somehow or other we must ensure that the structure is kept there and that the third runway gets built.
On marketing, I say to my noble friend on the Front Bench that the Queen’s Awards for Enterprise are pretty tired. They need a complete revamp. On trade associations, the noble Viscount, Lord Waverley, talked of an all-party parliamentary group, and I would be more than happy to join it.
I am disappointed that there appears to be a row between Her Majesty’s Government and the UK Association for International Trade, or in particular with HMRC. We do not need this at this point in time, and I suggest that my noble friend bangs a few heads together.
My noble friend and others will get support from ECGD, the Road Haulage Association, and so on. However, we also need our universities on side. We need to know that the young people coming forward really understand the importance of exporting and the interaction between people. On the question of interaction, much needs to be done. There needs to be much of it, and, frankly, we cannot afford for officials to be sitting at home, having very little interaction.
Lord Berkeley (Lab) [V]
My Lords, I am grateful for the opportunity to introduce the House in this debate to the Luxembourg Rail Protocol, which needs a minor amendment to the Trade Bill. It would enable the Government to move forward with ratification, which would help rail operators and manufacturers encourage foreign investment into the UK and support UK exports of rail equipment. It mirrors something which has existed for some years in the air sector, and it is caused by a problem of getting finance for things that move and can be taken away.
To introduce it very quickly, the Luxembourg Rail Protocol to the Cape Town convention is an international treaty which will make it easier and cheaper for the private sector to finance all types of railway rolling stock, from locomotives to passenger and freight wagons, metro trains and trams, and so on. I believe from earlier discussions that it has government and cross-party support, and it needs a statutory instrument, as long as that is authorised by primary legislation. The protocol to the Cape Town convention creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. This includes a facility to register security interests in an international registry, and it is the first common global system for uniquely identifying rail equipment. As noble Lords will know, rail equipment, like aircraft, has a habit of being moved if it is in the owner’s interest to do so.
It reduces creditor risk, the legal cost of financing and the cost of capital, and will relieve central and local government of the burden of financing or underwriting the procurement of new rail equipment. It will also provide the opportunity for government to refinance cost-effectively existing equipment. Of course, for exporters of rail equipment, which we hope will continue and grow after Brexit, the treaty will make manufacturers more competitive, particularly by levelling the playing field against Chinese competition, which many industries fear quite a lot. It will create valuable new markets and facilitate lower risks.
As I said, the UK has already adopted the Cape Town convention’s protocol applying to aircraft. It has signed but not ratified the rail protocol. Post Covid, this is all very important, so I propose to put down a few small amendments to Clause 2 to allow this convention to be ratified within the wider definition of the implementation of international trade agreements.
Baroness Burt of Solihull (LD) [V]
My Lords, I commend the maiden speeches of the right reverend Prelate the Bishop of Blackburn and the Minister—particularly his remarks on small businesses, because that is the focus of my brief remarks today.
I am glad the Government have confirmed our accession to become independent members of the WTO’s Agreement on Government Procurement. This can be of great benefit to SMEs. Opportunities covered by the GPA market are estimated to be worth £1.3 trillion per year across the 20 parties to the agreement. The United States, South Korea and Japan have all put annexes to their GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations. I believe these provisions would enable parity of support for small businesses in accessing markets, against larger ones. Can the Minister confirm that the Bill has this provision and, if not, whether he would be open to considering an amendment to incorporate it in the Bill?
The Bill sets up the trade remedies authority, designed to protect UK businesses from unfair trading practices. This looks like a good thing, but when will we have further details, particularly on the TRA’s governance structure and accountability?
Key to small businesses’ exporting success is financial assistance, which should be obtainable through UK Export Finance—but UKEF is currently subject to inquiry from the Commons International Trade Committee. Could the Bill be used as an opportunity to lay out some of the UK’s future trade structures to make UKEF more accessible, user-friendly and, frankly, fit for purpose?
Small businesses will play an important role in the UK economic recovery post Covid. They are more agile and faster to market with new products and services in an uncertain world. The FSB reports that 78% of its exporting members export outside the EU, although this represents only just over one in five of its membership. The potential is there for the number of small business exporters to double.
Finally, what could the Government do through this Bill to make the prospect of exporting more appealing and seem more possible to small businesses by encouraging them and simplifying the process?
Baroness Neville-Rolfe (Con)
My Lords, it is exciting to be on the speakers’ list twice—once physically and once virtually—but I will trouble noble Lords with my thoughts only once. I start by giving a warm welcome to the right reverend Prelate the Bishop of Blackburn. I was glad to hear him mention the contrasting miracles of graphene and “Strictly Come Dancing”. He will be a great addition to our House.
This Bill is not very different from the Bill introduced in this House in 2018 on which I spoke at some length. It provides for the continuity of EU trade agreements where possible on a bilateral basis and sets up the UK-only arrangements for procurement and an independent trade remedies authority. Not much has changed, although some of the Lords amendments have been stripped out.
However, the context is very different. Boris Johnson has become Prime Minister—a welcome change—and won a decisive election victory. We have left the EU and the nature of any FTA with the EU makes our international trading arrangements even more important. Continuity arrangements have been agreed and scrutinised effectively by the EU Committee of this House. We have produced 22 reports on 50 different Brexit-related agreements, and I thank our brilliant clerks.
Trade negotiations with Japan, Australia, New Zealand and the US are very active and the Department for International Trade has been strengthened enormously, most recently with the addition of former Australian Prime Minister Tony Abbott, whom I had the pleasure of meeting on an earlier visit to the UK. I am now chairman of the UK-ASEAN Business Council—one of my interests in the register—and can assure noble Lords that in the ASEAN region, which is dynamic and growing, he is well regarded for the important trade agreements he concluded in Asia.
We have also welcomed my noble friend the Minister, with his global business experience, to his role, and at last today we heard his maiden speech. He has an amazing record and network, but for me the most important qualities he highlighted were clear thinking and decisiveness. These should be much valued in our Government today.
I welcome the return of this Bill and the Minister’s clear introduction and look forward to supporting its rapid passage through our House. I have a particular interest in data and intellectual property and thank the Alliance for IP for its usual briefing. I know that these areas are important to the noble Lords, Lord Stevenson and Lord Clement-Jones, and I look forward to working with them on the usual cross-party basis.
I sympathise with many of the points made about parliamentary scrutiny and hope to bring to our debates my experience on trade issues within the EU in the European Parliament and on the European Union Committee. I also endorse everything my noble friend Lord Naseby said, his practical ideas on export promotion and the intriguing ideas of the noble Lord, Lord Berkeley, on rail rolling stock. Like the noble Baroness, Lady Burt of Solihull, I care a lot about the role of small business in trade.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
The next speaker is the noble Lord, Lord Freyberg. I am sorry but we cannot hear him at all. We may have to move on to the next speaker and return to the noble Lord, Lord Freyberg, afterwards. I call the next speaker, the noble Baroness, Lady Chakrabarti.
Baroness Chakrabarti (Lab) [V]
My Lords, I believe I am unmuted. What an excellent debate. I join the welcome from across the House to the Minister and the right reverend Prelate the Bishop of Blackburn.
The Bill in its current form is at best a missed opportunity and at worst something a little more troubling still. It is a missed opportunity to safeguard parliamentary sovereignty and respect for devolution and for detailed scrutiny of trade policy. As others have said, it provides a lack of structures for that purpose. I also draw your Lordships’ attention to the sweeping delegated powers that are a key feature of this legislation, to which I really hope many noble Lords will return at future stages.
It is a missed opportunity to prioritise human rights, workers’ rights, food standards and, in particular, the fight against impending climate catastrophe as pillars of ethical trade policy in the vital years ahead. In its current form, it is a missed opportunity to enshrine protections for the world-envied treasure that is our National Health Service, watched in admiration by ordinary vulnerable people everywhere and especially during this current terrible pandemic—yet stalked greedily by many corporate interests that would seek to plunder its sensitive datasets and commoditise the healthcare that, in Britain at least, has been seen as a universal human right for 72 years.
The Government say—the Minister said it very ably—that this is just continuity legislation, so we need not seek extensive safeguards here. No doubt we will in due course be asked time and again to trust the Executive and their new personnel. But the likes of Mr Tony Abbott, with his expressed views and values, are on the way in to this Administration at just the time when the likes of Sir Jonathan Jones, head of the government legal department, appear to be on their way out. In the light of all this, I really hope that, following this passionate, expert and visionary debate, your Lordships’ House will feel confident to approach the Bill’s future stages with muscular scrutiny and confident amendment, especially in relation to rule of law issues.
Baroness Sheehan (LD) [V]
My Lords, I start by welcoming the maiden speeches of the Minister and the right reverend Prelate the Bishop of Blackburn, whose focus on inequality is very welcome. The Secretary of State for the Foreign, Commonwealth and Development Office has stated:
“With democracy and human rights as the central principle of the FCDO mission, we can bring together the UK’s values, its global mission, and its responsibilities as a world-beating international development institution.”
Those are fine words indeed, but they would have greater force if underpinned by the opportunity presented by the Bill, but that has not happened. Not only that, but Parliament’s role to set objectives, scrutinise deals and evaluate the impact on fundamentals, such as public well-being, climate requirements, human rights and international development, has been diminished. The second time around for the Trade Bill means that some of the essential safeguards won last time may be lost, given the Government’s majority. However, this House has a responsibility to uphold parliamentary sovereignty, and I will support amendments that seek to do so. To date, we have had nothing but promises from Boris Johnson to protect us from the vagaries of countries such as the US or Brazil while they are led by men whose principles and values we do not share.
I move on to the dual challenges of climate chaos and Covid-19. Some 50% of the UK’s carbon footprint appears elsewhere in the world. The Bill is an opportunity to do more to invest in green trade and use Aid for Trade support to help developing countries transition into renewables. The upcoming leadership of COP 26 gives us a real opportunity to lead on fossil fuel subsidy reform, starting with the UKEF. In 2019, the Environmental Audit Committee stated that UK Export Finance supported fossil fuel projects to the tune of £2.6 billion over the previous five years, the vast bulk of it going to low and middle-income countries, compared with just £104 million for renewable energy. It is not enough to stop subsidies for coal production. The parlous state of planetary ecosystems dictates that subsidies for oil and gas should also be consigned to history.
I end by speaking about equitable access to treatments and vaccines for Covid-19 for the developing world. Jeremy Farrar, the director of Wellcome, has said:
“For as long as COVID-19 is present somewhere, it is a threat everywhere … Governments, industry and philanthropy must pool resources to pay for the risk, the research, manufacturing and distribution.”
A recent YouGov poll commissioned by Wellcome found that most people think that Covid-19 treatments and vaccines should first be made available to those who need them the most, wherever in the world that need is greatest. Does the Minister agree, and does he agree that trade arrangements have their part to play to deliver this?
The Deputy Speaker (Lord Duncan of Springbank) (Con)
We will attempt to return to the noble Lord, Lord Freyberg.
Lord Freyberg (CB) [V]
My Lords, I add my congratulations to the two maiden speakers. I have spoken before about the need to better harness the value of healthcare data in the UK. Today I want to draw attention to the need for clear provisions on data trade in the Bill, where they could usefully assuage concerns about privacy and patient safety, as well as help guarantee that economic benefits flow from the next generation of data-driven health services.
The Government have indicated that the Bill will enable the UK to take back control, so its provisions should ensure that we retain the sovereignty that implies. Others have called for a specific, if broad-ranging, carve-out for the NHS with this in mind. I ask the Minister whether he is minded at least to consider introducing a carve-out for publicly funded healthcare data processing services in the United Kingdom. This could be achieved here by guaranteeing the application of a pertinent national treatment limitation clause to new trade agreements and is, in some senses, consistent with the Government’s existing policy concerning the offshoring of such sensitive personal data. In the light of the judgment of the European Court of Justice in the Schrems II case, as discussed by the noble Lord, Lord Clement-Jones, it would also indicate that the Minister takes privacy and the concerns expressed by the public in this regard seriously.
The Government must negotiate new trade agreements with countries which subscribe to an increasingly protectionist approach to intellectual property, and I am concerned that the effect of provisions in some agreements could be to reduce access to the algorithms that underpin them—in particular, where developed countries seek restrictions on forced disclosure of digital technology, treating source code and algorithms as trade secrets. Can the Minister assure noble Lords that it is his clear intention to safeguard us from all mutant and potentially lethal algorithms in healthcare when the Government negotiate digital elements of new trade agreements?
Finally, does the Minister agree that it is of the utmost importance that the UK Government do not find themselves in the invidious position of being sued for taking decisions about the processing of publicly funded healthcare data in the future, not least given the scope for them to contribute to economic growth through the Government’s life sciences industrial strategy? If so, will he consider amending the Bill to ensure that no investor-state dispute settlement clauses may be introduced to new trade agreements where they would impact policy-making, regulation or the provision of services underpinned by publicly funded healthcare data in the United Kingdom?
Lord Lilley (Con) [V]
My Lords, I congratulate my noble friend and the right reverend Prelate on their excellent maiden speeches, and I welcome the Bill; it is necessary and workmanlike. But neither critics nor supporters should exaggerate its importance. Critics claim that it would lead to privatising the NHS, undermine environmental standards and threaten animal welfare. They have nothing to fear. Those things are outside the scope of the Bill. The Government certainly have no such intentions, and Parliament would not let them happen. But there is a tendency on all sides of the debate to exaggerate the importance of trade deals. They are useful and desirable, but their impact is much smaller than generally thought.
This was brought home to me when I was Trade Secretary. I had to implement the single market programme, held as the deepest ever free trade arrangement. I also had to negotiate the Uruguay round, which halved tariffs and set up the WTO. I made bullish speeches about both, and how they boosted our exports, but neither had the impact I anticipated. Indeed, UK exports to the 14 original members of the single market have stagnated since then, having grown at less than 0.5% per annum—barely 10% over the past 20 years. By contrast, our exports to the 14 largest countries with which we trade just on WTO terms have risen by 88% and now account for 37% of our goods exports worldwide. Our exports to countries with which the EU had negotiated trade deals—the subject of this Bill—have risen considerably faster than our exports to the EU itself, but by less than our exports to countries with which we have no trade deals, and therefore trade on WTO terms.
I have sympathy with noble Lords who call for a greater role for Parliament during trade negotiations. I felt uneasy about the lack of accountability to Parliament when negotiating the Uruguay round. Accountability can strengthen a negotiator’s hands, not just in dealing with the other side but in galvanising his own. Civil servants work their socks off when they know a Minister will have to defend their actions in Parliament, but if that synergy does not exist—how should I put this to the Minister who was an official when I was a Minister?—officials feel freer to pursue their own agendas. But I reluctantly concluded then, as I do now, that though we should consult and report to Parliament, since nothing is agreed until everything is, so negotiation is inevitably a matter for ministerial prerogative and Parliament can only accept or reject.
I urge noble Lords to support this Bill, which will carry forward the modest benefits that existing trade agreements provide. But let us recognise that what really drives trade is producing goods and services that people want to buy and getting out and selling them.
Baroness Jones of Moulsecoomb (GP)
My Lords, I too would like to welcome the right reverend Prelate the Bishop of Blackburn, who is not in his place at the moment, and of course the Minister, the noble Lord, Lord Grimstone. He has been very reassuring—one might say emollient—and has made some quite definitive, optimistic statements about what the Government will or will not do about the NHS and our food standards. I very much hope that the Government will not let him or us down.
It was almost exactly two years ago to the day, on 11 September 2018, at 5 pm, that I spoke on an earlier version of the trade Bill here in your Lordships’ House. I looked it up today, and most of what I said is still valid and true. I pointed out, for example, that the Government’s idea of trade is based on outdated ideas; I complained about the Henry VIII powers in the Bill; and I complained about the fact that, as I mentioned yesterday, when I voted to leave, I had no idea it would be possible to mess it up so badly. Of course in that debate, all Peers had unlimited time to air their views—one element of normality that I doubt the Government want back.
This legislation will have far-reaching impacts in economic, democratic and constitutional areas. Trade deals are no longer just about removing tariff barriers between countries. Modern trade deals can change vast areas of public policy, such as food standards, environmental protections, working conditions and the privatisation of public services. Protection of our NHS and of our food and animal welfare standards is very popular—definitely the will of the people. A trade deal can make huge changes to our hard-won rights and protections. I wonder when the Government are going to make these changes positive. We have scrutiny powers that are 40 years out of date, and taking any more power away from Parliament would be deeply anti-democratic.
We know that the USA is pushing for us to reduce our food standards to allow it to import food that would currently be deemed unsafe and just plain disgusting by British consumers. We hear a lot about chlorinated chicken, but the unsanitary, diseased conditions of American mass-farming are scarier than the use of chlorine. We should be glad that American chicken is chlorine-washed, because that makes it a little safer to eat. I am sure noble Lords know that someone eating food in the United States is 10 times more likely to contract food poisoning and other food-borne illnesses than if they were eating in the UK.
We have an opportunity here to rethink what trade means and what trade deals are. Trade does not have to be a race to the bottom or to the cheapest; it can be used as a way to work with other countries to create good jobs and improve living standards. Instead of working together to bargain away workers’ rights and environmental protections, we could make deals in which we agree collectively to strengthen our standards. It is possible to be ethical about these things and to shape policy for the good, with an eye to the impact on climate change. I thank the noble Baroness, Lady Boycott, who is not in her seat at the moment, for her comments on climate change, and for saving me the effort of repeating them.
I have here a little wheat-sheaf from the NFU, which is all about Backing British Farming—I hope it does not mind me using it a day early—and that is exactly what we should do. We should be thinking locally and not internationally. Moving food around is not a smart way of operating.
Lord Hain (Lab) [V]
My Lords, I also welcome the maiden speeches by the Minister and the right reverend Prelate.
The UK faces the economic consequences of the global pandemic amplified by a no-deal Brexit. The Government have now admitted that, even with a Canada-style deal, non-tariff barriers and checks by the EU will come into force. Incredibly, the Government’s border operating model will create an internal UK border in Kent, with truckers required to acquire a Kent access permit, or KAP, for the required paperwork before travelling, on penalty of a £300 fine.
The Brexiteers seem to remain under the delusion that they can replace the EU market—the richest and biggest in the world, and which constitutes nearly half of our trade—with new agreements with countries such as the US, which constitutes 16% of our trade; Japan, which constitutes just over 2%; and Australia and New Zealand, which constitute less than 1%. Leaked government forecasts suggest that a trade deal with the US would benefit the UK economic output by only about 0.2% in the long term. Japan has been reluctant to agree a deal more favourable than its existing agreement with the EU. As for Australia and New Zealand, they have a combined population of 30 million, compared to the EU’s 450 million.
For the last couple of years, the Department of International Trade has been scrambling to roll over the 40 or so existing EU agreements with over 70 countries, constituting another 10% of our trade, excluding Japan. The DIT website shows that roughly half of these countries have signed rollover deals, often with human rights provisions watered down. The Bill fails to provide for essential parliamentary scrutiny of such future trade deals, as recommended by the Institute for Government to protect, among other important matters, human rights, workers’ rights and the environment. Parliamentary scrutiny should extend to the UK’s future membership of the World Trade Organization’s Agreement on Government Procurement to protect public services, such as the NHS, which are at risk from grabs by US companies under the Government’s agenda.
Then there are the reckless briefings in the media to renege on the Irish protocol in the EU withdrawal treaty, which would mean the UK defying international law, not to mention poisoning relations with by far our biggest trading partner and undermining the Good Friday agreement.
The spurious claim that, cut off from open access to the EU, Brexit would enable the UK to make advantageous trade deals is unravelling before our eyes. The Bill does nothing to mitigate the disastrous economic consequences of no deal, or a thin-deal Brexit, now tragically in prospect.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I also congratulate the Minister and the right revered Prelate the Bishop of Blackburn on their maiden speeches.
I wish to speak about the impact of the Bill on food and farming. During the passage of the Agriculture Bill, it was made abundantly clear that the food and farming industries are extremely concerned about the Government’s push to secure trade deals with some countries outside Europe. Our current animal welfare and health standards are totally in line with those in Europe, and the nations of Britain have an unrivalled high record in this area. Consumers and farmers alike are concerned that the new trade deals will mean that food produced to lower animal health and welfare standards will begin appearing on our supermarket shelves. This food is likely to be cheaper because less stringent production methods have been used, and it will not be labelled as such. The result will be that our own farming industry will be undercut by these products, and farmers will find that the market for their excellent produce will dwindle.
Much has been said about the importation of food products from the United States, where its chickens are washed in chlorine to compensate for the poor welfare standards they are raised in. Its cattle are injected with hormones to increase their muscle weight, but this does very little to improve their flavour. Some years ago, when out for a meal with our family who live in Alabama, one member of the family commented that her steak had no flavour at all. I believe that this is the norm, and why many Americans add rubs and spices to their steaks to make them palatable.
It is not that the US wishes to import our own excellent food products, with the exception of Scotch whisky. It is unlikely to have Aberdeen Angus beef in its supermarkets or some of our excellent cheeses on its shelves. This is not an agricultural two-way street that the Government are taking us down. There is a total lack of regulation in the US of genetically modified crops and food. In Britain, currently such GM and GMO foods are strictly regulated, and consumers can be confident that they are being protected. No such reassurance will be provided for goods coming from the US.
It is vital that British farmers are protected from the effects of poor-quality imported food and that the British consumer is similarly protected from food that is not suitably labelled with its country of origin, method of breeding and production. I look forward to the Minister’s reassurance that the Trade Bill will not undermine our current agriculture industry.
The Earl of Devon (CB) [V]
My Lords, I am no trade export but, as a Californian IP litigator, a Devon farmer and father to an American family, I want to understand what a US-UK trade deal might look like and the process by which it will be reached. I am grateful to the noble Lord, Lord Grimstone, who is to be congratulated, along with the right reverend Prelate, on an excellent maiden speech, and I am grateful to his team for the updates, but I am concerned by the opacity of the process and the ad hoc nature by which information is made available.
I sought trade negotiation expertise at London’s leading international law firms, but there is none. The experts are all in Brussels, and therein lies an issue. Britain thinks of itself as a great trading nation, and once we were, but that was decades ago. Right now, we are pure novices, yet we are negotiating with the world’s most experienced trade teams—the US, the EU, Japan and others—under considerable pressure, at very short notice and in the teeth of Covid-19.
Parliamentary oversight and transparency are essential, but the Government’s cloak-and-dagger approach can foster only mistrust and uncertainty in our negotiating counterparts. They need to know that our negotiators represent the British people and not merely vested interests promoted by the Government.
For months, I have wanted to know the composition of the expert trade advisory group for agriculture, but details have not been forthcoming. We all know the vast agricultural interests that drive trade negotiators in the US, particularly with the presidential election looming. We cannot say the same for our negotiation team. Can the Minister please explain whether this obfuscation is a deliberate government policy and, if it is, can he explain what benefit it serves?
Returning to our rich trading heritage, 400 years ago next week the “Mayflower” set sail from Plymouth—a timely reminder that European settlement of North America was about trade, along with other things. While undoubtedly that was key to the development of Great Britain and its Empire, it was decidedly not a good development for the indigenous peoples of North America or west Africa. Trade was made for the subjugation of others in the quest for better-priced commodities. Given the importance of the Black Lives Matter campaign, what assurances can the Minister give that our trade deals will not exacerbate discrimination and the exploitation of minorities?
Finally, we have heard much on climate, animal husbandry and food standards, and much of that pertains to the Agriculture Bill, so I will not repeat myself here, save to reiterate a plea that we be cautious of overprotecting our markets but, rather, focus on promoting our low-carbon, high-welfare agricultural products. The US and other major economies will soon adopt net-zero targets similar to our own, and we should become world leaders in the export of agritech and environmental science expertise.
Lord Borwick (Con) [V]
My Lords, first, I declare my interests in trading companies, as listed in the register.
When I first opened the Bill, I wondered why much of it was necessary. It had never occurred to me that HMRC could not already do what is permitted under this Bill. Was this collection of data done anyway and then stopped? Surely the data collection was necessary to make the figures accurate. Clearly, HMRC has trouble with the regulations.
I have heard it said by business leaders that the GDPR is one of the most burdensome regulations that Parliament has produced. Business leaders are usually not very good at explaining which bits of regulations they would like to see changed, but almost all can say something bad about the details of the GDPR. I am glad that the Bill will remove some of that regulatory burden from HMRC and the Government. That is a good step in starting to remove the burden from business. Perhaps these clauses reveal excellent communication between HMRC and the department. HMRC has a problem; the Government step in and solve it. That is great. When will any department ask for the details of similar problems being dealt with by business and solve them? Regulations, like taxes, are costly and need to be reduced as soon as possible.
A few years ago in a debate about salesmanship, my noble friend Lord Grade gave a spellbinding speech about how salesmanship is undervalued by British business, and I agree with him completely. Furthermore, I suggest that trading ability is in the same category. Some historians argue that it was the 18th-century world traders rather than the 19th-century manufacturers who were responsible for the pre-eminence of the British economy up to the First World War. Whatever the merits of their trade, one can certainly admire their bravery in travelling all over the world without a way to get home in a hurry. Even nowadays, there is a large element of bravery and imagination in setting up a sales business, selling British goods to places that have not bought them before. However, these people are usually not helped by more legislation, and on the whole the British Parliament should do its best to ensure that they are hindered to the minimum extent. I think that the Bill achieves that, but the amendments talked about this afternoon would carry the ability to get in their way substantially.
The amendments debated and rejected in the other place will no doubt reappear here. No doubt they will be enthusiastically supported by a majority in our House, and no doubt they will be rejected all over again. The concept of trade democracy sounds seductive, but we would all agree that democracy produces uncertainty. Many noble Lords started their career in this House following the result of an uncertain election, but certainty and stability are important to a trader. The world is getting smaller, but it is certainly getting more complex and unpredictable.
For some years, I was lucky enough to be chief executive of a group of companies, one of which had the majority market share in the sale of bus doors to Hong Kong. Perhaps that dates me, as the idea of profitably sending a crate of glass and aluminium assemblies from Beverley in Yorkshire to Hong Kong is a bit unlikely, however skilled the workforce in my favourite factory was. But that trade was so extraordinary that it was difficult to explain, and certainly no Government were able or needed to help it. However, we had heroes ready to leap on to a plane to Hong Kong at no notice to solve a customer’s problem, and those sorts of diligent people are not those who have a great deal of time for politics. Traders trade despite regulations, not because of them, so I doubt very much that the sorts of amendments proposed for this Bill will be designed to increase trade between British companies and overseas customers.
Baroness Donaghy (Lab) [V]
My Lords, I congratulate the noble Lord the Minister on his maiden speech, as I do the right reverend Prelate the Bishop of Blackburn. The Minister’s presentation was a lot clearer than his Bill. I support everything that my noble friends Lord Stevenson of Balmacara and Lord Whitty said. In his opening remarks, the Minister referred to the Trade Remedies Authority and gave an assurance that it would be independent. I think that we need some guarantees about that, and I hope that the TRA will be treated better than the Competition and Markets Authority has been.
I want to concentrate on competition and state aid infrastructure. Let us look at the extraordinary history of the Government’s handling of the future responsibilities of the CMA. They moved from designating the CMA as the domestic regulator with proposals to provide additional interim financial support. Subsequently, in February 2020, that draft regulation was withdrawn and the Government now maintain that ratification of the withdrawal agreement with the EU means that a domestic regulator might not be needed at all—from winning the lottery to possible abolition. I have no idea why the chairman of the CMA, the noble Lord, Lord Tyrie, resigned, but I can take a good guess.
Despite close questioning in June from the noble Lords, Lord Turnbull and Lord Lamont, and my noble friend Lord Wood about the void in policy, the Minister, Paul Scully—same Minister; different Government—maintained that the Government were “working on options” which would be discussed with key stakeholders in due course. There was no hint that policy on the CMA would change as a result of the withdrawal Act, and I am not sure which is worse—being disingenuous or making it up as you go along.
There are complex issues around state aid, not least of which is what structure will be established for consultation with the devolved Administrations, and what strategy the Government will adopt. What is the future for the CMA? How will it tie in with the Bill? If the Government are content that the WTO rules are sufficient, how can they persuade the devolved Administrations that they will get a fair deal?
Lord McNally (LD)
My Lords, I welcome the speech by the right reverend Prelate the Bishop of Blackburn, not least because I speak as Lord McNally of Blackpool, and it was encouraging to hear him talk about some of Blackpool’s problems and some of its successes, because both should be remembered.
I also welcome the Minister, not just for this Bill but for his vast knowledge of China. I suspect that his experience will be needed now as much if not more than when he was encouraging the golden age of our relationship with China. I share with the noble Baroness, Lady Jones, an admiration for his wonderful bedside manner—but the wrong policies put forward in a wonderful bedside manner are still wrong, so I hope that he will listen to some of the experience in this House during the task ahead. It cannot be suggested that this is just some kind of nodded-through technical Bill to cover matters already discussed and decided. The evidence against it is far too strong.
I also ask the Minister to read the report of yesterday’s Grand Committee debate about the powers of Parliament. The CRaG Act was produced when we were firmly ensconced in the EU, and it is stretching credulity too far to suggest that its powers and responsibilities do not need to be reviewed, as is true of the royal prerogative.
We cannot allow this Bill to be nodded through as a mere technical transition of existing and agreed measures. Too many sectors, from intellectual property to the Green Alliance, from farmers to the BMA, have asked for their interests to be better protected during the passage of this Bill. Too many sectors have had their concerns fobbed off with “it’ll be all right on the night” bravado from Ministers. I was interested in the warnings of the noble Earl, Lord Devon. There is a very real danger that a Government desperate to prove that they can get trade deals will indulge in a race to the bottom, putting at risk environmental, work and safety standards, and creative and cultural assets. I urge the Minister to look again at the Djanogly amendments, which were not carried in the other place, because nothing would give greater confidence in the intentions of the Government than if they were to bring the Djanogly amendments back and pass them in this House.
Baroness Hooper (Con) [V]
My Lords, I add my good wishes and congratulations to the Minister and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches.
Since I participated in the consideration of last year’s Trade Bill, and as things have moved on since then, it was most helpful to hear from the Minister the ways in which this Bill differs. I hope and trust that many of the forceful arguments raised in your Lordships’ House then have influenced the Bill before us—although that is not obvious.
Many of the things which I welcome and support have already been said and, in the short time available, I shall only emphasise that I agree with the argument that a trade agreement in itself does not create trade. We need boots on the ground, fully equipped with enthusiasm, perseverance and appropriate languages, but a trade group agreement can facilitate trade, and it is perhaps worth noting at this point that a double tax treaty can also make a difference. As many of your Lordships know, I have an interest and involvement in the countries of Latin America and am president of the All-Party Group on Latin America. In that context, I am interested not only in the continuity of trade agreements, but in developing and enhancing them. I am delighted that the agreement with Chile is one of the 20 agreements already ratified, but can the Minister give us any information on continuity regarding the EU-Mercosur agreement? After years of negotiation in which we were fully involved, it appears to be close to completion, but not within our membership timetable. Since important markets in Brazil, Argentina, Paraguay and Uruguay await us, and since under the EU-Mercosur rules we cannot enter into unilateral agreements with individual countries, I would welcome the Minister’s views on future plans.
Finally, I welcome the Government’s assurances that powers in this Bill will not be used to reduce standards. In the good old days of our membership of the European Union, we were rather given to gold-plating EU rules and regulations in any event—for example, on paternity leave, flexible working and one of the strictest ivory bans in the world. That approach augurs well for the future. In the past, the Government could blame Brussels if anything went wrong, so I hope that they are now ready to face the future without a scapegoat. I hope and feel sure that your Lordships’ scrutiny of the Bill will ensure that it leaves the House a better Bill.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, congratulations are due to the Minister and the right reverend Prelate the Bishop of Blackburn on their maiden speeches.
In just a few weeks’ time, the UK will fully and finally leave the EU. There is very little time for the British Government to secure a trade agreement. Serious questions are now being asked about whether they want a deal at all. Lest we be in any doubt, to preserve our economy in these islands there needs to be a trade deal, and while this Bill deals with very technical issues to make provision about the implementation of international trade agreements, there is a glaring omission: the need for both Houses of Parliament to scrutinise the trade deals, as happens in other institutions.
An area of this Bill that has been totally eclipsed by the internal market Bill due to be unveiled shortly is that of trade relations between Northern Ireland and the rest of the UK, and between Ireland and the UK. I understand that in the other place today, the Secretary of State for Northern Ireland indicated that it would represent a breach of an international agreement. I find it totally inexplicable that the EU withdrawal agreement—an international agreement between the UK and the EU—could be unilaterally undermined by the British Government. Can the Minister provide us with further details on that, because it is essential to any trade deals and to any discussion on the Bill?
We have to think about the Northern Ireland protocol. There are various issues and concerns to be addressed. What happens if Northern Ireland is excluded from UK free trade agreements? What measures will be put in place to minimise this risk? What mitigating measures will there be to prevent Northern Ireland being outside all free trade agreement areas? To be absolutely sure, we would like to see standards for agriculture and trade enshrined in this legislation so that it coincides with the Agriculture Bill and those standards do not lie outside legislation. The same goes for our National Health Service, which is not up for marketisation.
Lord Rooker (Lab) [V]
My Lords, I too welcome the maiden speeches of the right reverend Prelate the Bishop of Blackburn and of the Minister. I too made my maiden speech from the Dispatch Box, 19 years ago.
This Bill is about standards—standards of governance and transparency and standards of food. In respect of governance and transparency, it is crystal clear that the Bill has to be amended to allow Parliament a greater degree of scrutiny of trade deals. I will support something like new Clause 4, which was promoted in the Commons on a cross-party basis, but we need to go further. I shall be tabling an amendment based on the Food Standards Act 1999. It will propose that the Trade Remedies Authority have the same rights as the Food Standards Agency to publish its advice. This will guarantee its operational independence.
I am sure that, by now, the Minister’s private office is thoroughly embarrassed by the lack of attention to detail because he referred to the Food Standards Agency as an entirely different body.
The Conservative manifesto is clear on pages 42 and 54 about animal welfare. On page 57, it is very clear about not compromising on high environmental protection, animal welfare and food standards. However, there is nothing in the Bill on that. It is true that more Conservative voters than Labour voters support the United States’ policies of chlorine-washed chicken, dairy products treated with antibiotics and meat treated with hormones. In a recent YouGov survey, 15% of Tory voters polled supported chlorine-washed chicken, against 3% of Labour voters. The figures were 13% and 3% for dairy products treated with antibiotics and 12% and 5% for hormone-treated meat. These figures are not very high, even for Tory voters, are they, Minister? Overall, in the same poll, 80% of the public said they found such policies unacceptable. As high a figure as 87% opposed the removal of labels showing the origin of meat products, which is what the United States wants. It will take a really brave Minister to try these policies out.
Southampton University has shown that washing with chlorine does not take all the nasty bits out. Nothing is risk free, but we have been safer in the EU than we will be outside it. When we leave on 31 December, we will lose the use of RASFF—the rapid alert warning system for food and feed. Some eight alerts per day are issued, warning of hazards such as salmonella in meat products, mercury in fish products and aflatoxins in fruit, nuts and vegetables.
Finally, I return to the first two points I made about governance and transparency. I am not alone in detecting a high stench of corruption in this Government. The searchlights of openness and transparency are the weapons needed to combat this stench. They should be inserted into this Bill.
Lord Chidgey (LD) [V]
My Lords, I congratulate the Minister and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches.
In the very limited time available to speak in this debate on the critical Trade Bill, I will concentrate my remarks on trade with Africa, acknowledging my interests as set out in the register. I have acted as a political co-ordinator for the parliamentary offices for budget oversight throughout the SADC region of southern Africa.
The Government stress the importance of trade agreements with Africa, particularly in a post-Brexit era. African economic growth outstrips many parts of the globe and many African countries have a common affinity with the United Kingdom—shared language, laws and accountancy practices. There is, however, an overwhelming desire to break the historic pattern of exporting raw materials and food and importing manufactured goods from the West. Instead, African countries are building trading agreements between them, supported by regional transport links rather than links merely to the nearest port.
This brings me directly to the development of treaties entered into with the European Union. Many African countries have signed economic partnership agreements but a number, notably Kenya, have stopped short of ratifying them in their Parliaments. In discussions with finance Ministers from Namibia, Tanzania, Uganda and other SADC members, with a deputy director-general at the UN and with senior parliamentarians from Scandinavia, Holland, Belgium and Ireland, it became clear that the EPAs, which had been developed from co-operation agreements that gave ACP exports preferential access to European markets, were deeply controversial. There are fears that the EPAs are undermining the sustainability of ACP countries and their regional integration processes. In this context, the status of the UK’s trade and development agreements with African countries at the end of the UK-EU transitional period is a crucial issue.
I would be grateful if the Minister could acknowledge the urgent need to clarify the status of the UK’s new free trade agreements with blocs of eastern and southern African countries. To these must be added others in east and west Africa which have yet to be concluded. In particular, regarding the Southern African Customs Union, which was formed in 1910 and is the oldest customs union in Africa, can the Minister say if the agreement has been ratified by all parties? If not, which parties have ratified it and which have not? Will the new trading agreements be fully operational from 1 January 2021? What aid for trade commitments have the Government made since these agreements have been signed? What new aid for trade commitments for these countries will the UK Government be making in the financial year 2020-21 to accompany these agreements?
Lord Taylor of Warwick (Non-Afl)
My Lords, I welcome the Minister; I am sure he will continue to bring much experience and expertise to his role. I also welcome the right reverend Prelate the Bishop of Blackburn and thank him for his excellent maiden speech.
For Britain, trade must never fade. For centuries we have been an international trading nation but, after 47 years in the European Union, Brexit has once again given Britain the power to make trade agreements for itself.
Trade is not just about money and finance. International trade is an agent for peace. There are many examples in the Bible, for instance where the Israelites made a treaty with the Phoenicians. They organised merchant trading ships which travelled so far that some of their round trips took as long as three years. These not only resulted in great wealth but brought peace to what was then the known world.
I am delighted that the Government have already concluded 20 continuity trade agreements with 48 countries, which accounted for £110 billion of UK trade in 2018. This represented 74% of the trade with nations with which we were seeking continuity before leaving the EU. As someone of Caribbean heritage, I am delighted that this includes the CARIFORUM trade bloc, of which my parents’ birth land of Jamaica is a member. I was increasingly concerned that our preoccupation with the EU countries for more than four decades was overshadowing our close historical, religious, royal and cultural ties with the Commonwealth. Now that the news cycle is more centred on black and other ethnic minorities—at least for the time being— I am glad that Brexit can make the Commonwealth family even stronger.
At present, Parliament’s role in the trade agreement process is defined by Part 2 of what is known as the CRaG Act 2010. The CRaG Act process has been described as inadequate and unfit for purpose by no less than four senior parliamentary committees. We should remember that, when the Act was passed, the UK did not make trade agreements by and for itself. Scrutiny of such agreements fell within the scope of the European Union. Will the Minister recognise that, since things have changed and we are no longer part of the EU, it now has to be in our interests for the UK Parliament to be given greater powers to scrutinise future trade agreements? Scrutinise does not mean mutiny or interference, but oversight in order to make the whole better.
I acknowledge that the Trade Bill establishes a new Trade Remedies Authority. I know that two senior executives have resigned in recent months, but I wish this new body well.
I welcome this Bill because, crucially, it enables the UK to implement in domestic law obligations that the UK signs with countries which have had existing agreements with the EU.
Covid-19 has put great financial strains on this nation, so rebuilding our economy is vital. It is through trade that an even greater Britain will emerge from the economic shade.
The Earl of Lindsay (Con) [V]
My Lords, I too congratulate my noble friend the Minister and the right reverend Prelate on their excellent maiden speeches. In warmly welcoming the Bill, I want to focus on how the Government can deliver the priority they attach to the achievement of frictionless trade in current and future trade deals.
For trade to be frictionless, there must first be mutual recognition between trading partners of the standards relating to the goods and services being traded. Secondly, there must be mutual recognition of a regime of accredited conformity assessments that verify that those goods and services are complying with those standards. This mutual recognition of standards and accredited conformity assessments already underpins many international trade agreements around the world. It is therefore unsurprising that standards and accreditation, with their critical role in underpinning trade, are treated as global activities and are overseen by international organisations made up principally of the relevant national institutions of most of the world’s economies. In the UK, the relevant national institutions are: the British Standards Institution, or the BSI, the UK’s national standards body; and the United Kingdom Accreditation Service, or UKAS, the UK’s national accreditation body. Here I should declare an interest as chair of UKAS.
UKAS and the BSI are leading lights in the international organisations that oversee the global role that standards and accreditation play in facilitating frictionless trade. Accreditation at national and international level is the highest level of assurance that permits the free movement of products and services. The OECD estimates that 80% of global trade involves some form of conformity assessment which enhances competitiveness by demonstrating that products and services meet the requirements of Governments and consumers. In short, mutually recognised accreditation, alongside mutually recognised standards, is a tried, tested and well-proven combination for delivering frictionless trade.
In closing, I ask the Minister to confirm that the mutual recognition of standards and accredited conformity assessments derived from the UK’s national standards and accreditation bodies operating through international frameworks will be central to the UK’s trade negotiations and future trade agreements.
Lord McConnell of Glenscorrodale (Lab)
My Lords, I too welcome the noble Lord, Lord Grimstone, to his place and welcome his maiden speech. As chair of Standard Life, he brought strong strategic direction, clarity and consistency to the company over many years, which ensured that it survived and thrived in difficult times for many other companies in financial services in this country. As he said, at the heart of that was good governance. I hope he is able to bring some of that to help his colleagues in the Government in these troubled times.
I want to make two points. The first is in relation to parliamentary scrutiny and engagement with the devolved Governments and Parliaments. One of the reasons we are in this place—by that I mean moving towards the final stages of Brexit—is the decline in trust in politicians, government and institutions over recent years. While the Government’s intention might be to try through Brexit to bring back some of that trust and to deal with some of those issues, I do not believe that we can deal with the problem of trust among the general population in institutions and Parliament by reducing the role of Parliament in scrutinising trade agreements and other important decisions. I urge the Government to look at this in a positive way and to enhance the role of Parliament, not diminish it, as they bring trade agreements back home to the UK.
I also urge them to take the same approach in relation to the involvement of the devolved nations and their Governments and Parliaments, because early engagement with the devolved nations can ensure that we have better, not worse, trade agreements. We will have more unity in the country—unity of purpose and of implementation—if we are able to secure that engagement, and therefore better agreements at the end of the day.
I also urge the Government to think positively in a wider sense about trade. The noble Lord, Lord Chidgey, mentioned this in relation to some of the developments that are taking place across Africa in these times. We need trade agreements that serve not only the economic interests of the UK and its population but do not make climate change worse or increase the inequity in the world and therefore all the many problems of migration and conflict that result. Our trade policy should not only ensure that we have strong democratic accountability at home but that we have a real sense of purpose abroad.
I think—I hope—we all have a shared objective in trade that is free and fair but that also grows the global economy, as well as our own, and ensures that more people in the world can secure its benefits, and therefore a better life and better opportunities.
Baroness Featherstone (LD) [V]
My Lords, I congratulate both maiden speakers on their excellent maiden speeches.
The Government assure us that this is a continuity Bill, but that is not totally true. That is not all that it is. The Government also assure us that food and environmental standards will be maintained, but will they? On what basis should we trust a Government that have not stuck to a single edict they have issued during the coronavirus pandemic and who only today have signalled their intention to renege on an international treaty? What is the comfort that underpins their assurances? Words seem very cheap. The Government assure us that they are putting green at the heart of recovery, but assurances are not the actualité. If all those things are the case, why not underpin those assurances with legislation?
This Bill is not simply about continuity rollover of trade agreements, because it enables further change to be enacted by secondary legislation. Assurances that anything major would be the subject of further legislation sadly count for nothing. Perhaps the Minister would like to explain exactly who would be the arbiter of a minor technical change which rightly could be dealt with by an SI and who would not. When you add in the absence of any commitment to discuss or consult on proposals for changes that might well be contained in these extensive powers, one cannot help but be left with suspicions. The Trade Bill is vulnerable to major changes, with new trade agreements that bear scant relationship to a simple rollover.
This need not be a bad thing. I would argue that it could be an opportunity to change to even better environmental and food standards and work conditions, which we should be looking at post Covid. Covid has bequeathed us an opportunity to do things differently. With the scales gone from our eyes, we can see the unacceptable level of inequality that bedevils our country. We can see that the planet needs us to take the radical action that Covid forced on us, and that there has to be a better balance between “what’s good for me” and “what’s best for us”—an aspiration for the common good rather than only individual advancement. Let us really take back control and use this as an opportunity to build back better.
With a majority such as that enjoyed by this Government, it can only strengthen their negotiating position and validation of outcome by having input from Parliament and others. Sunshine is the best disinfectant, they say. Openness, transparency and proper scrutiny will not only reassure those of us who are, to put it politely, sceptical of the Conservative Government’s agenda but will strengthen their position.
Lord Hope of Craighead (CB)
My Lords, following the points made by the noble Lord, Lord McConnell, my interest in this important Bill is in how it deals with the devolved authorities. The sensitivity of arrangements relating to trade cannot be overstated. Plans are already being made by the Scottish Government for the holding of a second referendum on independence after the elections to the Parliament at Holyrood in less than eight months’ time. This is an increasingly perilous time for those who believe in the union. Anything that might be seen as failing to respect the desire of the Scottish Government to be free to run their own affairs as they choose in this crucial area and set their own standards will be seized on by supporters of the campaign for independence. I will leave that warning on the table for now and concentrate on the Bill.
There are two points to which I wish to draw attention. First, international relations and the regulation of international trade are reserved to the UK Government here at Westminster, so the devolved authorities have no formal role in the negotiation or approval of these agreements. However, the implementation of an international trade agreement in the devolved nations is a devolved matter, and there are bound to be cases where the content of an international trade agreement will affect an area of devolved competence. We can see how the Bill deals with the exercise by the devolved authorities of their powers in that regard in Schedule 1, which states that
“no provision may be made … unless it is within the devolved competence”.
There can be no complaint about that, and the absence of any attempt now to limit what may be done here within a devolved competence is as it should be. However, we are told that:
“No regulations may be made by a devolved authority … about any quota arrangements … unless … after consulting with a Minister of the Crown.”
This looks like a constraint on the exercise of devolved powers so it needs to be explained and justified. What is the purpose of that provision? Can we be assured that it is consultation for information only and is not intended to fetter those powers in any way?
Secondly, conspicuous by its absence from the Bill is any provision about what would happen if the power in Section 2 to modify retained EU law were to be used by Ministers of the Crown to amend legislation in the devolved areas. It is often said, when issues of this kind are raised, that such powers are not normally used without the consent of devolved Ministers, but why in a matter of such importance as this does an unqualified requirement for consent not appear in the Bill? There is not even a requirement to consult the devolved Ministers before doing so, in sharp contrast to what Schedule 2 says that those devolved Ministers must do. Why not? What is sauce for the goose should be sauce for the gander. Can the Minister assure the House that those Ministers will at least be consulted and their consent sought before any such provision is made amending legislation in the devolved areas?
Baroness McIntosh of Pickering (Con) [V]
My Lords, I congratulate my noble friend the Minister and the right reverend Prelate the Bishop of Blackburn. I welcome them both to the House and look forward to working with them over the next few months.
I broadly welcome what is in the Bill so I would like to focus on what is currently not in it. I recognise that the UK has a proud history as a trading nation—we are an island so we are completely dependent on trading—but we are leaving the trading bloc of 500 million consumers of which we have been a part for nigh on 50 years. Currently there is no reference to a body that would advise the Government on future trade deals and indeed rollover trade deals, so I welcome the non-statutory body of the Trade and Agriculture Commission. Parliament has an important decision to make on what the future of that commission should be. I would like to see a permanent advisory body on a par with the Migration Advisory Committee and the climate change committee, and indeed those trade advisory bodies that countries such as Canada, the US, New Zealand and Australia have, which advise their Governments on and measure each trade deal against those criteria.
I pay tribute to my noble friend’s predecessor, my noble friend Lady Fairhead, who got and summed up the mood of the House and indeed accommodated a number of amendments that improved the previous Bill. Obviously it is a disappointment that those amendments have been lost, and I hope that the Minister will use his good offices to reinstate them. However, perhaps one rollover agreement that we do not want to see as a model is that which we reached with the Faroe Islands, whereby we take £200 million-worth of goods from it, mostly fish, but export only £90 million-worth of products to it.
Secondly, I welcome that the Government and the Minister today have said that we will not lower our standards of production. However, the flipside of that, as referred to by Henry Dimbleby in his first report on our food strategy, is that we must not allow produce to enter the UK that is to a lower standard. I want to take the opportunity of this Bill to ensure that that is written into it. I would also like to see on the advisory board a British official, perhaps one currently working for the Commission, who has a track record and experience of negotiating trade agreements.
While I welcome the Bill, I think there is too much reliance on delegated powers and we need to see much more in the Bill itself.
Baroness Tonge (Non-Afl) [V]
My Lords, I congratulate the noble Lord, Lord Grimstone, and the right reverend Prelate the Bishop of Blackburn on their maiden speeches. I particularly commend the right reverend Prelate on mentioning inequalities and human rights; he is one of very few Peers to have mentioned those issues.
I want to ask some questions about the old trade association agreements made in 1995 between the EU and other countries. Israel in particular springs to mind. I have been told, after Questions to the Government, that the terms of the old EU association agreements have been adopted in the new agreement between the UK and Israel. This trade agreement was signed as long ago as August 2019 with, as far as I know, no parliamentary scrutiny at all. The terms of the new agreement, as in the old one, include Israel’s commitment to observing human rights and democratic principles, and adopt,
“as a main objective, the encouragement of regional cooperation with a view to the consolidation of peaceful coexistence and economic and political stability.”
Those are fine words.
The Government of Israel allow the constant humiliation and persecution of the Palestinian people under occupation in the West Bank and Gaza. Land is stolen, crops are destroyed, water is restricted and almost always polluted, and electricity is rationed to a few meagre hours a day. Children are harassed and badly treated in prison, and many have been killed; in fact 3,000 children have been killed in the last 17 years. Homes are demolished and families made homeless. I could go on and on, as noble Lords know. Is this Israel’s adherence to the terms of the new trade agreement? Is this how it respects human rights? We can no longer fall back on the European Union for a decision—not that it ever took a lot of action. The monitoring of the terms of the agreement is now our responsibility and ours alone. Will the Minister tell the House how this monitoring is to be done?
Looking further across the world to other trading partners, why do we continue to trade with Myanmar, despite its treatment of the Rohingyas? This was raised with me by Bangladesh officials over a year ago when I visited that country. Saudi Arabia is another tale of violation of basic human rights, while the noble Lord, Lord Alton, mentioned China and its treatment of the Uighurs. Are we to put no conditions that have to be adhered to on these other countries?
I remind the Government of the pledge in the Export Control Act, passed in 2002, not to sell arms to countries that would use them for internal repression or external aggression. Those are also fine words. On this and other issues, when is our country going to practise what it preaches?
Baroness Redfern (Con) [V]
My Lords, I too congratulate the Minister, the noble Lord, Lord Grimstone, and the right reverend Prelate the Bishop of Blackburn on their excellent speeches. I also thank the Minister for introducing the Bill, which puts in place measures that support the UK in achieving an independent trade policy, ensuring that the British taxpayer gets the best deal while public sector organisations and government departments continue to benefit from increased choice and value for money on contracts.
The Bill creates a new independent body, the TRA, which allows businesses to liaise with negotiators as deals progress, importantly keeping stakeholders informed in a timely manner and protecting British businesses from unfair trading practices or unforeseen surges in imports, as we have seen with the dumping of steel in the past. As someone who lives near Scunthorpe, I note that British Steel produces some of the best-quality steel in the world. It stands ready in the global market, supported by excellent SMEs in the supply chain. I am pleased to see that the powers in the Trade Bill will not be used to privatise the NHS, to which the Government are committed.
Lincolnshire, where I live, is noted for being the bread- basket of the UK, supporting farmers, producers and exporters in maintaining and enhancing their critical edge in global trading. Under a free trade agreement, great importance will be attached to ensuring that the standards to which imported goods are produced—including animal welfare standards—are as high as, or higher than, our own. I particularly welcomed the banning of veal crates in the UK 16 years before the EU banned them. On the environment, too, the UK was the first major economy in the world to enshrine in law the requirement to bring all greenhouse gas emissions to net zero by 2050. People want to see a doing Government.
The Bill creates a new discretionary legislative gateway to allow data sharing from specified public authorities, most notably the Minister for the Cabinet Office and the Secretary of State for International Trade, with other Ministers of the Crown supporting their functions in relation to trade.
To support the UK as an independent trading nation, we must have a robust independent trade policy. Parliament will have the opportunity to scrutinise any legislation required to implement the treaty in the normal way. I support all four areas in the Trade Bill and look forward to the next stages as it progresses.
Lord Wood of Anfield (Lab) [V]
My Lords, I too offer my congratulations and very best wishes to the new Minister. It is slightly depressing that we have to make the case for basic parliamentary scrutiny to a Government who, once again, seem intent on minimising it but, yet again, this is what we have to do. The degree of parliamentary scrutiny provided for in the Bill is laughably thin; as some noble Lords have observed, we are faced today with a proposal to approve fewer scrutiny powers and control over trade agreements than when the UK was a member of the European Union—so much for taking back control.
The European Parliament, a body so often disparaged as lacking legitimacy and plagued by democratic deficit, has access to timely information about trade negotiations, access to negotiating texts, and is able to vote on the final outcome. We have an archaic provision that trade falls under the royal prerogative, with Parliament involved only at the end of the treaty-making process, at a time when it cannot influence the substance and text of the treaty.
I use the word “archaic” because the world of trade deals has transformed since the last time the UK had competency in trade policy, in the early 1970s, in a way that demands updating the commensurate powers of Parliament. Trade deals then were fundamentally about tariff reductions and associated border measures. They attracted little public attention and raised few wider concerns, and thus enjoyed little debate and scrutiny in national Parliaments. Now, in 2020, trade agreements have huge implications for public policy across a range of areas, from farming and food, to the digital economy, healthcare, financial services, manufacturing and even education. Proper prior parliamentary scrutiny, including the opportunity to question and challenge Ministers at a formative stage of the proposal, is appropriate in an age when the scope, implications and public concern on the substance of trade agreements is light years greater than it was 50 years ago.
Secondly, unfashionable as it is to say it, proper parliamentary scrutiny would improve the quality of decision-making. Ministers who know that their decisions will be examined by Parliament are, I suggest, more likely to make proposals robust enough to survive scrutiny.
Thirdly, proper parliamentary scrutiny would help rebuild public trust over whether policymakers are responding to public concerns on issues such food standards, where polling suggests that there is significant public lack of trust.
Fourthly, as the noble Lord, Lord Lilley, explained from his experience, requiring legislatures to approve a negotiating mandate can provide strength, not weakness in international negotiations by providing constraints on those negotiators. Therefore, I strongly support the proposals set out eloquently by my noble friend Lord Stevenson at the start of this debate.
Like trade, the decision to deploy the Armed Forces is also an area traditionally reserved for the royal prerogative. Yet Parliament has been asked to debate on both Armed Forces deployment and prerogative power on several occasions since 2003. In 2011, the Government suggested that a convention had emerged whereby the House of Commons should debate before such deployment. As Emily Jones, a trade expert and my colleague at the Blavatnik school at Oxford University, has argued, a similar practice could be adopted for trade agreements, with the Government committing to a full debate on a substantive Motion prior to ratification of any trade agreement that the relevant scrutiny committee deems of interest. Back in 1867, Walter Bagehot —often quoted, I know—remarked:
“Treaties are quite as important as most laws, and to require the elaborate assent of representative assemblies to every word of the law, and not to consult them even as to the essence of the treaty, is prima facie ludicrous.”
Personally, I am with Bagehot; perhaps the Minister can tell us why he is not?
Baroness Coussins (CB)
My Lords, I have two points. The first concerns the human rights clause in trade agreements. Our continuity agreements have kept the human rights clause from the FTAs we have been part of through the EU. However, when they are developed into full FTAs, will the Government go further than the EU’s vague and non-binding clause and add rigorous monitoring and annual review process with NGO input and penalties for unacceptable practices? There is precedent: the FTA between Canada and Colombia included an annual review because of Colombia’s poor human rights record. The UK should make this non-negotiable. Will the Minister agree to give this serious consideration?
My second point concerns the importance of language skills in negotiating agreements and supporting businesses to grow their export markets. I declare interests as co-chair of the APPG on Modern Languages and vice-president of the Chartered Institute of Linguists. The Government assume that English alone will suffice in trade negotiations, with back-up from professional interpreters where necessary. However, for 40-plus years, EU officials have negotiated our trade agreements and UK nationals have been dramatically underrepresented among them, largely because so few had the required language skills to compete for posts. Negotiations with Egypt, Mexico, Vietnam or Turkey, for example, would be hugely improved if DIT officials had some facility with relevant languages. What, if any, assessment of current and future language needs has been made?
This Bill also creates the mechanism to help businesses in their export drive. Does the Minister agree that language and communication skills should be at the heart of the data collection and bespoke exporting promotion activities triggered by the Bill? Lack of language skills, local knowledge and cultural understanding are barriers to export growth. The CBI says that languages are critical for the UK’s global competitiveness, but the economy is losing over £50 billion a year in lost contracts because of the languages deficit. If you cannot read the initial tender documents, you cannot bid for the contract, and they are by no means always written in English.
UK businesses are largely in an anglophone bubble, with 83% of SMEs operating only in English, and the biggest language deficits are for the fastest-growing markets. By contrast, SMEs that invest in language skills can increase the ratio of exports to sales by 37%. To be sustainable, UK businesses must be encouraged and incentivised to invest in language skills and not just adopt a quick-fix approach through Google Translate or using native speakers as and when needed.
Therefore, will the Government set an example with multilingual trade negotiators and use this Bill to get businesses out of their anglophone bubble and into a multilingual 21st century where speaking only English is as much a disadvantage as speaking no English?
Lord Sheikh (Con) [V]
My Lords, I congratulate my noble friend the Minister on his appointment and excellent maiden speech. He brings a breadth of experience and expertise to your Lordships’ House.
I support this Bill, which, while being fundamentally about continuity, is also about redefining and strengthening our trading relationships across the world. Today, I am particularly interested in what this means for the emerging and frontier markets that are among our growing trading partners.
I have been actively involved in promoting trade and investment with other countries and have volunteered to deliver keynote speeches at multiple high-level conferences organised by DMA Invest in London, including with the Governments of Tunisia, Morocco, Sudan, Nigeria, Ethiopia and Papua New Guinea.
I have witnessed an appetite to do business with the United Kingdom on the part of overseas countries. Following my visit to Tajikistan last year, where I was a guest of our ambassador, we have begun organising the first Tajikistan summit for next year. We have a series of engagements with the Government of Nepal beginning with a great conference this month, and I would be pleased if my noble friend the Minister would accept my invitation to speak at it. We are also in discussion with two other embassies about the possibility of future events.
Over the past few years, the importance of economic co-operation and bilateral relations has become more prevalent. The UK is a leader in development and a powerhouse of trade and diplomacy. We have 280 overseas missions, including embassies and high commissions. On my visits overseas, I have seen how the DIT is increasingly geared to actively promote trade and deliver excellent training of people’s business skills.
Following the recent merger of DfID and the FCO, this Bill enables us to streamline our global strategy further, focusing in particular on how we can tackle the climate crisis, inequality and the pandemic collectively. This Bill will reflect our commitment to fair trade and improving access to markets for developing countries. We need to ensure that we have the correct tariffs to support the import of added-value products successfully and fairly.
In making it easier to do business, we cannot ignore our environmental commitments. We must promote green energy, the development of green technology and green skills. That is how we can inspire environmental incentives not just to maintain standards, but to improve them, and accelerate our environmentally friendly business activities in the UK and abroad. We have a great deal of knowledge and expertise on Islamic finance, and we must actively promote the industry overseas, which would result in mutual benefits. In this regard, I declare that I co-chair the APPG on Islamic finance.
In conclusion, the Trade Bill is about opportunity—the opportunity to achieve inclusive growth by building deeper partnerships with emerging markets, to strengthen our involvement internationally and to commit meaningfully to sustainability.
Baroness Bryan of Partick (Lab) [V]
My Lords, I add my congratulations to both maiden speeches made today. The Bill, along with legislation on agriculture, fisheries and the environment, and tomorrow’s Bill on the UK internal market, is throwing up questions about the UK’s constitutional settlement that will have to be addressed, not least for the people of Northern Ireland, who must feel they are being used as bargaining chips.
At some point soon, we will have to adjust our constitution to deal with the reality that, after 20 years of devolution, we have not resolved some basic questions of intergovernmental relations. Good trade agreements will be vital for the UK’s future, and to ensure widespread support we must have transparency, the ability to scrutinise and the meaningful involvement of the devolved Administrations.
The Constitution Committee said in its report on parliamentary scrutiny of treaties in April last year that tensions are “inevitable” but
“if problems with the inter-governmental machinery had been addressed at an earlier stage, some of them might have been ameliorated.”
Devolved competences must be respected, and the devolved legislatures should be able to undertake meaningful scrutiny of the treaties that will affect them. The best means of ensuring this is by the devolved Administrations’ participation in the negotiation. Does the Minister accept this? Will the Government stop acting as if devolution had never happened? Will they accept that we are a semi-federal and not a unitary state?
The devolved Administrations must be able to defend their economy, protect their environment and food standards, safeguard their health services and fulfil the commitments that they have made to their electorate. As the Bill stands, this is not allowed to happen.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady Bryan, who speaks with great authority on devolved issues. I compliment my noble friend Lord Grimstone and the right reverend Prelate the Bishop of Blackburn on exemplary maiden speeches. I look forward to hearing from them in the future.
What the Bill does is substantially non-controversial, in a sense. It is appropriate that we should have access to public procurement of £1.3 trillion, that we have power to implement trade agreements, that we have a new body to protect against unfair trade practices—the Trade Remedies Authority—and that the HMRC is able to collect and share data on exporters.
It is the dogs that do not bark in the Bill that are likely to provide the pinch points, if I may be forgiven for mixing a metaphor: things that should not be left to the end of a trade agreement, where it is a negative procedure, ex post facto. Some things are clearly important to this country; the United Kingdom has so often led the world—and clearly therefore led the EU—on such matters as the National Health Service, climate change, the environment, animal welfare, employment protection, intellectual property and food safety. These are crucial areas and I look forward to hearing how my noble friend sees us ensuring proper parliamentary input. As we take back control, we need to provide for that input on how we are going to represent the interests of both Houses of Parliament, although the Commons is clearly central to that. I look forward to hearing about that key area.
I want to say something about the devolved Administrations and the trade issues touched on by the noble Lord, Lord Wigley, the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Bryan. These areas are important and although they are substantially non-devolved—they are reserved areas—there are, of course, as noble and learned Lord, Lord Hope, said, fuzzy areas where there is a legitimate interest and a competence resting with the devolved authorities, and we need to provide for that. Just yesterday, I was proud to be at the launch of a new all-party parliamentary group on Wales and the wider world. It is actually chaired by a Conservative, the honourable Member for Montgomeryshire, Craig Williams, but it has input from Plaid Cymru, Labour and the Liberal Democrats and is a model of how these things can be carried forward. The first meeting linked up with the Welsh Parliament and the Minister there, our own noble Baroness, Lady Morgan of Ely. That is the way forward on such things to make sure we are providing for proper partnership working. In the new world outside the EU, this will be very important.
So I support the legislation, as far as it goes, and I look forward to hearing what the Minister has to say about providing parliamentary input on the key areas I mentioned, including my suggestion about how we work with the devolved Administrations.
Baroness Kidron (CB) [V]
My Lords, we are to be an independent trading nation, but while the terms upon which that happens are deeply contested, I am sure there is not one iota of disagreement that we must safeguard the UK’s children. However, it seems that the Trade Bill and the trade agreements it enables are a threat to our children from an unexpected quarter. I declare my interest as chair of the 5Rights Foundation.
The UK has committed to creating a safe online environment for children. The age-appropriate design code successfully completed its parliamentary passage only last week, and the online harms Bill is promised by the Government this Session, with protections from a range of issues: from child sexual abuse and pornography to hate speech, promoting suicide and self-harm, and so on. It is widely expected to make the UK the most advanced country in the world for child online safety, but as we build a better digital world for children, the power of the tech sector is impacting on US trade agreements. This was visible during President Obama’s Administration, with TTIP and the failed EU deal, and is now fully realised in the Trump era.
Recent deals have seen Japan, Korea, Mexico and Canada forced to adopt the broad online platform liability waiver, Section 230, and an obligation to allow free flow of data as a trade right, thereby locking in the wild-west, anything-goes policies and a yawning absence of basic data privacy protections and asymmetric benefits from data flow. The Prime Minister has expressed his concern that a proliferation of non-tariff barriers is
“letting the air out of the tyres of the world economy”,
but I do not believe for a moment that he means to characterise the safety, privacy and security of our children as non-tariff barriers. He has staked his reputation on the UK’s sovereignty and I believe that parents up and down the country expect that to include an explicit commitment to protections for the UK’s children.
Others have made the case that any trade deal should be subject to parliamentary oversight but, at a minimum, the Bill must give our negotiators a power and the explicit instruction to demand full carve-outs for our domestic priorities. This would, in the case of a UK-US trade deal, give negotiators the authority to carve out existing and future UK domestic legislation that protects children, and the underlying legislation and policies upon which those laws are built.
I warmly welcome the Minister to the House, and I thank him for his letter, in which he stated that the objective is to ensure that the Government maintain their ability to protect users, including children, from emerging online harms. However, this welcome objective needs an amendment to the Bill, delegating an authority and an obligation to preserve domestic legislation and related policies that enact the social goals and values of the UK as they relate to children. Such an addition to the Bill will carry weight through the inevitable conflicts of future trade agreements, and send the clear message that, with respect to the protection of children, the UK is not for sale.
Lord Haskel (Lab) [V]
Like other noble Lords, I am concerned about parliamentary scrutiny of trade agreements. As I see it, in parliamentary terms, at present these treaties are subject only to a negative procedure, with no guarantee of debate. The Government are using royal prerogative powers and the Minister is presenting this Bill as a continuity Bill—my Lords, this is clearly inadequate.
At the very least, there should be an affirmative procedure process, together with the statutory debate that goes with it. This should take place when negotiations are opened, so that Parliament can exercise influence then, and again before signature, to provide a last chance for change. These checks and balances are an essential part of our democratic system. As I understand it, unless these arrangements are changed, it is too late for Parliament to influence arrangements with the EU, the USA, Australia and New Zealand, because these have already been launched with a simple statement. Consultation is not a substitute for scrutiny, as my noble friend Lord Stevenson said.
In the other place, the Government opposed this additional scrutiny and said that Parliament gets its say when we deal with implementation, but that is too late. It is too late because trade agreements are not just economic matters: as my noble friend Lord Wood explained, they are strategic and geopolitical. They are an expression of the social and environmental values mentioned by other noble Lords. Therefore, Ministers should lay their negotiating objectives in these trade agreements before Parliament and debate them. There are also practical considerations, which affect the health, safety and security of every one of us in this country.
Of course, we have to maintain our political and economic independence, but we face the same long-term threats and global challenges as many of our trading partners: threats from China and Russia, and instability in the Middle East. Our largest trading partners are our most reliable partners in facing up to these threats.
The Government have already recognised the strategic importance of operating with our trading partners through the Project Defend strategy. The strategy seems to have concluded that we will not generally go it alone, especially when the pandemic has exposed our dependence on imports of critical goods, as the noble Lord, Lord Alton, explained. Presumably, our new freedom to use state aid will be directed to increasing our resilience by incentivising UK companies to make some of these critical products. Again, this is a strategy which impacts our trade agreements, requiring careful parliamentary scrutiny to ensure that the groundwork for this aspect of our trade deals has been properly done.
In the other place, the Government did not allow amendments enabling this scrutiny. I hope they will think again in this House, and I look forward to debating the promised amendments in Committee.
Baroness Blower (Lab) [V]
My Lords, it is always interesting to hear maiden speeches and I particularly enjoyed the speech of the right reverend Prelate, focusing on equality.
As my noble friend Lord Stevenson indicated, there are significant gaps in this Bill. We will hope and expect to remedy these with amendments as the Bill progresses. I note that the Government’s own amendment on gender equality, which featured in the previous Bill in 2019, is now gone, stripped out from the current Bill. It is fervently to be hoped that this disappearance is not an indication of misogynist tendencies in either the UK Government or any person from Australia, or anywhere else, who may be invited to advise on trade. Gender equality must be, and must remain, a priority.
It is well known too, of course, that workplaces in which workers are organised in and by trade unions are safer places to work. As we face not just this Trade Bill but the ongoing Covid pandemic, health and safety at work—a bread-and-butter issue for trade unions—needs to be uppermost in our minds and policy.
The issues of food quality, animal welfare and environmental protection, especially given climate change and the global climate emergency we face—argued but rebuffed in another place—will no doubt return in this House’s Committee stage. Crucially, too, we will argue for trade union rights of workers, not just from the health and safety perspective, vital though that is, but on fair pay and decent working conditions.
Those workers whose contribution to fighting the coronavirus in our NHS was so warmly applauded must be acknowledged not just in pay but by securing the future of the NHS as a public service, publicly funded and publicly provided, free from the ravages of predatory privatisation. I note that the Minister asserted that the NHS will not be for sale. I therefore look forward to the protection of the NHS being enshrined in legislation.
What is needed from a Trade Bill are detailed policies to protect workers’ rights and to secure the supply chain, as well as to tackle global challenges. As we face a jobs crisis wrought by the Covid crisis, this Bill must ensure that trade plays its part in ensuring sustainable jobs in the workplace, where all ILO conventions and trade union rights are respected and promoted.
Baroness Noakes (Con)
My Lords, I am pleased to support the Trade Bill today and to welcome my noble friend the Minister to the Dispatch Box. I am an unapologetic free trade enthusiast. Free trade is a foundation stone of a prosperous economy, which in turn is a precondition for sustainable reductions in poverty and inequality. At the end of the day, fetters on free trade and protectionism are GDP destructive and we should always seek to avoid them.
I did not take part in the deliberations on the trade Bill introduced in the last Parliament. At that time, Parliament was barely functioning, and the Bill was sabotaged in your Lordships’ House with various amendments that meant that it could not proceed further. Many of the same arguments were rehearsed in another place when this Bill was considered, and the other place, by large majorities, rejected the proposed amendments. There is of course nothing to stop your Lordships’ House asking the other place to think again, but noble Lords must know that the chances of a different outcome are vanishingly small. I hope noble Lords will want to avoid creating an impression in the country at large that our House is simply out of touch with political realities.
In addition, I hope noble Lords will recognise that amendments that seek to constrain imports of agricultural goods and impose restrictions on free trade agreements in relation to the NHS have not only been rejected in the other place but are completely unnecessary. The Government’s policy on both areas is clear and, in the case of agriculture, is backed up by the new Trade and Agriculture Commission.
In Grand Committee yesterday, we debated the role of Parliament in treaty scrutiny, and it is clear from today’s debate that there will be attempts to change this Bill to give Parliament more powers, as your Lordships sought to do in the last trade Bill. Leaving aside the facts that this Bill modestly covers only continuity treaties, and that our existing, long-standing scrutiny processes have served us well enough in the past, I remind the House that this too was defeated in the other place.
While I am a big fan of the Government’s trade policies, I am going to sound one note of caution about the Bill’s information powers, of which I am instinctively wary. I shall want to explore in Committee whether the provision of information to HMRC under Clause 7 really is voluntary, as the Minister in the other place has claimed, and whether the information disclosure provisions are proportionate. However, I have no intention of spoiling my noble friend the Minister’s day, and I reiterate my support for this Bill.
Lord Hendy (Lab) [V]
My Lords, I offer my congratulations on the two maiden speeches today and thank the right reverend Prelate for reminding us of, among other things, the importance of human rights and our duty to protect those who lack power.
Members of your Lordships’ House have raised many matters of concern in relation to the Bill, not least the lack of parliamentary scrutiny. I wish to raise three issues, touched on by others. The first is ISDS arrangements, or investor-state dispute settlement arrangements, such as the tribunal established in the Comprehensive and Economic Trade Agreement with Canada. Originally, ISDS arrangements were set up to give a right of action to investors from developed countries sceptical of enforcing their contracts in states with underdeveloped judicial systems and laws. ISDS has now become a monster, where the decisions of and laws passed by democratic states are under threat of claims for millions, and even billions, of dollars from foreign corporations.
The Minister said in opening the debate that free trade agreements “cannot change UK law”. That is true, but they can override UK law. This is an intolerable threat to the supremacy of Parliament and the rule of law—an issue with which this Government seem to have real difficulties, as events today highlight. ISDS rests on explicit discrimination, incompatible with the European Convention on Human Rights, against our citizens, investors or not, who have no right of access to ISDS tribunals. Only foreign investors have that special and unjustifiable privilege.
The second point I wish to raise is that it is appropriate that the Bill should ensure that existing rights are protected. In relation to our labour laws, in free trade agreements there must be better protection for UK labour standards than at present. I echo the wider point made by the noble Baroness, Lady Coussins: the Bill should ensure that other state parties to free trade agreements, and indeed the UK itself, do not obtain competitive advantage by failing to comply with fundamental ILO conventions and other international treaty obligations.
The third concern is that the government procurement agreement, or GPA, should ensure that public authorities in the UK, including the devolved Administrations, have the right and power to impose public procurement conditions that require contractors to observe the current requirements of UK labour law and the ILO conventions ratified by the UK. Such conditions are permitted by current law, which has been established by EU directives on the subject, but with Brexit that might change. It would be good if the Minister were able to give us reassurances on those three points.
Viscount Trenchard (Con)
My Lords, I too congratulate my noble friend Lord Grimstone of Boscobel and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches. I have known my noble friend for very many years since we worked together under the British invisible exports programme in the 1980s. I look forward to assisting him in taking the Bill through the House and to many future contributions by him and by the right reverend Prelate.
I believe that the powers contained in the Bill to join the GPA, to enter into continuity trade agreements and to set up and supervise the new Trade Remedies Authority are appropriate and proportionate. One benefit of Brexit is that we will resume our place on the world stage as an independent trading nation and a leading advocate at the WTO and other international fora of rules-based, free and fair trade. This is the way to build maximum prosperity for all our people and indeed for our trading partners.
It is right that we should not try to restrict access to public procurement projects to British firms alone, although under the rules of the GPA we will be free to restrict access for foreign companies where there is a good reason to do so. In the main, exposing British firms to international competition helps keep them competitive, both to their benefit and to that of the taxpayer. British firms obviously enjoy an advantage in domestic bids, and I believe that many of our successful businesses will also continue to win a significant number of contracts in the international public procurement market, worth around £1.3 trillion a year.
The Bill provides the Government and the devolved Administrations with the necessary powers to implement the changes in domestic law necessary to implement continuity free trade agreements. As my right honourable friend the Secretary of State said in her Second Reading speech in another place, the Government have defied the sceptics by already signing 20 such FTAs, representing 48 countries and 74% of continuity trade, and are making good progress on enhanced or new FTA negotiations with Japan, the United States, Australia and New Zealand.
I was very pleased to hear that the Government are also prioritising accession to the CPTPP, which will provide a framework for improved access to its members’ markets for British exporters, including agricultural exports. Can the Minister tell the House when he expects formally to apply for accession? In my 11 years as a resident of Japan, I noticed that the Japanese do not eat much cheese, especially blue cheese such as Stilton. I doubt that delaying further the successful conclusion of our bilateral FTA with Japan in order to sell it more cheese would be in our interests, especially because it has provided significant market access for such products through the CPTPP.
I welcome the other provisions in the Bill—those establishing the Trade Remedies Authority and the provision that sensibly enables the Government to collect and share data. I look forward to the contributions of other noble Lords and to the Minister’s reply.
Baroness Henig (Lab)
My Lords, I too welcome the Minister and the right reverend Prelate the Bishop of Blackburn to the House, and I congratulate both on their maiden speeches.
In post-Brexit Britain we should expect this Trade Bill to be a landmark piece of legislation. It will be a major element of global Britain, laying the groundwork for ambitious trade deals, which we are told will follow our EU exit. Therefore, one objective of the Bill should surely be to establish an enduring framework for future trade negotiations, to secure as wide a consensus as possible.
In setting trade mandates, we should expect to see extensive consultation with businesses, representative bodies, consumer groups and all those likely to be affected by the treaty in question. Negotiating objectives should be agreed with Parliament and the devolved Administrations, with provisions for regular progress reports and the chance to scrutinise the draft treaties. Surely both Houses and the devolved Administrations would debate and vote on the final treaty. We could expect the whole process to be at least as comprehensive and transparent as under the EU, but now also including provisions to uphold the high environmental, food safety and animal welfare standards established in the UK.
I have to say that the reality falls short, not just compared with what happened when we were a member of the EU but as set against the way that other major trading nations, such as the US or Australia, conduct and oversee their trade deals. This Trade Bill is very limited. The Minister has argued that that is because it is concerned only with the rollover of existing trade treaties, but the Bill will inevitably set important precedents for the future. Its current contents show that “taking back control” applies only to the Government, with negligible input from Parliament, the devolved Administrations or extra-parliamentary groups such as farmers, industrialists, business or consumer bodies. This does not bode well for future trade policy and will not lead to successful trade deals.
Amendments are required in four areas, first and foremost to include wide consultation with a range of bodies to feed into the drawing up of trade mandates—interest groups that could track progress and add their weight and insights as negotiations proceed. If our trade policy is to be effective, it has to mobilise as broad a constituency as possible and not, as now, be shrouded in the utmost secrecy.
Secondly, it is urgent that we clarify the role and input of the Welsh, Scottish and Northern Irish Administrations, with clear indications of when and how they feed into the legislative process.
Thirdly, there has to be a meaningful role for Parliament. Parliament should be seen as a partner in negotiations, an important sounding board and indeed a useful weapon when negotiations get tough.
Fourthly, on standards, we are going backwards. The previous Trade Bill on Report had clauses upholding a range of standards as a result of discussions held between the then Trade Minister and a number of us from across the House. Those clauses have disappeared. What has happened to them? Some Members have argued that such clauses would fall foul of WTO rules. I point out that that depends on how they are interpreted; the relevant provisions can be and are interpreted flexibly by our trade competitors, and are not the great obstacles that ardent Brexiteers would have us believe. As we know, there is also growing pressure from the public for the Bill to provide protections for the NHS by excluding it from the scope of trade negotiations.
So the Bill as it stands is inadequate and, in many areas, unacceptably limited. It needs amendment, and I look forward to further debate in Committee.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
As the noble Earl, Lord Shrewsbury, has withdrawn, I call the noble Lord, Lord Judd.
Lord Judd (Lab) [V]
My Lords, the Bill is central to the kind of role that we want for Britain in the world. Of course we need trading partners but, in the interests of people who live in the UK, an open and constructive system of world trade, not self-destructive, short-sighted, self-interested trade, is vital.
There is an intricate matrix of interrelated issues, including military security, the vital issues of Ireland, human rights and the best way to protect and enhance the working environment here in the UK and the protection of the role of trade unions. There are food standards and agricultural production, the problems of pesticides and antibiotics and animal husbandry and welfare.
Overseas development will be a real test of the new merged department. We do not want to slip into a system of encouraging cash crops or cheap crops for consumers at the expense of the self-sustaining agricultural development vital for these countries.
We must consider climate change, the environment and biodiversity, and ensure that everything that is done is done in harmony with our undertakings and commitments in the Paris climate agreement. We must, of course, preserve the health service—the health service that Nye Bevan fought for, not a health service emaciated by back-door privatisation. We must judge purchasing policy, keeping prices low and encouraging generic medicines. We must beware of marginal advances in trade at the expense of failure to cut emissions and protect nature and the environment. I believe strongly that we need to continue the European Union principle of inherent precautionary principles.
For all these reasons and their interrelationship, scrutiny is absolutely vital, and we must not skimp on it. With such a significant Bill being introduced, it is amazing that noble Lords should be limited to three minutes in this debate; it makes a mockery. Are we about real politics and a real contribution to the well-being of the country, or are we about synthetic, token politics? This is a crucial issue that must be faced.
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, I begin by congratulating my noble friend Lord Grimstone, the Minister, on his excellent maiden speech. With his customary modesty, he skated over a stellar career in financial services in the City of London. I also congratulate the right reverend Prelate the Bishop of Blackburn. He covered so many of the issues that we all must care about.
The Bill has a big title and there are at least 1.3 trillion reasons to support it. Many of the measures contained in it are appropriate and proportionate. But, very much like the noble Lord, Lord Bourne of Aberystwyth, I am interested in what is not in the Bill—as he put it, the dog that is as yet not barking. The noble Lord, Lord Clement-Jones, covered fabulously many of the points concerning technology and IT. In fact, he covered more in three minutes than an algorithm could have possibly got hold of, even a mutant one.
Similarly, I would like to go to the essence of what technology and transformation we need in trade if we are to enable the kind of change a nation state requires. To that end, I ask my noble friend the Minister what the Government are looking at in terms of a transformation of trade finance; supply chain visibility; the ability to connect physical goods with finance; and legal, regulatory and customs requirements—all in real time. Are the Government looking at a UK utility trade platform, which could spearhead our future dealings in this area and, if got right, be the envy of the world? To that end, I point the Minister to a report I published on distributed ledger technology a couple of years ago. I am also about to publish a report on reducing friction in international trade on exactly these points. What role does the Minister see for fintech and regtech to enable much of what the Bill is about, and perhaps our greatest asset: that of common law?
In short, I believe we have an extraordinary opportunity, if not an imperative, to deliver on e-gateways and frictionless trade flows and to become a 21st-century global trading nation. Does my noble friend the Minister agree? Will he also say what, if not in this Bill, the Government intend to bring forward to realise all these opportunities? If not this Bill, what Bill? If not now, when?
The Earl of Caithness (Con)
My Lords, the UK is a world leader in setting ambitious climate and environmental targets, as well as in farm production and hygiene standards. It has made important progress in delivering many of them. Our ability to maintain and increase those standards remains at risk from investor-state dispute settlement clauses in trade agreements which allow foreign investors to sue national Governments for measures which harm their profits. Until now, the economic terms of trade deals have had full legal standing, while the environmental chapters of trade deals have tended to be non-binding and secondary in status to economic terms. From an investor’s perspective, ISDS provisions can help ensure that new environmental measures do not interfere with their ability to trade but, as many noble Lords have said, that must change.
Trade rules ensure the right of nations to regulate and to require that goods and services reach specific standards for import, so long as those requirements are applied fairly. The Government must be able to set the right standards without fear of being sued.
I congratulate my noble friend Lord Grimstone of Boscobel on his appointment and excellent maiden speech. Would he agree that the UK should introduce into its trade agreements something like the inter-Mercosur agreement signed between Brazil, Argentina, Uruguay and Paraguay? It provides an alternative to ISDS provisions. It gives legal certainty to investors without granting expensive and unnecessary powers that threaten the Government’s right to regulate. Such an agreement would seek to avoid disputes arising in the first place, through co-operation, mediation and risk mitigation. Investors would seek redress by taking complaints to a national ombudsman. As a last resort, a state-to-state dispute settlement process would be available.
Given how exposed the UK is to ISDS, how will the Government ensure that free trade agreements help the UK deliver on its world-leading climate and environmental goals and do not undermine the competitiveness of British industry as they transition to a net zero emissions economy? As there has been nothing in law to protect the Government from ISDS challenges in extraordinary circumstances, and nothing in our investment treaties to carve out exemptions for things such as public health, how will the Government ensure that the UK is protected from legal challenges brought under ISDS against policies introduced to protect jobs and public health during the Covid-19 pandemic? I gather these are now being laid with solicitors in order to sue this Government.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, there is a tradition in the House of Lords that maiden speeches are received only with approval. Today I must break that tradition. While congratulating the noble Lord, Lord Grimstone of Boscobel, on his maiden speech, it was made by him as a Minister, for the Government, and expressed a philosophy that is urgently in need of explicit challenge.
In his introductory remarks, the Minister said that globalisation, trade and investment are the best routes to prosperity and peace. These sentiments attracted wide support during the debate, reflecting the 19th-century and earlier origins of the political philosophies that dominate in your Lordships’ House. For the Liberal Democrats, the noble Baroness, Lady Kramer, said that free, open and fair trade is “the bedrock of our political movement”. These are the antiquated ideas that gave us the world we have today, one wracked by poverty and inequality, facing a climate emergency and a nature crisis, a model that Covid-19 has helped expose as profoundly insecure and unstable.
Pursuing our current economic model, based on economic growth, multinational-dominated trade and the exploitation of vulnerable workers and nations, has given us a world in which one in nine people regularly goes to bed hungry. The planet is treated as a mine and a dumping ground—including the forest destruction to which the noble Baroness, Lady Boycott, referred. That destruction has been to the benefit of a few and not to the majority of the people on the planet.
In today’s other maiden speech, which I commend, the right reverend Prelate said that he would work to ensure that the House heeded the needs of the poorest and most vulnerable communities, noting how many of those are in northern England. This region enjoyed a period of relative prosperity built on trade and on the backs of child labourers and exploited women workers, but that was at the cost of the impoverishment of what became Britain’s colonial possessions, as the noble Earl, Lord Devon, noted earlier in his excellent speech. There is a chilling reminder of this period in the astonishing appointment of the former Prime Minister of Australia, Tony Abbott. He is now an adviser to the Board of Trade—or, to get into the full formalities, the Lords of the Committee of the Privy Council appointed for the consideration of all matters relating to Trade and Foreign Plantations. It seems we are not so much heading into the 21st century as the 18th.
However, there are positive possibilities. The Green Party believes that we need strong local economies in all parts of the world, built on a foundation of local independent businesses and co-operatives with money circulating around those economies, doing its work of meeting people’s needs rather than the place of money in our trade-focused world, which is all too often concentrated uselessly in tax havens, with the financialisaton of more and more areas of life. It is a threat to the security of us all, as the increasingly regular arrival of financial crises has demonstrated.
Lord Trimble (Con)
My Lords, in addressing the House at this stage of the evening I shall try to keep things as tight as I can, but there are some important points that I want to make. Obviously one would desire free trade on as wide a scale as possible. Whether we will get that, I am not sure. As to this legislation, really the same Bill has come back a number of times, so it will be very well construed.
I have one little curiosity about the Bill. First, I am a unionist, so the Acts of Union are significant. All the Acts of Union contain clauses on trade. Indeed, those clauses on trade in the Act of Union were part of the reason why some parts of the British Isles decided to form the United Kingdom. Perhaps we should send this message to Edinburgh as well.
With regard to Northern Ireland, there are a number of points of some difficulty. From our point of view, it is important that there is equality and non-discrimination in trade matters. There are also things that we require in Northern Ireland, particularly the Northern Ireland protocol; it is not something that I welcome, but it is now in legislation and that is that. However, the protocol is internally inconsistent and needs clarification. I think that what has been leaked about the Government’s intention and all the rest of it is built on that. If one looks at the protocol, there is no doubt that it needs to be dealt with.
There is another factor that we need to look at. It was touched on in an earlier speech. It is that trade powers are now moving from Brussels to London. What are we going to do when they come to us? What are we going to do with the relationship between the Government and the devolved institutions? That should be looked at very carefully indeed. We probably have to draw a distinction between things that are trade-related and things that are not in the powers that have come to London from Brussels.
Lord Inglewood (Non-Afl) [V]
My Lords, I must begin like other Members of your Lordships’ House by congratulating the Minister and my southern neighbour, the right reverend Prelate the Bishop of Blackburn, on their maiden speeches. My short remarks will be focused on my roles, first, as chair of the Cumbria Local Enterprise Partnership and, secondly, as a UK parliamentarian.
Cumbria has been identified as one of the most seriously affected parts of England in the event of a no-deal Brexit. Livelihoods, jobs and standards of living depend on trade; its curtailment would be self-indulgent and gratuitous, and the consequences of that would be very damaging and hurtful to a lot of people who are least able to deal with it.
As a UK parliamentarian who was once a Member of the European Parliament, it seems to me that the role played by this Parliament in the matters under discussion is shabby and—as I intimated in Grand Committee yesterday—quite inadequate. In an era when so much domestic policy, and hence legislation, is forged not in Westminster but elsewhere around the globe, Parliament must press this, not least to honour its historic responsibilities to this jurisdiction.
Setting aside the question of whether it is appropriate for trade negotiations to be conducted under the royal prerogative—this can of course be changed by legislation—the Government are fully accountable to Parliament for their action both within and without their own jurisdiction. For hundreds of years, Parliament has had a responsibility for how government policies are implemented and put into legislation within this jurisdiction, regardless of where they were conceived. This makes the Hobson’s choice approach to treaty ratification and putting statutory instruments on the statute book an entirely unacceptable form of parliamentary procedure.
A number of speakers have argued for a range of matters to be put into the Bill—an approach widely supported in the country. As we have heard, the Government’s response is that they are already the law of the land, so it is unnecessary. However, this ignores the widespread suspicion that the Government may, at a stroke, rewrite the rules, possibly using the short- hand form of legislation that I have just described. Parliamentarians and politicians are not trusted, and Governments are trusted least of all. The sad truth is that the more the Government reiterate their mantra, the more distrusted they become. It is a matter of credibility, which is slow in coming at this point.
For me, two priorities have emerged from this debate: first, the wheels of commerce must be kept turning, and, secondly, the way in which Parliament handles these matters must be reformed.
Lord Lansley (Con)
My Lords, so many speeches, so much good material—I have often wanted to hear more. I am sure that during the passage of the Bill we will indeed hear more from our Second Reading speakers on the issues raised today. In particular, I look forward to hearing more from our two maiden speakers. I hope that the right reverend Prelate the Bishop of Blackburn will follow up on what he had to say about human rights when we initiate a discussion on the unilateral scheme of preferences. This is not in the Bill. It was in the Taxation (Cross-border Trade) Act 2018, which we did not have the opportunity to debate since it was a money Bill, as noble Lords will recall. I hope that we will get an opportunity to debate it during the passage of this Bill; it raises issues of human rights.
I was delighted to hear the maiden speech of my noble friend on the Front Bench. He bowled his maiden over excellently, took wickets, and now joins the little club of former private secretaries who have themselves become Ministers. I hope he enjoys it as much as I did.
I share with the noble Baroness, Lady Noakes, her support for free trade. However, unconstrained global trade is as dangerous as unconstrained competition in a domestic economy. We need the WTO; we need it to work. We need plurilateral agreements such as the government procurement agreement that we have been talking about, but we need more; we need agreements on services, digital trade, intellectual property and beyond. We need the WTO to make that happen. We should not think about trade simply in terms of bilateral agreements. We are looking to be in the regional agreement for the Pacific. Frankly, I hope we will get an agreement with the EU that helps us to create a regional European market, operating together in support of free trade. I hope we will talk much more about trade during the passage of this Bill.
On the issue of scrutiny, and thinking back to the last Bill, many noble Lords in this debate have not quite understood. We got the commitments we were looking for from the Government on how they would go about the process of scrutinising free trade agreements. They published them in February 2019. I hope my noble friend will reiterate that that is the Government’s intention. He and I know that that is not the end of the story; we will be looking for further commitments. There is some limited statutory underpinning.
A number of noble Lords have referred to my honourable friend and parliamentary neighbour when I was in the other place, Jonathan Djanogly. His new Clause 4 on Report in the other place was not wholly right, in my view, but I hope we pick up elements of it relating to the process of scrutiny, leading to ratification. Taking the point from my noble friend, there are amendments we can make here that they may look kindly on in the other place.
Baroness Hayman (CB) [V]
My Lords, as the final Back-Bench speaker after a wide range of fascinating contributions, not least two outstanding maiden speeches, it is tempting to continue some of the arguments that have been made. However, I will be disciplined, save to endorse the powerful contributions on the need for improved transparency, parliamentary scrutiny and protection for the NHS.
I want to focus on the need to ensure consistency between our domestic legislation and targets under the Climate Change Act 2008 in the Bill and in all the policies and legislation that the Government bring forward. This consistency is not simply a matter of domestic policy, but goes to the heart of our international commitments to tackle climate change and biodiversity loss. I am pleased that the Government recognise the need for this alignment when, for example, after cross-party efforts in this House, the Pension Schemes Bill was amended and now includes statutory powers to ensure that new regulations under the Act take account of our 2015 net zero target and obligations under international treaties, such as the Paris Agreement. The Back Benches have brought forward similar amendments on the Fisheries Bill and the Agriculture Bill—those will be further debated—but I urge the Government to assess all legislation for consistency with our climate goals, as a matter of both principle and good practice.
It is particularly important that our climate goals are included in the Bill, not only because it gives the opportunity to set a UK precedent that promotes a race to the top on environmental standards around the world, but because a trade policy that takes account of climate goals will also strengthen the UK’s economic competitiveness, through export of low-carbon goods and services, a massively growing market in which we can excel.
The Bill gives us the opportunity to design trade policy to support the environmental ambitions to which the Government consistently asserts they are committed. The Prime Minister said earlier this year that “we will crack” the climate emergency. Including provisions in the Bill not only would be coherent with our domestic policies, but could be seminal in our international efforts in the run-up to COP 26 next year. I hope the Minister indicates a willingness to consider amendments to the Bill when he responds, very soon, to this debate.
Lord Purvis of Tweed (LD)
My Lords, with neat symmetry, it is two years to the week that we again have a trade Bill before us. The Minister has been engaging and proactive since his appointment in the spring, and I personally appreciate his way of doing this. I can tell that he was a very successful member of a private office, because his own private office is supremely efficient and helpful in its engagement. He is the third Lords Minister during the passage of the Bill and its predecessor—it will be third time lucky for him, I am certain. Having been at the Dispatch Box a few times before his maiden speech, he is a rather experienced maiden already in this House, but his maiden speech and that of the right reverend Prelate were greatly welcomed, and justifiably so.
We on these Benches want the UK to prosper. We want free, open and fair trade based on rules around the world, to allow, as my noble friend Lady Burt said, our businesses to take advantage of opportunities to export, whether across the Channel or around the world. We want our consumers to have access to the fairest-priced and best-quality goods from anywhere, and we want the UK to lead an ethical trade, helping to implement the sustainable development goals and support human rights and supply change, ever driving up standards and supporting the least developed countries in the world so that they can develop and trade with us on an equal basis. I disagree respectfully with the noble Baroness, Lady Bennett of Manor Castle, who said that fair trade is antiquated. I do not agree, and I think many people will be disappointed to hear her say that. As Winston Churchill summed it up—when he was a Liberal:
“We want to have free competition upwards; we decline to allow free competition to run downwards.”
It is a pleasure to follow the noble Baroness, Lady Hayman. Reflecting on her speech, it is sad to see that the Government have removed from the Bill their amendment to the predecessor Bill, which was new Clause 2, on guaranteeing standards. Can the Minister explain why they have done that?
Our support for free and open trade is a founding principle to our cause, as my noble friend Lady Kramer said. We ensured the repeal of the corn laws and the benefit for poorer consumers, and we opposed the protectionist tariff reform campaign of 1903 and split from the national Government in 1932 when the Conservatives introduced the Import Duties Act, with 10% tariffs all around. We supported the common trading market in Europe as a vehicle to advance global freer trade, and we saw the average UK import tariff rate fall from 7.9% in 1972 to part of the average EU tariff this year of 2.8%. It was the biggest and most continuous fall in British import tariff rates in a century.
Because Liberals believe in free, open and fair trade, we are anxious about the prospect of starting 2021 with the highest rates of trade barriers, tariffs and burdensome customs procedures for our businesses. The massive and unavoidable new friction on our trade with new customs red tape will, as HMRC itself has estimated, cost UK exporters £7 billion a year and those importing £7 billion a year. We know our borders will not be ready in January, so the Government have deferred export processes by six months to buy time. Why the need to buy time? It could be the reason contained in an email from HMRC on 30 July:
“To date, HMRC has made a total investment of £34 million available to support the sector, which has supported more than 20,000 training courses, nearly 15,000 units of IT and the recruitment of over 600 new customs agents.”
At a cold reading of that your Lordships may be impressed, but Michael Gove said that we needed 50,000 customs agents by January next year. Spending £34 million has given us 600, a figure that is rather short of 50,000. If the Minister could say how many we have currently recruited, that would be welcome.
However, this was of course part of an indication that we would already have all our continuity trade agreements in place by March—March 2019, that is. Information on the Department for International Trade website today shows that the countries where we have continuity agreements, referred to by the Minister, represent £111 billion of UK trade in 2019. Total UK trade in goods and services in 2019 was £1.5 trillion. To put that into context, as we finish this Second Reading debate today, the UK is currently placed to trade on a free trade agreement basis that represents only 8% of our overall trade. This would be the worst trading relationship for the UK since 1932.
Some tout themselves as free-traders, but are happy to see a massive reduction in UK free-trading relationships and a massive increase in trading bureaucracy and costs. It is an irony that some Conservatives, who for three-quarters of a century proposed protectionism, were finally persuaded of reducing tariffs by entering the common market—our largest market—and now think that by leaving it, they can grow trade.
As referred to by my noble friend Lord Oates in his very lucid speech, some conservatives, such as Tony Abbott, think that the solution to this is to shed environmental and climate standards and to allow competition to run downwards, as Churchill put it. As a global ambassador for the UK approach to trade, his credentials make perfectly clear what he thinks. As the EU-Australia trade talks themselves show, the Australian Government have rebuffed Tony Abbott’s call to leave the Paris Agreement because a deal with the EU would be impossible without it. However, Abbott told a global policy foundation in conference in London, in October 2017, that
“it’s climate change policy that’s doing harm; climate change itself is probably doing good”.
Is that the attitude for a British adviser for 21st-century UK trade? I think he will probably be doing our country harm, not good.
We on these Benches were concerned that leaving the single market for services would potentially bring about capital flight and reduce competitiveness in our services sector. We were told by some that we were simply moaning and had basically no idea what we were talking about. The Government’s slogan that we see at the moment—“Let’s get going”—could have been used to describe what Barclays did last year, for example. A Reuters report notes that Barclays
“spent 100 to 200 million pounds… moving operations and staff out of Britain to prepare for Brexit, its UK chairman Gerry Grimstone said on Wednesday… Barclays has moved its European headquarters and almost 200 billion euros in assets to Dublin and last year began shifting 40 to 50 investment banking jobs to Frankfurt from London.”
Mr Grimstone then said:
“We believe this will give us a competitive advantage on the continent”.
Would the Minister please explain what the competitive advantage is from leaving London for Dublin or Frankfurt?
When it comes to scrutiny, much has been said. I simply want to give one example, because I thought the radical saboteur speech of the noble Lord, Lord Lansley, about wanting to improve this Bill was very constructive. On scrutiny and accountability, I will give one example of a measure that we ratified: the Japanese agreement. The simple fact is that for the Japanese agreement, which we ratified in Parliament, British parliamentarians sitting in the European Parliament had a greater say in the setting of the mandate for it, had access to materials through the negotiating rounds and had a say on its approval. British parliamentarians sitting in this Parliament for the new Japan agreement will not have the same say as those who sat in on the agreement that we have ratified ourselves. This cannot be right. Surely the Government, who want continuity on everything but not parliamentary accountability, have to make some movements. I hope that the Government will see sense and respond constructively to those requests.
We also want to see the wider aims of trade enveloped in our overall approach. That is why we believe very strongly in supporting the least developed countries to develop and in ethical trade, and we want to see improvements. My noble friend Lord Chidgey asked this question, but can the Minister explain why, for example, Kenya and the east African states have now been dropped from the list of those that are likely to see ratification? Why have the Government cut support to help countries implement continuity agreements that we ourselves asked them to put in place? Why has the Department for International Trade said that it has no responsibility for aid for trade and that that responsibility lies purely with the new Foreign, Commonwealth and Development Office?
We want to link our trade policy with an ambitious international strategy, but fundamentally this is about us and British businesses prospering. Therefore, we need to link our trade policy with an ambitious export strategy, so that British businesses can take advantage of new trading opportunities, whether with the US or Japan. The Government’s paper itself said that with an American or Japanese trade deal, we would likely see only 0.16% growth.
I want to give a brief example before I conclude. The noble Lord, Lord Lilley, and others have indicated that we can now see great opportunities because we are out of the European Union. US trade census data shows that UK exports to the United States grew from $39 billion in 1999 to $63 billion in 2019. That is a 61% increase, which is great. French exports to America grew from $25 billion to $57 billion—a 123% increase. Over the same period, German exports to America grew by 131%. It has not been membership of the European Union that has held us back. Will the Government therefore link our trade policy with an export policy, because nowhere in the Japan or American deal was the word “deficit” included? We have a deficit with America of £5.9 billion in goods; France has a surplus of £18 billion and Germany has a surplus of £67 billion.
To address these points, we will seek to persuade noble Lords on sensible and proactive amendments to improve the Bill and to make it a better vehicle to support UK business and exports, to meet our international ambitions and to continuously reduce barriers. In his very welcome letter to me on 9 April, on his appointment, the Minister said that he believes in cross-party working and working as collaboratively as possible with noble Lords across the House. We agree with that: that is how we will conduct the Committee and Report stages of this Bill to make it better.
Lord Grantchester (Lab)
My Lords, it could not be a more crucial time as the House begins its long Autumn session and the Government continue to progress of trade matters through your Lordships’ House. Today marks the beginning of another round of talks with the UK’s most important trading partner, the EU, and of this Second Reading, where once again the Government profess this Trade Bill to be one of continuity agreements.
I mention trade matters, but shortly to come the House will undertake the Report stage of the Agriculture Bill, where domestic standards on food will be reflected, with implications that can be assessed in later stages of this Bill. Tomorrow sees the publication of the UK internal market Bill, with provisions as yet unseen and possible state aid provisions. These pieces in the landscape need to be settled within the next five weeks, in which continuity and certainty with the EU must be delivered by this Government, despite their rhetoric of being able to walk away. After all, we have been assured that the Government have an oven-ready deal.
However, this is the Government’s second attempt at a trade deal. As has been repeated throughout this excellent debate, speakers have a strong sense of déjà vu when dealing with this legislation: it has been only some 18 months since the first version of the Bill left this House. Peers on all sides were rightly proud of the progress made on the last Bill on standards, scrutiny, customs arrangements and EU agency collaboration. As the then Minister, the noble Baroness, Lady Fairhead, said,
“no legislation passes the scrutiny of this House without being improved … this is unquestionably true here.”—[Official Report, 6/3/19; col. 615.]
That this Bill is stripped of these improvements is of great concern to the House. It is a backward step. The cry that this is merely a technical continuity Bill to deal with the inherited EU treaties fooled no one then and will not this time either. The same debates from 18 months ago remain the most poignant.
Since that Bill, and until recently, the Government have been operating without a Minister representing the Department for International Trade in this House. It has shown. That reflects the lack of direction from the Government. However, today gives me the first opportunity to welcome the new Minister, the noble Lord, Lord Grimstone, to the House and to his responsibilities on this Bill. I congratulate him on his maiden speech at such an important juncture. His background enables him to help steer the House to reach similarly important improvements. I look forward to these developments in later stages.
I thank my colleague on the Front Bench, my noble friend Lord Stevenson, for confirming Labour’s challenge to the Minister and the Government. Labour welcomes the Bill as providing the legal mechanisms for trade agreements to continue operating after the implementation or transition period. However, it also accepts that many of the previous Bill’s improvements need to be reflected in this Bill. This has been echoed around the Chamber today. Labour recognises the continuity imperative to formalise trading relationships with those third countries that have a trade agreement with the EU, given that the UK is no longer a member of the EU.
But this Bill needs to go further and underline the UK’s approach to how it negotiates and concludes international trade agreements. That there are similarities to the previous Bill is but a starting point for fixing the many moving targets that have developed since, as the Government have responded to the many concerns. The recent announcement of the Board of Trade is but one example.
That the UK is taking back control of trade policy does not mean that this is the executive prerogative of the UK Government alone. Trade policy should be transparent and subject to full parliamentary scrutiny. The Bill fails to address the scrutiny deficit, which it must if continuing consent to trading relationships is to be maintained.
The new Trade Remedies Authority currently lacks stakeholder engagement, independence and accountability. My noble friend Lord Rooker is correct in comparing the TRA with the SFA. There is also no union representation on the TRA, nor in the new TAGs—trade advisory groups—recently introduced to replace the barely formed export trade advisory groups, or ETAGs. A prime aim of this legislation is to bolt down, in statutory form, the structures that cannot be dismissed at a whim by a Conservative Government back-tracking on past agreements. Explicit statutory enshrinement in the Bill of warm-sounding statements is a key objective in dealing with this Bill.
The debate today underlines to the Minister that the key changes to the last Bill are vital and necessary. These amendments will focus on protecting the National Health Service, as well as ensuring that climate change, environmental protection, food standards and human and workers’ rights and equalities are at the heart of future trade agreements, which need to be consistent with international treaties.
The Bill must guarantee opportunities for small and medium-sized enterprises in procurement contracts, as trade will play a vital role in the economic recovery from Covid-19. That this comes at a time when the UK has suffered a record 20% drop in GDP in the second quarter of the year—double that of the average of 10% for major OECD economies—underlines the fragile nature of the UK economy and the need to be inclusive of the needs of all sections and industries throughout all the nations, provinces and regions of the UK, with their representatives in Parliament in meaningful dialogue. I congratulate the right reverend Prelate the Bishop of Blackburn on his maiden speech today, which celebrated Lancashire and the north-west and said that the voice of the north must be adequately heard.
Scrutinising treaties and agreements through the Constitutional Reform and Governance Act 2010 gives Parliament only a minimal role against the position when the UK was a member state with oversight in the European Parliament. Last night, the House gave a strong endorsement to improve structures such as the International Trade Select Committee in the Commons and the International Agreements Committee in your Lordships’ House in a debate answered by the Minister of State for the Foreign, Commonwealth and Development Office. This was reflected repeatedly by speakers today, and issues will be subject to further thought for inclusion in the Bill. I congratulate the Minister on confirming that he and his department will do all they can to facilitate the early promise of the International Agreements Committee. It would be encouraging if he could welcome amendments crystallising these improvements.
The devolved Administrations are excluded from the provisions of the Constitutional Reform and Governance Act 2010, even though they are bound by all trade agreements. This means that no formal adequate consultation with them has to be considered. Importantly, their wishes might not be consistently reflected in the forthcoming, but as yet unseen, trade markets Bill, which is under the direction of the Department for Business, Energy and Industrial Strategy. What interdepartmental mechanisms are the Government setting up to help all these constitutional deliberations to be carried out at all government levels?
Even today, there must be serious concern for the union following the announcements of the UK’s unilateral overriding of agreed treaty provisions in the withdrawal Act and the resignation today of Mr Jones, the head of the Government Legal Department. Can the Minister clarify the current status of the withdrawal Act? The fact that it is not only Labour that believes that Parliament should have the power to debate, amend and approve mandates, negotiations and outcomes needs to be addressed by the Minister. The involvement of the devolved Administrations in this relationship was drawn attention to in the remarks of the noble and learned Lord, Lord Hope.
Another key aspect of today’s debate has been standards. This concerns not only food, environmental protections and animal welfare provisions but the standards reflected in ongoing participation in other areas with EU agencies, which are working closely with their UK counterparts. Indeed, what is the current status of the provisions in the multitude of chapters in the withdrawal Act and its supremacy over UK law?
Although this is a prominent issue, it is not merely a matter of answering serious questions about the Trade and Agriculture Commission. Climate change and equalities approaches should be central to all future trade policy considerations. The appointment of Mr Abbott to the Board of Trade, given his approach to climate change, does not sit comfortably with the need for compatibility with net-zero imperatives. The noble Baroness, Lady Boycott, was right to draw attention to the fact that a sustainability assessment must be included in trade deals.
The House will be keen to examine, through amendments, the Bill’s implications, and such examination should include implications for the provisions of the slavery Act and equalities, as referred to by the noble Lord, Lord Alton. That is not to ignore many of the other issues that have been discussed, such as intellectual property rights, spoken to by the noble Lord, Lord Clement-Jones.
The Bill puts us a long way back from where we were. Also, it has not kept pace with developments since the House last considered these issues. The disappointment that stems from having to play out the same arguments for a second time is increased not only by the present disarray of the Government but by the complete lack of a bold, long-term vision for Britain to secure growth and recovery, protect rights and tackle global challenges through having its own trade policy. The UK is a strong trading nation, and this must be maintained.
Lord Grimstone of Boscobel (Con)
My Lords, I am extremely grateful for the kind words that have been expressed across the House about my maiden speech and for the warm welcome I have received from your Lordships. I was particularly pleased to hear the noble Lord, Lord McNally, refer to my emollient bedside manner, and the reference to Standard Life from the noble Lord, Lord McConnell. I have been greeted with great courtesy by noble Lord, Lord Stevenson. I feel that I have a very constructive relationship with him, and of course I have known the noble Lord, Lord Grantchester, for more years than he and I would probably care to remember. I always enjoy the noble Lord, Lord Purvis, teasing me about my previous jobs.
I join other noble Lords in congratulating the right reverend Prelate the Bishop of Blackburn. His comments on equality and human rights were pitched very nicely. I am delighted to welcome him to the House and have no doubt that it will benefit from his knowledge and experience.
This is the first piece of legislation that I will be guiding through this House and I look forward to working with noble Lords to deliver a Bill that provides some of the certainty that businesses so desperately need in these unprecedented times.
I am of course following in the footsteps of my noble friend Lady Fairhead, who was in this very same situation in the 2017-19 Session. She undertook that role with calmness, courtesy and expertise. I have heard various references to the constructive way in which she dealt with Peers, and I will try to follow in her footsteps in that regard.
This place has the benefit of being able to hear from many experts, and we have seen that in action today. Being a newcomer, I stand in awe of the knowledge that there is in your Lordships’ House. I am particularly grateful today for the contributions that I heard from my noble friends Lady Neville-Rolfe and Lord Lansley, the noble Baronesses, Lady Henig, Lady Jones of Moulsecoomb and Lady Quin, and the noble Lord, Lord Wigley, among many others. I completely agree with the noble Baroness, Lady Coussins, about the need for language skills, and I endorse her views on that.
As ever, the considerable experience of this House will be invaluable in helping us to put in place an effective independent trade policy now that we have left the EU. I was pleased to hear support for the objectives of the Bill from a number of noble Lords, including my noble friends Lord Astor, Lord Lilley, Lady Hooper, Lord Taylor, Lord Risby, Lady Redfern, Lord Sheikh, Lady Noakes, Lord Trenchard and many others.
This has been a very wide-ranging debate and I will endeavour to respond to as many points as I can. I may not be able to address all of them in the time available, but of course my door is always open and I am happy to follow up individual points and questions from noble Lords.
We intend to join the GPA, as the House has heard, as an independent party on substantially the same terms as we had under EU membership. This approach will support a swift accession at the end of the transition period and preserve UK businesses’ access to procurement opportunities covered by the GPA, which are estimated to be worth £1.3 trillion annually. My noble friend Lord Trenchard spoke convincingly about this.
The noble Baroness, Lady Burt, asked about SMEs in the GPA. Non-discrimination is the core principle of public procurement in the UK, and as such we do not have set-asides for SMEs in international agreements. We have an active policy agenda to facilitate SME participation in public procurement, and we will continue to advance that agenda as we accede to the GPA as an independent state.
A number of noble Lords, including my noble friend Lord Balfe and the noble Lords, Lord Oates and Lord Whitty, have raised concerns during this debate that the Government’s continuity programme will reduce standards. I want again to be quite clear about this: now that we have left the EU, the UK will be the same country that it has always been—dependable, open and fair. The Government have been clear that we have no intention of lowering standards, and we have fulfilled this commitment through our deeds. None of the 20 agreements already signed has reduced standards in any area.
I recognise the strength of feeling that the issue of standards generates among colleagues on all sides of the House. We can see this during the current debates on the Agriculture Bill and we saw it during the debates on the Trade Bill 2017-19. As my right honourable friend the Secretary of State for International Trade and my Defra colleagues have said, this Government will stand firm in trade negotiations. We will always do the right thing by our farmers and aim to secure new opportunities for the industry. This Government will not dilute our high environment protection, animal welfare and food standards. I hope that noble Lords will be reassured that all imports, whether covered by a trade agreement or otherwise, have to comply with the import requirements as provided for under the WTO SPS agreement.
This is a highly regulated space. In the case of food safety, it will be the job of the food standards agencies to ensure that all food imports comply with the UK’s high safety standards and that consumers are protected from unsafe food that does not meet those standards. Decisions on these standards are a matter solely for the UK and are made separately from any trade agreements. It is also important to note that our existing import standards already include a ban on using artificial growth hormones in domestic and imported products. They also prohibit anything other than potable water being used to decontaminate poultry carcasses.
These protections are already enshrined in our domestic statutes and the Government will be upholding them. Any changes to them would require new legislation to be brought before Parliament. Decisions around standards are a matter for Parliament and they cannot and will not be traded away in negotiations. We have been very clear that our high food safety standards will continue to apply to all food imports, and our priority is to ensure trade agreements benefit the whole UK, including consumers, farmers and businesses.
Some peers have also expressed concerns as to whether our continuity agreements will be consistent with specific international environmental obligations. The noble Baronesses, Lady Boycott, Lady Sheehan and Lady Hayman, and the noble Lord, Lord Oates, all talked about the climate emergency. I can confirm that all the EU agreements we are transitioning are fully compliant with all our international obligations, including the 2015 Paris Agreement on climate change. The same is true of human rights and labour rights. I hope this House will acknowledge the UK’s strong history of defending human and labour rights, alongside promoting our values globally. The noble Baroness, Lady Coussins, spoke with passion on this, as did the noble Lord, Lord Hendy, on labour rights.
The noble Lord, Lord Holmes, talked about the benefits we will eventually get from operationalising FTAs. I will dwell on this for moment. It is easy to think that these are just pieces of paper, but their real worth comes when businesses large and small throughout the United Kingdom take advantage of them, hopefully using digital techniques and gaining benefit. That is why we are negotiating FTAs.
I will quickly deal with some of the specific questions raised by noble Lords. The noble Lord, Lord Clement-Jones, asked about intellectual property. As he will know, our intellectual property regime is consistently rated as one of the best in the world. One of our priorities will be to ensure that future trade agreements do not negatively impact on standards in this area and that our regime will promote trade in intellectual property.
My noble friend Lord Astor asked about trade envoys. I pay tribute to the role he has played as the Prime Minister’s trade envoy to Oman. My noble friend asked when a newly appointed trade envoy will be announced. As he and I know, this is a train that has been a long time coming. While I cannot provide an exact date, I assure my noble friend that he will not have to wait very long.
The noble Viscount, Lord Waverley, asked for a quick update on FTA discussions with Turkey. We place a great deal of importance on our trading relationships with Turkey. Bilateral trade was worth over £18.6 billion in the four quarters to the end of June 2020. We want to protect those existing trade flows by replicating the current trading relationships as far as possible. However, Turkey’s unique position of being in a customs union with the EU means that some of our future trading relationships will be influenced by the agreement we have reached with the EU. My trade colleagues are having good, positive discussions with Turkey, and I am convinced that eventually they will reach a favourable outcome.
The noble Lord, Lord Chidgey, asked for an update on the agreements with east and southern African countries. The UK, Southern African Customs Union member states and Mozambique continuity agreement was signed in October 2019 and passed CRaG in February 2020. It has not yet been fully ratified by all third countries that were signatories to the original agreement, but I am pleased to say that HMG in our local posts are working closely with local partners to support full ratification and implementation of this agreement.
My noble friend Lady Hooper asked about the EU-Mercosur agreement. This will not be in force before the end of the transition period, but we will look to discuss our future trade relationship bilaterally and collectively and to develop it further in due course.
The noble Viscount, Lord Trenchard, asked about the CPTPP—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I am pleased to say that all its members have now welcomed our interest in accession. We will decide whether and when to formally apply to join in light of these continuing engagements, the process of bilateral negotiations with CPTPP members and our confidence that we will be able to negotiate accession on terms compatible with our broader interests, which is, of course, the only basis on which we would want to join.
The noble Earl, Lord Lindsay, asked for reassurance about the important work that our standards agencies, including UKAS, do. I can confirm that we are very grateful for what they do, and that they will still play a large role in helping us deliver our trade agreements.
A number of noble Lords raised the important question of agriculture, and I totally understand. The Government recognise the importance of ensuring that the views of farmers, producers and consumers are able to inform trade policy. As we have heard during the debate, we have established a Trade and Agriculture Commission, following consultation with the industry, and we have a farming trade advisory group. I reassure the noble Earl, Lord Devon, that the membership of these groups is not secret: you can find it on GOV.UK. We are on the side of farmers, and the establishment of the commission has had overwhelming support from the National Farmers’ Union and many others.
I realise there is a strong concern felt by certain noble Lords on animal welfare. Of course, this is laudable but, as noble Lords will appreciate, it is not within the gift of the UK Government to legislate for overseas countries. Indeed, legislating for higher agricultural production standards could have far-reaching, unintended consequences, which could harm the UK economy and our relationships with countries around the world, particularly our partners in the developing world.
We heard concerns from some noble Lords, including the noble Lords, Lord Balfe and Lord Judd, and the noble Baroness, Lady Blower, about the National Health Service. I reiterate yet again that our position is absolute: the NHS is not, and never will be, for sale to any company, anywhere. It will remain universal and free at the point of need, and no trade agreement will alter that fundamental principle. I noted carefully the points made about health data. I love the expression “mutant algorithms” from the noble Lord, Lord Freyberg, and I will draw his point to the attention of our negotiators.
ISDS is a subject which often causes excitement, and my noble friend Lord Caithness raised the issue during his contribution, as did the noble Lords, Lord Freyberg and Lord Hendy. I confirm that ISDS tribunals can never overrule the sovereignty of Parliament. They cannot overturn or force any changes to law; they can only award compensation if a foreign investor’s rights under an international treaty, to which the UK is party, have been breached. ISDS cannot force the privatisation of public services. There has never been a successful ISDS claim against the United Kingdom, but our investors operating overseas have often benefited from these agreements.
I turn now to the question of parliamentary scrutiny. In relation to the continuity agreements, our objective, as noble Lords know, for transitioning EU third-country trade agreements has been to secure continuity in existing trading relationships. The original EU trade agreements have already been scrutinised, both by the European Parliament, on which the UK sat, and member state legislatures such as our own.
I know that last time a similar Bill was debated, noble Lords did so in the absence of any real-world example of how the continuity programme would work, but we are in a different position now. We have ensured that Parliament has had the opportunity to fully scrutinise all continuity trade agreements, and of the 20 we have signed so far, noble Lords have held three debates on six of them, and not one attracted a Motion to Regret. To clarify a point that the noble Baroness, Lady Tonge, made about the UK-Israel continuity agreement, it went through the CRaG process and concluded that process in March 2019.
Furthermore, to provide additional transparency for our programme, we have voluntarily adopted the proposal put forward during the passage of the Bill in the 2017-19 Session and laid a report alongside each transitioned trade agreement to explain to Parliament our approach to delivering continuity.
Lord Stevenson of Balmacara (Lab)
May I make a point that might help the discussion?
Viscount Younger of Leckie (Con)
I regret that, under the current arrangements of the House, no interventions are permitted.
Lord Grimstone of Boscobel (Con)
I will be very happy to discuss that point with the noble Lord afterwards, if it would be of assistance.
Our continuity agreement treaty scrutiny arrangements received praise recently from the House of Lords EU Committee, which, in its recent report Treaty Scrutiny: Working Practices said:
“We encourage other Whitehall departments to follow the lead of the Department for International Trade and make similar commitments to ensure that other important agreements … are scrutinised just as effectively as trade agreements.”
Praise indeed.
Many Peers raised issues in relation to parliamentary scrutiny of future free trade agreements. While, of course, the Trade Bill does not deal with these agreements, I recognise the importance that noble Lords attach to Parliament having proper oversight. As I said when I opened this debate, the implementation of such agreements will be subject to separate scrutiny arrangements. We will be publishing negotiation objectives, voluntarily publishing impact assessments before and after negotiations, keeping Parliament updated on negotiations and, at the end of negotiations, treaties will be subject to the usual ratification processes.
I know that a number of noble Lords do not share my view that the Constitutional Reform and Governance Act provides an effective and robust framework for scrutiny of all treaties that require ratification, but it has worked, it is the arrangement we have, and it is incumbent on all of us to make sure that the information we provide under CRaG is transparent and helpful and allows, in particular, the committees to do their work properly. The UK has scrutiny mechanisms via the CRaG procedure whereby Parliament can see exactly what we have negotiated and can, if it chooses, prevent ratification by voting against the treaty—in the case of the other place, it can do so indefinitely.
I stress that no trade agreement can, of itself, alter our domestic legislation. We will ensure that there will be a report, independent of government, published by the committees at the beginning of the CRaG process, that will assist parliamentarians and the public in understanding the implications of agreements. We have heard a number of comments from noble Lords about devolution. We have listened carefully to the concerns of the devolved Administrations and I am pleased that the Scottish Government have now recommended consent to the Bill. I hope that continued engagement with the Welsh Government and the Northern Ireland Executive will lead to further recommendations for legislative consent to the Bill.
This has been a long debate and a number of extremely valuable points have been raised. With a huge sense of relief, I now turn to my closing remarks, and I imagine that noble Lords are as grateful for that as I am. I know that I have not been able to address all the points raised by your Lordships, but if there are matters that noble Lords would find it helpful to discuss further, I would be only too happy to meet them at any stage. I look forward to the further stages of the Bill and to working in a spirit of partnership and purpose to provide the certainty that businesses and consumers in all four corners of our great nation crave and need in the current circumstances.
Trade Bill
Tuesday 29th September 2020
(4 years, 7 months ago)
Grand CommitteeTrade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 128-II(Rev) Revised second marshalled list for Grand Committee - (29 Sep 2020)
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, respecting social distancing, while others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points after use. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
A participants’ list for today’s proceedings has been published by the Government Whips’ Office, as have lists of Members who have put their names to the amendments or expressed an interest in speaking on each group. I will call Members to speak in the order listed. Members are not permitted to intervene spontaneously. The Chair calls each speaker. Interventions during speeches or before the noble Lord sits down are not permitted. During the debate on each group, I will invite Members, including Members in the Grand Committee Room, to email the clerk if they wish to speak after the Minister, using the Grand Committee address. I will call Members to speak in order of request and will call the Minister to reply each time.
The groupings are binding; it will not be possible to degroup an amendment for separate debate. A Member intending to move formally an amendment already debated should have given notice in the debate. Leave should be given to withdraw amendments. When putting the Question, I will collect voices in the Grand Committee Room only, and I remind Members that Divisions cannot take place in Grand Committee. It takes unanimity to amend the Bill, so if a single voice says “Not Content”, an amendment is negatived, and if a single voice says “Content”, a clause stands part. If a Member taking part remotely intends to oppose an amendment that is expected to be agreed to, they should make this clear when speaking on the group. We will now begin.
Clause 1: Implementation of the Agreement on Government Procurement
Amendment 1
Lord Lennie
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or (b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”Member’s explanatory statement
This amendment would require the Secretary of State to enter into negotiations to secure greater labour rights in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.
Lord Lennie (Lab) [V]
My Lords, like others, I regret that the Committee stage of the Trade Bill has to take place in a Covid-secure manner—our new normal—and I look forward to when we can all return to the Chamber. Until then, we must make the best of what we have. I am extremely grateful to all the staff who have worked so hard to make this all possible.
Trade is an essential component of the UK’s future economic recovery from Covid-19 and to our continuing future prosperity. Labour’s overarching concern is to ensure that the necessary protections and measures that have been developed over more than a century of rising standards are not put at risk by this or any other future Government. We cannot have a series of trade deals that open the door to reduced workers’ rights or living standards or to higher carbon emissions. To ensure that this is not the case, Labour supports acceding to the GPA after Brexit as an independent member, while safeguarding the capacity for public bodies to make procurement decisions in keeping with public policy objectives.
The Government have said that it is their objective to join the GPA as an independent member, with substantially the same arrangements that we currently have with the EU. If we are to have this, there is the significant matter of retained EU law. For that statement to hold true, surely the EU law must continue to apply beyond 31 December 2020. As an example, the public contract regulations will end at the end of next year. It remains essential that the UK maintains the strongest procurement systems for companies in the UK. Labour is about having the strongest possible procurement system. This would instruct the Government to pursue with GPA partners the inclusion of labour standards, environmental standards, support for small and medium-sized enterprises and the consideration of the public health consequences in our annexes to the GPA.
Amendment 1 refers to
“labour market interventions and compliance with ILO standards”.
We want to ensure that companies that fulfil their obligations to the workforce and meet their commitments to working with trade unions in a constructive manner are not undercut by companies that do not. This would reward businesses while supporting their workforce. ILO standards seek to support and protect workers in supply chains, especially those exposed to modern slavery, which are a vital component of procurement.
Amendment 2 refers to environmental exceptions with carbon considerations. Public procurement through the GPA must help in the fight against climate change. Current UK minimum standards take into consideration energy and water usage, carbon footprint, resource efficiency and life-cycle costs in order to set minimum standards of sustainability for government purchases. Our standards need to be protected, both to maintain these procurement standards and to ensure that our schedules at the GPA remain up to date, with action to meet the climate crisis.
Amendment 3 seeks to ensure that SMEs have access to procurement contracts, which can often be a real problem. Now, more than ever, this is essential if this recession is to turn into recovery. Amendment 4 seeks to improve the way in which public procurement operates by addressing public health. The public health value of a provider should be a factor in awarding contracts, not just price. Public health medicine is part of the greater enterprise of improving the public self and that is why procurement matters in this respect.
The TUC has a range of concerns about the provisions of the GPA being more limited than the current measures within the EU procurement directive of 2014, which were transposed into UK domestic law through the public contract regulations 2015. The TUC says that there is no condition in the GPA that obliges member states to ensure that, when performing public contracts, contractors comply fully with the applicable environmental law and with the social and labour standards set out in the EU and national laws in collective agreements. The TUC believes that provisions must be made in the Bill to enable contracting authorities in the UK to include wider definitions of social value and price-quality ratio as well as obligations set out in respect of social, environmental, labour law and collective agreements within their tender specification, contract evaluation and award criteria. These should be incorporated into the regulations that replace the public contract regulations when they expire in December 2020.
Amendments 100, 101 and 102 seek to ensure that any secondary legislation needed to implement commitments under the GPA following our accession should be affirmative. Labour believes that Parliament should have the right to scrutinise the all-important “coverage schedules” that the Government will lay before the WTO in respect of our accession to the GPA.
We are minded to support Amendment 5 in the name of the noble Lord, Lord Hendy, which would ensure that the UK could not implement the GPA if it would prevent public authorities from insisting that public procurement tenders and contracts conform to the UK’s ILO commitments.
I hope that the Minister considers the long-term economic, social, environmental and labour values to be gained from this approach. Unless we are prepared to use this moment, it is hard to see how we will maintain the standards of procurement that we currently have, let alone enhance them. I beg to move.
Baroness Burt of Solihull (LD)
My Lords, I shall speak to Amendment 3 on small businesses, to which I have added my name. As we enter the post-transition and post-Covid world of international trade, we must ensure that the role of SMEs in procurement is fully protected so that it can help strengthen the UK’s economic playing card as we navigate the current turbulence and beyond.
At Second Reading, I asked the Minister, the noble Lord, Lord Grimstone, whether, given our new freedom from the EU, we should adopt the policy of the US, Canada, South Korea and Japan to put an annexe in our GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations to help bring parity of support for small businesses in accessing markets against larger firms. After all, is that not why the UK decided to leave the EU in the first place? The noble Lord informed me that non-discrimination is the core principle of procurement in the UK and we do not have set-asides for SMEs in international agreements. Okay—I hear him. But whether or not it is intended, it can be more difficult for small businesses to compete against larger firms by virtue of their size and the complexity and requirements of the procurement process.
I will not detain the Committee by going through them all, but when pitching for public contracts, I suggest that few small businesses would feel that the playing field was equal. Take late payment, the scourge of small businesses, particularly because of the relative power of the organisation doing the procuring. The Federation of Small Businesses has long been calling for bad payers to be barred from applying for government contracts. I know that this is something that the Government acknowledge, and this amendment would effectively help the Government to defend themselves against late payers on the trading stage. Why does the Minister feel confident that, when we are competing against the likes of the US, South Korea and Japan, UK small businesses will get fair access to public contracts? Nobody wants to see poor payment practices on the trading stage; this is about fairness and parliamentary accountability, so I would appreciate some commitments from the Minister today.
That brings me to the point of the amendment. It lays a duty on the Government to ensure that small businesses can compete fairly to get greater access to procurement contracts in countries to which the GPA applies. It makes sure that the Government fulfil this obligation by laying a Statement before Parliament reporting that this has been done, and the outcome. If the Minister is committed to a level playing field for small businesses, why not agree to put it into law?
Lord Hain (Lab) [V]
My Lords, I support Amendment 1, moved so ably by my noble friend Lord Lennie. I wish to speak specifically to Amendment 5 in the name of my noble friends Lord Hendy, Lady Blower and Lady Bryan. Why? One year ago, on the same day—24 September 2019—that the UK Supreme Court ruled the Government to have unlawfully sought to prorogue Parliament, the Prime Minister was in New York presenting his vision of a post-Brexit Britain to an audience of American business leaders. It involved undercutting European tax rates and adopting lower standards of environmental protection, consumer safety and labour rights than those set by the European Union. It foresaw a low-tax, lightly regulated haven on the European Union’s doorstep, not interested in competing on a level playing field but intent on winning any race to the bottom.
This Trade Bill seeks to take us one step closer to fulfilling the Prime Minister’s dream. It does so more by omission than by commission. As in Lena Horne’s “New Fangled Tango”,
“It’s not what you do do, it’s more what you don’t do”.
It does nothing to promote labour standards. It does not stop signatories to trade agreements seeking unfair competitive advantage by failing to comply with International Labour Organization conventions. It provides no powers for government bodies in the UK to impose public procurement conditions on contractors requiring them to abide by UK labour law or by ILO conventions ratified by the UK. Instead of levelling up labour standards, the Bill encourages shady employers who want to undercut their more responsible rivals by shafting their workforce. It does so by turning a blind eye to bad employment practice and pretending that unfair exploitation does not exist, despite ample evidence that it is widespread from employment tribunal cases and from the daily experience of trade union representatives in workplaces nationwide.
This amendment would put a stop to any regulations implementing the Agreement on Government Procurement if that agreement could in any way hinder the ability of UK state authorities—be they central Government or the devolved Governments—to set conditions on anyone tendering for a public contract. The power of the public purse should be used to raise labour standards and to encourage compliance with global standards such as those set in ILO conventions.
Lord Hendy (Lab) [V]
My Lords, I will speak to Amendment 5, which complements one aspect of my noble friend Lord Lennie’s Amendment 1, as explained in his excellent speech just now. As my noble friend Lord Hain has set out with his customary clarity, the purpose of Amendment 5 is to prevent the GPA undermining or limiting the capacity of public bodies to impose conditions in public contracts that require respect for the rights and protections of the workers engaged to carry out those contracts. The rights and protections identified are limited to those specified by those conventions of the ILO that have been ratified by the UK.
Public procurement is a key tool in the protection of workers’ rights, and has been at least since the fair wages resolution of 1891, which was expanded in 1909 and again in 1946. The resolution required a “fair wages clause” in government contracts which obliged government contractors to pay the wage rates and abide by the terms and conditions that were set by collective agreements or arbitration in the relevant sector. From 1909 to 1979, collective bargaining was the policy of Governments of all political parties, with the consequence that collective agreements covered well over 80% of the UK workforce for the 40 years leading up to 1979. Since then, there has been a change in government policy and law that has resulted in collective agreements now covering only about 25% of British workers.
However, public procurement requirements can be based on other standards than those of collective agreements, desirable as that would be. Another means of achieving the levelling up, which the Government claim is an objective, is by reference to the minimum standards set by the ILO. There can be no rational objection to reliance on these standards, since they have long been ratified by the United Kingdom. Indeed, under EU law for many years, states have been required to ensure the observance of ILO standards by public contractors. Article 18, paragraph 2 of the EU directive on public procurement of 2014 requires states to take measures to ensure
“that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law”
including the provisions listed in Annex X to that directive. In that list are the core ILO conventions, all of which have been ratified by the United Kingdom. That is not inconsistent with the revised GPA.
Amendment 5 is modest indeed, and requires no more than that the envisaged regulations should not undermine what the current law requires. I hope that the Government will accept this amendment.
Baroness Blower (Lab) [V]
My Lords, it is a pleasure to follow my noble friends Lord Hain and in particular Lord Hendy, whose erudition in this area of law is well known. I have lent my name to Amendment 5, because, as I said at Second Reading, the Bill is lacking in positive reference to workers’ rights. As my noble friend Lord Hain said, it is more about a race to the bottom. It is therefore important to remedy this deficiency.
The deficiency can be remedied in part by Amendment 5. The UK already has commitments as a signatory to the ILO. These are currently protected by EU directives on public procurement, but this amendment is an opportunity to insist on conformity to them in relevant domestic legislation. The much-vaunted “levelling-up” agenda of the Government may be thrown into doubt by any number of decisions they may take. Not to accept the need to protect workers’ rights would be one such decision.
There is ample evidence that workplaces organised by trade unions are generally healthier and safer places to work, so the right to organise as in Convention 87 is a core principle. The right to collective bargaining and to achieve collective agreements, as set out in Convention 98, is central to providing an appropriate forum to determine wages.
This amendment is about creating conditions to ensure the provision of employment rights by insisting that no provision of the GPA should undermine the rights of and protections for workers in relation to or under a tender or contract. If, as I am sure we would all wish, we are to see public procurement in which relevant authorities have proper regard to the rights of workers and in which we as a country are seen to honour the obligations up to which we have signed in the ILO, our course is for your Lordships to agree the amendment.
Lord Fox (LD)
My Lords, I shall speak to Amendment 6 in my name, but before that I want to speak more generally on Amendments 1 to 5. These all refer to Clause 1 and the UK’s future participation in the Agreement on Government Procurement. It should be noted that the GPA has been an important form of market access that has come with our membership of the European Union. As the Minister and others have said, it opens up the possibility of access for UK companies to about £1.3 trillion of government contracts. One would expect Her Majesty’s Government to talk up this side of the equation.
The expectation is that the UK will enter the GPA at the end of the year, and I understand that the Government are seeking more or less to reproduce the access that we have enjoyed thanks to our European Union membership. Perhaps the Minister can give us an update on the timetable and whether there may be any changes to the terms that we might expect of the GPA at the turn of the year.
As I said, the external element of GPA is extremely important, but the flipside of that external access is that international businesses have access to about £67 billion of public service contracts in the UK every year. As we heard from the noble Lords, Lord Lennie, Lord Hain and Lord Hendy, the noble Baroness, Lady Blower, and my noble friend Lady Burt, these amendments seek to establish comfort on the nature of those services in terms of their impact on society and how publicly procured contracts affect people. We are sympathetic to these aims. Of course, we will debate later further amendments with similar objectives covering the whole trade environment and not just GPA, because workers’ rights, the environment, food standards, protecting the NHS, the needs of small businesses and other vital issues are central to the trade agenda. There is no point in having international trade if it erodes standards for people who live in this country.
In his maiden speech at Second Reading, the Minister made it clear that there was no intention to water down terms and conditions, yet the Government seem reluctant to put any of those terms and conditions into the legislation. This makes people suspicious—it makes me suspicious. These amendments, or amendments that come later, would help alleviate our suspicions.
Amendment 6 would require the Government within six months of acceding to the GPA to lay before Parliament a report on what help they are providing to businesses in the UK so that they can secure the advantages of this market access. The Government paint a picture of “global Britain”, a nation sailing the high seas of international trade with swagger and elan. I am not sure that I wholly sign up to this particular view of the world, but the GPA is an opportunity for UK companies, and has been since 1996. The Minister also said at Second Reading:
“I should like to make it clear that this Government and I are committed to transparency”.—[Official Report, 8/9/20; col. 675.]
All the evidence points to his sincerity in this regard. In the interests of the transparency that the Minister espouses, Amendment 6, proposed by my noble friend Lord Purvis and I, simply asks for a report within six months on how the global Britain project is going with respect to the GPA. It would set out how Her Majesty’s Government are facilitating UK business taking advantage of the GPA. What actions have backed up the Secretary of State’s brio? For example, how have Her Majesty’s Government helped small businesses in the way just advised by my noble friend Lady Burt?
This level of transparency will have the benefit of reassuring people like me who fear that much of the language around international trade is just that: words. We want action; we want success. Human nature being what it is, our proposed six-monthly report would also help ensure that someone was actually doing something during that period.
Baroness Bryan of Partick (Lab) [V]
I am pleased to speak in support of Amendment 5. The Institute for Government puts UK government spending on procuring goods, works and services from external suppliers in 2018-19 at around £292 billion, which is more than a third of all public spending. This huge spending capacity should be used as leverage to ensure the highest standards of labour rights here in the UK and in countries with which we do business. The Trade Bill gives the Government the opportunity to advance this process.
This amendment and the later Amendment 18 ask the Government to permit public bodies to consider more than short-term concerns such as lowest price and to take into account the welfare of the workers who will carry out the contract, ensuring that acceptable standards of employment are applied by any successful bidder. The conditions suggested in the amendment are in no way onerous; they are the basic minimum standards as set out in the conventions of the International Labour Organization which have been ratified by the UK. As we are a founding member of the ILO and a country that has ratified the eight fundamental conventions, this would not be asking too much. The amendment simply expects that any trade deal should not undermine or restrict the ability of a public body to include in its tender that bidders should abide by these basic employment rights, covering: freedom of association; the right to organise and to free collective bargaining; following basic rules against forced labour and child labour; and outlawing discrimination.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I will address the provisions of Amendment 3 in the name of the noble Lord, Lord Lennie, and use this opportunity to ask the Minister a couple of questions.
One clear advantage of leaving the European Union was that we would leave behind the European procurement programme, which is very similar to this one. That would open up possibilities for our home producers of meat, cheese, dairy products and other products, particularly foodstuffs, to win contracts in our hospitals, schools, prisons and so on. The threshold that I remember was €135,000, but that may of course have changed with the passage of time.
Does the Bill limit the opportunities for small businesses and others to bid for contracts, particularly with public bodies such as schools, hospitals, prisons and others, or will the opportunities be exactly the same as we currently enjoy under the EU? Further, will my noble friend explain what the threshold will be? Will the threshold that we adhered to under the European Union be followed by the GPA, as we are already deemed to be members through our membership of the EU? Who will be party to setting the threshold and the conditions of procurement? I hope my noble friend will put my mind at rest that, as we transition out of the EU, there will be more and greater opportunities for small and medium-sized businesses to bid for these opportunities, not fewer.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I offer the Green group’s agreement with the legal aims of all noble Lords who have spoken so far. Amendments 1 to 5 seek to keep environmental and public health protections, and in particular workers’ rights protections. I note that there has been very strong support for Amendment 5. I offer support, too, for Amendments 100 to 102, because of the need for democratic control of this House—something that we seem to spend a lot of time talking about these days. I also agree very much with the words of the noble Baroness, Lady Bryan, about how they would keep basic minimum standards here, so it is very hard to see why the Government would disagree with any of them.
However, I can perhaps offer different sentiments to some of the ones expressed in the debate thus far. The noble Lord, Lord Lennie, said that we had seen a century of rising standards. That is broadly true if you start from the beginning and go to the end, but in recent decades there have been real falls in standards, and when we look at the state of the world, whether we consider the natural environment or the climate emergency, we see that there has been a massive degradation.
The noble Lord, Lord Fox, said that there is no point having trade that reduces our standards. I very much agree with that, but we have a real problem in that so much trade has done just that. On Friday, I was at the launch of a report by the Green House Think Tank and the Green European Foundation on trade and investment requirements for zero carbon, which set out how much damage trade has done historically. However, what we are debating are the amendments, and however much we might want to shape towards a trade world that has less trade in it but far better trade that does not build in environmental destruction and exploitation of workers, we do not want to go backwards. These modest amendments, as other noble Lords have said, seek modestly to ensure that we do not go backwards. I therefore commend them to the Committee.
Lord Rooker (Lab) [V]
My Lords, I agree entirely with the speech of my noble friend Lord Hain. We have moved a long way from when public contracts and the wages thereof were governed by the 1946 House of Commons fair wages resolution. We do not want to go back to those days, but we will if we are not careful.
Before making my main point, I want to reinforce the point made by the noble Baroness, Lady McIntosh, in her question about small traders. I agree with the sentiment behind her questions to the Minister, but in relation to schools, hospitals and prisons, there is an real ongoing problem: it is not possible to create a situation where someone can bid—or feel that they have a chance of bidding—for a particular prison or school, or for a group of prisons or schools, simply because we have devolved the administration and awarding of contracts to the lowest possible level; there is no central control. Small firms will miss out unless something is put into the process that allows them to benefit. On the other hand, I do not want to leave the EU, so I do not want small firms to benefit either way; there is a better way of reorganising the EU.
The only reason I asked to speak on this group is Amendment 100. It is another example of how this Government are constantly trying to make sure that this House does not get a voice. The Bill talks about scrutiny as a resolution of either House of Parliament. That is not good enough. The amendment would correct it: it should be each House of Parliament. The contempt shown by Ministers for the parliamentary scrutiny process is abysmal and on a massive scale, and it has to be pulled back constantly. The House of Commons will try to make that provision tomorrow, and we have to do it in this Bill. I therefore offer 100% support for Amendment 100.
Baroness Noakes (Con)
My Lords, listening to noble Lords who have contributed so far, it seems to me that they are losing sight of the fact that Clause 1 is really about enabling the UK to take advantage of the GPA, and they seem to be trying to make that much more difficult. Several noble Lords talked about a reduction in standards, and a race to the bottom was mentioned twice. Government policy is not to race to the bottom; it is not to diminish standards. We constantly hear that noble Lords in other parts of the House do not trust the Government. The noble Lord, Lord Fox, said that we need amendments to allay his suspicions. I have to say to him that we do not legislate just to allay the suspicions of Liberal Democrat Peers; we legislate for effective legislation.
Many of the amendments are just telling the Government how and when they have to go and negotiate on certain things. If they were passed, they would be quite burdensome on the Government, who have quite a lot to do to try to get us ready for a post-EU trading world for the benefit of the UK. Nothing really happens if there is no outcome from most of the amendments, which seems to me a flaw in them.
I listened carefully to what the noble Baroness, Lady Burt, said about SMEs. There is an issue about SMEs having access to public procurement opportunities in the UK, as well as the rest of the world, which is what we are talking about getting access to through the GPA. The answer is not to go and negotiate with other signatories to the GPA. The issue of SMEs not having the access that they think they could have would be better dealt with by more specific and targeted government action to remove any barriers to SMEs taking part in government procurement, wherever they are. I hope that my noble friend can say something about what can be done to enable those SMEs which wish to take part in government procurement—not all do, especially not international government procurement —to do so.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
I call the noble Lord, Lord Judd. Do we have Lord Judd?
Lord Judd (Lab) [V]
I am sorry about that; I did not have the unmute signal on my laptop; it came rather belatedly.
I want to say how much I support the speeches of my noble friends Lord Hain, Lord Hendy and Lord Rooker —and, yes, the noble Baroness, Lady Bennett of Manor Castle. When we are looking at legislation of this kind, it is very important to see what the purpose behind it really is. We know that there are strategists at work who are determined to change the British constitution and the British economy into a completely different constitution and economy from that which we have known for most of our lives. They want a free-for-all, with as few inhibitions as possible about what is done. They want to have a free hand. That is why the amendments in this group are so important.
At the age of 13—a long time ago—I had the privilege of being taken by my father to a conference in which he had very much a leading part. It was taking place in the ILO building in Geneva. I remember how impressed I was then by that post-war international consensus, which was determined to ensure that we had not only prosperous economies—which of course we wanted—but standards and work conditions worthy of a civilised society. We must not let that become eroded. It is essential to be vigilant, and we therefore need these safeguards in the Bill. How glad I am that we have this grouping before us.
Lord Balfe (Con) [V]
My concerns are rather general. I have been associated with the European Union for a very long time, as many people know: since 1979. I was at the TUC when Jacques Delors came and won the TUC over to the fact that the European Union could lay down standards which would benefit working people all over Europe, not just in Britain. I am very concerned that the Bill should not weaken any of those standards.
I am not going to point a finger at the Government and say, “Oh, that's what they are trying to”, but I would welcome a clear statement from the Minister that the Bill does not aim to give British working people lower standards or enable people to work around the standards that have been laid down and enjoyed for a long period. That is a fundamental matter.
When we look at where those standards come from—I follow the noble Lord, Lord Judd, in this—we see that the International Labour Organization has played an historic and noble role in working people’s standards for the past 100 years. It is the only part of the League of Nations that is still in being in its original state. The ILO and its conventions must be at the centre of any trade agreement negotiated by the British Government. If we are to have trade agreements, we cannot ignore the ILO’s standards or the basic standards of human and workers’ rights, and this is one way in which we can do it.
We heard a lot in the referendum, after the referendum and in the election about taking back control, but I hope that we are not going to be taking back control in order to weaken standards which have been hard won over the years. One of those standards is the democratic participation of Parliament in lawmaking and the making of trade agreements. This is highlighted in Amendment 100, and I share the sentiments of the noble Lord, Lord Rooker, who said how important it is that each House of Parliament has a say. We cannot delegate democracy. If we are a two-part Parliament, this House must also have an input.
What concerns me about the whole approach is that we are not taking back control to Parliament; we are taking back control from a Parliament, the European Parliament, and seem to be putting it quite firmly into Whitehall—largely, it would seem, in an unaccountable manner. I hope that the Minister will be able to assure us that there will be a central role for both Houses of Parliament in how the trade agreements to be negotiated under the many clauses of this Bill are implemented.
The final point I want to make is this. The noble Lord, Lord Lennie, mentioned the TUC. I have not heard a word from the TUC so I put it to its representatives, who I presume will be monitoring this debate, that if they want to protect workers’ rights, they should remember that a third of all workers do not vote for the Labour Party, they vote for the Conservative Party, a good number of them vote for Plaid Cymru and a fair number vote for the Green Party, the SNP or the parties in the north of Ireland. I would say to the TUC, “If you are issuing briefs, please issue them to everyone. If you’re not, please wake up”, because this Bill has enormous import for the future of workers in Britain and they deserve the TUC to be a little more proactive than it has been up to now.
Lord Purvis of Tweed (LD)
My Lords, I wish to address Amendment 6, referred to my noble friend Lord Fox, and to support Amendment 3, spoken to by my noble friend Lady Birt and to which she has put her name. In so doing, I thank the noble Baroness, Lady Noakes, for supporting in principle the idea that we are asking the Government to outline how they will be supporting British business to take advantage of the GPA agreement of which we are now a member in our own right as agreed by the other members. I reassure her that this Bill will never be long enough to address all the fears that me and my colleagues may have of this Government, but the amendment is practical, sensible and simply asks the Government to be clear. We will not rely on the Minister’s winding-up speech in this short debate in Grand Committee; rather, as my noble friend Lord Fox has indicated, we are asking for a proper report from the Government setting out how they will support our businesses.
We want the UK to prosper and our businesses to benefit from any new opportunities while also not being burdened if trading relations with our biggest market in Europe are harder. Procurement is one area where our businesses can seek contracting opportunities across all the GPA members, but there are practical barriers to those, whether it is language, knowledge of that country’s government procurement system, having local partners or legal protections. These are just some of the factors among many and it is a complex area in which to do business.
According to the OECD, taxpayers’ money that is spent by the Government on goods, services and infrastructure such as roads, hospitals and schools accounts for over 13% of gross domestic product, so there is a huge market. I can reference Amendment 51 in a later group, but let me refer to the NHS here at home. My noble friend Lord Fox gave the figure of £67 billion of UK procurement. NHS England spends around £27 billion on goods and services every year. Ward consumables are delivered through the American-founded and German-owned DHL. Mental health beds are operated by American companies providing about 13% of in-patient beds in England. In some areas, the proportion of US-owned mental healthcare facilities is much higher. In Manchester, patients have a 50:50 chance of being admitted to a privately owned hospital and a one in four chance of that bed being provided by an American-owned company. Patients think that the NHS is purely British from beginning to end, but services are being provided by an American-owned company. There is thus no question about the need for the British Government to provide more support for British companies to take up opportunities abroad. The Government strategy is for the NHS supply chain to be expanded and to make it easier for companies around the world both to bid for and to secure NHS services within this country. Of course, they will assist British businesses in doing the same but—I am not necessarily critical of this—the Government operate a level playing field.
The US sees this market as a valuable one because it is colossal, so it is no surprise that it has within its negotiating mandate with the United Kingdom to ease barriers so that its companies can benefit from greater market access to provide over £30 billion-worth of basics and consumables in addition to £7 billion in deals for capital contracts. It has been interesting to note that procurement opportunities within the UK have expanded and that that is positive. It opens up the UK to more international co-operation, but as my noble friend Lady Birt, has said, we want to see greater support for British businesses to enable them to take up some of these opportunities too.
It is interesting to note that the European Union has emphasised that the final market access offer presented by the UK for membership of the GPA was
“commercially credible and viable, replicating the UK’s current coverage under the EU schedule with minor technical adjustments.”
The EU was a fairly enthusiastic supporter of the UK application, and why would it not be? It replicates the same basis as it has at the moment.
I note that the noble Baroness, Lady McIntosh of Pickering, asked the Minister about the thresholds. She referred to $130,000 being the threshold. That is the threshold of every single GPA member other than Japan and Aruba, which have it set at $100,000. Can the Minister say, if we are to have opportunities in our own right, why that threshold is the same as what we had within the European Union?
The reason the WTO and the EU were enthusiastic about replicating what we have at the moment is because the WTO said when it approved our GPA membership in our own right
“It was underlined that the United Kingdom accounts for over a quarter of the EU’s total procurements covered by the GPA and that, when taking into account just central government entities, the UK accounts for nearly half of the EU’s covered procurements.”
There is no doubt that the EU is happy because it has retained market access to nearly half of all of that covered within the EU.
We were led to believe that the Government would negotiate nothing without using British leverage to get a better deal for Britain. Can the Minister explain what we have done with that? The Government did not include procurement in their mandate for a future relationship with the EU, while the EU’s mandate did. It wanted to go beyond the GPA, including utilities and supplementing the GPA with additional areas of coverage which would have opened up the European market for British businesses under procurement. But, no, the Government wish to go on the GPA model, which means that the European Union has in effect preferential access to UK procurement where we have not sought to open up some of the barriers to the European market.
I have a final question to ask the Minister regarding what is happening here at home. The 1998 devolution settlement means that public procurement is an area of responsibility for devolved government in Scotland and Wales. The Government have indicated that they wish to seek divergence in our current approach to procurement. How would this be seen in the devolved areas? I know this as a former constituency Member in the Scottish borders who fought many campaigns on the issue of being against centralisation and the Government centralising procurement policy and bundling up contracts, which makes it harder for smaller, local businesses, as my noble friend Lady Birt has indicated. The White Paper states
“For both goods and services, these provisions will be supplemented by the non-discrimination principle. For goods, non-discrimination will apply within certain excluded areas such as procurement.”
Paragraph 145 goes on to say that the Government are considering
“whether and to what extent it should apply to public procurement, in particular for above-threshold procurements.”
That means that, in effect, the UK Government for England can decide what the threshold levels and the policies for procurement would be for the devolved Administrations. No reference is made to procurement in the Bill, so can the Minister clarify the position on procurement within the internal market?
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)
My Lords, it is a pleasure to speak for only the second time in a debate and my first time in Committee, but as with my maiden speech, it is on matters of great importance to the businesses and consumers of the United Kingdom as we prepare to take our first steps as an independent trading nation for the first time in over half a century. I look forward to working with your Lordships to bring this Bill on to the statute book. I listened to the vast experience of Members of the House when we debated the Bill at Second Reading, an experience which I have already heard repeated in this Committee, and I know that noble Lords will take great care to scrutinise the provisions of the Bill thoroughly.
As I said at Second Reading, the intention of the Bill is to ensure continuity and certainty for the UK and our trading partners once the transition period ends. It will establish an independent body to protect UK producers from injury caused by unfair trading practices. It will enable better use of data to facilitate and improve trade. It will also ensure—the subject of this group of amendments—that UK businesses continue to have access to £1.3 trillion a year of government procurement contracts globally through our independent membership of the WTO’s Agreement on Government Procurement, or GPA. What the Bill will not do is lower our standards in any area.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, I am sitting here looking at the small surface wipes, which profess to kill 99.9% of all viruses. In his speech, the Minister used broadly the same terms twice, and substantially the same terms once, when describing the follow-on GPA agreement. That is equivalent to the 0.1%, which is important these days. Could the Minister tell us what is not the same, because “broadly” and “substantially” is not “identical”? Therefore, there is a difference. In what areas are we seeing variation?
Lord Grimstone of Boscobel (Con)
I thank the noble Lord, Lord Fox, for listening so intently to my speech to make those calculations. It is of great benefit to me that he did so. The changes are technical. I do not have them in front of me, although I know what they are. However, if I may, I shall write to the noble Lord and recount them for him.
Lord Lennie (Lab) [V]
I thank the Minister and other noble Lords who have taken part in this debate, in particular my noble friends Lord Hain, Lord Hendy and Lady Blower for their contributions on Amendment 5, my noble friend Lord Rooker on Amendment 100, and my noble friend Lord Judd for his childhood memories from the age of 13 about maintaining standards.
We are about trying to avoid any possibility of lowering standards or racing to the bottom. Maintaining current standards and including provisions in current EU law in the crossover to post-EU exit would be the greatest reassurance that we could all receive about the Government’s intentions. I am not in any way doubting the Minister’s well-intentioned summary of his intention and the Government’s provisions. However, if it is not carried over, it leaves the possibility of escaping from one or other provision at some time in future.
The noble Lord, Lord Balfe, remembers Jacques Delors coming to the TUC and talking about the EU’s intentions to provide standards across the whole of the continent. At the time, part of the TUC felt conflicted with those who believed that collective bargaining was the only way forward. A long time has passed since then, and we recognise the importance of legislation in supporting workers and standards, and other provisions that are subject to public procurement.
Therefore, there is no clear-cut decision to be made on these amendments, and the affirmative process brings things into the open. It is not just about the minimum decisions about changing departments’ names; it is about matters, from that, right the way through the procurement process that can be brought out into the open and debated in both Houses as and when it is necessary. It provides the Government with the opportunity to avoid the charge that they are not subjecting themselves to proper scrutiny. That said, for the moment, I beg leave to withdraw these amendments, but we may well return to this at a future stage of the Bill.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
We now come to the group beginning with Amendment 7. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate.
Clause 2: Implementation of international trade agreements
Amendment 7
Lord Stevenson of Balmacara (Lab) [V]
My Lords, in moving Amendment 7, I shall also speak to the others in this group, which it is difficult to argue about knowing what is to come further down the agenda and on the list of amendments. I mean this in the sense that it talks about and effectively looks to amend what I will call the status quo ante. I say this because we very much hope that the Government will accept later amendments about scrutiny and other issues; this would, of course, considerably change what would be said in Clause 2, which is about the implementation of international trade agreements.
In some senses, this debate will largely be conducted in a vacuum. I hope I will be able, as I go through, to argue the points that I want to make and that there are points here that we need to focus on quite hard. This is particularly because the opening subsection here—Clause 2(1)—is drafted very broadly, and I will make a particular point about it. I will read it out:
“An appropriate authority may by regulations make such provision as the authority considers appropriate for the purpose of implementing an international trade agreement to which the United Kingdom is a signatory.”
This seems such a wide power that is being given to Ministers, and it needs to be questioned in its own right. However, obviously, it plays back into what I have just been saying regarding future amendments that we will discuss in relation to the power of Parliament and where and how its various committees have a role in this process.
Amendment 7 is very narrowly drawn; it suggests that, before “appropriate” we put in “necessary and”, which would make it read “considers necessary and appropriate” in relation to the power being given to Ministers. There may well be an argument against what I am saying along the lines of, “This is splitting hairs and is a legal definition that we do not need to worry about; it is common in many parts of the statute book and we should not be concerned about it.”
However, I thought it would be worth raising this as an earlier point on the agenda because a similar amendment was moved in the Commons by the Member for Dundee East. Regarding the powers in Clause 2, he pointed out:
“The effect of the amendment would be to limit the scope of the powers”.—[Official Report, Commons, 18/6/20; col. 130.]
He described those powers as “vague and subjective”. I cannot possibly comment on that, but I look forward to hearing the Minister’s response to it. I want to quote, very briefly, what the Minister in the other place said when faced with this amendment:
“The power is needed to implement obligations arising from continuity trade agreements into domestic law over time and in all circumstances.”
He went on:
“Without such an ability to make changes, the UK would be at risk of being in breach of our international obligations.”
I pause, perhaps for hollow laughter. He then said:
“I can assure colleagues that the powers in the Bill will be used in a proportionate way ... The Government view ‘appropriate’ and ‘necessary’ as synonymous”.—[Official Report, Commons, 18/6/20; col. 131.]
That made me think a little, and I went to check the dictionary for my own satisfaction. It defines “appropriate” as:
“Suitable or proper in the circumstances”.
However, it defines “necessary” as “essential” and “needing to be done”. I really do not think that these are synonyms; I hope that when the Minister responds, he will be able to throw a little more light on to this.
However, I pause only to set the scene for discussions picked up in later amendments—on which I am very pleased to be joined by the noble Baroness, Lady McIntosh, and the noble Lord, Lord Purvis—and one in my name that I will speak to shortly. As I said, Amendment 9 deals with a situation that we hope will change, but it is basically about the use of the powers that are in the Bill and would be used should it be necessary to change or adjust the terms of a free trade agreement currently organised through the EU but that will become a matter for the UK once the interim period is finished.
We think that Clause 2(1) is important and the whole of the clause deals with the way these powers are implemented but also constrained. The point was made in the other place that, although the primary drafting of Clause 2(1)—which gives the power to
“make such provision as the authority considers appropriate”—
is very wide, there are constraints further on, particularly in relation to limits on such matters as not allowing the rule to be used to change tariffs, for instance. In fact, this is because there are powers in other parts of the statute book that would deal with that. Nevertheless, it is an example of the Government’s argument—which I am sure we will hear from the Minister when he responds—which is that, although this is a very broad-based power, it is necessary because of the uncertain way in which these things might change over time.
However, I wonder whether the Minister, when he comes to respond, might look in particular at some of the issues raised in the Explanatory Notes, paragraph 36 of which states:
“Not all obligations in EU-partner country trade agreements will have been fully implemented by the EU in EU law … by the end of the transition period.”
Therefore, the power in Clause 2 will be necessary to pick this up going forward. Could he give examples of areas where this applies? The Explanatory Notes talk about “procurement” and
“mutual recognition … in respect of enforcement or compensation provisions.”
They may well be the limits, but it would be helpful for the Committee to know a little more about that, and, when the Minister responds, I would be very grateful for this. If he wants to write to me, I will understand.
Paragraph 37 of the Explanatory Notes says:
“It is also possible that adjustments may be required to ensure that the new UK-partner country trade agreements work outside the original EU context.”
It states that this might require a “change to UK law”. We are now talking about changes to primary legislation so, again, it would be helpful if the Minister could give us some examples in relation this. The third point is that paragraph 38 says that it is important that we have continuity over time and that regulations must be “up to date”. Again, I think we accept that this is necessary, but it would be useful to have examples.
I do not want to detain the Committee too long on this, but I point out that the power in Clause 2 is very widely drawn. Constraints are implied in the way the Explanatory Notes are drafted but, as we know, these are not part of the statute book and are not able to be prayed in aid. We need statements from the Government to make sure that those arrangements are clear and available for us as we go forward. I think that deals with Amendment 7.
Amendment 10 would apply the provisions in the Bill to trade agreements other than the EU rollover trade agreements and allow the Bill to act as a framework for future trade policy. I suppose that, in tabling this amendment at this time, we are anticipating debates to come, as I have mentioned.
However, it is important that we get the context for this right. It is a complete mystery to me—despite the extensive discussions that we had the last time the Bill was in your Lordships’ House and despite our subsequent meetings with the current Minister and officials about this—why the Government cannot see their way towards an accommodation with those of us who believe very strongly that there is a role for Parliament to play that is not constrained by the negative resolution procedure under CRaG and that the Government would benefit from having more engagement with Parliament during the process of setting up trade deals and in relation to what they are doing, and would benefit in their negotiations with third parties on deals. This is because there would always be the constraint under which Governments would be able to say that they were not able to get such-and-such through Parliament and therefore they could not take it further. However, these issues will be rehearsed on future days, so I will not go into them in any detail, but I wanted to get a bit of the sense of that into the debate that we shall have on this group of amendments.
The Deputy Chairman of Committees (Lord Lexden) (Con)
The noble Baroness, Lady McIntosh of Pickering, does not seem to be available at the moment, so I call the noble Lord, Lord Blunkett.
Lord Blunkett (Lab)
My Lords, I shall address Amendments 9 and 10. I do not have anything as profound to say as my noble friend Lord Stevenson about Walter Bagehot, but I have something to say about the importance of our parliamentary democracy. There has been considerable recent debate, both publicly and in the House, about the role of Parliament, its input as well as its scrutiny, consideration and decision-making processes, and the importance that is attached to what the noble Lord, Lord Balfe, was saying on the previous group of amendments. In fact, I thought what the noble Lord said about taking back control was so obviously on point that I can make my observations extremely brief.
If Parliament is to work at all, it is not simply to give carte blanche to the Executive. My noble friend Lord Stevenson quite rightly made the point that, were amendments to be agreed and changes made that secured the framework on which trade agreements in future are ratified, Parliament would in part have done that job. If the amendments are not agreed, of course Parliament’s ultimate sanction is to consider and vote on the agreements themselves. Given the profound nature of our withdrawal from the European Union, the change in trade policy and the terms on which other subsequent trade agreements will be reached, it is absolutely critical that that is secured.
The reason that I intended to intervene this afternoon is purely on the basis that our Executive exist within Parliament. There is no presidency appointing an Executive, nor an assembly bringing forward its own separate policy requirements. Governments are embedded in Parliament, and as such Parliament has an obligation as well as a democratic duty to ensure that it does not give away those powers unless it has secured the requirements in the framework that avoid having to do it.
Lord Lansley (Con)
I thank noble Lords for my first opportunity to speak in Committee. Since Second Reading, an all-party parliamentary group has been established on the subject of trade and export promotion, of which I am vice-chair. I raise that in order to signal that I have that additional interest which has not yet been entered in the register.
On this group, I thoroughly agree with what I took to be the import of the remarks of the noble Lord, Lord Stevenson—that is, that he intends to have a substantive debate about the process for agreeing future trade agreements at a later stage. I agree with him about that; the group led by Amendment 35 seems to be more appropriate for that purpose, bringing, as it does, an amendment similar to that raised on Report in the other place by my former parliamentary neighbour, Jonathan Djanogly. So I will not go on at length about that.
At this stage we need to understand to what extent the Bill is purely for the purposes of securing continuity agreements following our exit from the European Union. Those who were with us on the debates on this subject on the Trade Bill in 2019 will recall that many amendments, just as they are this time, were put forward on the proposition that we are trying to establish what the future structure of trade agreements should look like, rather than seeking to establish what the continuity agreements after we leave the EU, carried forward, should look like.
Later amendments will look at how we might modify the constitutional reform and governance process. I think that is a better way of proceeding. I have my own amendment later for this purpose, and I think that CRaG is the basis for how we will look at future trade agreements. We can amend CRaG, and we will debate later how we might do that. I have my own proposal, but I will not go on about it now. I think it is important for us to distinguish between, on the one hand, the process of parliamentary approval of trade agreements and, on the other, separately from that, the implementation into domestic legislation of the obligations we enter into through international trade agreements and treaties.
A treaty entered into by the Government cannot itself change domestic law. Therefore, legislation is required to implement it, so will the Minister tell us two things in response to this early debate? First, will he repeat at this stage what our noble friend Lady Fairhead said on 21 January 2019 in the first day in Committee on the then Trade Bill? She said:
“We have already been clear that we will introduce bespoke legislation as necessary to implement those future free trade agreements. The Secretary of State for International Trade has already launched four consultations on prospective future trade agreements and announced that the Government will introduce bespoke primary legislation as necessary to implement these.”—[Official Report, 21/1/19; col. 613.]
I am hoping that my noble friend the Minister will say that, whether the number is four or more, the same process will apply in future. Of course, from my point of view that means that we do not need to specify what should be in future trade agreements and, by extension, change the law in this country, because, when the time comes, if the Government seek such a thing they would have to secure the consent of Parliament in primary legislation to do whatever they wish to do under those trade agreements. We do not need to have all those debates now.
The second thing is that I am hoping, as my noble friend the Minister knows, that he will reiterate the Government’s commitments, given early in the passage of the previous Trade Bill, to the processes for the future scrutiny and parliamentary approval of free trade agreements, published in the early part of 2019. If he can do that, it would help a great deal from the point of view of simplifying scrutiny of these and future amendments.
As for this group, Amendment 7 is a matter, strictly speaking, of semantics. To Ministers, if certain regulations are necessary to implement an agreement, then, in their view, they would be appropriate. If Ministers think something is appropriate, they always think it is also necessary. That is why, although the dictionary may not regard these two terms as meaning the same, in the mind of a Minister, they are the same.
Amendment 9 deals with the question of ratification. It says that the agreements that have to be implemented should not simply have been signed but should be ratified. It relates this, of course, to exit day for these agreements. I remind the Committee that we have passed exit day. After exit day it was the case, for example—I do not know how many examples there are, but it is a rather compelling one—that all member states of the European Union that were required to ratify the comprehensive agreement with Canada, CETA, had not so ratified. So, for example, the Dutch parliament ratified that agreement in July of this year: it was after exit day. The example I would draw, which I think is a compelling reason not to accept Amendment 9, is that it would have the consequence that the Canada-EU agreement would not satisfy the requirements of the legislation.
Lord Haskel (Lab) [V]
My Lords, apart from any rollover deals which we entered into when we were part of the European Union, these amendments deal with the ratification of future trade deals. Unlike the noble Lord, Lord Lansley, I support these amendments, for many reasons. First, as my noble friend Lord Stevenson explained, they give Parliament on opportunity, a chance, to improve treaties by flagging up ambiguities, loopholes or unintended consequences which may have been missed.
When we were members of the EU, these trade agreements were scrutinised for this purpose, on our behalf, by the European Parliament. It had considerable say in these negotiations and actually voted on the final text. This scrutiny is particularly important because international treaties are binding on future Governments. Indeed, full parliamentary scrutiny of trade deals was a commitment in Labour’s 2017 general election manifesto. Now that we have left the EU, we find that instead of Parliament having a say in these agreements, it is largely an executive power, and ratification becomes a formality.
When we debated the previous Trade Bill, Amendment 12 on Report proposed a similar process for ratification. It was approved by a strong majority in this House. Indeed, the House’s concern is demonstrated by the setting up of our International Agreements Committee to look at progress on trade negotiations—the noble Lord, Lord Lansley, referred to this.
These amendments also bring the management of our trade agreements into the 21st century, as my noble friend explained. This is because trade deals have become much more than simple matters of business. They are strategic; they are geopolitical; they affect our standard of living. This is why ratification has to be so much more than a simple executive process. Amendment 10 acknowledges this by setting a framework for future trade policy. This is so Parliament can ensure that our social and environmental values and standards are maintained. Amendment 10 assumes that these matters were taken into consideration when the EU negotiated a trade agreement, so this arrangement does not apply to rollover trade agreements, which I think is reasonable.
In supporting these amendments, I was influenced by a paper published by the Global Economic Governance Programme. It compared our ratification process with that of other countries in the EU. They involve their Parliaments extensively with the ratification process. Here, the extent of our Parliament’s power is to delay ratification by 21 days, which is the only way it can hold the Government to account. This is clearly inadequate, and these amendments set about putting it right. That is why I support them.
Another reason why I support these very timely amendments is that, in recent weeks, public trust in the Government’s executive powers has declined because of the way they are using their emergency powers to control the Covid-19 epidemic. This decline in trust is likely to be demonstrated in the other place tomorrow. If we are not careful, the same lack of trust will happen with the Government’s power to ratify trade deals with little parliamentary input. Again, this is why these amendments are timely and important, and they have my support.
Baroness Noakes (Con)
My Lords, this Bill is supposed to be about continuity agreements. I accept that Amendments 10 and 103 are within the Long Title, but I do not understand why whoever drafted the Bill gave it a Long Title which allowed amendments dealing with non-continuity agreements, non-free trade agreements, to come within its scope. However, we are where we are.
I put my name down to speak on this group of amendments mainly because of Amendments 10 and 103, which seem to be another back-door attempt to override the CRaG process, which is based on the much more long-standing process of the Ponsonby rule. It is part of a long-standing tradition that that is how we handle treaties in our Parliament. I accept that we will have a longer debate on that when we get to the group including Amendment 35. We ought to recognise that this is not simply a question of Parliament not being involved. In February 2019, the Government announced their approach to involving Parliament in international treaties, which supplements the formal CRaG processes. The current Administration have confirmed that they broadly stand by that earlier announcement of policy. It would be helpful if my noble friend the Minister could reaffirm that today.
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, I will call the noble Baroness, Lady McIntosh of Pickering, again and hope that she is able to join us this time.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful. I was muted, so I apologise for any inconvenience.
I support Amendment 7 and would like to explain to my noble friend Lord Lansley that this is more than just semantics. “Necessary” has a specific meaning in law, as has been identified by the Law Society of Scotland. Perhaps I should state for the record that I am a non-practising Scottish advocate. Against the background expressed by the Constitution Committee of the House on numerous occasions, in particular on this Bill but also on others, we are seeing an extensive scope of delegated ministerial powers, so it is incumbent on my noble friend the Minister to explain why they are required. By adding “necessary” as well as “appropriate”, we are flagging up to the Government that, in scrutinising the Bill and subsequent regulations, the objective of this legislation will go only so far as is necessary to implement the agreement in question. I hope that the Minister will see fit to accept this amendment.
I also wonder whether there has been an oversight in Clause 2(2)(b). The Explanatory Notes define international agreements as follows:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
For the sake of trade agreements relating to services, not least the right of people to trade services such as legal services, I wonder whether that was an oversight and whether it should be amended to read “free trade agreements and services”.
I also support Amendment 9, which I have signed, because, as stated in the Explanatory Notes, a trade agreement would need to be ratified before regulations could be made to implement it. In most other jurisdictions it is certainly the case that Parliament, and the devolved Assemblies and Parliaments, would ratify the agreement. Would my noble friend put my mind at rest that this amendment is not required because that is the legal situation? If it is not, I would see some argument for the need for Amendment 9.
Amendment 10 seeks to apply the provisions of the Bill to trade agreements other than EU rollover trade agreements, allowing it to act as a framework for future trade policy. If the Bill is not to be the framework, it would be helpful if my noble friend took the chance to explain to the Committee what framework the Government intend to use.
Lord Purvis of Tweed (LD)
My Lords, I will primarily address Amendment 10, to which I have put my name, and then Amendment 7. In doing so, I will reflect on a couple of very good points made by the noble Lord, Lord Lansley, and other noble Lords during this short but useful debate. I agree with the noble Lord, Lord Stevenson, that this debate frames the context for many of the later groups.
There is now no disagreement between the Government and the Opposition that trade agreements are now, by definition, deeper and more comprehensive than they were before we joined the European Union. The transformation of trade agreements from the mid-1970s to now has been significant. They touch on wide domestic policy, far beyond simply tariff rates or quotas for goods. Many will now include provisions on the service-sector economy, which trade agreements never touched on in the past. Therefore, seemingly innocuous technicalities in a trade agreement can sometimes have far-reaching consequences for domestic policy. Later on, the Committee will address additional chapters on climate, development and human rights that never used to exist in trade agreements. In the last group, the Minister referred to impacts on modern slavery and supply chains. These are now all within wider, deeper and more comprehensive trade agreements. It is also the case—admitted by the Government—that trade agreements in the UK in the 21st century impact on the devolution settlements that did not even exist before we joined the European Union. Therefore, there are wider consequences, and the Committee will be discussing those later.
Lord Grimstone of Boscobel (Con)
My Lords, before I start, I acknowledge the point just made by the noble Lord, Lord Purvis, about the wide-ranging nature of modern FTAs. We will no doubt return to that point in our future debate.
On Amendments 7, 9, 10 and 103, I shall turn first to Amendment 9, which stipulates that Clause 2 would apply only to agreements that the EU has ratified with third countries, as opposed to simply having signed them. Unfortunately, this amendment would mean that important agreements with key strategic partners would be excluded from the scope of the clause and so, once signed, would be left without an implementing power. My noble friend Lord Lansley has picked up this point in relation to Canada. This would include an agreement with Canada, because CETA has not been fully ratified by each member state of the EU, despite being in effect for some time now. We have heard from businesses large and small that providing continuity in this particular trading relationship is essential; unfortunately, this amendment would threaten these vital trade flows and commercial relationships.
I also draw your Lordships’ attention to the fact that a number of international development-focused agreements between the EU and third countries have not been fully ratified, despite being in force for some time. One example is the economic partnership agreement with the CARIFORUM states. Developing countries are sometimes unable to ratify agreements in full before entry into effect. Sometimes this is for procedural reasons; sometimes it is due to issues of domestic governance. Whatever the reason, this amendment would deny the UK’s trade for development assistance to these countries, simply because the predecessor trade agreement was not fully ratified.
I reassure my noble friend Lady McIntosh that the agreements that this amendment seeks to exclude have been subject to comprehensive EU scrutiny processes at mandate, negotiation and concluding stages. We were fully involved in those processes. As noble Lords are no doubt aware, the delay to ratification relates to individual country or state processes, as opposed to those carried out at the level of the European Union.
On Amendment 10, just as the previous amendment sought to exclude a number of key trading partners from the scope of the Bill, this amendment seeks to bring a number of new FTA partners into scope, including the USA, Australia and New Zealand. As I explained to the House at Second Reading, this Bill is a vehicle for the implementation of continuity agreements only. I am grateful to my noble friend Lady Noakes for picking up this point. Scrutiny and implementation of new free trade agreements is an important conversation but one that must be had separately from the Bill. No doubt we will be having that conversation at various points in the future.
However, I recognise that many colleagues would like some indication of and clarity about how this process will work. As noble Lords are aware, when negotiating new free trade agreements we have gone above and beyond the baseline CRaG process, providing extensive information to Parliament, including publishing our objectives and economic scoping assessments prior to the start of talks. We also hold regular open briefings for MPs and Peers throughout the negotiations. We will continue to keep Parliament updated on negotiations as they progress, including close engagement with the International Trade Committee in the House of Commons and the international agreements committee in the House of Lords. I give full recognition to the valuable work of these committees.
At the end of negotiations, we will produce an impact assessment of the final treaty prior to it being laid before Parliament for scrutiny under CRaG, alongside an Explanatory Memorandum. In addition, we will seek to allow time between finalising a new FTA and laying it before Parliament under the CRaG procedure, so that the relevant scrutiny committees in Parliament may produce an independent report on the agreement.
I am sure we will return later in Committee to the whole question of scrutiny and the important role of Parliament. I hope that the noble Lords, Lord Purvis, Lord Blunkett and Lord Haskel, and my noble friend Lord Lansley will not feel short-changed if I keep some of my power dry until that later debate.
My noble friend Lord Lansley asked about legislation for implementing future free trade agreements. As we have said on a number of occasions before, the Government will bring forward specific implementing legislation—the primary legislation necessary—for new free trade agreements, providing Parliament with plenty of opportunities to scrutinise and vote on these agreements. I hope that reassures the noble Lord, Lord Purvis. I look forward, no doubt, to our debating the matters that we have debated on this Bill on future Bills which would implement future free trade agreements.
In a nutshell, I do not believe that the established and well-functioning process for scrutinising continuity agreements needs to be changed at this point. This House has held three debates covering six continuity agreements, following reports published by the European Union Committee. As your Lordships will be aware, none of these debates has resulted in a Motion to Regret. This process has been fair, open and, most importantly, proportionate to the nature of the continuity agreements.
On Amendment 7, like other noble Lords I enjoyed the noble Lord, Lord Stevenson, parsing the meaning of “appropriate” and “necessary”, and my noble friend Lady McIntosh has given us the benefit of her Scottish expertise on this matter. I can speak quite plainly and say that all regulations made under the Clause 2 power to implement international trade agreements will be necessary. The Clause 2 power is needed to implement legislative obligations arising from trade continuity agreements into our domestic statute. Our expectation is that this power will be mainly used for obligations relating to procurement or recognition of product conformity assessments. To clarify, tariff-related provisions will be implemented using powers in the Taxation (Cross-border Trade) Act.
Without the ability to make such changes, we would be at risk of breaching our international obligations. It is the Government’s responsibility to ensure that this does not happen. However, this proposed amendment could prevent that by constraining the vires or scope of the regulations that can be made under Clause 2, in particular when using the concurrent powers to legislate in areas of devolved competence. We will be debating that topic later in Committee.
I can assure the House that, despite the suspicions that some noble Lords have, the powers in this Bill will only be used in a proportionate way and that consultation with all stakeholders is a fundamental part of our approach and will remain so going forward.
On Amendment 103, I thank the noble Lord, Lord Stevenson, for his amendment. However, I fear I may be beginning to sound like a broken record, as I am going to say yet again that this is a continuity Bill. The Government have no desire to seek sweeping powers to be able to use this Bill to implement all our future free trade agreements, with the likes of the US, Australia and New Zealand. I dare say that, if we had tried to do that, our knuckles would have been very sharply rapped by this House.
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, I have received two requests to speak after the Minister, from the noble Lords, Lord Lansley and Lord Purvis of Tweed. I call the noble Lord, Lord Lansley, first.
Lord Lansley (Con)
My Lords, I am grateful to my noble friend the Minister for the assurances, although I note his powder is as yet dry in relation to some of the subjects we will discuss later.
If I may make a point about what I am looking for from my noble friend, it is very clear that if future trade agreements—not continuity agreements—give rise to a requirement for changes in domestic legislation that are of significance, that must be achieved by bespoke primary legislation. I am sure that is what he intended by what he said. That is why, I am afraid, the noble Lord, Lord Purvis of Tweed, said about Amendments 10 and 103 is wrong, because they would, in effect, create a super-affirmative procedure for the implementation into domestic legislation of future trade agreements. We do not want that. We want it to be done by primary legislation because then it is capable of being amended.
We have to keep in mind, as we go through this, that there is a clear difference: ratification of a trade agreement is not the same as changing our domestic law, as my noble friend just said. Therefore, the CRaG process does not change UK law; what it does is enable the Government to ratify, or not to ratify, a trade agreement or an agreement into which it has entered. That is the distinction that we have to continuously keep in mind: the CRaG process is not changing UK law; it is determining on what basis we have agreed with another country. If we then need to change our law, we must do it ourselves, and Parliament will have the ability to decide in what terms we do so.
Lord Grimstone of Boscobel (Con)
I thank my noble friend Lord Lansley for giving me the chance to clarify my comments. We have already said, and I am happy to say again, that we will bring forward primary legislation as necessary for future FTAs with new trade partners. As my noble friend quite appropriately spotted, we could not implement those free trade agreements without bringing forward primary legislation. The CRaG process does not do that—it ratifies the treaty but cannot, in itself, alter domestic legislation.
Lord Purvis of Tweed (LD)
My Lords, I listened carefully to the Minister. He said two things, one with regard to the scope of this Bill. We have heard Ministers many times state their desire for this Bill to be very limited in scope and look only at continuity of trade. The Government have brought amendments to this Bill to widen the scope quite significantly, for example on data sharing. The debates we will be having fall squarely within the spirit of what the Government have done to open up the scope.
We will be returning to this valid debate area, but I want to ask the Minister a specific question. I listened carefully to what he said. In objecting to some of the amendments, he referred to the fact that some of the agreements did not require scrutiny within this Parliament because, he said, they had already undergone the EU scrutiny process, mandate, negotiation and ratification stages. That was by the European Parliament, where British MEPs sat and were able to take part. For new agreements, we will have no equivalent. To be clear, is the Government’s position that the EU scrutiny process—when it comes to the agreements that have been approved by the European Union and gone through it but not yet been put into domestic legislation—is equivalent to the CRaG process the Government are asking to use going forward?
Lord Grimstone of Boscobel (Con)
My Lords, I thank the noble Lord, Lord Purvis, for his comments. The continuity agreements were those that were in force before 1 January or had been agreed to by the EU, even if not fully ratified, before then. We were fully participating members of the European Union then. The committees of this House and the other place that scrutinise European legislation—the noble Lord knows much more about that than I do, being a new boy—scrutinised these agreements and did that satisfactorily.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank everybody who has spoken in this debate. It has been a bit of a rollercoaster ride. I have felt optimistic at some moments and deeply depressed at others. I am going to end up being optimistic because I am that sort of chap. I will take the good that I have heard from my noble friends Lord Blunkett and Lord Haskel, in particular. I was grateful on this occasion not to be attacked by the noble Baroness, Lady Noakes. It is always a good day when that happens—I am only joking.
The noble Lord, Lord Lansley, made some good points about keeping in mind the difference between ratification and implementation as we go forward. He is right to stress that point and I am sure we will come back to it. The noble Lord, Lord Purvis, raised a number of questions that had a bearing on that. I started to get slightly worried about where he was heading —for example, on the issue about the implementation of agreements made under the royal prerogative being ratified under the CRaG arrangements. This is an obvious consequence of where we stand with our current procedures. It leaves the question open as to why we need primary legislation. If the Minister is saying that all future deals are to be made in relation to existing standards that will never be lowered, in view of not changing or disadvantaging our labour and environmental standards and our future arrangements on climate change—on the agenda later today—what is this primary legislation of which he speaks? This is something we will need to come back to and I will be thinking about it.
Finally, I want to pick up the point made by the noble Baroness, Lady McIntosh of Pickering, which I thought was a good one. Can I join her in asking the Minister whether he could write to us about it? Paragraphs 44 and 45 of the Explanatory Notes refer to varieties of trade agreements and the Minister did not deal with that in his response to the noble Baroness. The types of agreement within the definition of “international trade agreements” include memorandums of understanding and he will know that this matter has been raised with him by the International Agreements Committee of your Lordships’ House. It is a topical point and I would be grateful if he could give us some further information when he is able to do so. With that, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Lexden) (Con)
We now come to the group beginning with Amendment 8. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate.
Amendment 8
Lord Berkeley
“( ) an international treaty or private international law convention (including any amendment or protocol thereto) which facilitates trade or the financing of trade.”Member’s explanatory statement
This amendment, along with another amendment in the name of Lord Berkeley, is intended to enable the Government to ratify the Luxembourg Rail Protocol to the Cape Town Convention to make it easier for the private sector to finance trade in railway rolling stock, from locomotives to passenger and freight wagons to metro trains and trams.
Lord Berkeley (Lab)
My Lords, I am grateful for the opportunity to move Amendment 8. I will also speak to Amendment 19 to save the Committee time. This is a small issue compared with many of the ones the Committee will discuss today and in future days, but it is important for the rail sector and the financial sector that is linked to it. The amendment, which is a small addition to Clause 2(2), would enable the Luxembourg Rail Protocol to the Cape Town convention to be ratified.
I will try to explain what this is as quickly as I can. The Cape Town convention is a global treaty which, with the Luxembourg Rail Protocol, will make it easier and cheaper for the private sector to finance all types of railway rolling stock—locomotives, passenger and freight wagons, metro trains and trams, et cetera. It creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. It includes a facility to register security interests in an international registry. It is the first common worldwide system for uniquely identifying rail equipment.
This is nothing particularly new because it has been around in the air sector for many years and there is already a protocol in the Cape Town convention to benefit aircraft. The rail sector protocol has been signed but not yet ratified. I will give the Committee some examples. Aeroplanes obviously move around the globe. Occasionally, they get stolen or people take them to places where creditors cannot get at them. Members may wonder what this has got to do with the railways. When I was first chairman of the Rail Freight Group, about 20 years ago, and getting interested in international rail freight across to the continent through the Channel Tunnel, we came across a number of examples where rail freight wagons went to Italy and but did not come back. Nobody could seem to find them. Italy was different in those days. I do not think it is the case today at all. It was a worry because the people who had financed those wagons lost their assets. I am sure this can happen today in other parts of the world, but I am not going to start giving examples. This protocol is designed to prevent that happening without creditors knowing what has gone on.
Baroness Neville-Rolfe (Con)
My Lords, this is the first time I have spoken in the brave new world of Grand Committee. We have lost Moses, and instead we have something that looks like the translation booths that I remember from my time as the UK Minister at the European Council in Brussels—the numbers were about the same, given the number of EU languages, although of course everyone spoke English informally.
As my noble friend knows well, I welcome the Bill and the Government’s global ambitions. Again, I declare my interest as chairman of the UK-ASEAN Business Council. Today, it is with particular pleasure that I support the noble Lord, Lord Berkeley, and the noble Lord, Lord Bradshaw, for whom I think the noble Baroness, Lady Kramer, will speak. Although we sit on opposite sides of the House, the noble Lord, Lord Berkeley, and I share a practical bent when it comes to infrastructure, and especially to railways. Our Amendments 8 and 19 would make it easier for the private sector to finance trade in railway rolling stock, as he explained, and would allow the UK to implement the Luxembourg rail protocol to the Cape Town convention, bringing rail into line with aviation, which is important in the current climate. That would help to build a more dynamic rail sector, harking back to our heritage as a pioneer of rail technology. As someone descended from an engineer who helped Stephenson build the “Rocket”, I find this extremely attractive.
As the noble Lord, Lord Berkeley, has indicated, another way forward that would achieve these aims may have been found. If so, I welcome that. I thank my noble friend Lord Grimstone for his assurances and work on this issue, and I associate myself with the comments of the noble Lord, Lord Berkeley, on the way ahead.
Baroness Kramer (LD) [V]
My Lords, I thank the noble Lord, Lord Berkeley, and the noble Baroness, Lady Neville-Rolfe, and bow to their expertise. I am stepping in in the place of my noble friend Lord Bradshaw, who is, unfortunately, not able to speak today. I know that the three of them have had sufficient conversation to enable me to be sure that I can support everything that has been said up to this point.
Many of us are utterly frustrated that, in this era when we are so concerned with climate change, the advancement of rail is frequently constrained by the concerns of rail equipment companies about the security of their rolling stock. This protocol addresses that issue. It provides a public registry for rolling stock, which would hugely facilitate cross-border operations of freight and passenger trains, and the certainty that a registry offers. It would free up financing for rail stock, because it provides mechanisms for repossession of collateral in cases of insolvency.
Stimulating private investment in this arena is absolutely critical. This is not a burden that most countries around the world can carry at government level, so ensuring private participation is crucial. We move now into an era where our concern about climate change means that rail options, in contrast to aviation or road options, are increasingly attractive because of the environmental benefits, and very often it is far more cost-effective for exporters and importers.
As the noble Baroness, Lady Neville-Rolfe, said, the UK has increasingly become a player once again in the manufacture of rail equipment and it needs international markets. It would of course be of benefit if those markets had much greater certainty and confidence in those who are selling.
I am somewhat concerned because, when I last looked—and perhaps the Minister might correct me—only Luxembourg had actually ratified this treaty, although many countries have signed it, as the UK did in 2016. We really want to make sure that there is no obstacle to UK ratification, which would undoubtedly give others the confidence to go ahead and ratify, lifting the whole platform of rail as part of the ongoing future, so that it has much more significant international consequences than even domestic consequences.
I hope very much that we can use this opportunity to bring the issue once again to the Government’s attention. I am very comforted: it sounds as though the Government have found a route for ratification to be achieved. I do not think any of us particularly care what the route is, provided that it is secure and effective. I look forward to hearing the Minister’s comments on this issue.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I am grateful to my noble friend Lord Berkeley for introducing this amendment. I am afraid that it is outside my normal expertise area, and I listened with interest to what he had to say. We should support his argument that if it is possible through this Bill to facilitate the rail sector and its development, we should do so. I am happy to back up the points made by other speakers.
Viscount Younger of Leckie (Con)
My Lords, we have a change of rider as I leap into the saddle. I turn to Amendments 8 and 19 in the names of the noble Lords, Lord Berkeley and Lord Bradshaw, and my noble friend Lady Neville-Rolfe. The noble Lord, Lord Berkeley, eloquently explained to this Committee the nature of and reasoning behind these amendments. Taken together, they would expand the scope of the Trade Bill, incorporating the implementation of private international law conventions to which the EU was signatory before exit day.
I thank the noble Lord, Lord Berkeley, for his constructive engagement with my noble friend Lord Grimstone and our departmental team of officials over recent weeks. As the noble Lord has outlined, this amendment would allow the UK to implement the provisions of the Luxembourg Rail Protocol.
Let me say at the outset that the Government are supportive of ratifying the Luxembourg Rail Protocol. We recognise the competitive advantages which this could bring to the UK rail sector and UK financial services, as the noble Lord, Lord Berkeley, outlined so convincingly in his speech today and at Second Reading. I also took note of the remarks of the noble Baroness, Lady Kramer, who pointed out the economic advantages.
However, I do not believe the Trade Bill is an appropriate vehicle to provide the powers necessary for the implementation of this agreement. As has been explained to your Lordships, the powers conferred by the Bill are limited and narrow in scope, yet wholly essential for the delivery of the UK’s independent trade policy. It is our view that the contents of the Bill should not expand beyond essential readiness for life outside the European Union.
However, I can advise the noble Lord that the delegated power that was originally part of the Private International Law (Implementation of Agreements) Bill would have allowed the Government to implement domestically private international law agreements, including the private international law elements of a convention such as the one to which he refers.
The Government intend to reintroduce this in Committee in the other place, which, as the noble Lord, Lord Berkeley, said, I understand is to be as early as next week—I think 6 October. I therefore urge the noble Lord to encourage your Lordships in this Committee and beyond to support the reintroduction of the delegated power when the Private International Law (Implementation of Agreements) Bill returns to this House for Lords consideration of Commons amendments in coming weeks.
The Department for International Trade has engaged on an official level with the Department for Transport, which supports the Luxembourg Rail Protocol. The Department for Transport believes that the protocol has potential economic benefits for the UK, just as the noble Baroness, Lady Kramer, said.
I would be very pleased to facilitate a further conversation on this in conjunction with my noble friend Lord Grimstone in my capacity as a Whip with responsibility for transport and trade policy, and perhaps as an interdepartmental broker—I hope a very honest one. On that basis, I ask that these amendments are withdrawn.
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, I have received no requests to speak after the Minister, so I call the noble Lord, Lord Berkeley.
Lord Berkeley (Lab)
My Lords, I am very grateful to all noble Lords who contributed to this short debate and for the support they have shown. They all have expertise in this field and it is heartening that we have cross-party support, if I can put it that way. I am also grateful to the Minister for his helpful comments. If it is the Government’s view that they do not want to widen the scope of this Trade Bill, I fully understand that, especially as the Minister appears to have found another solution to take this forward. Clearly we have further work to do when the other Bill comes to your Lordships, assuming there will be some ping-pong involved. We will have to try to convince various legal experts in this House that this is a particularly important thing to allow through in whatever state the Government are proposing when it comes from the other place. I am grateful to all noble Lords who have spoken and to the Minister for his very helpful reply. On that basis, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, we now come to the group beginning with Amendment 11. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate.
Amendment 11
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with and are consistent with—(a) the provisions of international treaties ratified by the United Kingdom;(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;(c) the primacy of human rights law;(d) international human rights law and international humanitarian law;(e) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to—(i) the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and(ii) the fundamental principles and rights at work inherent in membership of the International Labour Organisation;(f) women’s rights and the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;(g) children’s rights and the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and(h) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”Member’s explanatory statement
This amendment would ensure that regulations made under the Bill can only be made if the trade agreement which the regulations would implement does not contravene the UK’s international commitments with specific reference to human rights and related treaties, and must respect the sovereignty of parliament.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank the noble Baroness, Lady McIntosh of Pickering, for her support for this amendment.
This group deals with high-level considerations—whether we should have constraints and, if so, whether they should be introduced through primary legislation should the Government wish to depart from international agreements or standards which are subject to international treaties such as UN conventions.
We are of course party to a large number of international agreements. The amendment deals in particular with provisions of international treaties that have been ratified—for example, those on the sustainable development goals, international human rights law, international humanitarian laws, the obligations relating to workers’ rights and labour standards, which we have already discussed under the ILO’s Declaration on Fundamental Principles and Rights at Work, and various others relating to matters such as women’s rights and the rights of children, although of course they are not limited to just the conventions that we have, such as the UN Convention on the Rights of the Child. So the list is very long and very important, and I am sure that no Government would wish to see us depart from any or all of them, should we be in a position to do so, simply for particular trade reasons.
Later groups will deal with our self-generated standards, and there are considerable overlaps. So in a sense this is perhaps a two-part debate, and this one will focus on the outward arrangements that we make with external agencies. But it should not constrain us, and I hope that the Minister will not keep his powder dry, as he said he would in an earlier debate on another issue.
Having said that, I suspect that the Minister’s line will be that the Government will always adhere to the rule of law and treaty obligations, but I think it is fair to point out that trust has already been broken through the Government’s own actions. Even so, it raises the question of why, if there is never to be an occasion on which we would wish to depart from our existing treaty obligations, we are talking about any constraints on the activities that the Government might wish to engage with in terms of their primary legislation agenda related to trade. However, that is for further discussion.
Also in this group is Amendment 18, led by my noble friend Lord Hendy, and that will lead to an interesting debate. In addition, the points made by the noble Lord, Lord Alton, and his powerful Cross-Bench supporters on Amendment 33 will be worth hearing and discussing. We also have an amendment in the name of the noble Lord, Lord Purvis, about reporting arrangements in relation to trade agreements, which I think will also be of value. I beg to move.
The Deputy Chairman of Committees (Baroness Barker) (LD)
I call the noble Baroness, Baroness McIntosh of Pickering. No? I think the noble Baroness is unable to join us at this point, so I call the noble Baroness, Lady Bennett of Manor Castle.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I rise to speak primarily to Amendment 11, to which I attached my name, as moved by the noble Lord, Lord Stevenson of Balmacara, and in the name of the noble Baroness, Lady McIntosh. I thank the noble Lord for his very clear introduction.
We are well aware that compliance with international law is something of a sore point now, so on the basis of that sensitivity, one would hope that the Government would adopt this amendment as a matter of course. They have the opportunity, by agreeing with this amendment, to demonstrate their belief in the rule of law. However, it has to be said that we have, as the amendment includes, signed up to the sustainable development goals, but we are not on track to deliver a single one of them, even in our own country. UK trade and UK actions are damaging the push towards sustainable development goals all around the world. We need accountability and leadership, and we need a legal framework, which Amendment 11 would supply.
I will also speak briefly in support of Amendment 18, which seeks to guarantee the ILO conventions and the European Social Charter. Many years ago, I prepared a report for the ILO on child labour in Thailand. If I had needed a reminder of the importance of regulation, the rule of law and the risk of exploitation, I certainly had it with that. Given the reports that we have had from the garment sector in Leicester, those experiences are not as foreign as we might once have thought. Protecting workers’ standards around the world has impacts on workers’ standards in our own country.
I will also speak briefly in support of Amendment 33 in the name of the noble Lord, Lord Alton. In doing so, I will quote another Member of your Lordships’ House, the noble Lord, Lord Patten of Barnes, in a meeting this morning of the All-Party Parliamentary Group on Hong Kong, of which I am a co-chair. He spoke of a sense of moral values being a bigger part of our foreign policy. I very much agree. I suggest that we also need to see that in trade policy, particularly in the purchasing practices of our Government. This amendment allows democratic oversight of key government procurement.
Finally, I will speak to Amendment 45 in the names of the noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Kramer, reflecting the need to undertake human rights and equalities impact assessments of all trade deals before and after implementation. I am very aware that noble Lords have not yet spoken to all these amendments—I am reflecting the written material —but the same argument applies as in Amendment 33, and also the comments I made in my first contribution to this Committee. “First do no harm” is a medical phrase that, if applied to trade over recent decades, would have produced far less trade and a far healthier, less poverty-stricken, more rights-respecting, less damaged world. Given the fragile state of this planet and its people, we have no alternative but to apply that principle in our future trade policies, and the amendments I have named take us some steps in that direction.
Lord Hendy (Lab)
My Lords, I speak to Amendment 18, which develops one aspect of Amendment 11, so ably introduced by my noble friend Lord Stevenson and the noble Baroness, Lady Bennett.
It is usual in free trade agreements to have a chapter which contains provisions on labour standards. Chapter 23 of the much-discussed EU-Canada Comprehensive Economic and Trade Agreement is typical. It requires each state party to ensure that its labour law and practices embody and provide protection for the fundamental principles and rights at work, which it lists as
“freedom of association and the effective recognition of the right to collective bargaining; elimination of forced labour; abolition of child labour; elimination of discrimination”.
In that free trade agreement, the parties affirmed their commitment to respect, promote and realise those principles and rights, in accordance with the obligations of the members of the ILO and the commitments under the ILO Declaration on Fundamental Principles and Rights at Work, and its follow-up. They undertook that their labour law and practices would promote
“health and safety at work; minimum employment standards for wage earners, and non-discrimination in respect of working conditions, including for migrant workers.”
That is all very well, but it is not enough. The United Kingdom has ratified many ILO conventions, including the core conventions. Indeed, 70 years ago this summer it was the first nation on the planet to ratify fundamental ILO convention 98 on collective bargaining. However, its potential trading partners may not have such a fine record. The USA is sadly lacking in this respect. Any free trade agreement should require a prospective partner to ratify those conventions which the UK has ratified—otherwise, there will be asymmetry in labour standards.
Ratification by partners is not enough. We should insist that our prospective trading partners customarily observe standards we have ratified. That is an obligation in CETA too, which states:
“Each Party reaffirms its commitment to effectively implement in its law and practices in its whole territory the fundamental ILO Conventions that Canada and the Member States of the European Union have ratified respectively.”
That principle should apply to all the international treaty provisions that the UK has ratified, not just those of the ILO. We should therefore include those of the Council of Europe, its convention on human rights and the articles of the European Social Charter 1961, which we have ratified. Non-European states cannot ratify those provisions but they can certainly undertake to implement them. The effect, I hope, will be to uplift the labour standards of some potential trading partners to those we purport to uphold. It will also prevent the creation of an unbalanced playing field on labour rights, contrary to the level playing field that the Government claim to advance. Likewise, the free trade agreement should be compatible in all respects with the ILO conventions that this country has chosen to ratify; otherwise, standards can be watered down.
The amendment is surely uncontroversial in requiring that prospective FTA partners must uphold the sovereignty of Parliament, the authority of our courts, the rule of law and the principle of equality before the law. It is hard to conceive of a rational objection to the proposal that the minimum standards referred to in the amendment are required of any prospective trading partner, whatever may be said about our own Government’s record on these points. I ask the Government to ensure that these requirements are embodied in the Trade Bill.
Baroness Kramer (LD) [V]
My Lords, as the noble Lord, Lord Stevenson, explained, the amendments in this group cluster around the importance of issues such as human rights and other rights in trade agreements. I will focus on Amendment 45 in my name and that of my noble friend Lord Purvis of Tweed. It would require human and equalities rights assessments of all trade deals before and after implementation. The linking of trade agreements and human rights has become normal practice in recent years and is evident in almost every trade agreement signed by the EU.
I take heart from the fact that Liam Fox, when Secretary of State for International Trade, made it clear in some of his comments that the UK was fighting to ensure that human rights provisions in continuity trade agreements stayed in place as we transitioned out of the EU. I hope the Government continue to have that deep commitment and understand the importance of those clauses within the trade agreements. However, we had some disturbing comments in the same year. The then Minister for the Middle East, Andrew Murrison, discussed whether or not any future trade agreement with China would include human rights clauses. The question has been raised and I think, it needs to be answered in this legislation.
It is concerning the UK has indicated it does not want to apply the European Convention on Human Rights to its FTA with the EU in any way that is legally binding. This could be an unfortunate and concerning precedent and the Government need to provide an adequate response. There are huge implications if the ECHR is not included in trade agreements. If we take the trade agreement with the EU as an example, it has serious implications for data protection and for the Northern Ireland protocol. I hope we do not see this Government take heart from Dominic Cummings, who has an ideological hostility to the ECHR. The only country in Europe not a party to the ECHR is Belarus. As we all say, the convention was initially a British project to put in place a genuine defence for ordinary people following the horrors of the Second World War.
It is therefore key that appropriate clauses are embedded in the Trade Bill; otherwise, the message will be that the United Kingdom is showing flexibility around these key issues. That is not a position that I would like to see us negotiating.