Transatlantic Trade and Investment Partnership

Debate between Baroness Clark of Kilwinning and Lord Clarke of Nottingham

Tuesday 25th February 2014 Commons Chamber

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Minister give way?

[Mr Clarke]

Let me make some progress; otherwise, I will not be able to complete my speech in the appropriate time.

The question of investor-state dispute settlements—ISDS is the acronym—has given rise to fears that the proposed deal is a plot between multinational companies that are seeking to destroy our long-established standards in labour laws, environmental laws and so on. I really do not believe that that is the case. On the other hand, the concerns are being taken seriously. I realise that we have to have substance to my assertion that we are not raising or lowering standards on either side of the Atlantic and we are not usurping the role of legislatures, which is why the Commission has said that it is going to consult. I understand some of the fears that have been expressed, but I do think that people have got the wrong end of the stick and the fears are wholly exaggerated.

[Katy Clark]

rose—

[Mr Clarke]

Let me make my point and go through the argument, and then I will give way. First, let us remember that trade deals do benefit consumers, which is why consumer groups such as Which? are in favour of this trade deal. It is protectionist providers that resist such deals. Quality, choice and the price for consumers are improved where there is a good trade deal, and those with the best products and services tend to win out in trade deals. The ISDS clause is not a novelty; it is not some new threat that has emerged. Such clauses have been put into most trade deals for years and years. I have heard the familiar examples of odd claims that have been made in actions around the world, but these clauses have not had the effect that has been described.

Apparently, there are 3,400 of these clauses inserted in trade deals globally. The EU and its members have 1,400 ISDS clauses in various trade deals, and the UK has 94 ISDS clauses in our existing bilateral treaties. We have twice been challenged under ISDS for standards alleged to break our treaty obligations, but so far no British Government have ever lost a case under ISDS. What we have done is successfully brought claims against other countries; we have had slightly more success there, because the point of an ISDS is to underline the value of the total agreement by making sure that no individual investor or business can be disadvantaged by a Government or union of Governments breaking the obligations they have entered into.

The case was cited of Slovenia—somebody, perhaps the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), said Slovakia—and my understanding is that it was lost when, as a result of local lobbying, that country went back on the deal it had just done to open up its health insurance market. That cannot be done, but no ISDS takes away the right to legislate from a Parliament; an ISDS gives rise only to a quicker and cheaper means of resolving disputes if there is some suggestion that a Government are breaking the agreement. Some say, “No European Union Government or the USA would ever do that”, but one of the big ambitions of those on this side of the Atlantic is to open up the public procurement market in the US. In some states of the US it is open, but in others it is not; some states do not measure up to WTO standards at all. Far be it from me to express the faintest doubts about the approach of politicians in some smaller US states or some EU states, but public procurement sometimes takes on a pork barrel element when the contracts are being placed, as opposed to when the tenders are being issued.

I think there could be some advantage, some reassurance and some pressure against people cheating in public procurement contracts if it is known that there is an ISDS clause. Of course it is quicker and cheaper, and it is arbitration and not litigation, but again the argument of those against ISDS is, “Why don’t you just go to law? There is a perfectly good legal system in the European countries and in the US.” I can say only that the US does have a perfectly good legal system, but it is expensive and it can be extremely long, as one sails through either the state courts or the federal courts trying to resolve a dispute. People have said that the advantages in all this agreement are as much in the area of regulatory coherence —with far more regulatory coherence stopping unnecessary convergence in our recognition of regulatory standards—than they are in tariffs, but small and medium-sized countries are not going to go into these markets if they are taking on the risk of having to go in for expensive litigation against American authorities that are plainly not complying with their terms of the treaty. Similarly, there are states in the EU where American investors would be most reluctant to sail in if they were relying entirely on the fact that they can take to the legal process in some southern European countries to challenge the bona fides of local officials over whether they were complying with the agreement. I will go no further, but the British have always put these clauses in our trade deals and the US normally puts them in its trade deals; 3,400 of them are in place and they have made a reality of free trade where it would otherwise not have happened.

[Mr Clarke]

Obviously, I understand the doubts being expressed, because some extremely respectable lobbies and non-governmental organisations—some consumer groups, some aid lobbies and some sections of the trade union movement—are raising all these fears. I genuinely think that they are mistaken and that their arguments, if they are too successful, will not benefit employees, consumers or anybody else, which is why I am trying to rebut them. Those who have spoken—I do not think anyone would be offended if I described them as somewhat of the left of the broad political spectrum, which does not mean that they are unacceptably or extremely left—are getting the wrong end of the stick. The ordinary man and woman have a great deal to benefit from this TTIP. To make it less effective by excluding an ISDS would not help.

[Katy Clark]

Will the right hon. and learned Gentleman therefore give us an assurance that nothing in this trade agreement would undermine the democratic ability of this House and other parts of Government in these islands to take decisions on the commissioning and organisation of public services—whether those services are in the private or the public sector?

Oral Answers to Questions

Debate between Baroness Clark of Kilwinning and Lord Clarke of Nottingham

Tuesday 13th September 2011 Commons Chamber

[Katy Clark (North Ayrshire and Arran) (Lab)]

7. What recent discussions he has had with the Secretary of State for Foreign and Commonwealth Affairs on his proposed reform of access to justice for overseas victims of corporate harm.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Overseas victims of alleged corporate harm by UK international companies are, where appropriate, able to bring civil claims in the UK now, and that will continue to be the case following implementation of our reforms to civil litigation funding and costs. My officials and I are in contact with the Foreign and Colonial Office—[Laughter]—the Foreign and Commonwealth Office as and when necessary to discuss the impact of our proposed reforms to legal costs in this class of case in this country, the Commonwealth or the colonies.

--- Later in debate ---

[Mr Clarke]

We are not changing the jurisdiction in this country, which certainly does entertain claims in personal injury cases and so on against multinational companies that have some footing in this country. All we are arguing about is how much is paid in legal costs. The reforms to the no win, no fee arrangements that we are proposing would ensure that the costs would be fairer, more balanced and not out of proportion to the claim. We are not making any change at all to the jurisdiction. Most of the cases against multinational companies are not human rights cases; they are personal injury cases. Many of those cases might be attracted here because our present system of rewarding lawyers is far more generous than can be found in any other jurisdiction in the world.

[Katy Clark]

The Secretary of State will be aware that the UN Committee on the Elimination of Racial Discrimination has also criticised the reforms, which would remove access to justice for the victims of corporate abuse overseas. Does he not recognise that the reforms could result in there being no disincentive to environmental and other abuse? Will he not look at this again?

[Mr Clarke]

As I suggested a moment ago, I regard it as just a little disingenuous—I hate to say that about UN agencies—to suggest that we are in any way undermining the jurisdiction here for dealing with racial discrimination or serious personal injury cases involving British companies. What we are talking about is how much the lawyers are paid by way of success fees and other costs. The Trafigura case was a classic scandalous personal injury case involving a British company and an incident in Côte d’Ivoire, in which £30 million in compensation was awarded by the British courts to the plaintiffs and £100 million was paid in legal costs to those who brought the action. All we are doing is going back to where no win, no fee used to be—in getting the costs and the claims back in proportion to each other.

Oral Answers to Questions

Debate between Baroness Clark of Kilwinning and Lord Clarke of Nottingham

Tuesday 15th June 2010 Commons Chamber

[Mr Clarke]

No. I think that it is a serious issue, and, although I may not have initiated its appearance in the coalition agreement, the hon. Gentleman may gather that I am not averse to the House looking at it again. There are people who want us to do so, and we will have an opportunity, no doubt in due course, to put it to Members. I am not responsible for the whipping in the House, but I suspect that all three parties would rather prefer a fairly free vote on the issue, because I do not think that there is any consensus in any part of the House, unless I am suddenly told it is—[Interruption.] The Labour party is looking for new policies, I know, but I do not think that it has decided to make this issue the central plank of its much overdue reform.

We have said that we are attracted by the argument, and that we will debate it and consider all the arguments produced by Members from all parts of the House. The Prime Minister actually referred Members to the Home Affairs Committee on which he sat, which on an all-party basis recommended anonymity, at least until the time of charge, only a few years ago.

[Katy Clark]

I am pleased to hear that there may be a free vote on this issue and that the Secretary of State has so little personal enthusiasm for the policy. Does he agree that the main problem in rape cases is the low conviction rate and the fact that rape victims are not believed? Rather than trying to create ways to provide those accused of rape with more protection, we should be looking at ways to make sure that women feel able to come forward and that we increase the conviction rate.

[Mr Clarke]

I hasten to repeat that I have no responsibility or control over the whipping arrangements of any of the political parties in the House. When I was operating as a Back Bencher, I took this sort of vote very seriously. I considered it seriously in 2003 and came down in favour of voting for anonymity. It is no good trying to sweep the issue from the field, and we are not going to do that.

The conviction rate among those charged with rape is 38%, which is lower than that for some other offences, but rape is different in many ways from more straightforward crimes such as theft. In rape cases, we are essentially relying on the frame of mind of one of the parties; something that is perfectly lawful and affectionate if the woman is consenting is a very serious criminal offence if she is not.

Juries are the best people to decide whether they believe one version or the other in what, in my very distant experience of such trials, can sometimes be difficult cases that are best left to juries. That is why I am urging that this is a serious issue, and the coalition agreement was right to raise it. We have expressed our current intention, but Members from all parties will want to listen to all the arguments on both sides and not just be driven away from considering them.