Trade Bill (Second sitting)

(Limited Text - Ministerial Extracts only)

Committee Debate: 2nd sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[Bill Esterson]

Q George Peretz, you were talking before about the Trade Remedies Authority. Can I bring you back to that? I believe that the Government are conducting a review into which trade offensive measures can be rolled over or passed forward—having heard that last piece of evidence, I am not sure what description to use. Can you describe the challenges and the consequences if some of those are not used by us when we are outside the EU?

George Peretz: Not all WTO law is clear, but what is pretty clear is that we could not simply automatically carry over existing trade remedies imposed by the EU and say, “These remedies will apply to the UK now that it is a separate WTO jurisdiction”—if I can use that term loosely. We cannot do that for one very simply reason: it is a condition of all trade remedies that there is a domestic injury. A domestic injury is defined, and the UK is obviously not the same as the EU. It is potentially an issue that applies the other way around, incidentally, but that it a problem for the EU rather than for us.

As far as I understand it, the Department for International Trade is feeling its way to dealing with this problem. As a first step, it is asking industries that benefit from an existing trade remedy to set out why they think it should continue and to explain what the domestic injury is. There is probably also a need for the UK to discuss with the European Commission what the position is. After all, in its investigation of all these remedies, the Commission will have built up a case file that will include quite a lot of information about what the injury is, some of which will be pinned down geographically. It will be able to say that that is evidence of an injury in the UK. Perhaps that could be used to justify carrying on the remedy after we have left the EU, but it would have to be the judgment of the new Trade Remedies Authority whether that evidence was good enough to withstand domestic scrutiny and appeals and, ultimately, a possible WTO challenge. There is a very difficult set of issues there, which will be a challenge for DIT and the TRA.

[Craig Whittaker (Calder Valley) (Con)]

Q I want to go back to the scrutiny of the Bill. My understanding of what some people call the Henry VIII powers, for an SI or a DL, is that there is provision in both of those processes, whether they are negative or affirmative, to raise an objection for debate on the Floor of the House of Commons. My question is where is that process flawed?

George Peretz: I do not claim to be a great expert in parliamentary procedure, and I am not sure that I can add very much to what Brigid Fowler said about that—she is an expert on parliamentary procedure.

Plainly, there is an opportunity to challenge a statutory instrument that uses the negative resolution procedure, but clearly it is less likely to be challenged—just look at the statistics—than a piece of primary legislation, because one fundamental point about any statutory instrument is that the vote is simply an all-or-nothing vote on the instrument. There is no ability to have the primary legislation to say, “We agree with most of this clause but we don’t like clause 5, therefore we would like to amend that.” It is take-it-or-leave-it. The problem with a lot of this is that you will be told that the clock is running and you need to decide very quickly what to do.

Professor Winters: There is very little time, so be realistic about what the cost of a challenge would be and the pressures that that would generate.

Michael Clancy: It is the balance between speed and scrutiny—that is the whole point. To get that right is quite difficult with a negative or indeed an affirmative resolution procedure. Although theoretically each of these could be debated, I think it would be very difficult to get each of these debated. There simply is not enough time to do that—we are told that there are between 800 and 1,000 orders in relation to the EUWB. I do not know how many of them might be here—63 existing trade treaties, maybe more, and other things as well. That is the difficulty.

What are the defects? The defects are that we have an alternative procedure of super-affirmative if we need extra time to look at something—that is where the sift comes in. If the sift identifies a particular order as being important, it might then get better scrutiny, and better scrutiny might mean the affirmative resolution procedure on a super-affirmative basis. We do not know that the sift applies to these orders because the sift is not mentioned in this Bill. Will it be? Are you going to propose amendments? Is the Government going to take that forward to this Bill? That is another story for another day perhaps.

Then there is the issue—I think it is in one of the Hansard Society papers—of the difficulty, in fact the incapability, of amending these orders. They have to be taken back by the Minister and re-presented. That induces time and delay, and we are running out time and inducing delay.

[Craig Whittaker]

Q I want to come back on that. What you all say is that there are elements of truth in everything, but the reality is, yes, we have a huge amount to get through, and there is a place for the SI process to get some of these through quickly. My point to you is that, although there is a huge amount made of these so-called Henry VIII powers, this Parliament does actually have overall scrutiny control of these trade Bills if we choose to take it.

Michael Clancy: That is true, but the ultimate test is overturning the order. We saw that the last time an order was overturned in the other place—it resulted in the Strathclyde review because it was such an outrage, so we have to be careful about that, because it may have more political impact than we would imagine.

[The Chair]

We are having trouble with time and scrutiny as well. We have only two minutes left for Matt Western.