Trade Bill

Lord Stevenson of Balmacara Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 30th January 2019 Lords Chamber

[Baroness Fairhead]

I thank my noble friend for that clarification. I should have said that it was not a government amendment. But I take the point.

I meant to respond to that question. We are trying to do whatever we can to provide help to SMEs and other organisations to help trade. That includes working with them on procedures and practices which will reduce the cost of, and barriers to, trade. I confirm that we are actively engaging with the chambers. If it is not on this particular point, I will take that back to the department and make sure that we include this too.

[Lord Stevenson of Balmacara (Lab)]

My Lords, what is now Clause 6 was an amendment introduced by a Conservative Back-Bencher in the other place. Did I hear the Minister correctly when she said that it was still the Government’s contemplation that this might be amendable? I point out to her, in case she is in any doubt, that this would require a government amendment, which I have not seen on the Marshalled List so far. Is she saying that this is something they are actively considering for Report?

[Baroness Fairhead]

The Government do not endorse the wording of the amendment, and consider that the wording has legal and technical difficulties, so we are reflecting on what should be done.

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Moved by

[Lord Stevenson of Balmacara]

32: After Clause 5, insert the following new Clause—
“Trade agreement impact assessments
(1) Before the end of the initial five year period after an international trade agreement has been implemented under section 2 of this Act, the Secretary of State shall lay before both Houses of Parliament—(a) an assessment of the qualitative and quantitative impact of the agreement on—(i) the economy, broken down by the different parts of the United Kingdom and different regions of England,(ii) the environment,(iii) human rights standards,(iv) labour standards, and(v) individuals with protected characteristics under section 4 of the Equalities Act 2010,in the United Kingdom; and(b) an assessment of the qualitative and quantitative impact of the proposed trade agreement on—(i) the economy,(ii) the environment,(iii) human rights standards,(iv) labour standards, and(v) individuals with protected characteristics under section 4 of the Equalities Act 2010,in any other state which is a proposed signatory to the agreement.(2) Before the end of the initial five year period after an international trade agreement has been implemented under section 2 of this Act, the Secretary of State shall lay before both Houses of Parliament an assessment of the extent to which the provisions of the agreement conflict with, or 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 provisions of the United Nations Guiding Principles on Business and Human Rights;(d) domestic human rights law;(e) international human rights law and international humanitarian law, including but not limited to—(i) the International Convention on the Elimination of All Forms of Racial Discrimination,(ii) the International Covenant on Civil and Political Rights,(iii) the International Covenant on Economic, Social and Cultural Rights,(iv) the Convention on the Elimination of All Forms of Discrimination against Women,(v) the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, (vi) the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families,(vii) the International Convention for the Protection of All Persons from Enforced Disappearance,(viii) the Convention on the Rights of Persons with Disabilities, and (ix) the Convention on the Rights of the Child;(f) the United Kingdom’s obligations on workers’ rights and labour standards as established by the United Kingdom’s commitments under the International Labour Organisation’s fundamental conventions, including but not limited to the Declaration on Fundamental Rights at Work;(g) obligations relating to animal sentience by which the United Kingdom is bound, or any principles relating to animal sentience to which the United Kingdom adheres, and any provision in domestic law (including retained EU law) relating to animal welfare standards and the welfare of animals in the production of food;(h) the principle of eliminating poverty;(i) the United Kingdom’s environmental obligations in international law and as established by, but not limited to—(i) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change,(ii) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and(iii) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety;(j) offences under section 1 of the Modern Slavery Act 2015 (slavery, servitude and forced or compulsory labour);(k) the sovereignty of Parliament;(l) the legal authority of UK courts;(m) the rule of law; and(n) the principle of equality before the law.(3) The Secretary of State must make arrangements for the assessment to be laid before the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly.(4) In preparing the assessment under subsection (1), the Secretary of State shall consult—(a) the Scottish Ministers, the First Minister or the Lord Advocate,(b) the Welsh Ministers, and(c) a Northern Ireland devolved authority.”

[Lord Stevenson of Balmacara]

My Lords, we move from future prospects and problems around definitions and what other partners will do to a matter which will lie very much in the hands of the Government as we go forward. As and when trade agreements become the responsibility of this Parliament, there need to be procedures for establishing how and on what basis these are agreed, but also, as is the subject of Amendment 32, for reviewing our progress in carrying these forward.

The amendment is rather full. It contains a long list of issues so it is perhaps not a probing amendment, but I hope the Minister will accept that we would be open to further discussion on the wording. It is meant to set out broadly all the issues that we think need to come into play on this issue but the detail itself could be subject to discussion.

I hope all Members of the Committee will agree that we need to have a system under which we have confidence that any trade negotiations taking place on behalf of the people of this country are subject to effective periodic review of the issues involved, what the process will be and how many dimensions are involved in the consultations and engagement with the devolved Assemblies and Parliaments, as well as the involvement of those affected by the negotiations, such as consumers, those who work in the industries concerned and the companies themselves.

Of course, there is an issue about what impact these trade agreements will have regionally, not just across the national regions but within England in particular, with variations that will need to be picked up. We need to make sure that Parliament, in assessing how these trade deals are done, has access to all the information that is required.

The whole process is set out in Amendment 32. Amendment 81, in the name of my noble friend Lord McNicol—he did so well with his previous amendment that we have given him the afternoon off to recover, so I am speaking for him on this amendment; we are working together, of course, as noble Lords would expect—sets out in more detail the question of independence for the responsible body. There are many candidates for that. We do not need to go into it, but it is important that there is separation between those who set up and agree trade agreements and those who review them for the benefit of the public interest.

This issue can be developed across various activities. I think there will be contributions from those who will wish to see more stress placed on the social rather than the economic issues. The Government are involved in international treaties that will come into play on this. There is a great deal to be said about how you would do this, with what process and everything else. The amendment attempts to set that up. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I shall speak to Amendment 64 in my name in this group. I also welcome the noble Lord, Lord McNicol of West Kilbride, to the joys of tabling amendments. They provide the ability to lead scrutiny and discussion of significance in a very freewheeling way. I was also going to say “succinct”, except that the previous group, on rules of origin, took nearly an hour.

My amendment is inspired by Amendment 32, which was just moved by the noble Lord, Lord Stevenson. However, having studied other amendments to the Bill and the Government’s reaction to them, I have opted for a simpler formula in the hope that this might attract support across the Committee. It provides for a review, after five years, by the Secretary of State of the impact and effectiveness of each international trade agreement under Clause 2, but it deliberately omits the long list of criteria in Amendment 32. That is because I believe in simplicity. I do not believe we should lay down detailed areas that the review should cover, worthy though they may be. As we know, policy priorities change over time and the review should be conducted from a contemporary perspective.

I pray in aid a precedent that the noble Lord, Lord Stevenson, will remember well: the report on innovation and economic growth provided for under the Intellectual Property Act 2014. I believe that was the result of an amendment that he tabled during the passage of that Act. As a Minister, I found the process of producing the report every year very helpful, as did the Intellectual Property Office. In fact, its CEO confirmed that to me only last week.

I have some doubts about the wisdom of setting up a special compliance monitoring agency, as proposed in Amendment 81, which is also in this group. It seems a big stick, given the Bill’s scope. However, on a separate point, compliance would appear to be in the purview of a general review of effectiveness. I have provided for such a review to be laid before the devolved Parliaments, to which the noble Lord attached importance, because I believe this would be a good way to keep them up to date, ensuring that the reviewers, looking back, think about their interests as well as English and UK interests. Such a review would also cover SMEs, which we discussed in another long debate last week. I look forward to hearing from my noble friend the Minister.

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[Baroness Fairhead]

I am happy to confirm that.

I turn to Amendment 64. Trade continuity agreements, which Clause 2 would be used to implement, simply continue the effects of existing EU trade agreements. Many of the benefits are already being reaped by UK businesses. I hope that my noble friend can take comfort from my reassurance in my responses to Amendments 32 and 52, and I would like to reassure her further by confirming that any impact assessments published at the time the agreements we are transitioning came into force remain valid. On the international agreements referenced by my noble friend, I can confirm that we have not changed our commitment to them. The process of exiting the EU will not alter the UK’s commitment to upholding either international laws or our international commitments. These include commitments on climate change and the sustainable development goals.

The noble Baroness, Lady Thornton, and my noble friend Lady Hooper both raised issues in a number of areas such as human rights, labour and environmental standards around the world. In an earlier debate in Committee we confirmed that we will proudly continue to comply with those international obligations. In response to the comment of the noble Baroness, Lady Thornton, on monitoring by independent bodies, I can confirm that that too will continue.

I turn now to Amendment 81, tabled by the noble Lord, Lord McNicol. Let me be clear that the Government will continue to ensure that Parliament and the devolved Administrations play a crucial role in the scrutiny of the UK’s trade agreements. We are in discussions at both official and ministerial level on this.

Specifically in relation to compliance, I must stress that the UK will not bring into force any international agreement without first ensuring that it is fully compliant with its obligations. Where we are transitioning existing ratified EU trade agreements, we have been complying with those agreements as a member of the EU. We are working hard to ensure that we continue to be compliant after leaving the EU, for example by using the powers in the European Union (Withdrawal) Act to make UK law operable without reliance on the European Communities Act 1972. Any secondary legislation necessary to ensure that we are in compliance will be made before ratification, following the usual parliamentary processes. This means that we will start from a point of being in compliance with our agreements. We would expect the same of our international partners. This is simply what is required when it comes to making international treaties.

Normally within trade agreements there are mechanisms for monitoring and reviewing the agreement through bodies such as joint committees. This applies both to our compliance and the compliance of our partner countries. We will of course look to replicate the functions of these existing mechanisms. The noble Lord, Lord Purvis, mentioned that we should make sure that we reflect the regions and the devolved Administrations. Again, I am happy to meet with him to discuss how that can be done. We will operate the mechanisms according to the terms specified in the relevant agreement. These will of course differ by agreement, but we will be accountable for compliance overall. I hope that this reassures the Committee, and I would ask the noble Lord to withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, it is pretty much an open secret that amendments of the type we have just spoken to are usually tabled by Oppositions when they have very little to say about a topic. You call for a review and that usually ties up the civil servants for days trying to work out what that is supposed to do. It gets the Minister into a knot and allows you to have a relatively easy passage, especially if the Bill is a bit boring at that particular point. That is not what has happened today, and indeed we have been reminded that it has worked in the past. I recall the discussion during the passage of the Intellectual Property Act and it has worked out well.

There is a case here for thinking really hard about what we want to see happen as a review. I accept absolutely that my amendment is ridiculously overspecified and gold-plated. I am happy to learn from noble Lords who have served as Ministers and those who have experience of this on the other side. We could probably with advantage put together quite a sensible, minimalised amendment which would cover the ground. The Minister spoke about wanting to meet to discuss this; that would be worth while. If we can get sensibility, scale and scope in a reasonable approach, we can make some progress here.

I do not think this can just be left to the passage of time. It is true that the Bill as currently drafted has considerations of reviews, but these were late additions and are not well drafted. We have already noted earlier in Committee that while Clauses 3 and 5 make provision for reports to be provided, Clause 4 provides an opportunity for Ministers to duck out of that; and they deal with the process of agreement, not of review. I therefore think there is a bit of a lacuna here in the Government’s approach. We may be able to resolve it by statements in the House, but there may be a case for having at least something in the Bill to cover it.

Other points were made in this very rich debate. I do not think we need to look too hard—I was going say to the noble Lord, Lord Lilley, but he is not in his place. The EU model, although it exists and operates, is not perfect, and there is already much documentation on how it needs to be improved if it is to be effective. The question of independence is not dealt with in the current drafting of the Bill. I think there is a sense around the Committee of a coming together on this issue. We should take advantage of that—a meeting would be very useful—and I look forward to being able to make some progress on this in a relatively easy way. I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

Moved by

[Lord Stevenson of Balmacara]

33: After Clause 5, insert the following new Clause—
“Establishment of Committee on Trade Agreements
(1) A body corporate called the Committee on Trade Agreements is to be established consisting of nine members who are to be drawn both from the members of the House of Commons and from the members of the House of Lords in accordance with the provisions in Schedule (Committee on Trade Agreements).(2) Negotiations towards a free trade agreement may not commence until the Secretary of State has laid a draft negotiating mandate before the Committee and it has been approved by a resolution of that Committee.(3) Prior to considering a resolution approving a mandate relating to the negotiation of a free trade agreement, the Committee must produce a sustainability impact assessment in accordance with the provisions in Schedule (Committee on Trade Agreements). (4) Before either House of Parliament may approve by resolution the text of a proposed trade agreement in accordance with the Constitutional Reform and Governance Act 2010, the Secretary of State must lay the text of the proposed agreement before the Committee and that text must be approved by a resolution of that Committee.(5) Prior to considering a resolution approving the text of a free trade agreement under subsection (4), the Committee must produce a report setting out a recommendation in relation to the ratification of the agreement.(6) The Secretary of State must lay the report produced under subsection (5) before both Houses of Parliament.(7) Schedule (Committee on Trade Agreements) contains further provision about the Committee.(8) In this section, “free trade agreement” refers to any agreement between the United Kingdom and one or more partners that includes components that facilitate the trade of goods, services or intellectual property including but not limited to—(a) Free Trade Agreements (FTA);(b) Interim Association Agreements, Association Agreements (AA);(c) Economic Partnership Agreements (EPA);(d) Interim Partnership Agreements;(e) Stabilisation and Association Agreements (SAA);(f) Global Agreements (GA);(g) Economic Area Agreements (EAA);(h) Cooperation Agreements (CA);(i) Comprehensive Economic and Trade Agreements (CETA);(j) Association Agreements with strong trade component;(k) Transatlantic Trade and Investment Partnerships (TTIP);(l) Investment Protection Agreements.”

[Lord Stevenson of Balmacara]

My Lords, in moving Amendment 33 I will introduce some of the discussion topics raised by the other amendments in this area. I look forward to the response from the noble Viscount, Lord Younger, who is standing in on this issue. The subject of the amendment is, as previously described by the noble Lord, Lord Hannay, a key—probably the most important—part of the Bill. I take his advice and am happy to try to man up and make sure that I establish the case in the sorts of terms he would like to see. We have also had contributions from the noble Lords, Lord Lilley and Lord Bilimoria, and the noble Baroness, Lady Kramer, which have set out some of the scene, so I do not think we need to go right down to the very basics of it. I would like to focus on some of the principles that are important in trying to assess this issue.

We are talking here about how Parliament and wider civil society get engaged with a process that we in this country have not really had much direct involvement with since 1972 because the function we are talking about—trade—has been a sole competence of the EU. Yes, there have been occasions when issues have come back but, as we heard in earlier discussions, they have not been very detailed and there has not been proper scrutiny. I think there is a general feeling that the procedures set out in the CRaG Act 2010 do not now satisfy those with an interest in this area.

I have eight principles that I think should inform our discussion. These are: how do the Government intend to ensure that formal consultation with external stakeholders, in advance of any negotiation mandate being drawn up, is exercised? How do the Government intend to ensure proper transparency of trade negotiations and negotiating mandates, and what role will Parliament play in that process? How do the Government intend to ensure maximum transparency in advance of those consultations? Obviously, they are constrained to some extent by issues that would be regarded as necessary to be taken under some level of secrecy if they involved security or other issues, but how will that transparency happen? In particular, how will the Government prepare proper impact assessments and make these available to inform the debate?

There is a general question about reviewing reporting on trade agreements after a specified time period, but also in relation to progress—we touched on this earlier, but it is part of a principle that we need to build in from the beginning. How do the Government intend to ensure that parliamentarians are able to access the negotiating texts? Without knowledge of the texts, very little scrutiny can take place. Some texts will be very sensitive, but nevertheless it is important that there is a mechanism under which they can be reviewed and discussed.

What will be the formal process or procedure for the ratification of trade agreements? The current arrangements under CRaG are not satisfactory. What will be the formal procedures for changes that need to be brought forward—not new trade agreements but how, particularly in light of the need for broader discussion and debate, we amend and change agreements found to be deficient, unfair or working badly in relation to any aspect of our economy or our part of the country?

Those are the issues the amendment seeks to open up. Again, it is gold-plated—I accept that—but it is important that we see the full range and depth of the issues raised and I hope to have a good debate around that. I beg to move.

[Lord Hannay of Chiswick]

I support Amendment 33, about which a great deal was said in the debate on the previous amendment, although some of the contributions more properly belonged to the discussion of this amendment. I have no hesitation whatever in suggesting that this is probably the single most important article in this legislation—except that it is not there, of course, at the moment, but it needs to be there.

Why is it so important? It is because until now the British Parliament has had no clear role in giving mandates or setting out the broad lines under which the Government should negotiate trade agreements, nor has it had any proper system for oversight of them. Possibly that did not matter in the far distant days before we joined the European Union, but it certainly matters now when free trade and other trade deals are, as the Government have said again and again, at the heart of their Brexit strategy. Britain’s ability to negotiate on its own on trade is at the heart of the Government’s pleading to back their deal.

This is really urgent now because the Government have made it urgent by refusing to take no deal off the table. If they took no deal off the table, as the Spelman amendment passed by the House of Commons did last night, we would have time to look at this. However, if no deal remains on the table—and the Prime Minister has said that it does—we have to realise that the Bill we are now discussing may be operational in 60 days’ time on 30 March this year. As currently drafted, the Bill says nothing about approving mandates before the Government can negotiate on trade with a particular country. That is a lacuna which cannot be left unfilled.

When he replies, I would like the noble Viscount the Minister to repeat what the noble Baroness the Minister said: that the Government will table amendments before Report and explain how they believe that Parliament’s authority should be established in the context of an independent trade policy. I agree that it may not be needed on 30 March and we would be mad to leave without a deal on 29 March. But the Government have decided to go on saying that we may and therefore we had better be prepared. I hope the noble Viscount will deal with that point as soon as he starts his response.

The substantive issue at stake relates to the provisions—or lack of them—for parliamentary mandating and oversight of all negotiations with third countries once we are able to conduct them on our own. They are important because without them, if the Bill remains as it is currently drafted, together with the provisions for the approval of international agreements, the only say that Parliament will have will be after the Government have conducted and concluded negotiations and then put before Parliament an up or down, yes or no agreement to what is in them. That is what we call in this House, when we are talking about statutory instruments, the nuclear option. It would be absurd if we went into the conduct of an independent trade policy with nothing for Parliament except the nuclear option. What does the nuclear option mean if it is ever deployed? It means that the Government would in good faith have negotiated with a third country—reached agreement with it, settled all the tariff details and the non-tariff barriers—and then the deal gets rejected. How much negotiating credibility would we have left after that? Zero.

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[Lord Stevenson of Balmacara]

My Lords, I am grateful to the Minister for his extensive response. He has been attempting, within the constraints he is undoubtedly under, to give us as much information as he can. I will need to read Hansard to be absolutely sure what we have and have not been promised. I certainly heard the word “amendment” in one of his sentences, but it may have been a misunderstanding on my part. If there are not to be amendments to this Bill, I am intrigued—that is parliamentary language for “a bit confused”—about what exactly the Government are going to offer us to resolve the obligation placed on the House by the Motion passed in the name of my noble friend the Leader of the Opposition relating to progress on this Bill, which is a point that the noble Lord, Lord Hannay, has also raised.

We can hope that the two aspirations at play here come together, because despite the Minister’s valiant attempt to remind us that this is a continuity Bill—an aspiration negated in the second amendment after we started this process, and continually ignored in every amendment we have discussed so far—we should get real and understand that the mess we are in will not be helped by having an artificial distinction between what is a continuity issue and what will be a non-continuity issue, or, in other words, the real world in which we live. We need to get this right, and we on this side of the House have offered—I am sure the party on my left has also offered—to work through this with the Government, and that offer remains on the table. We will meet at any time, at the Government’s request, to see if we can come together to make something of this that will work for the future, because it is that important.

That said, I endorse what has been said by others: any attempt to rely on the procedures in the Constitutional Reform and Governance Act 2010 will be doomed to failure. The Government have to get over that hurdle before we can make significant progress. The 2010 Act is inadequate as a process, and would be inadequate under any terms, because it allows the Government to use the negative resolution procedure for secondary legislation, so that the treaty we agree comes into law automatically, irrespective of any opposition or amendments Parliament might want to make, provided it has been laid before Parliament for 21 sitting days. That is not the right process, as we are talking about trying to get Parliament to engage with the process by bringing it back to the mandate arrangements, and allowing Parliament plenty of time, lots of information, a good process and a proper committee structure for proper decisions to be reached in the public interest. The Government should not play games with procedures and say, “We’ve got that already, so why are we bothering about it?” This needs to be dismantled and rebuilt in a way fit for the 21st century.

A new system is required, and the time has come. If there is any doubt about the interest in that, the Minister should be aware that six major business federations—the CBI, the BCC, the EEF, the ICC, the IoD and the FSB—have taken the unprecedented, in my experience, step of bringing forward a joint statement with the TUC, Unite, the Trade Justice Movement, the Consumers’ Association, Which? and other industry bodies calling for a proper model of consultation and scrutiny to govern the UK’s policy-making process in the future. The Government cannot ignore that; it has to be something that they will do.

We will come back to this, whether in the form articulated by the Minister, or in amendments we consider at later stages. I hope there will be a Report stage, because the Bill is important and needs to go through, but the danger is that delay or difficulty in coming forward with something clear enough for this House to respond to will mean the Government finding themselves in real difficulty on the Bill. I do not say that lightly; the last thing we want to do is use procedural issues to hold back what is, at its heart, a good piece of legislation, which we support. I beg leave to withdraw the amendment.

Amendment 33 withdrawn.