Trade Bill

Lord Lansley Excerpts

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, I added my name to these two amendments and I will be brief. I agree with every word that my noble friend Lady Brown just said. I add my thanks to Ministers and the Bill team, who have been very gracious and given of their time generously to discuss these issues. I have nothing to add to what my noble friend Lady Brown said about Amendment 31, about which I wholly agree.

I also agree with what she said about Amendment 32, but I have one more point to add. It arises out of the report of the Constitution Committee into the Trade Bill. Talking about the formation of the Trade Remedies Authority, it states:

“While we recognise the pressing timescales and uncertainties concerning Brexit, in constitutional terms, creating and empowering an important public body in such a manner is inappropriate”.


I very much agree with that assertion. I therefore regard Amendment 32 not only as a mechanism for debate but as a partial cure for the problem that the Constitution Committee has unearthed in its report. I therefore see it as being an attempt to try to somewhat address that problem. Can the Minister comment on that and, if she feels the amendment should not be agreed, how we should address the itch that the Constitution Committee identified?

[Lord Lansley (Con)]

My Lords, I will make three very quick points. First, we need to be clear that Amendment 31 simply tries to attach the words “special consideration” rather than “take account”. It is not that all the factors are not there; they are, and they will be considered. The point is that special consideration should be given to this. It is not necessary to do that, because the nature of the structure in Schedule 4 would suggest that that precisely would be the case. I cannot therefore support the amendment. Temperamentally, I want to support Amendment 32, but I fear that in practice there will be many such regulations and it would not be the best use of time for this House and the other place repeatedly to engage in approving regulations of this kind.

I am interested in whether the Minster has anything to add on the potential announcements today on tariffs, which we foreshadowed last week. It is said that all the existing remedies presently imposed by the European Union would be continued, even under a no-deal scenario, by the United Kingdom. I want to inquire—the Minister might choose to reply by letter—to what extent it will be sustainable for us to do that when the remedies will have been assessed in relation to the European Union as a whole, rather than to the United Kingdom itself. For example, an increase in imports leading to injury to an industry might well be applied by the European Union in relation to an industry in Italy or Spain, but it would not be appropriate for such a remedy to be applied in the United Kingdom. That would very rapidly be open to challenge if we do not get the Trade Remedies Investigation Directorate, which is up and running in the Department for International Trade, on the case, so that we can, if we have to—I hope we do not—apply remedies on the basis of an investigation with UK, rather than EU, data.

[Baroness Fairhead]

My Lords, I thank the noble Baroness, Lady Brown of Cambridge, and the noble Earl, Lord Kinnoull, for tabling their amendments and clarifying in advance their concerns with me and the ministerial team.

Before I respond fully to the amendments, I will take the opportunity to draw your Lordships’ attention to the steps that the Government have taken to ensure that the UK is ready to deliver a fully operational trade remedies system by exit day. The Government have brought forward legislation under the Taxation (Cross-border Trade) Act 2018 to establish the UK’s trade remedies system in the event that we leave the EU without a withdrawal agreement. These regulations also temporarily confer trade remedy functions on the Secretary of State until the Trade Remedies Authority, the TRA, is legally established.

Staff already recruited to DIT with the intention of transferring to the TRA on Royal Assent of the Bill, including those trained as investigators—the key function of this body—will carry out their functions as the Trade Remedies Investigations Directorate within the department. The directorate started work on 6 March and will deliver trade remedies functions in house pending legal establishment of the TRA.

Let me repeat that this arrangement will only be temporary. As noble Lords will appreciate, this is a necessary and pragmatic operational contingency to ensure continuity of protection for UK businesses. This must remain the Government’s priority. It is right that we plan for all eventualities, including where, for whatever reason, the TRA is not legally established under the Bill by 29 March.

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[Lord Lansley]

My Lords, I profoundly believe that we should not leave the European Union without a deal in place, but making this amendment to the Bill would not prevent that. Such an outcome would have to be stopped in another place with legislation or through the revocation of Article 50, and this amendment does not bear on that. Unfortunately, in that unhappy event, the amendment would remove from us the power to implement, for example, the agreement that has been reached with Switzerland. It is not ideal, but it is there. It has been entered into in good faith by us and by the Swiss on the basis that, in the event of no deal, we have to have that measure available.

I am afraid that it is also not true, as the noble Lord, Lord Purvis of Tweed, suggests it is, that the Bill is entirely occasioned for the eventuality of no deal. It enables us, for example, to establish the Trade Remedies Authority—we have just heard about the valuable work that it is doing—and it implements the Agreement on Government Procurement, which is a very large-scale issue for British services companies and others which want to be able to bid internationally under the WTO for such contracts. The amendment would stop this Bill coming into force, and we would therefore be unable to ratify the international Agreement on Government Procurement in the way that we were intending, and it would deprive businesses of the opportunities that that would provide. Much as I heartily concur with the intention behind the amendment, it would not have the effect that is sought.

[Lord Purvis of Tweed]

I just want to make a point about the ability to have the regulations on the Swiss agreement. The Government are not using the likely regulatory powers under this Bill to ratify the Swiss agreement, so I do not think that the noble Lord is accurate on that point. They are using the CRaG process, not this Bill.

[Lord Lansley]

My noble friend the Minister may know what their intentions are but, as I understand it, in a number of instances—and I think the Swiss are among them—they will use what are effectively not just bilateral agreements with the Swiss but the opportunity to roll over the EU-Swiss agreements into UK-Swiss agreements, and the power here is available for that purpose.

[Lord Mackay of Clashfern]

My Lords, it is also worth pointing out that, in the event of an accidental no deal—which I hope will not happen—the amendment moved by the noble Lord, Lord Hain, this afternoon would be relevant as well.

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Moved by

[Lord Lansley]

59: Schedule 4, page 19, line 27, at end insert “following a report from the International Trade Committee of the House of Commons”

[Lord Lansley]

My Lords, it is a pleasure to be the back-marker on Report. Amendment 59 inserts text into the schedule that sets up the process for appointments to the Trade Remedies Authority, so that the chair can be appointed by the Secretary of State,

“following a report from the International Trade Committee of the House of Commons”.

In effect, this includes the chair of the Trade Remedies Authority in the list of appointments that are subject to pre-appointment scrutiny.

I do not do this lightly. There are about 1,000 senior public appointments, only 50 of which are subject to pre-appointment hearings by Select Committees. The Cabinet Office guidance on this was amended then reissued in January. Paragraph 8 sets out three criteria, the first of which says that such appointments should be for,

“posts which play a key role in regulation of actions by Government”.

This clearly must be satisfied as it determines one of the essential roles of the Department for International Trade in investigating and recommending trade remedies. Secondly, the appointments must be,

“posts which play a key role in protecting and safeguarding the public’s rights and interests in relation to the actions and decisions of Government”.

This instance may not be about the public, but certainly it ticks the box for the business community, which would regard the TRA as one of the most important bodies impacting on its interests in relation to the actions of the Government. Thirdly, the guidance says that appointments subject to pre-appointment hearings must be,

“posts in organisations that have a major impact on public life or the lives of the public where it is vital for the reputation and credibility of that organisation that the post holder acts, and is seen to act, independently of Ministers and the Government”.

Noble Lords will recall that, at a much earlier stage, we debated whether this body should be independent. The Government, having looked around the world, decided that the Trade Remedies Authority should be independent, and seen to be independent. We have three ticks in the box. This is clearly an important appointment; for the Department for International Trade, it must be regarded as the most important appointment. I do not know of any other posts that it is presently asked to scrutinise prior to appointment. This seems a perfectly reasonable way to proceed; nor does it constrain Ministers too far, as we have discovered. Ministers have to consult and liaise with Select Committees, respond to them and take account of what they have said, but they do not have to do what a Select Committee says and in quite a number of instances have not done so. Ministers can still make the appointments that they consider to be the right ones. I do not feel that I am holding the Government back from doing what they need to do. I am just encouraging them to include this appointment in that list. I beg to move.

[Lord Stevenson of Balmacara]

I support the noble Lord, Lord Lansley, and congratulate him on the succinctness with which he has made his point. I have been confused for some time as to why the department might resist this. He has made the points exactly as I would have done. This is a key role with a public-facing responsibility and will hold the Government to account on issues of great importance. Indeed, it is the only body that the DIT will have as a marker; it behoves the department to raise the TRA to the appropriate level so that it is seen to have the importance that the department claims for it. For these reasons, it is absolutely right that we have an established routine that the person selected by the Minister to be the chair of this body—we are not expecting the same to happen for the chief executive or more junior staff, just the chair—should be seen by the International Trade Committee. As he says, it is a courtesy in some senses because the Minister can still appoint should they wish to do so. I support the amendment.

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[Baroness Fairhead]

My Lords, I thank noble Lords for their continued engagement with the work to establish the Trade Remedies Authority. I trust that I am able to provide reassurance that we are taking proper steps to set up this important body in the right way.

I turn first to Amendment 59, tabled by my noble friend Lord Lansley and the noble Lord, Lord Stevenson of Balmacara. We listened carefully to the points made by them and other noble Lords in Committee about how best to ensure that the senior leadership is as independent as possible. This includes the appropriate role for the International Trade Committee. That is why I am pleased to announce that the Secretary of State is content for the International Trade Committee to conduct a pre-commencement hearing of the TRA chair. This hearing will take place after the Secretary of State has appointed the TRA chair, but before the chair has taken up their position. I further reassure the House that this offer of a pre-commencement hearing by the International Trade Committee will apply to all future TRA chairs, not just the first one. We hope that this will ensure that the ITC has the appropriate role in scrutinising any individual appointed to that position.

I turn now to Amendment 60, for which I thank the noble Baroness, Lady Brown of Cambridge, and the noble Earl, Lord Kinnoull. There are three key issues at hand that I would like to address. The first point is independence. Having had discussions with the noble Baroness and the noble Earl, I will say that independence really matters. We are committed to creating an independent TRA that all our stakeholders can trust and that will be seen as an independent body by third countries. We have taken clear steps to achieve this, including establishing it as a non-departmental public body in the first place, which is different from other organisations around the world, and giving it the appropriate separation from Ministers. We are ensuring that it has an independent board. That is why the Secretary of State will be required to follow the tried and tested Cabinet Office Governance Code on Public Appointments when appointing all non-executive TRA board members.

As this House will be aware, that code enshrines the independence of those members by explicitly stating:

“All public appointments should be governed by the principle of appointment on merit”.


TRA board members must be appointed based on their ability, not the stakeholder group or interest that they represent. The Commissioner for Public Appointments will regulate all non-executive appointments to the TRA, providing independent assurance that the Secretary of State follows the code’s strict rules on making such appointments based on merit and the public interest. While TRA non-executives may well have had experience representing certain stakeholders, we believe that that alone cannot be the reason why they are appointed. To do otherwise would jeopardise the true independence of the board, particularly as this is an investigative body.

The noble Baroness, Lady Brown, referred to the Higher Education and Research Act 2017. We do not feel that it is appropriate to draw parallels between the TRA and the Office for Students. The primary function of the Office for Students is to protect the interests of students, whereas the TRA has been set up to protect UK industry from unfair trading practices, which it will do by undertaking independent and impartial technical investigations into whether these practices have occurred. While this will ensure that manufacturers are protected against unfair trading practices, the TRA has not been set up specifically to protect the interests of those manufacturers or other groups.

The second point relates to skills and experience. I assure your Lordships that we are committed to making sure that the members are best placed to oversee this new function. That is why, when appointing the non-executive members of the TRA, the Secretary of State will have regard to ensuring that the board has the right balance of skills and range of experience. I will do more than pause, as requested by my noble friend Lady Neville-Rolfe. She has wide experience of sitting on boards in both the public and private world, and it is having that right balance and mix of skills and experiences that is most important. Moreover, this process does not happen behind closed doors. To ensure transparency, the requisite skills and experience for each non-executive appointment will be set out in individual TRA job descriptions that will be published in accordance with standard practice.

The noble Earl, Lord Kinnoull, raised a question about the TRA having regard to guidance, and we have included clear statutory restrictions on the Secretary of State’s ability to issue guidance to the TRA. That includes setting out specific circumstances in which the Secretary of State can publish guidance. For example, they cannot publish guidance in relation to a specific case. That is also why the Secretary of State must consult the TRA before publishing guidance, and explicitly have regard to its independence, impartiality and expertise.

These skills and experience requirements include, among others, strong and effective leadership, astute business awareness and an understanding of the complex domestic and international trading environment which the TRA will be operating in. However, we believe that specifying a detailed list of desired experience in statute risks restricting the Secretary of State’s ability to appoint individuals, and the chair and the board’s ability to appoint executives with other relevant experience not detailed here. It suggests that only those criteria listed in legislation are desirable, and may inadvertently displace others. That could create a problem if, in the future, a TRA non-executive was needed to fill a skills or experience gap not covered on the list.

On stakeholders, let me reassure the House that we understand the need to ensure that stakeholders’ interests are accounted for properly. We have also taken clear steps to ensure this. That is why the TRA chair’s job description, and terms and conditions, make clear that he or she will be expected to communicate with stakeholders and incorporate their perspectives into TRA board discussions where appropriate.

We specifically recognise the importance of the devolved Administrations in building the UK’s independent trade policy. That is why we have made several key commitments to ensure they, too, have an appropriate relationship with the TRA and DIT. These include sharing the TRA’s annual report with each devolved Administration, seeking suggestions for the optimal way to recruit TRA non-executives, and suggesting to the TRA chair that the board undergoes specific devolution-focused training. The Welsh Government of course have passed a supplementary legislative consent Motion in the Welsh Assembly, indicating their support for the TRA provisions in this Bill.

As we are reaching the end of Report, I will make some concluding remarks. This stage has provided us with a valuable opportunity to test and improve the detail of this important Bill. I thank your Lordships for that and look forward to Third Reading next week. Having said that, I respectfully ask the noble Lord to withdraw his amendment.

[Lord Lansley]

My Lords, I am most grateful to the Minister for her response to this short debate. It is fitting that we have further evidence in her response of the constructive and positive way in which Ministers have listened to the debate and sought to meet the concerns raised. That has been evident throughout our discussions.

I apologise—I should have declared an interest. I am the UK co-chair of the UK-Japan 21st Century Group, and in that context Sir David Wright, who is the chair-designate of the Trade Remedies Authority, was a member of that board and a former ambassador to Japan, so I know him. It will be evident from those who know him that the purpose of this discussion is not in any way to question his suitability for the post—far from it—but rather the process by which his successors are to be appointed in years to come. In that context I was grateful for the specific nature of the assurance my noble friend was able to give.

The difference between a pre-appointment hearing, in circumstances where the Secretary of State is minded to appoint somebody who is then seen by the Select Committee, and a pre-commencement hearing, where the Secretary of State has appointed somebody but the post has not been taken up, is a distinction without a difference in circumstances where the Secretary of State could proceed in any case. There is a benefit in such appointments being taken up by those seen by Parliament as well as by the Executive, not least having been seen positively in the context, not of trying to second-guess the Secretary of State’s choice of the right person but of understanding at the outset, before somebody takes up the post, how they propose to approach it, their suitability for the tasks, and what objectives they are looking for—what kind of outcomes they are hoping to achieve. In that respect, what my noble friend was able to say adequately and fully meets the purposes that I was raising in my amendment, so I beg leave to withdraw it.

Amendment 59 withdrawn.