Stamp Duty Land Tax (Reduction) Bill

Barry Gardiner Excerpts

Committee stage
Tuesday 10th January 2023 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

rose—

[Victoria Atkins]

I will take one more intervention, and then make a little progress.

[Barry Gardiner]

I am very grateful to the Minister. I listened carefully to what she was saying about global economic circumstances, in particular Russia’s invasion of Ukraine and the effect that that has had on people in this country through their energy bills. She will know that the Government set a target for a 78% reduction in greenhouse gas emissions by 2035. To achieve that, will she consider looking at whether stamp duty might be raised up or put down in accordance with the energy performance certificate ratings of properties, perhaps providing a way for households to benefit financially but ensure that they meet the Government’s target?

[Victoria Atkins]

That is an interesting suggestion. At first blush, my mind goes immediately to the complexity of such a scheme, particularly given our proudly antique housing stock—certainly in my constituency, with beautiful farmhouses and market town high streets that are many, many hundreds of years old. I therefore think it unlikely—I will be honest with the hon. Gentleman—but he is always welcome to write to me. I will make this point: the Government’s very real progress over the last decade, on drastically cutting our carbon emissions, with the help of industry, homeowners and members of the public, should be acknowledged. Dare I say it, if it is not unparalleled across the world, we are certainly in the top few. What is more, we have tried, through measures such as VAT zero rating on energy-saving materials, to encourage homeowners and others to plug gaps and make their homes more energy efficient. So, I do not think stamp duty is the way to help, but certainly the Government have already put in place measures to try to help us meet our very, very ambitious climate targets.

The last few years have, frankly, been tough on us all and we want to help people take that next step in their lives to buy a new home. The Bill cuts stamp duty land tax for first-time buyers and other homeowners to reduce the upfront cost of moving home. It is because we want to help people as quickly as possible that the rates are already in force, helping our constituents.

The provisions in the Bill apply only to purchases of residential property in England and Northern Ireland, as land transaction taxes have been devolved to Scotland and Wales.

Autumn Statement Resolutions

Barry Gardiner Excerpts

Monday 21st November 2022 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I would like to start on a note of agreement—because I probably will not end up on one. The supply shocks after the covid pandemic, followed by the war in Ukraine and Putin’s weaponising of the gas supply to Europe, are the primary reasons for inflation and the cost of living crisis. But they are not the whole story. Analysis of data from company accounts and the Office for National Statistics suggests that there is an additional level of profiteering that the Government have failed to address.

Let me substantiate that claim. If companies were simply passing on increased supply chain costs, we would expect company profits to be broadly static, or even slightly reduced, given that low wages have been unable to keep pace and therefore would have reduced demand. In fact, profit margins for the UK’s biggest listed companies on the FTSE 350 were 73% higher than pre-pandemic levels.

When companies raise their prices to cover their increased costs, that is justifiable; when they increase their prices by more than their increased costs, that is gouging and it gives them a boost in profit. The trouble is that this can then create a second, third and fourth wave of inflation as companies along the supply chain all follow suit. This is the real inflationary spiral. Workers’ wage demands are not driving it; they are following it and responding to it in desperation, as workers see their living standards eroded first by genuine inflationary pressures and then by profiteering.

Many companies respond badly to the accusation that they are price gouging. In April, Sainsbury’s reported a record profit of £730 million. The supermarket insisted that it was not price gouging, but it was not above accusing its competitors, which were making even higher profits, of doing precisely that. Sainsbury’s chief executive Simon Roberts said:

“We are inflating behind the market, our direct competitors are inflating ahead of the market.”

I take that to mean: “We are only profiteering because we don’t want our share price to decline against our competitors who started profiteering first.” As protestations of innocence go, that one does not really go far.

When so many companies are making record profits at a time of soaring inflation, the logical expectation is that they should be able to pay their workers at least enough to maintain their standard of living, yet employers and the Government insist on wage restraint, by which they mean workers accepting wage settlements that are a cut in real terms. They think that is the key to managing inflation. I say again that wage demands have not and are not driving inflation.

Food prices are causing real misery in the UK. Food price inflation is running at over 16%, yet Tesco, Sainsbury’s and Asda increased their combined profits, compared with pre-covid levels, by a staggering 97%. Many of their customers—even their own workers—earn so little that they are on universal credit. This Government are presiding over a system that is happy to see companies grind down workers’ wages to funnel more and more public money through universal credit into shareholders’ dividends. It is obscene.

What about the food manufacturers? They made a profit of £22.9 billion after the pandemic. Nestlé alone showed a profit of £13.7 billion, more than £4 billion more than its pre-pandemic level. Yet in July, after a two-month strike at its east London factory, Nestlé agreed to settle with its workers for a miserly 4%. The workers had asked for 7.5%, which, as we now see, would still have meant a real-terms cut in their living standards. It is not workers who are being unreasonable.

Remember that in the UK we have approximately 2.5 million children who have been using food banks, and then ask why the four giant agribusinesses managed to increase their profits by 255% compared with pre-covid levels. Probably the most blatant example of profiteering and gouging, though, comes from the container shipping industry. The sector is dominated by three alliances of major multinational giants and, together, they control 85% of the world’s container trade. Some might call that a cartel. Only eight of the top 10 container companies have yet reported their latest profits. They are not up by 200%. They are not up by 2,000%. Their combined profits are up by 20,650%, compared with pre-pandemic levels. No wonder they managed to pay out £4.7 billion to their shareholders last year. No wonder P&O, under DP World, is now back in the container business. That brand is so well-known in Parliament for the disgusting treatment of its own workers, and its directors’ total disregard for the law.

When Members speak of the cost of living crisis, attribute it all to Putin and covid, and attempt to blame ordinary working people for fuelling inflation, they should understand that it is a perfectly reasonable request for ordinary people to say that after 12 years of declining real wages, they should not lose out yet again when inflation is at a 40-year high.

Our Government, and more especially those on my party’s own Front Bench, need to be making the case that workers are not causing this inflation spiral. They need to listen to what some of the companies themselves are saying. In a survey of retailers earlier this year, 56% of companies said that inflation had allowed them to raise prices beyond what was required to offset increased costs. Some 63% of larger companies reported that they were using inflation to “boost profits”. BP’s chief executive has referred to his business as a “cash machine”, and BMW’s chief financial officer has said that the company has

“a significant improvement in pricing power”.

When companies themselves tell us that they are ripping us off, it is time for politicians to listen and to act. Ordinary families should not have to pay the price.

[Madam Deputy Speaker (Dame Rosie Winterton)]

A perfect eight minutes.

Economic Update

Barry Gardiner Excerpts

Monday 17th October 2022 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I genuinely welcome many of the announcements that the Chancellor has made today and the stability that they will produce, and I wish him well for all our sakes in his new role. I want to focus his attention back on the young couple seeking to purchase their first home. They fear that the housing shortage means that the cut in stamp duty will not benefit them, but will simply raise the price of property and benefit existing homeowners—or have he and his party managed to abolish the law of supply and demand in the last 24 hours?

[Jeremy Hunt]

No, I have not. We recognise the need for more housing and the problems in the planning system. They will be at the top of our mind as we announce reforms to restore economic growth.

Economic Situation

Barry Gardiner Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

I imagine that constituents in the hon. Lady’s constituency, as much as in mine, are pleased that they will not face energy bills of £6,000 or £7,000 this winter, which the growth plan delivered on. I do not agree with the analysis she read out from Mr Krugman, or Dr Krugman—[Interruption.] Professor Krugman; I am happy to stand corrected. This growth plan will ensure that we continue with our G7-leading levels of growth.

[Barry Gardiner (Brent North) (Lab)]

The £60 billion of borrowing for the energy guarantee is to paid back by bill payers, not the oil and gas producers who are making record profits on the back of the public’s misery. That is not fair. Will the Minister consider raising not a temporary windfall tax but the basic tax rate for oil and gas producers, which in the UK is the lowest in the entire world? If he raised it even to the global average, he would raise an addition £13.4 billion every single year.

[Chris Philp]

I will make a couple of points. Extraction companies already pay about double the rate of corporation tax that other companies pay. In addition, we have imposed the energy profits levy, through which the rate of taxation on their profits increases to 65%. That is a pretty significant rate of tax, even by Labour party standards, and it will raise about £23 billion over the relevant three-year period. The hon. Member will also have seen the announcement from my right hon. Friend the Business Secretary yesterday on ensuring that renewable companies provide energy to our constituents at reasonable prices. The suggestion that no contribution is being made by the energy sector in the circumstances is, frankly, not accurate.

The Growth Plan

Barry Gardiner Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

What I will admit is that the plan is a plan for growth that will drive entrepreneurialism, endeavour and economic opportunity in this country. Everybody will benefit from that.

[Barry Gardiner (Brent North) (Lab)]

While the Chancellor was speaking so optimistically about growth, the City saw the FTSE 100 fall, the S&P 500 fall and the pound fall to the lowest level since 1985. Given that oil and gas prices on the wholesale markets are in dollars, he will appreciate that that has increased still further the borrowing that he will have to pay back for the package announced yesterday. If he is so optimistic about growth, will he set a timescale? Will that timescale be six months? Will he retire in a year if the growth that he has predicated has not been achieved, or is this an admission that he is going to stuff as much money into as many of his friends’ pockets as possible before the general election in 2024?

[Kwasi Kwarteng]

The hon. Gentleman will know that over the past two or three months, oil and gas prices have come off quite a bit, so actually the long-term contracts that we are negotiating are just as likely to be much less costly as to be at an increased cost. As for our growth plan, I am not embarrassed about wanting to grow the British economy, I am not embarrassed about driving opportunity in this country, and I do not believe that higher taxes lead to prosperity.

Financial Statement

Barry Gardiner Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

No. In the spending review, we announced the largest investment in upgrading home energy efficiency that this country has ever seen—billions and billions of pounds across a range of different schemes, helping hundreds of thousands of households with the costs of upgrading their energy.

[Barry Gardiner (Brent North) (Lab)]

Can the Chancellor explain why, in the fifth-richest country in the world, and under his stewardship of the economy, this morning’s news reported that a mother would not accept potatoes from a food bank because she did not have enough money to boil them?

[Rishi Sunak]

I am very sorry to hear that, and I am hopeful—in fact, confident—that the policies we have announced today will help those who are most vulnerable. We have made sure, as we have over the last two years, that we are standing by the British people, and that is what the policies announced today do.

Downing Street Parties: Police Investigation

Barry Gardiner Excerpts

Tuesday 25th January 2022 Commons Chamber

[Michael Ellis]

One has to wonder. The Labour party’s focus on gatherings two years ago, as alleged, rather than on Ukraine and the Russian troops massing on the border of Europe, is quite extraordinary. What we are doing is focusing on the matters that really make a difference for the people of this country, while the police and the Cabinet Office continue their investigations.

[Barry Gardiner (Brent North) (Lab)]

Given that it has taken six weeks since the Daily Mirror first broke the story of parties in Downing Street to have a police inquiry, what consideration have the Government given to appointing Pippa Crerar as the commissioner of the Metropolitan police?

[Michael Ellis]

Well, I have no reason to be concerned about who the Metropolitan Police Commissioner is.

Economic Update

Barry Gardiner Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

I am grateful to my hon. Friend for his support. He is absolutely right. We are approaching a summer unlike any we have ever seen, and it is important that we all enjoy it safely. It will be different, but it is vital for our coastal communities and those used to welcoming visitors from home and abroad that they get to have a proper summer, and we can help collectively by eating out to help out. It is critical to remember that the 2 million people who work in these industries are particularly vulnerable and often are in areas that are not necessarily as resilient as others. They need our support so let us get out there this summer.

[Barry Gardiner (Brent North) (Lab)]

The Chancellor has made some excellent announcements, and none more so than to the hospitality sector. The prospect in his May announcement to that sector of grants of up to £25,000 delighted 9,000 hospitality businesses in my borough of Brent. That was the prospect. The reality was very different. His Department released just £3.3 million to Brent, which would have given each of those businesses no more than £366. What can he say to those 9,000 disappointed businesses, and will he back up today’s announcements with real cash this time?

[Rishi Sunak]

The hon. Member talks about real cash and business rates grants. We have deployed more than £10 billion in cash to local authorities across this country, which has found its way to 800,000-plus businesses, through grants of either £10,000 or £25,000 targeted at businesses in the retail, hospitality and leisure sector. It has been a lifeline for small shops and businesses up and down the country.

European Union (Withdrawal) Act

Barry Gardiner Excerpts

Thursday 6th December 2018 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I congratulate not only Members on my side of the House today, but all those who have spoken in this debate, because what we have shown is testament to the passion and the force of argument and rationality that Members can present the House with at times such as this. I also want to pay tribute to you, Mr Speaker, for the fact that you have shown leadership by staying in the Chair for the entire proceedings of this debate.

The person I wish to start by quoting is not one of my own side, but the right hon. Member for East Devon (Sir Hugo Swire). He said:

“No one ever said it was going to be easy.”

Actually, on 20 July last year, the Secretary of State for International Trade informed the country that an agreement with the EU would be

“one of the easiest in human history.”

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

If we are going to have a sensible debate and if we are going to use quotes, they should be accurate and in context. As the hon. Gentleman knows, the point I was making was that the trade element—the part we have not yet negotiated with the European Union—should be simpler than most, because we would begin, unlike in most trade agreements, with regulatory alignment and legal alignment in trade.

[Barry Gardiner]

I know exactly what the Secretary of State said. In the following sentence, he said this would happen unless

“politics gets in the way.”

Clearly, politics has got in the way, but it is not the only thing. Yesterday, reality got in the way, with the release of the Attorney General’s written advice to Cabinet. The implications of this legal advice are that we could be locked into a position where the EU negotiates a new trade in goods agreement that might be beneficial for the EU but deeply disadvantageous to the UK. This could be a deal where we have no say in the negotiations but where the UK could be obliged to open up our markets, perhaps to the United States of America, without any reciprocal right of access for UK manufacturers into that US market. I know the Secretary of State will have reflected carefully on that outcome. In fact, earlier this year in his Bloomberg speech, he presaged just such a situation. He said:

“As rule takers, without any say in how the rules were made, we would be in a worse position than we are today. It would be a complete sell out of Britain’s national interests and a betrayal of the voters in the referendum.”

But in a few minutes, he will stand at that Dispatch Box and urge hon. Members from across the House to vote for it. I can only admire his flexibility.

So how did this mess come about? The Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), excoriated the Government for their failure to prepare. My hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) focused on the rigidity of the Prime Minister’s red lines. Perhaps the most serious error, though, was, as my hon. Friends the Members for Ynys Môn (Albert Owen) and for Rutherglen and Hamilton West (Ged Killen) said, to try to exclude Parliament from the process. The Government tried to exclude us on the triggering of article 50, on the impact assessments, on the right to a meaningful vote on the deal and on the financial modelling, and of course we argued that Parliament had the right to see the full legal opinion prepared by the Attorney General. Their refusal was a blunder that resulted in an achievement unique in a thousand years of our history: a Government being held to be in contempt of their own Parliament—ironic, given that Brexit was supposed to be about the sovereignty of this Parliament.

It is hardly surprising, then, that now that the Prime Minister has finally brought her deal back to the House of Commons, it is a deal that Members on both sides believe is not in the best interests of the country. She used to say, “No deal is better than a bad deal”; now the motto seems to be, “Any deal is better than no deal.” In fact, the Prime Minister’s deal is not actually a single deal at all: it is a package, in which there is one deal with binding commitments by the UK on the things that the EU demanded that we settled before we leave—money, citizens’ rights and the Irish border—and another proposed deal, which contains only a wish list, with no binding commitments on the EU on all the things that the UK would like in terms of our future political, trading and security relationship. Both are packaged up with the transition period, during which the real final deal is supposed to be negotiated.

People have called it a blind Brexit, because we are unable to see what we will get before we leave the EU on 29 March, by which time we will have lost all further leverage. After President Macron’s comments, is there anyone present in the Chamber who thinks that it is mere coincidence that the final date to extend the transition period and avoid the backstop is exactly the same date as that for the ratification of an agreement on access to our waters and fisheries quota shares?

My hon. Friend the Member for City of Chester (Christian Matheson) pointed out that, although the Government say that the technology to avoid a hard border does not currently exist, in a staggering act of faith, they believe that it will be possible to achieve that by December 2020, when the transition period comes to an end. If the future relationship is not agreed by that date, the UK is faced with a stark choice: pay billions of pounds to extend the transition, or enter into the trade purgatory of the backstop arrangement.

Forty years of harmonisation of standards and regulations has resulted in UK companies being deeply embedded in complex supply chains. In the past few months, I have visited factories in all sectors. I have been to the ceramics factories about which my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) spoke so powerfully when he told the House about the unions that he met and their fight. They are stressing that we must not have no deal, while not exactly being enamoured of the one that is on offer.

[Vicky Ford]

Will the hon. Gentleman give way?

[Barry Gardiner]

The automotive sector—[Interruption.] The hon. Lady will understand that the purpose of summing up at the end of the day is to respond to all the comments, including hers, that have been made during the debate. That is what I will try to do.

I visited the automotive sector with my hon. Friend the Member for Crewe and Nantwich (Laura Smith). I spoke to the management, the unions and the workers. Their sector represents £18 billion-worth of exports to the EU. It has benefited enormously from our EU membership, and particularly from the customs union, which has allowed companies to streamline their supply chains and employ just-in-time systems.

I am not a pessimist about the future of our country. I do not say that the UK will be poorer if we accept the Prime Minister’s deal. But I do say, with the support of both the Treasury and the Bank of England, that it will be much poorer than we otherwise would be, by approximately 4% of GDP. My hon. Friend the Member for Sheffield South East (Mr Betts) spoke with clarity and passion about the differential impact that this would have on the poorest people and on the forgotten regions of our country, which need infrastructure investment.

Let us examine the potential upside: the new free trade agreement that the Secretary of State is so keen for us to do, particularly with our single largest bilateral trading partner, the United States. We have a trade surplus with the USA—a trade surplus that President Trump is determined to overturn. Last week, he suggested that a deal may now no longer be possible because of the way in which this deal proposes to align with the EU. President Trump made it clear that any trade agreement would involve aligning with American regulations and standards. Yes, of course, that means chlorine washed chicken, but it also means the US “Defect Levels Handbook”, which specifies the level of mice droppings or rat hairs that are permitted in our food—for example, 11 rodent hairs per 50 grams of cinnamon and 20 maggots per 100 grams of drained mushrooms. If anyone in this Chamber doubts it, they can read the handbook for themselves or they can see what is proposed by reading “Plan A+” launched by the original Brexit Secretary and by the hon. Member for North East Somerset (Mr Rees- Mogg) just recently. It proposes to remove parity-pay for posted workers; end limits on the hours that people can be asked to work; end the precautionary principle; say yes to pesticide residues and yes to hormone-disrupting chemicals in genetically modified organisms. Such regulatory divergence from the EU would substantially impact our ability to trade with our biggest, closest market. It would increase the risk profile—

[Dr Fox]

rose—

[Barry Gardiner]

Of course, I will give way to the Secretary of State.

[Dr Fox]

I am grateful to the hon. Gentleman for giving way. Is he aware that because of trade asymmetries—that is the way in which trade flows are measured transatlantically —the United Kingdom believes that we have a trade surplus with the United States, but the way that the US measures trade means that the US already believes that it does have a trade surplus with the UK. That rather undermines his case.

[Barry Gardiner]

Not at all. The Secretary of State will have read what President Trump has said recently. He knows that the President, as a protectionist, wants to put America first, not the UK.

That regulatory divergence from the EU would substantially impact our ability to trade with our biggest and closest market. The Minister for Trade Policy recognised the same. He noted that, “If we come out of alignment with EU regulations in this area, then there is a penalty to be paid in terms of frictionless trade with Europe.” That comes from the Secretary of State’s own team.

Even assuming that new trade deals are possible without these complications, what would these new agreements contribute to our GDP? The Bank of England has quantified any benefit at less than half a per cent—just 0.2% of GDP growth. The Government’s own assessment says that a no-deal Brexit would result in a reduction of 9.3% of GDP. Most MPs are clear: a no-deal Brexit cannot be allowed to happen. None the less, the Prime Minister is presenting her agreement as a binary choice between her deal and no deal. She urges MPs to vote for a deal that they firmly believe is not in the country’s best interest by threatening that if they do not, the consequences of no deal would be even worse. That is not an argument; it is blackmail. Most importantly, it is a false choice.

Earlier today, my right hon. Friend the shadow Chancellor set out an agreement that respects the key reasons why many people voted to leave—namely money, borders and law—and also ensures that we continue to have frictionless trade that protects our manufacturing industry’s just-in-time supply chains and the integrity of the United Kingdom.

We are at a critical point in our history and business needs certainty and stability. Our children need an optimistic future. Our country is deeply divided. I started by quoting the Secretary of State and remarking how flexible he has been in acquiescing to this deal. I conclude my remarks, exhorting him to be yet more flexible still and to recall his own words, which were quoted in The Mail on Sunday on 16 September 2012. He said:

“I believe the best way forward is for Britain to renegotiate a new relationship with the European Union—one based on an economic partnership involving a customs union and a single market in goods and services.”

The Secretary of State may not like it, but it sounds an awful lot like Labour party policy to me.

--- Later in debate ---

[Dr Fox]

Once we get out of the realms of fairy tales and consider reality, we see that the unemployment rate in the United Kingdom is 4.1%—almost exactly half the level in the eurozone, which is 8.1%. Our exports are growing faster than in most other countries in Europe, with the exception of Germany, and investment in our infrastructure is at record levels.

[Barry Gardiner]

rose—

[Dr Fox]

Now that the hon. Gentleman wants to come into the debate, I welcome him.

[Barry Gardiner]

As, indeed, I twice welcomed the Secretary of State. Will he confirm whether he has seen Her Majesty’s Revenue and Customs statistics on regional trade in goods for the third quarter that were published this morning? They show that all regions of the United Kingdom are importing more than they are exporting, and we therefore have a large balance of trade deficit.

[Dr Fox]

I hate to bring this to the hon. Gentleman’s attention—it will no doubt come as a shock—but we have had a trade deficit since the 1980s. In fact, one of the few times when we have not was in February this year, when the UK became a net exporter for the first time in some time. The hon. Gentleman will no doubt be overlooking those facts because they do not suit his narrative.

Trade Bill (Third sitting)

Barry Gardiner Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[The Chair]

Thank you. I invite Barry Gardiner to begin the questions.

[Barry Gardiner (Brent North) (Lab)]

Thank you, Mr Davies. May I wish everyone a very happy Burns day? So that our Welsh colleagues do not feel left out, I understand that it is also St Dwynwen’s day—I hope I pronounced that correctly—so let me say a very happy St Dwynwen’s day, too.

[The Chair]

You have the tie as well.

[Barry Gardiner]

Indeed.

--- Later in debate ---

[The Chair]

Order.

[Barry Gardiner]

Q 151 Let me begin with Sarah Dickson. In your association’s view, does the Bill set out the consultation and scrutiny processes that you would like? Does it set out proper processes for the conduct of our international trade? Did the way the Government prosecuted the lead-up to the Bill—the way they took on board the representations of your industry and the wider business community—engender trust?

Sarah Dickson: For us, transparent and participative trade policy is really important. As an exporting organisation, we have been dealing with trade policy decisions in countries around the world for many years. We find that the best way to make trade policy is to involve people, consult them in that process and gather views, because you will find that some people will do better out of an agreement than others, and decisions will need to be made. Only by having a wide consultation on that and involving people in the process do you really get to a good outcome that it is then possible to implement and pass.

The Trade Bill as written at the moment—we do not know if there is more legislation to come—does not really cover that point in a statutory way. Of course, you do not have to consult and use statute to do that, but it concerns us that trade policy has been with the EU for many years and the UK has not done it. When it comes to having confidence—it is about confidence, rather than trust—in what the process is and when you would get input into that to have your say, we would be encouraged if we had more detail in a statutory instrument.

[Barry Gardiner]

Q Do you have that confidence yet?

Sarah Dickson: Not at the moment.

Gary Stephenson: I see the Bill as a sort of framework for future implementation of more specific regulations. I think the challenge is in the detail. If we look at key sectors such as animal-derived products, which represent 70% of the food exports from Scotland, there are some specifics there that will be required, on, say, animal health, protection and regulations in regard to which countries are permitted to export to different markets. There is registration for different markets. There are export health certificates and border inspection posts for imports of those materials. All that is fairly complex and detailed. We would hope that we would be consulted on any more specific legislation. It is difficult at this stage to say whether it is heading in the right direction or not. It depends on that ability to consult. There will need to be consultation in the devolved Governments, as well as with the UK.

[Barry Gardiner]

Q So to put that same final question, do you have confidence yet in the framework that the Government have set out?

Gary Stephenson: I am an optimist, so I would like to think that I have confidence that we would be engaged in consultation, yes.

Elspeth Macdonald: From Food Standards Scotland’s perspective, the part of the Bill that engages most with us relates to implementation of trade agreements going forward. If current trade agreements between the EU and third countries are carried over in their current form, that may not change matters significantly. If those trade agreements down the road start to change, or there is a desire or a wish to start to change them, the transparency on how that would happen is not yet evident. Overriding all of that, of course, in the devolved context, is the issue about the constraints in competence that the Bill would bring on Scottish Ministers and the Scottish Parliament, and therefore on ourselves, to be able to provide assurances to consumers in Scotland about standards, and assurance in relation to international trade.

[Craig Whittaker (Calder Valley) (Con)]

Q I want to ask each of you whether you think that the Bill is sufficient to do what it needs to do, bearing in mind that it is not about future trade deals, but is about facilitating the carry-over of deals that are already in place?

Gary Stephenson: It is difficult to tell with the Bill as it stands, because the devil is in the detail. There are 40-plus EU free trade agreements. Some are very small—economically they are not too important—but there are some very big free trade agreements within those. Clearly, we cannot do them all at once, and the key bit will be whether there is some sort of Government prioritisation of those agreements, perhaps from the standpoint of size of markets. There are some very big ones in there: Japan, Mexico, South Africa, South Korea, Ukraine, Turkey and Egypt are very large markets that are certainly important for UK-Scottish producers.

--- Later in debate ---

[Iain Stewart (Milton Keynes South) (Con)]

Before I ask my question, can I just point out an important error in some of the official documents? Whisky is spelled with an “e” on some of the documents, and that is a very different product from Scotch whisky. On Burns night, I thought it was appropriate to point that out.

[Barry Gardiner]

The Government cannot be trusted.

[Iain Stewart]

Q I would like to get a sense from the witnesses of what the impact would be on the food and drinks sector, particularly in Scotland, if this Bill did not happen and we left the EU without the carry-over of the existing EU free trade agreements. Have you quantified the value of transferring over what we already have into our domestic legislation?

Sarah Dickson: For us, 10% of our exports go to those countries and benefit from them. I cannot give you an overall figure, but obviously, if you are not paying the tariff, you are not paying the tariff and you do not have that cost. It would make a difference to about 10% of our exports, and our exports were £4 billion in 2016.

Elspeth Macdonald: I do not have figures in front of me, but I think the document the Scottish Government published recently, “Scotland’s Place in Europe”, about business, jobs and the economy, touched on exactly those issues and put some economic analysis around some of that in terms of trade.

Gary Stephenson: All I can say is that I think about 37% of exports of food from Scotland are to non-EU countries, but we have not quantified exactly what the impact would be and how much of that is going to countries with a free trade agreement. I cannot give an exact answer, but it will have an impact.

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[Judith Cummins]

Q Can I quickly return to geographical indications and ask Ms Macdonald a question? Given the ambiguity of the Government’s position to ensure that GIs are awarded to UK producers in trade agreements—they did not list a single one in the comprehensive economic and trade agreement—what are your concerns about the representation of your interests in trade agreements?

Elspeth Macdonald: Our interests in terms of geographical indications are that consumers know what they are buying and that, whatever system is in place—the Government’s stated intention is that things will be the same after exit—people can have confidence that products are not being misdescribed in terms of their geographic origin. There is confidence in the current system because it is a robust and well-regulated system that is set out in statute. Our particular interests are ensuring that, when businesses trade and when people buy products that are advertised and described in a particular way, those claims, whether they are about origin or anything else, are accurate.

[Barry Gardiner]

Q I want to marry up two things that Mr Stephenson and Ms Dickson said. I was struck by your phrase, Mr Stephenson, that there will be no “lift and shift”. In that context, looking at the way the existing agreements have to be transposed into corresponding agreements, I wonder whether you might comment on the Government’s ability to do that, given their red lines with the Norwegian agreement and the Turkish agreement. One of those currently involves the European economic area and free movement of people, and the other involves the customs union.

I want to marry that up with what you said, Ms Dickson, about the roll-over of terms. When you were asked about South Korea, you did not actually narrate the history of your association’s difficulty with South Korea, which of course was very resistant to the geographical indicator when you presented it on behalf of the Scotch Whisky Association. Do you think there is a possibility that South Korea might use this opportunity to reverse the progress that was made? There is one question for each of you.

Sarah Dickson: I would love to be in the head of the South Korean Government and to know quite where they will take this process. The conversation between the EU, the UK and the South Korean Government will have to be for them. Is it impossible that third countries might try to use this opportunity to reopen agreements? It is not impossible, but I hope that is not the case. When the UK has left the EU and is having its own bilateral trade policy conversations with third countries, we will undoubtedly get into these conversations about what they might want to change.

[Barry Gardiner]

Q Why would the South Koreans not use this opportunity, while we are under pressure to do things within a limited timescale, to negotiate better terms, as they see them? They tried very hard to negotiate those terms with the EU in the first place, did they not?

Sarah Dickson: The flipside is what South Korean businesses are saying to them about the benefits they gain from the trade deal. That is the judgment in all trade deals: who is benefiting, how much they are benefiting, and whether the things they do not benefit from outweigh the benefits they get. As I said, that is really a judgment for the South Korean Government. That is partly why we are trying to protect our GIs as best we can in addition to agreements.

Gary Stephenson: I will build on that. You are exactly right: there is an opportunity for them to renegotiate, and the UK, given the set-up it will be in, will be in a weaker position to defend against that. It would be ideal if the transition were just an extension of article 50, but we know it will not be. We will be out of the EU and trying to negotiate in a transitional period in which we are not supposed to be negotiating and are not supposed to have a final agreement, we want to get things delivered on time, and we do not have all the necessary resources. How do we prioritise everything? I think there are a lot of things rolled into your scepticism, but I share that scepticism.

[The Chair]

Order. That brings us to the end of the time for questions. May I thank the witnesses, on behalf of the Committee, for your evidence? We are very grateful.

Examination of Witnesses

Gordon MacIntyre-Kemp, Jonathan Hindle and David Scott gave evidence.

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[The Chair]

Can I also ask the witnesses to speak up? We seem a long way away back here. I invite Barry Gardiner to begin.

[Barry Gardiner]

Q I seek your thoughts on what seems to be an increasingly complex part of international trade agreements. As we have seen with Canada, negotiating partners are increasingly demanding that any potential difficulties with implementation, when devolved competence matters may be involved, are dealt with up front—for example, in the Canadian situation, the provinces were engaged right at the beginning of the process—and that there are assurances that the final agreed text of any agreement may be delivered. With that being the case, what is your view on the important role of consultation prior to agreements? Do you believe that the Bill sets out a suitable framework for such consultation? In addition, what would the implications be if the devolved Administrations had some measure of consent reserve that implied a veto on the implementation of our internationally agreed obligations? That is quite a complex question in two or three parts, but your response will be of considerable interest to the Committee.

Jonathan Hindle: I certainly do not feel qualified to be commenting on devolved Administrations—it is not part of my remit or where our industry is particularly clustered, so I do not feel qualified to answer that. I defer to the two gentlemen beside me, who probably know more.

David Scott: I am not convinced I am able to answer either, but the consultation is definitely a good thing. There is a voice that needs to be heard and various parties look for representation, not necessarily to veto anything, but certainly to ensure that the best interests of all parts of the UK are represented.

Gordon MacIntyre-Kemp: Business for Scotland was founded in 1996 to campaign for devolution and to set up the Scottish Parliament, so protecting the powers of devolution is one of our key remits. It is an area we have been investigating. This is one part of the whole Brexit process. The European Union (Withdrawal) Bill centralises about 100 Europe-influenced powers in Whitehall after Brexit, even though many of those cross over with the responsibilities of the devolved Parliaments and Assemblies. The deadline to amend clause 11 of the withdrawal Bill was missed, and that means we are sitting here without proper protections in place. The Trade Bill seems to suggest that it puts the power to act almost unilaterally in the hands of a single Minister—a single Minister who has what has been labelled a “hard Brexit agenda”—without clear protections on the public right to consult, scrutinise or stop trade deals.

At best, that means that a great deal of confusion remains over how trade negotiations will be handled where they overlap with the devolved Assemblies and Parliaments, and that is damaging to business. At worst, it looks like a deliberate attempt to delay the transfer of EU-held powers in particular to the devolved Parliaments until after the UK Government has had free rein to agree deals that you could say run roughshod over the devolution agreements that currently exist in these islands.

To give a key example, if we are going to do an instant trade deal, which we want to do with the Americans and which has to be the highest priority, the Transatlantic Trade and Investment Partnership is a great guide to what we can do with them. It is quite progressed; the key reason that TTIP did not make progress in the EU was that the EU wanted to put in protections to allow Governments to maintain public services such as the NHS, and our NHS is something that the United States is very likely to want to have access to.

I do not know much about trade negotiations, but I was trained in negotiation by a FTSE 100 company and by an American top 500 company, and the very first rule of negotiation is, “Make sure the person you’re negotiating with has the ability to say yes to the deal you’re presenting.” If we have devolved Parliaments who have control over the NHS, the Americans will look at that and say, “Well, you don’t have the ability to agree a trade deal with us,” so devolution is ipso facto incompatible with rapid trade deals, especially done under a World Trade Organisation agreement. I see that as being a problem and potentially creating constitutional issues not just in Scotland, but particularly in Northern Ireland.

[Barry Gardiner]

Thank you. That was an extremely interesting response, and I am sure one that will help our deliberations this afternoon, when we come to the first set of amendments. You have raised a number of very serious constitutional questions. It may be that the Minister has clear answers to them, but I think we will all be keen to hear what they are.

[Martin Vickers (Cleethorpes) (Con)]

Q Mr Scott, in the notes we have been provided with, there is a section titled “Your views on the Bill”. It says that you recognise that

“the government is committed to maintaining the existing trade relationships, effectively preserving the status quo.”

You go on to say:

“It therefore seems that there is the potential to spend a significant amount of time, effort and expense to deconstruct the current processes”

and introduce a new process to bring us back to the same place. The way I read them, those two statements are somewhat contradictory. Surely what we are looking at in the Bill is the provision to ease that transition to provide the status quo?

David Scott: From my perspective—I speak for my company, which has 60 individuals in Scotland working in the pharma services sector—there are established regulations and ways in which we currently work with the European Union and with global pharmaceutical companies. The Bill would suggest that, while we seek to maintain those, we reserve the right to deconstruct them and come back to the same position. That is how I read it; I may be wrong, and I do apologise if I have misconstrued that. It is important, from my business perspective, that we maintain our relationship as it currently is, because that is a major way in which we trade with European countries on behalf of the pharmaceutical industry.

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[Matt Western]

Q Finally, would you very much like your sector to be involved in any TRA?

Jonathan Hindle: Very much so, yes. We would certainly welcome having someone on that TRA that understands our sector and all the nuances and complexities that have been alluded to—absolutely.

[Barry Gardiner]

Q Very briefly, Mr MacIntyre-Kemp, I understood your example about chlorinated chicken not to be because you did not realise that this Bill was not about doing a trade deal with America, but to be talking about the need for the devolved Administrations to be involved in determining what are in those trade agreements, because of the way in which they may impact upon the implementation of what are devolved competencies. Do you believe—and do you believe that it is the Scottish Government’s position—that there should not only be consultation but consent at that level for the trade agreements before they are implemented?

Gordon MacIntyre-Kemp: Yes, exactly, and as food safety is a devolved issue in Scotland—

[The Chair]

Order. I apologise to the hon. Member, but we have come to the end of the time allotted to the Committee for questions. May I thank the witnesses on behalf of the Committee for your evidence today? The Committee will meet again at 2 o’clock this afternoon in Committee Room 12.

Ordered, That further consideration be now adjourned. —(Craig Whittaker.)