Trade Bill

Baroness Henig Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 23rd January 2019 Lords Chamber

Moved by

[Baroness Henig]

20: Clause 3, page 3, line 39, at end insert—
“( ) A report under subsection (3) must be drawn up by an organisation independent of Her Majesty’s Government and must include an economic analysis of the impact of the changed agreement.”

--- Later in debate ---

[Baroness Henig (Lab)]

My Lords, I rise to move Amendment 20 and speak to Amendment 21. Both amendments touch on the important issue of transparency, which has already been raised.

According to subsections (7) and (8) of Clause 2, the powers to be taken by the Secretary of State to implement replacement UK trade agreements for existing ones covered by our EU membership may last for up to six years after exit day. At present, as we have heard, the Government are not obliged to provide any indication of progress on the implementation of trade agreements covered by Clause 2. Businesses great and small have rightly complained that they have been given insufficient information about which agreements will be in place on exit day and beyond. The Minister has told me that there has been consultation between the Department for International Trade, trade organisations and businesses, but I am not sure that it has been on a sufficient scale to allay businesses’ concerns.

I acknowledge that the Department for International Trade has been working hard to ensure that no agreements are lost on Brexit day, whether we leave with a deal or not. But the fact remains, as we have already heard at great length, that there has been a failure to provide this House and the other place with information on the progress of the rollover of trade agreements. Surely we should not have had to learn from the Financial Times that there is a possibility that many, if not most, existing trade agreements will not be carried over after 29 March in a no-deal scenario. The previous amendment, moved by the noble Lord, Lord Purvis, suggested the establishment of a one-off register of trade agreements to be covered by the Bill. Surely that would benefit us greatly in terms of both our scrutiny role and our ability to act on behalf of businesses seeking to know the state of play on trade negotiations.

However—again as we have heard—there can be no doubt that best practice requires the provision of regular progress reports. We heard on Monday, and have heard already this afternoon, about the information provided by the EU on its website, covering the progress of trade negotiations. For example, I have here a one-paragraph report on the 19th round of negotiations, held in October 2018, on an EU-China investment agreement, along with an expectation that the next round of talks will be held early in 2019. That is the sort of information being put out by the EU. I appreciate the issue of commercial confidentiality, but surely if the EU can provide such information on a regular basis, the United Kingdom should commit itself to doing the same, particularly given the concerns of businesses and the commercial sector, and the powers requested by the Department for International Trade in the Bill. That is the purpose of Amendment 21.

The second part of the amendment would ensure that the Government keep us up to date during each parliamentary Session by means of a fairly simple report. We are not talking about just this Session; this could go on for some years, so we are talking about every parliamentary Session. We should all be aware of plans and the likelihood of agreements being laid at particular times. We need early notice of issues that may prove controversial. I would have thought that any responsible Government would feel that this was a basic requirement for those who are tasked with scrutiny functions, such as this House, and for businesses wanting to know about progress.

The first part of the amendment is similarly based on the good practice we have seen in the European Commission. I am pleased that the Government propose to lay before us a report on the trade agreements they intend to implement, including the difference between existing and proposed agreements—but that does not go far enough in providing information to businesses and this House on the nature of the agreement. From what the Minister has told me I gather that, in the Department for International Trade, agreements will be scrutinised thoroughly by internal economic assessors. That is very good—but could the Government therefore be seen as marking their own homework? Might the Government not bring to our attention all matters of importance?

That brings me to Amendment 20. I would like to see the scrutiny also done externally. We should be provided with a full, independent report of the sort that would be typically be provided by, for example, the LSE or Sussex University, both of which have well-established trade policy expertise. That would detail the precise differences between existing and new treaties, if any, and—importantly—the expected economic impact of any changes. Without this information, it will be very difficult to judge whether an agreement is worth pursuing.

The Minister keeps saying that the treaties will be rolled over and will all be very similar, with no variation. I will give an example to illustrate my point. Let us say that a country covered by one of these agreements is prepared to sign a rollover only on the condition of a change in a regulation to allow a certain type of food to enter this country with reduced checks. This could have an impact on health, on United Kingdom domestic providers and, potentially, on other countries’ exports, including those of developing countries. In this situation, surely Parliament deserves to know the impact of the change and should be able to scrutinise its effects. The best way to do that, as far as I can see, is through the provision of an independent report.

--- Later in debate ---

[Baroness Henig]

My Lords, I have listened very carefully to what the Minister has said. I take the point about speed, but at the same time the department is seeking powers for up to six years. Therefore, on the one hand we are talking about speed and on the other the Government are saying that they might need these powers for some years. That is my concern. If we are talking about longer than a few months, we need a proper communication strategy and a proper strategy for scrutiny. In a sense, the department cannot have it both ways: if it is seeking powers over a period of years, then it is only reasonable for us then to be able to say, “Well, what are the arrangements for scrutiny?” If we are talking weeks, that is fine, but since the Bill is seeking these powers for this length of time, I do not think it is unreasonable for us then to say, “So what are going to be the arrangements for scrutiny and discussion?”

On the matter of scrutiny, it is quite obvious from everything that has been said by a whole number of people, on both this and previous amendments, that so far the scrutiny arrangements are by no means adequate. They really are not: we have to look at this and return to this. I hope that the department itself will come up with something on Report. Clearly, it is something that we will have to look at.

On communication, I take the point about the website, but the fact is that if you talk to businesses outside this House, if you talk to people who are trying to prepare for 29 March, they do not feel well informed and do not know what is going on. Businesses do not feel confident; the Minister might want them to, but they do not. This is a very serious matter because all of these businesses, great and small—it is a particular problem for smaller businesses, of course—do not feel at the moment that they understand what they should be preparing for. It is undermining their profitability and we are causing huge problems with this. Therefore, I am really not happy with where we are at the moment.

I am not going to labour the points this afternoon, as we have already heard about them at great length before. We will have to return to this whole area on Report, but meanwhile I beg leave to withdraw the amendment.

Amendment 20 withdrawn.

--- Later in debate ---

Moved by

[Baroness Henig]

22: Clause 4, page 4, line 10, at end insert “and Ministers have previously informed Parliament of the proposed changes to the agreement”

[Baroness Henig]

My Lords, I will be extremely brief—I am sure that noble Lords will be happy about that—in moving Amendment 22 and speaking to Amendment 23. They are two very short probing amendments for the particular circumstances when Ministers do not feel the need to lay a report before the House. Once again, given the importance of trade agreements and the need for scrutiny, this is something that the Government need to consider carefully. Can it really be right for the Government to lay regulations before Parliament without informing us what they are and what impact they might have?

We can deal with the matter fairly straightforwardly. The Government will know in advance of the proposed changes to an agreement, not just at the point of laying it. There is therefore no reason whatever why we cannot be told what the change is at the time, as part of whatever reporting system there is. That is the purpose of Amendment 22.

In relation to Amendment 23, I say that the phrase “as soon as possible” is far too vague. I appreciate that the Government have many issues to consider and to juggle, but they should have the means to tell us what is being proposed. We need to know within a clear timeframe so that we can scrutinise the Government effectively. I have to hear a convincing reason from the Government as to why they need the wide-ranging powers under this clause. I therefore propose these amendments to seek further information from Ministers, and to signal the kind of openness and levels of scrutiny that I am sure Parliament will demand in terms of both these rollover agreements and the new trade agreements. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, once again I support the amendments of my noble friend Lady Henig; I will also speak against Clauses 4 and 5 standing part of the Bill. Counterintuitively, I will deal with Clause 5 stand part first, simply because it follows exactly in the same vein as the reasons I gave for suggesting that Clause 3 should not stand part. Clause 5 deals with reports to be laid with regulations under Section 2(1). In an expanded, more amplified and better and more rounded policy dealing with both the continuity of free trade agreements and the new free trade agreements, we would have a completely different system sitting in place, so Clause 5 would be otiose, which is why I put this forward. I will not press this and I do not need much response from the Minister because we will return to this issue later in group 13.

However, I wonder about Clause 4. It seems at a superficial level to give the Government a “get out of jail free” card in relation to any reports that they might feel obliged to make, particularly if they are expanded in terms of my noble friend Lady Henig’s original proposal under Clause 3. Clause 3 states:

“Before the United Kingdom ratifies the proposed agreement, a Minister … 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”.

But Clause 4 states:

“Section 3 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”.


I stress that phrase,

“a Minister of the Crown is of the opinion that”,

and the use of “exceptionally”, which is an interesting word. In other words, you do not have to do it if you have sufficient gravitas and the ability to convince Parliament that you are not of that opinion and that it is exceptional, so you can get away with it. That is not satisfactory drafting.

This is not a good clause to be in a Bill of this nature. It certainly does not meet the questions that we have been raising about proper transparency, accounting and independence of reporting. When the Minister comes to reply, I hope that she will consider taking this away. If she cannot bring herself to agree that this needs redrafting, perhaps she can write to me explaining why it does not.

[Baroness Fairhead]

My Lords, I too will try to give a short response to the amendments before us, and first on Amendment 22 tabled by the noble Baroness, Lady Henig. Clause 4 creates an exemption from the reporting requirement so that, in exceptional circumstances, the Government may seek to ratify an agreement without having first published the associated report on changes made to it. Let me categorically reassure noble Lords that we intend to draw on the reporting exemption provided for in the Bill only if we are in exceptional circumstances.

I am sure the Committee will agree that we may find ourselves in exceptional times. We cannot predict the speed with which continuity agreements will be ready for signature. Moreover, the exemption is narrow. It does not remove the requirement for a report to be laid. It simply provides a little leeway to enable a trade agreement to progress to avoid a cliff edge. The Government would still be required to lay a report as soon as possible following ratification. I hear the noble Lord, and will reflect on the drafting, but in a sense it was because of the uncertainty about the speed.

Amendment 23 would ensure that, if this exemption is invoked, the report would have to be laid no later than 10 days after ratification. Again, to be clear, we have drafted this exemption for use in only the most urgent of circumstances. If we were to need to rely on this, it would be necessary to ensure that we could continue to operate in the most uncertain of contexts, and avoid that cliff edge.

Clause 5 will ensure that the Government lay their report 10 days in advance of using the Clause 2 power to implement any obligations of a continuity agreement. That will ensure that Parliament is wholly informed about how we intend to deliver continuity for an agreement before it is required to consider implementing legislation. If we removed Clause 5, as the noble Lord, Lord Stevenson, suggested, the Government would not be bound in any way to report, so we should set that aside.

Before I conclude on this point, I would like to inform the Committee about an amendment that the Government will bring forward on Report. As the Committee is aware, the purpose of the Government’s trade continuity programme is to seek continuity of the effects of existing EU free trade agreements as far as possible as we leave the EU. The vast majority of these existing trade agreements, which we are part of as an EU member state, are already in operation and have been scrutinised by Parliament. Let me make it clear to the Committee that we do not expect to need to change existing domestic equalities legislation as part of this programme. In the unlikely event that we choose to make minor or consequential changes to this legislation, we will aim to ensure that this does not result in reduced protection against unlawful discrimination or diminution of equality rights.

However, to ensure suitable transparency and accountability on this particularly important issue, we intend to provide that a ministerial Statement is made alongside any draft statutory instrument laid under the Clause 2 power. The Statement would outline whether the statutory instrument repealed, revoked or amended any provision of the Equality Acts 2006 and 2010 or any subordinate legislation made under them. In addition, I am happy to confirm that the reports under Clause 3 will explain any changes that would be required to equalities legislation as a result of our shift from an EU to a UK agreement if, and I stress if, any changes are needed. My officials have agreed to work together with the Equality and Human Rights Commission—and I put on record our thanks for its efforts in helping us to design the process so far—on designing the content and templates for these reports.

I hope that that reassures the Committee and I ask the noble Baroness to withdraw her amendment. Additionally, I commend that Clauses 4 and 5 stand part of the Bill.

[Baroness Henig]

I thank the Minister for her response, and particularly for the additional information that she has just given us, which I am sure we welcome. As I said, they were probing amendments on my part and I was trying to get some more detailed information about the Government’s thinking, which I think we have had. On that basis, I am happy to withdraw my amendment.

Amendment 22 withdrawn.