House of Lords
(5 years, 9 months ago)
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National Health Service: Missed Appointments
(5 years, 9 months ago)
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Lord Dobbs
To ask Her Majesty’s Government what is their latest estimate of the annual cost to the National Health Service of patients missing appointments with their general practitioners.
Baroness Manzoor (Con)
My Lords, as data on the number of missed appointments in general practice is available for only six months of the period 2017 to November 2018, we are unable to provide a precise estimate of the cost. However, NHS England produced an approximation using the limited data available, which suggested that the cost to the NHS of missed GP appointments was over £216 million a year.
Lord Dobbs (Con)
I am grateful to my noble friend. If you add in the number of missed appointments at hospitals as well, the figure from NHS England—not from the Government because they do not have figures—rises to over £1 billion. It is a huge amount of money, yet recently the Government in a Written Answer discussing missed appointments said it did not really matter because,
“staff are able to use time resulting from missed appointments productively … This may include”,
giving,
“support to other patients, or spending time on personal development”.
I hope noble Lords will accept that perhaps that is not sufficient. Does she accept that while of course all patients have a right to the National Health Service, they have a responsibility to it too? I ask her to go back to the department and shake a few sticks there, so that it accepts that the department itself and not just NHS England has a responsibility for this problem, institutes some research as to why so many patients miss their appointments, and comes up with policies that will tackle this massive drain on the resources of the National Health Service.
Baroness Manzoor
I am always happy to go back and shake the tree to find out the answers. I am a little bit like the Chief Medical Officer and believe that what you can measure you can manage. To that degree, I agree with the noble Lord that we need greater understanding of where patients are missed and exactly how that is managed. I also agree that there are rights but also responsibilities. However, some patients miss appointments for very good reasons, and we have to understand those reasons so that we do not just think it is irresponsible behaviour; I know it is not. I agree with the noble Lord that if somebody misses an appointment the GP could use the time to cover another issue. It is important if patients miss appointments because 70% or more of them will come back.
Lord Winston (Lab)
My Lords, some 15 years ago when I retired from the health service, we accurately costed how much the lost appointments in my out-patient clinic cost. The figure then was over £200 per patient in a clinic that was grossly oversubscribed, so we lost a lot of patients as a result. It is not good enough to say that we have looked at general practitioners. Can the noble Baroness answer the important question put by the noble Lord, Lord Dobbs? It is an effective drain on the health service and results in salaries being paid unnecessarily.
Baroness Manzoor
My Lords, I agree that it is a very important issue, and the NHS is looking at it. If you miss an appointment with a consultant or GP, the costs of that service are stated very clearly. We take this issue seriously and are tackling it.
Baroness Walmsley (LD)
My Lords, this morning I had an appointment at a hospital in Wales, for which I had two reminders on my mobile phone, yet because I live in Wales I do not have access to the NHS app to make appointments with my GP. First, as the app develops, would it not make sense to add reminder functionality to it to remind people of their GP appointments? Secondly, what discussions have taken place with the Government of Wales to allow patients in Wales the same advantage from digital health management as patients in England?
Baroness Manzoor
My Lords, of course the NHS is a devolved service, so that is a matter for Wales. It is important to have technology, and in fact some GPs send reminders by text to let people know that they have a forthcoming appointment.
Baroness Lane-Fox of Soho (CB)
My Lords, building on the last question, can the Minister please update us on the ambitious targets in the 10-year plan for doctors’ appointments by Skype? I believe that these will greatly reduce the number of missed appointments, but investment in infrastructure and skills for GPs and patients alike is vital.
Baroness Manzoor
The noble Baroness is absolutely right that we need to ensure that the workforce is skilled enough to utilise this technology. I do not have the exact numbers for Skype consultations, but the Secretary of State is very keen that we use technology for patients who are able and have the competence to use it. However, there are other methods of contacting GPs, so it is not just a case of using that new technology.
Lord Leigh of Hurley (Con)
My Lords, the Minister says that she is not able to disclose the numbers because they are not monitored, but NHS Digital very helpfully gives the number of mental health service appointments that are unfulfilled, as it calls them, with children and young adults not turning up. In the year to October 2018, there were 600,000 unfulfilled appointments. Given that the Government know the nature of the problem, can they not take steps to resolve it?
Baroness Manzoor
The Government are taking steps to try to resolve this situation but, as I said, it is not straightforward. It is not sufficient to look just at the number of missed appointments, because patients miss appointments for a range of reasons, particularly in mental health services, and we need to better understand that information. NHS England is collating that data. It is not at the level at which we would like it to be but we will of course take appropriate actions as we better understand it.
Lord Tomlinson (Lab)
My Lords, does the Minister agree that there are two sides to this Question? Particularly with hospitals, there is also the problem of cancelling operations at short notice. I required surgery for a very inconvenient complaint, my operation was cancelled the day before, and I had to go for private medical treatment—where I was treated by the same surgeon who would have treated me had my operation not been cancelled.
Baroness Manzoor
My Lords, it is always regrettable when any patient has an operation cancelled. No hospital or clinical team will do that lightly; they take the whole situation into consideration. I am sorry about the noble Lord’s experience.
Defence Safety Fire Authority: Fire Safety Review
(5 years, 9 months ago)
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Lord Lee of Trafford
To ask Her Majesty’s Government what assessment they have made of the report by the Defence Safety Authority Fire safety review—defence single living accommodation, published on 4 January.
Baroness Goldie (Con)
My Lords, the Ministry of Defence takes the safety of its people extremely seriously and is committed to addressing the areas identified in the Defence Safety Authority’s report Fire Safety Review. The MoD has taken action on recommendations and has established a new committee to deliver improvements. The Defence Safety Authority will hold the MoD to account for progress on the recommendations through its annual assurance report.
Lord Lee of Trafford (LD)
My Lords, I am not surprised that this report was sneaked out on 4 January, during our Recess, having been sat on since last August. It is an appalling indictment of the Ministry of Defence’s whole approach to fire safety and to the care of personnel in its charge, despite earlier warnings. To quote from the executive summary,
“The majority of the issues identified in this report result from a failure by Top Level Budget (TLB) Holders and Heads of Establishment (HoE), as Accountable Persons (AP), to comply with Fire Safety legislative duties requiring them to have adequate arrangements in place to manage Fire Safety”.
How does the Minister react to the news that some military personnel deliberately interfere with and disable fire safety systems for their benefit, and others apparently illegally cook meals on camping stoves in their living quarters to save cash? Do we not have a military Grenfell just waiting to happen?
Baroness Goldie
The report in itself is an admirable piece of work—thorough, analytical and robust. It has been pivotal in ensuring and securing improvements to fire safety in MoD single-living accommodation. The specific issues to which the noble Lord referred were indeed in the report—my recollection is that they form part of paragraph 6.6, and led to recommendation 5, which, importantly, is a priority 1 recommendation. I can say that the MoD has already addressed those areas of concern. The Defence Fire and Rescue Service has provided a signposting document that details a hierarchy for fire safety management across Defence. This includes terms of reference for adequately trained individual building fire focal points, who have been appointed by their heads of establishment, so that they can appropriately manage all fire safety risks, such as those identified by the noble Lord, within their respective buildings.
Baroness McIntosh of Pickering (Con)
My Lords, would this be a case of the defence fire safety establishment benefiting from training in this regard? I commend the work of what used to be called the Civil Contingencies Centre—the EPC, as it is now called—in Easingwold, which does great work in training many of the civilian fire services. Would my noble friend investigate whether this would be a possibility for defence fire establishments if they have fallen short of best practice?
Baroness Goldie
The report made a swathe of recommendations, leading to a total review of governance and governance structures. The committee to which I referred in my first Answer, the fire safety management committee, is new, and I can reassure my noble friend that it meets quarterly to review progress by recommendation owners. If progress is unsatisfactory, the chief fire officer will raise concerns directly with front-line commands or other top-line budget holders. There is a process in train to ensure that progress is monitored and that any tardiness or deficiencies in meeting recommendations will be identified and addressed.
Lord West of Spithead (Lab)
My Lords, the noble Lord, Lord Lee, is right that this is a damning indictment of the situation in single-living accommodation. There is no doubt that a lot of the single-living accommodation onshore for the military is not really up to standard, and we have to put a major effort into this. I have to say that, in the naval sense, the best place for single-living accommodation is at sea, but sadly we have too few ships to have many of them there. I am sure the Minister would agree that more ships would be a good idea. The report really is a damning indictment, though, and is it not true that it was rather sneaked out? If the noble Lord had not brought this to my attention, for example, I would have been completely unaware that such an appalling report had been produced.
Baroness Goldie
My Lords, to take the noble Lord’s last point first, I would observe that this is an internal report so there is not an obligation to publish, but it is important that it is in the public domain. I have already reassured your Lordships that, following the report being made available to the MoD, immediate steps were taken to progress recommendations, and that has been done to very good effect. On the specific issue that the noble Lord raises about single-living accommodation, I entirely support his desire to have a well-structured Royal Navy, which I believe we have, but I want it to be attending to front-line activity, not being a B&B facility. I say to him with reference to single-living accommodation that, in the last decade, 50,000 bed spaces have been delivered through a modernisation programme. He will possibly be aware that, in the financial year 2018-19, £4 million was programmed on SLA fire safety works, and in addition £9 million has been programmed on SLA refurbishment works that include fire safety upgrades.
Lord Campbell of Pittenweem (LD)
My Lords, we can be grateful that changes have been made, but how was it that the circumstances were allowed to arise in which the committee said there had been a lack of priority afforded to fire safety, major weaknesses and an unacceptable degradation of barracks? We ask our young men and women to risk life and limb in action. Surely we can go out of our way to ensure that they are safe in their own barracks.
Baroness Goldie
I entirely agree with the noble Lord. The issues were identified in the AAR of 2016-17, when it was realised that steps had to be taken. Since then there has been a systematic review and efforts have been made, culminating in the excellent report that we have just been discussing, to provide the necessary safety and the improvements that we all want to see.
Lord Houghton of Richmond (CB)
My Lords, I read this report. I did not find it that clear at all; it was something of a bureaucratic emulsification. It was virtually impenetrable to the common reader and gave you the view that the sole answer to fire safety was the application of layers of bureaucracy. It reached something like the truth in paragraph 8.2, where it talked of people disillusioned and fatigued by the universally accepted situation that the infrastructure was underrepaired and underresourced and there was a complete absence of suitably qualified personnel. Does the Minister agree that this is another example of the Ministry of Defence attempting to bridge the gap between true capability and resources by the application of hope and risk?
Baroness Goldie
I do not agree with the noble and gallant Lord at all. I think there is a widespread understanding across the Chamber that this report has been pivotal in ensuring that improvements have been forthcoming. I have some sympathy with him over the opacity of some of the language; I too struggled with the sea of acronyms. I finally got the department to provide a diagram for me showing who is doing what, who is responsible to whom and where they rest in the chain of command. I am very happy to put that diagram in the Library.
Sepsis: National Register
(5 years, 9 months ago)
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Lord Grade of Yarmouth
To ask Her Majesty’s Government what plans they have to create a national register for sepsis and severe infection cases.
Baroness Manzoor (Con)
My Lords, we are making good progress in recognising sepsis and improving outcomes. The Government’s new five-year national action plan for antimicrobial resistance includes a commitment to develop a real-time patient-level data source for patients’ infection, treatment and resistance history, which will be used to inform their treatment. NHS England is co-ordinating this work across the health system, ensuring that all infections, including severe infections and sepsis, are appropriately managed and outcomes improved.
Lord Grade of Yarmouth (Con)
I thank the Minister for that reply. I do not think the House will need reminding that 250,000 UK citizens are affected by sepsis each year and at least 44,000 of them die as a result—too many of these deaths are preventable. I am sure the House will welcome the Government’s recently published antimicrobial resistance strategy; developing real-time patient data for serious infections, especially sepsis, is a major step forward and should be welcomed. Can the Government assure the House that they will work with partners, particularly the UK Sepsis Trust, and that sufficient resources are allocated to achieving this vital, life-saving project?
Baroness Manzoor
My Lords, this is a very important area of work. The UK Sepsis Trust has done incredible work to raise awareness of sepsis and ensure that we continue to focus on improving outcomes for patients. NHS England is co-ordinating work across the health system, including working with the UK Sepsis Trust. Of course, we are ensuring that sufficient resources are made available to tackle this devastating illness. The noble Lord has my reassurance on that.
Baroness Pitkeathley (Lab)
I declare an interest as someone who luckily recovered from a total-body sepsis and organ failure. Although more attention is now being given to this devastating illness, thanks to the UK Sepsis Trust among others, I understand that in its early stages, it is very difficult to diagnose. What kind of training and awareness-raising is being given to GPs and other primary care staff to enable them to identify it at an early stage?
Baroness Manzoor
My Lords, that is a very good question. We are working very closely with clinicians to ensure that they have the tools to diagnose this very serious condition. We do not yet have good data on all the long-term effects of sepsis, but we have developed data analysis tools that look at all people admitted to hospital with infections, or sepsis, to see the impact of actions over a long time. Of course, we are training junior doctors and others to recognise sepsis in the early stages of the illness, as people are admitted to accident and emergency, and we have set up data collection for serious incidences of sepsis.
Baroness Finlay of Llandaff (CB)
Do the Government recognise that such a registry must go right across primary and secondary care, given that patients present at all parts of the pathway and 25% of survivors have long-term sequelae from sepsis? In that process, will the Government undertake to look at and learn from the 1000 Lives Improvement project in Wales and the HealthPathways project in Cardiff and the Vale, which have themselves learned from experience in New Zealand?
Baroness Manzoor
My Lords, the NHS takes this issue very seriously. NHS England and clinicians are working together very closely to make sure that we have good, clear datasets to enable us to diagnose this illness at a very early stage. Where good work is being done, we are looking at that very carefully.
Baroness Jolly (LD)
My Lords, sepsis does not respect age; it is our biggest killer, killing more people than breast, bowel and prostate cancer combined. A national register for sepsis could save thousands of lives and reduce the economic burden by £2.8 billion through improving access to healthcare and basic care for sepsis. To collect the necessary data, however, the public need to be brought alongside. What stage have the Government have reached in their conversation about a register with clinicians, patients and the third sector?
Baroness Manzoor
My Lords, there is a clear need for better data collection on sepsis, but a registry uses retrospective data collection. Through the Government’s new national action plan on AMR, we will go beyond this and develop real-time patient data collection through data linkage. We will be working on this very closely.
Lord O’Shaughnessy (Con)
My Lords, my noble friend is quite right to highlight this issue, and collecting this dataset is incredibly important. One of the ways it can be useful is in developing new diagnostic tools that will diagnose sepsis earlier through the use of technology. Can the Minister reassure the House that the dataset that she says will be collected will be available to the researchers and innovators developing these tools, to make sure we can diagnose sepsis quickly, fight it and deal with some of the deaths that my noble friend has highlighted?
Baroness Manzoor
My noble friend is right. Data linkage will make it easier to identify those most at risk of infections and sepsis, and to get them treated much quicker. Once that data is available, we will ensure that clinicians and everybody else in the NHS has that information so that they can deliver treatment as quickly as possible.
Baroness Thornton (Lab)
My Lords, this is about leadership. When the Department of Health and Social Care decided to bear down on hospital-acquired infections, MRSA and C. difficile, and to collect the data and act on it across the NHS, it happened because it was led from the top of the NHS. Would it not be possible to bring the same determination to bear on sepsis in hospitals? We know that GPs have to record diseases and infections, so the infrastructure to do this is there. It requires the political will to make it happen.
Baroness Manzoor
My Lords, I can reassure the noble Baroness that the political will is there, and it is being done. This is what data linkage is all about—getting that data much sooner, with patients assessed much quicker than they have been in the past.
Military Equipment: Sales
(5 years, 9 months ago)
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Lord West of Spithead
To ask Her Majesty’s Government, following the liquidation of Used Equipment Surplus and Storage Ltd, what assessment they have made of security concerns over the proposed sale of military equipment held by that company on behalf of Leonardo S.p.A.
Baroness Goldie (Con)
My Lords, the Ministry of Defence takes the safety and security of the disposal and storage of military equipment extremely seriously. Officials have visited the site on a number of occasions. I understand that Leonardo has today had further discussions with the liquidator, and is confident that the identified equipment is not sensitive. The two parties are now working closely together to bring this matter to a sensible conclusion.
Lord West of Spithead (Lab)
I thank the Minister for that Answer. I remain concerned about this. Having been deeply involved in the intelligence world for many years, I know the value of getting hold of equipment such as defensive aids, because you can reverse-engineer it, and look at it to see how that country is developing techniques, even if it is an old bit of kit. I am aware that a police investigation in December 2017 highlighted the fact that the police felt that some items were sensitive. Was this a List X firm and a List X-bonded warehouse? Are we now going to go through in detail the equipment listed by the liquidator to see if there is anything we should not have allowed to go on to the open market? It sounds very dangerous indeed.
Baroness Goldie
The storage company, UES&S, was contracted by Leonardo to provide secure storage and disposal of military equipment that Leonardo no longer required. There was no contract between that disposal company and the MoD. I reassure your Lordships that the MoD has investigated Leonardo’s disposal practices, and concluded that the company is following all relevant processes and disposing of equipment in accordance with government policy and its List X obligations. As the noble Lord will be aware, these obligations are onerous, and apply to all items of equipment listed as secret and above.
Lord Campbell of Pittenweem (LD)
My Lords, what monitoring does the Ministry of Defence carry out in relation to arrangements such as those between Leonardo and the storage company? In particular, given that the national interest may be at stake, what legal advice have the Government taken on whether or not it would be appropriate to seek an injunction against the auction proposed for 6 February?
Baroness Goldie
As we now know, there is reassuring evidence that the items are not sensitive, but the noble Lord asks an important question. The MoD has the power to stop the sale of items, if that sale would be contrary to national security. I reassure your Lordships that the MoD has made it clear to the liquidator of the storage company that the sale of potentially sensitive items, if that is what they were, would have been a breach of national security. Where criminal activity is believed to have taken place, such as a breach of the Official Secrets Act, we would engage further with the MoD Police for them to access the site and reclaim any sensitive items with a view to potentially stopping any auction.
Earl Attlee (Con)
My Lords, does the Minister agree that if any person allowed a foreign power to use defence equipment in the way the noble Lord, Lord West, suggested, they would still fall foul of the Official Secrets Act?
Baroness Goldie
My noble friend makes an important point. The Official Secrets Act, as your Lordships will be aware, is a far-reaching piece of legislation designed to protect the national security of our country and its citizens. It is very easy to breach the provisions of that Act.
Lord Tunnicliffe (Lab)
My Lords, according to the Times, officials had to go to this warehouse and physically inspect what was there. Does the MoD not have systems that track the whereabouts of sensitive equipment? If not, why not—or is this another example of the MoD cutting corners under budgetary pressures?
Baroness Goldie
No, and I would not want any credence to be given to such an interpretation of the position. As I said, this is a situation where a respected defence contractor subcontracted a function to another company. That is not unusual in defence procurement contracts. What is important is that the proper protocols and standards are observed. As I indicated to the noble Lord, Lord West, where there is a List X category, companies have to comply with the security policy framework to ensure that they are protected appropriately under the List X clearance requirements. We are satisfied that Leonardo is discharging all its obligations in that respect.
Lord Craig of Radley (CB)
My Lords, what steps did the Government take to find out where the Times got its information? Are they satisfied that that information was totally inaccurate?
Baroness Goldie
We can only speculate that the information was provided either by the liquidated company or by the liquidator. There were visits to the storage facility by Defence Equipment and Support, security officials, MoD Police and the Defence Land Safety Regulator. They all asked UES&S for a list several times but, disappointingly, it was unable to provide one. This may seem strange to the observer, but apparently this facility has been used for more than 20 years. It is full of defence and non-defence related items. UES&S has not catalogued each item. This is apparently why it could not produce a list, but it would have been helpful if, when a list finally emerged, it could have been passed to the MoD.
Lord Hunt of Kings Heath (Lab)
My Lords, surely one point becomes abundantly clear: the Government, through the MoD, were not monitoring the contract correctly. Surely they should have known that this was happening.
Baroness Goldie
That might seem an easy interpretation to make, but I suggest that it is misconceived. I shall explain why. It is a common commercial structure for the MoD to contract with a defence procurement company. That company will then subcontract other obligations. What is important is that, where we are dealing with List X materials and equipment, the company with which the MoD contracts is under clear and enforceable obligations, which all companies are. I emphasise that Leonardo is discharging these responsibilities. But where we are dealing with below-secret category items, the company is expected to ensure that storage and disposal facilities are appropriate for that equipment. There is no suggestion that Leonardo had not been observing the situation. There seems to have been a genuine breakdown of the relationship, where, I understand, over time items that were going to be disposed of were not disposed of and remained in store. The important feature is that these items, as has been confirmed today, are not sensitive.
Overseas Aid
(5 years, 9 months ago)
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Lord Collins of Highbury
To ask Her Majesty’s Government in the light of recent press reports what plans they have to meet their statutory obligation to spend 0.7% of the UK’s GDP on overseas aid.
Lord Collins of Highbury (Lab)
My Lords, I beg leave to ask a Question of which I have given private notice.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, the UK’s commitment to spend 0.7 % of GNI on aid is enshrined in law and has been reaffirmed by the Secretary of State for International Development in another place, the Chancellor of the Exchequer in his most recent Budget, and the Prime Minister on her recent visit to Africa. The aid budget is fully funded and we have firm plans in place to continue to meet that important commitment.
Lord Collins of Highbury
My Lords, last autumn, the Secretary of State acknowledged that public funds alone would not deliver on the sustainable development goals. Seeing 0.7% as the target rather than the baseline will not deliver either. The key to eradicating poverty globally is building public services that deliver health and education that are accessible to all; that will encourage greater economic activity and greater investment. The Minister has a proud record on overseas development as both a DfID and a Treasury Minister. I hope he will confirm that at next month’s spending review, there will be no attempt to renege on the UK’s commitment—enshrined in law, as he said—to spend 0.7% of the UK’s GDP on overseas aid.
Lord Bates
I am very proud to give the noble Lord the commitment and reassurance that he seeks. The commitment to 0.7% was made by the international community way back in 1970; it was not actually introduced—under this Government, with our coalition partners—until 2013. I am immensely proud of that and we remain committed to it. His point about the SDGs is crucial. Achieving them by 2030, to which he and I are committed, will require some $3.9 trillion per year, according to World Bank estimates. Total global flows amount to some $150 billion. The only realistically possible way to bridge that gap in time is through leveraging and capitalising to get greater private flows through trade and development. We are very committed to that, but the commitment to 0.7% stands.
Baroness Northover (LD)
The UK commitment to spend 0.7% of GDP on development was made via a Lib Dem Private Member’s Bill, which in this House was in the capable hands of my noble friend Lord Purvis. It passed with all-party support, for which we were very grateful, in the last days of the coalition. The UK has indeed signed up to the sustainable development goals, which aim to eradicate to extreme poverty by 2030. Does the Minister agree that it is it right that the world—and we are part of the world, regardless of what appears to be happening politically at the moment—signed up to these goals, and that they are vital for global stability? Does he also agree that aid helps to pump prime the economic and human development that people in poverty so desperately need?
Lord Bates
I absolutely agree with that. The noble Baroness pointed to the proud record of the Liberal Democrats in actually providing the legislation. I remind her that a Conservative Chancellor is currently delivering on that pledge, giving £14 billion a year to the poorest in this world.
Baroness Chalker of Wallasey (Con)
My Lords, will the Minister be ardent in his pursuit of match funding, particularly for health projects, which will valuably use up at least 0.7% of the GNI? There are many countries without the basic GP facilities that we all take for granted, let alone equipment for their health services. We could do far more using training and second-hand equipment from this country as part of the 0.7% spending on those who are the poorest.
Lord Bates
I pay tribute to the work of my noble friend as Overseas Development Minister some time ago, before that commitment was met. She is right: health is absolutely central. We need to work in partnership, and that is the reason why we work with the World Health Organization, the Gavi alliance and the Global Fund in doing precisely that work.
Lord Alton of Liverpool (CB)
My Lords, the World Bank estimates that some 800 million people are racked by starvation, despair or living below any rational definition of human decency. The Minister is right to remind us that, as long ago as 1970, in Resolution 2626, the United Nations urged us to find this 0.7% figure. Does he agree that people expect their money to be spent well? I draw his attention to a Question that I asked him on the Order Paper today concerning discrimination and persecution in countries such as Pakistan, which is the biggest recipient of British aid—£383,000 each and every single day. Will he ensure that where British money is being spent, it will tackle the plight of minorities, particularly by preventing people from religious minorities from being subjected to discrimination, persecution and even genocide?
Lord Bates
I am delighted to give that reassurance. This Government have been at the fore on this issue. The Prime Minister has made announcements on it and has appointed her first Special Envoy on Freedom of Religion or Belief, my noble friend Lord Ahmad. We are proud of that, and we have to uphold, keep to and maintain those standards.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, as a former International Development Minister, I completely respect the Minister’s record. However, Priti Patel has been quoted regularly as wanting to undermine our international development programme; she also has very close links with the newspapers. How did those reports get into the papers today, and will he make it absolutely clear that they are completely wrong and that the Government are sticking to 0.7%?
Lord Bates
Of course, Priti Patel, sadly, resigned as Secretary of State for Development a couple of years ago. However, Penny Mordaunt is absolutely committed to the 0.7%—delivered by his kinsmen in Abercrombie House up in Scotland—which is of crucial importance. We remain committed to it.
Lord Purvis of Tweed (LD)
I was the Member who took the Act through the House, and I was able to do so only because of the wide cross-party consensus in this House—including the Minister’s predecessor, my noble friend Lady Northover, the Labour Front Bench and the Minister himself in another capacity. That consensus had a core, which could be a component of British leadership. We are the only developed country in the world to meet this target and to enshrine in law that we will continue to do so. Therefore, language such as “unsustainable” raises questions as to whether other developed economies should seek to meet their obligations. The Minister and I are wearing our SDG badges close to our hearts. We know that under the current expenditure profile, those targets will not be met. British leadership in this area can be critical. Can the Minister say categorically that language such as “unsustainable to meet our obligations” will not be heard from a British Cabinet Minister?
Lord Bates
First, I pay tribute to the noble Lord for taking through that legislation, which I was delighted to support myself from the Back Benches; it was crucially important. We need to keep at the forefront of our minds that there is a huge need out there. We need to build on the commitments we have already given and the pledges we have made, but as he rightly points out, we also need to encourage others to step up to the plate. Increasingly, however, we see that Governments cannot do this alone. We need to leverage in trade and private investment to bridge that gap if we are to lift people out of poverty.
Lord Flight (Con)
My Lords, may I ask the Minister what proportion of the 0.7% goes via EU projects or other EU conduits?
Lord Bates
Doing the maths quickly, I think that DfID spends about 72%, 18% goes through other government departments, and the remaining 10% goes through the EDF, ECHO and heading 4, but a proportion of that needs to be stripped out because it relates to gift aid. If my noble friend can do the calculations, that is the net effect.
Lord McConnell of Glenscorrodale (Lab)
My Lords, at the heart of some of the suspicions about the delivery of the commitment lies the spending of ODA through departments other than DfID. Will the Minister take this opportunity to reassure us that in the Government’s Agenda 2030 voluntary national review to the United Nations this summer, they will take the opportunity to explain how overseas development assistance spent by the Foreign Office, the Ministry of Defence or other government departments contributes to the delivery of the sustainable development goals?
Lord Bates
I am happy to do that. As the noble Lord knows, having done a lot of work in this area, the majority of the least developed, most fragile countries that we drive our aid spend towards are in that position because of conflict. We need to recognise that although development is one part of this, there is a development, diplomacy and defence nexus. We need to work together, and that is what those cross-Whitehall funds are doing.
Trade Bill
Wednesday 30th January 2019
(5 years, 9 months ago)
Lords ChamberRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 127-III Third marshalled list for Committee (PDF) - (28 Jan 2019)
“Rules of origin
It shall be the objective of an appropriate authority to negotiate as a term of all international trade agreements implemented under section 2 that goods subject to the agreement which have originated in the European Union shall be treated as if they had originated in the United Kingdom.”
Lord McNicol of West Kilbride (Lab)
My Lords, Amendment 31 is a short amendment but an important one. This is my first Bill and first amendment from the Opposition Front Benches in your Lordships’ House, so please forgive any mistakes from the outset.
Nowhere, as far as I can see, are rules of origin mentioned or dealt with in the Bill. This is worrying for a number of reasons. Most importantly, rules of origin will have a huge impact on the UK’s efforts to replicate our current EU trade agreements with other countries. Rules of origin are about how we define where a product or products really come from, and what “Made in Britain” actually means. It is important to the Bill because, if we are to take the Government at their word, this is just a Bill to allow the rollover of existing trade agreements—agreements that we currently have because of our membership of the EU and customs union. Without changes, rules of origin locally should be expressed in exactly the same way as they currently are. My concern is that they will not be. Post Brexit the EU will no longer be classified as “local”. The UK will be the new “local”. So a new definition will need to be written into these rollover trade deals, where “local”—which until leaving the EU meant inside the whole of the EU—will now mean not just the UK but the UK and the rest of the EU.
The issue of rules of origin is inextricably linked with our membership of the customs union. The big advantage now of being inside the customs union is that no tariffs or taxes are placed on imports or exports of goods traded between member states. Fulfilling the country-of-origin principle ensures that products can enjoy zero tariffs as part of free trade deals if they meet the requirement: conversely, if they do not, they will not. To give a practical example, trade deals in the car industry usually require about 55% of the components of a car to be considered as local. But most cars made in the UK have just 40% of UK-only content. If we then look at the fact that many of the subcontractors source many of their parts from abroad, a UK-made car could be less than 30% made in the UK. This is improved and passes a 55% threshold due to the fact that other manufactured parts of the car come from EU countries, currently classified as local. I ask the Minister: when we leave, how will this be addressed in each of the possible exit scenarios, as this is pertinent to the rollover of existing trade agreements? I also ask the Minister to clarify, if amendments need to be made to the text of existing trade agreements, how parliamentary scrutiny of those changes will be handled. I beg to move.
Lord Purvis of Tweed (LD)
My Lords, I congratulate the noble Lord on moving his first amendment to a Bill. It does not get any easier—I do not wish to offer any false reassurance—but I happily concur with his remarks in moving the amendment. I have little to add except to reinforce the point that, for the UK in particular, the majority of our imports from our biggest market and an even larger majority of our exports are intermediary. They include components that are from a number of different countries and not from here.
This issue was raised briefly with the Minister on the cross-border taxation Bill. It is the complexity not just of the components but what is necessary to ensure that many UK exported goods and our imported consumer goods have a seamless transaction process. It is less about the tariffs applied and much more about the regulatory aspects and checks that will be necessary, which I shall turn to in a moment. Therefore, for our key sectors—the noble Lord mentioned automotive, but for wider engineering and overall production and for our exporters— this issue is critical.
I will cite one example from HMRC’s advice to businesses that is close to my heart, living in an area that has a rich tradition of manufacturing in textiles. It shows some of the complexity when rules of origin have to be applied. Each business has in effect to do its own certification. The advice states:
“For example, yarn spun from non-originating man-made fibres in France”,
would not be considered as originating within the EU for preferential purposes when considering whether rules of origin apply.
“However, cloth woven from that yarn in the UK would be an EU originating product, just as if the weaving had been done in France or Germany”.
That is one tiny example of where, if we do not have a customs union with our biggest market, we will have difficulty with rules of origin with our largest market and then, as we move to trade with other countries outside the customs union, we will have difficulty in deciding which are applicable for other preferential or other trade policies.
That is part of the complexity that leads to Amendment 51 in my name, which is in the view of these Benches necessary to align with our biggest market in order for us to exploit trade with other markets. We need to triangulate as little as possible, which seems to be what the Government seek. The best way to do that is through these arrangements. I understand that there is tacit agreement from the Government on this point, because the announcement last week of an in-principle agreement with Israel to roll over our agreement means that it seems that the United Kingdom is in principle considering what is in effect a rules of origin regime with the EU, the EEA, Switzerland, the Faroe Islands, Morocco, Tunisia, Egypt, Jordan, Israel, Montenegro, Bosnia-Herzegovina, Serbia and Turkey—all countries that have in effect a rules of origin regime.
It would be helpful if the Minister could clarify the Government’s intention for rules of origin in the existing rollover agreements and how they consider the future. However, even if we operated under such a regime, necessary checks and certification still have to be done electronically; each exporting company has to apply its four-digit tariff heading and carry out its own checks on whether rules of origin are being complied with. If we are to have a separate anti-dumping and corrective measures system—which, incidentally, the Government promised us for consideration before the final stages of the Bill—and if we are to have a preferential rules of origin system for developing countries, we will have to have some form of check system to ensure that those countries comply with it. It is one thing to say that we will have an electronic system for our closest trading partner—but how will we know that it is not being abused by other countries that wish to circumvent it?
Up to the Lords stage, the Government said that the language as set out in these amendments would necessarily tie their hands and weaken their negotiating flexibility by having them take all necessary steps—but this is no longer the Government’s position because we see that language in Clause 6. This is now government language, where it relates it to the European medicines regulatory network. The Government seemingly do not intend to bring forward any amendments to delete that from the legislation, so if they do not then that is the government language. That means that the Government should not have any problem with accepting this language.
Secondly, the Government said, prior to yesterday, that it would be inappropriate for Parliament to set a mandate for how the Government should take forward negotiations. That is clearly no longer the case because, as the Secretary of State for Exiting the European Union and the Prime Minister herself have said, Parliament has set the Government a mandate with regards to the Northern Ireland protocol. So there is no barrier to the Government accepting the language of these amendments. As to the necessity of them, it is very clear that this is what most of the industrial sectors of this country are seeking.
Lord Lansley (Con)
My Lords, if I may add something to this group of amendments, first, I say well done to the noble Lord, Lord McNicol. He passed the first test: one of the Opposition’s central jobs is to know which subjects should be raised in Committee and make sure that they are raised. He has done us a service by doing exactly that.
Turning to these two amendments, neither is practical as drafted, but we can probably leave that to one side and focus on what we want to achieve on rules of origin. The first reason it is not mentioned in detail in this Bill is that Section 17 of the Taxation (Cross-border Trade) Act effectively puts the rules of origin requirements into law. They are the same, as far as I can see, as would apply generically to rules of origin under the revised Kyoto convention. The country of origin must be identified as that country or territory in which the last substantial process took place. But that does not really answer the point.
This is where we come to the existing international trade agreements that we might roll over. They will have been constructed on the basis that any processing that took place in the United Kingdom was processing within the European Union. We cannot assume that, when these international agreements are rolled over—whenever that will be, but a couple of years from now, I hope—products originating in the United Kingdom will be defined as including processing inside the European Union. We will have become a third-party country. That is unless, in the form that they rolled over, the countries with which these agreements have been made, and with which we enter into our future agreement, accept that origination should be cumulated between us and the European Union.
If I am asking a question of my noble friend the Minister it is: can we look to cumulation between the United Kingdom and the European Union as being a feature of the rollover agreements, such that, from the business point of view, what they have understood to be the situation prior to exit day becomes the situation after exit day? That is essentially what we are looking for.
Declaring an interest, 28 years ago I was deputy director-general of the British Chambers of Commerce. That movement was and is responsible for the issuing of certificates of origin, so it understands this rather well. Of course, that applies outside the European Union at the moment. If we are in a customs union, all those problems go away, but we had that debate on day two of Committee.
If we must deal with this issue, I say to my noble friend that I hope the Government’s discussions with the British Chambers of Commerce have been productive. I know that two years ago, the movement said that, given the nature of international supply chains, ensuring that a “Made in Britain” badge can continue to be displayed proudly on products originating in this country will require us to re-enter some complex definitions of the relationship between international supply chains and origination in the United Kingdom. It also said that it was happy to work with government to look at how that might be achieved in future. I hope that this will come forward in our discussions on Report to demonstrate that the Government have an idea of what future trade agreements might say about origination to ensure that the “Made in Britain” scheme is not frustrated in circumstances where we think of a product as British.
Baroness McIntosh of Pickering (Con)
My Lords, I add my congratulations to the noble Lord, Lord McNicol, on taking his place and on his performance today. Given his history, I am sure that negotiating procedures in your Lordships’ House will be less turbulent than in other places where he has worked. I thank both him and the noble Lord, Lord Purvis, for giving us the opportunity to, in my case, put questions to the Minister and probe the issue.
In particular, what will be the position in the interim period of our leaving the European Union? My noble friend the Minister pointed out in our debate— on Monday, I think—that there would be a period for these agreements, having been initialled, to be signed and approved by the relevant Parliaments. My understanding is that if we leave under World Trade Organization rules, agreements in this interim period will be on the basis of non-discrimination. So, if we, as a third country—my noble friend Lord Lansley correctly identified that we would be—chose to extend agreements to current European Union members and said, as many noble Lords have suggested, that we wished to impose zero tariffs, those agreements would have to be extended on a reciprocal, non-discriminatory basis. Is my understanding correct? In an interim period of what might be one or two years before such agreements are rolled over, whatever our preference, whatever we offered to our existing European partners would have to be offered to every other country with which we wished to trade, on the basis of non-discrimination. I do not think we have grasped that point. Obviously, it would be helpful to understand the implications for our trading arrangements.
There is deep concern among the farming community that tariffs imposed could be as high as 40% for certain products and 60% for lamb, at a time when we are exporting more meat than we ever have, historically. That would hit our producers particularly hard. It is causing real hardship in the hills because many of our farmers do not know whether to produce lamb; the supply of lamb to the home market could dry up. We would therefore import more lamb, beef and pork at a time when we should be increasing our exports there. I simply want to take this opportunity to seek answers to those queries from my noble friend.
Baroness Kramer (LD)
My Lords, I have questions that arise from the previous speeches which I hope the Minister will be able to help me with. Perhaps I may say to the noble Baroness, Lady McIntosh, that I am sure she recognises that, while in a no-deal scenario, for example, we could make the decision that we would reduce our tariffs to zero, she is absolutely right that we could not make them zero only for the European Union; that would also have to be done for everyone else under WTO rules, but there is no requirement for us to be treated in a reciprocal way. In fact, we would be very unlikely to be treated in a reciprocal way, because if the European Union was to look at us and say, “We will be reciprocal and offer zero tariffs to the UK”, it would then be required under its various trade agreements to offer a whole raft of countries across the globe zero tariffs, thus convoluting its entire trading system. There is an imbalance in that argument which sometimes does not quite get heard.
I cannot think of a worse situation for our farmers than finding that they have high tariffs on their exports but no tariffs to protect them from imports flowing in. Some people have said that that is ideal because it means that food costs would fall, but they would do so at the cost of wrecking, frankly, a swathe of one of our much-loved industries.
I want to pick up on rules of origin in a slightly different way, and I will refer to the point that the noble Lord, Lord Lansley, has been making. When the Minister was kind enough to invite us around the table to ask questions ahead of Second Reading, I did try to press on some issues around rules of origin. As I understand it, for these rollover agreements, the UK would turn to the country with which it wishes to keep the trade agreement and say, “We would like you to treat goods made in the European Union as British content in the way you do now, in order for us to have zero tariffs when we export the goods”. I shall take a simple example, “When we export this car, we would like you to treat the European content in it basically as local content for the purposes of a zero tariff”. The officials were quite clear that the UK could do that unilaterally and that we would not need the permission of the European Union.
I then raised this with a number of people outside this environment who said, “You must be joking. Which country is going to infuriate the European Union by allowing its goods to be treated as local content for the UK unless there is some form of balancing agreement with the European Union on this issue?” In other words, the thought that you can cut the European Union out of this discussion and simply do it on a bilateral basis is incredibly fanciful. For most countries, keeping a good trading relationship with the European Union is, frankly, far more significant than having a trading relationship and rolling over the existing deals with the UK. The European Union is going to have to be engaged in some way or allow itself tacitly to be used in this way.
The Government are currently negotiating these deals, and we understand that they are currently in the process of establishing the rollover agreements. Can they tell us whether they have an understanding with the European Union that will indeed permit EU content to be treated as local content for the purposes of these trade deals, or will they be having some stern discussions with the various countries with whom we wish to have these ongoing continuity bilateral arrangements? It would be very interesting to know.
My understanding is that when South Korea was first approached about treating EU content as local content for goods whose final point of export is the UK, its answer was, “That is interesting and we think that it would be a fair thing to do, but of course we would expect goods originating in China and forming part of the content of South Korean goods to be given the same kind of benefit. We think that there is an opportunity to make sure that there is an equal playing field in this area, because negotiating with the UK is not the same as negotiating with the EU. We are now in different circumstances”. I wonder how many countries aside from South Korea which are involved in these rollover agreements have come back to the UK—I can see that Israel would not because it is not particularly in that situation—saying that they wish to have the new flexibility that we are requesting reflected in a change in the flexibility that they are being offered. It would be helpful if the Government could let us know if that is happening.
Lord Davies of Stamford (Lab)
My Lords, the fact that, if the Government have their way, in two months’ time we shall be dragged out of the single market is a tragedy of great proportions which will affect everyone in this country with not the slightest doubt. That is particularly sad and ironic because of the great efforts that were put into the creation of the single market, particularly by this country. There is no question that the major movers were not Lord Cockfield and Margaret Thatcher. What is more, the single market has been an inspiration around the world. As others seek to imitate the achievement and derive the great benefits that we have had, the British Government can think of nothing better than to take us out of the original single market.
This raises many practical problems, as we have seen. We have heard three extraordinarily well-briefed, considered and well-informed speeches on this subject by the noble Lord, Lord Lansley, and by the noble Baronesses, Lady McIntosh and Lady Kramer. The noble Lord spoke particularly about the difficulties which will arise in connection with the definition or redefinition of rules of origin; and the noble Baronesses spoke extremely well about the threats and complexities we shall face because of the rules of the WTO and the possibility that we will suffer considerable perverse costs as a result of leaving the single market. These have never been properly considered in this country by the Government and, therefore, private individuals, trade associations and businesses up and the down the country have also not had enough time or opportunity to consider and reach a conclusion as to what the concrete impact will be in all probability on their own businesses.
That is the point of my intervention. It is not reasonable to ask tens of thousands of businesses which may well be affected by the changes that the Government are trying to enforce on the country in this regard to pick through all the volumes of Hansard in the House of Commons and the House of Lords where these matters have been debated, even supposing—which was not the case on the last occasion we debated this matter—that the Government give informative answers to the questions that have been raised.
My question to the Minister today is: does she propose, or has she already perhaps set in motion, an effort to inform businesses directly about these matters; to set out for the benefit of British business in different sectors the potential threats—or indeed the opportunities, if there are any—from the policies that the Government are pursuing in this area; and to answer definitively the questions that have been raised today about rules of origin, the impact of the WTO non-discrimination rule and principle, which has been set out so well, and any other WTO rules which may have an impact on the trading conditions for British companies which are trading with either the European single market after the end of March this year or with countries which currently have trade agreements with the Union?
In that latter context—my final remark today—can we please have some absolute clarity about what is happening to those countries which currently have free trade agreements with the European Union and where we have the ambition to roll over those free trade agreements? How many countries have accepted in principle to roll over the agreement as it currently exists without any substantive change? How many countries have expressed the willingness in principle to roll over an agreement but are asking for substantive changes?
Most people, I suspect, will ask for a particular concession of interest to them. They will take the opportunity to get something if they can. At the very least, this will result in many months of discussion and negotiation. In some cases, it may require us to make concessions that will be expensive for British industry or business. We need to know exactly where we stand here. I hope the Government themselves know the answers to these questions—I sometimes get the feeling that they do not. If the Minister thinks that that is unfair she has the opportunity this afternoon to make the position absolutely clear to the House and the whole country.
Lord Lilley (Con)
My Lords, I congratulate the Minister on introducing this debate and focusing on rules of origin, which is the main complexity that will arise with trading goods. I suggest that this should not be exaggerated. It is the big difference between free trade areas and customs unions but I note that the Swiss, who have a free trade agreement with the EU—not a customs union—do not seem to be too upset about that. They do not seem to be calling for a customs union. They seem to be coping with all the problems that noble Lords have told this House are insurmountable; the Norwegians likewise.
The Canadians have a free trade agreement with America but are not calling for a customs union. Even our Canadian Governor of the Bank of England, when he returns to Canada and joins in the political process there, is not going to call for Canada to have a customs union with the United States to overcome all these supposedly insurmountable difficulties. They are not insurmountable and they are going to get somewhat simpler.
The EU is bringing in the REX system for self-declaration of rules of origin—you will have to do the calculations but you will not have to buy a certificate; you will just declare the origin of the goods. Of course, you will have to get it right; as with any self-declaration, you will be open to investigation and checks if there is any reason to suppose you are cheating, but it will simplify the process greatly.
Can the Minister confirm that we will be able to join the pan-Euro-Med convention on rules of origin if we have a free trade agreement with any member of that convention—for example, Israel? I believe that when you belong to it you can begin to assess diagonally, as they say, the components of your goods when you export among them. If that is open to us, it will ease things as far as we are concerned for a large group of countries.
Lord Purvis of Tweed
It is less a point of the inability to trade with countries on WTO rules of origin principles—they have been established for many years and will continue, and the EU uses them with non-EU countries. The difference the noble Lord is alluding to is a mutual recognition of the rules of origin principles that we have agreed through the EU with, for example, Norway and Switzerland. This means that, as far as cumulation is concerned—and given that the majority of British imports and exports are cumulated products with our biggest market—the critical factor is the non-burden that comes with other checks that we would not have if we were a non-member of either a customs union or, indeed, a grouping that meant that all other regulations were aligned, as those countries have opted to do, and I think his position is that we should not do.
Lord Lilley
I am not sure that I said any of the things that I think the noble Lord is both telling me I said and that are not true. I suspect what he said is true but it is not what I said. Forgive me if I do not really respond to his point, which I do not fully understand.
My point was that there is the pan-Euro-Med convention which has the same rules of origin among all the countries. Cumulation is allowed between them. You can join the convention when you have a free trade agreement with one member of it—at least, that is what I am asking the Minister to confirm is the case and will be the case when we have a free trade agreement with Israel, to start with.
The noble Baroness, Lady Kramer, talked about the costs. I do not know if she is familiar with the study of the costs—which I think is the most recent and the most authoritative—carried out by the World Customs Organization. It searched through all the previous studies and found them to be deficient. The level of cost is actually much lower than had previously been thought. That must be true if the Swiss assessment of the total cost of their trade across the borders is correct, because they believe that it is only 0.1% of the value of their trade, including the cost of complying with rules of origin.
I advise the Committee as a whole to read that report. I am sorry that I cannot give the reference but I can give the reference to a document in which the reference is given—namely, a document that I myself wrote called Fact—NOT Friction. I urge noble Lords to read it, as they will find the appropriate reference.
Baroness Kramer
The noble Lord, Lord Lilley, is right that I have not read the document. I have just taken my information from fairly extensive conversations with companies. Perhaps they do not know what they are doing.
Lord Lilley
Perhaps the World Customs Organization knows nothing about customs, but we have to reach the judgments that we can, and certainly under the REX system the fees that the noble Baroness referred to will not have to be paid, as I understand it. However, again, I ask the Minister to confirm that.
Finally, the noble Lord, Lord Davies, waxed eloquent about the single market. I take that as personal praise, as I had to introduce the whole single market legislation back in the early 1990s and spoke eloquently about how it was going to boost our trade. How sad we, and he, must be that in the ensuing 25 years our exports to fellow members of the single market have risen by just 18%. It did not have quite the big and wonderful impact that I hoped it would have and which he in retrospect believes occurred. Our trade with the rest of the world rose by 72%, so let us get these things into perspective.
Lord Davies of Stamford
The noble Lord is, once again, moving into the dangerous business of making elementary errors in the interpretation of statistics. Quite clearly, where we had a relationship with mature markets, as we did when we joined the single market, we were not going to have the same rate of growth in trade as we had with countries that were still very poor and were maybe just beginning to embark on international trade. A mature economy is not going to have the same rate of growth in trade as a newly emerging economy. It is an absolute falsehood to try to compare the two and draw the conclusions that he has drawn.
Lord Lilley
It is always a pleasure to be patronised by the noble Lord, Lord Davies. As someone who passed only parts 1, 2 and 3 of the Institute of Statisticians exams, I suppose that I must give way to him if he passed part 4. I fully know the difference. If he looks, for example, at a group of countries which are at a similar level of development to ours and which trade with the EU single market, he will see that their exports rose significantly more than ours did over that 25-year period. I do not know quite why that is but it is clear that trading within the single market has not had such a big impact on our exports to the rest of the EU as I certainly expected it to have at the time and as he believes in retrospect it has had.
Lord Davies of Stamford
I am sorry to interrupt the noble Lord again, but I will just correct him on this matter. If he looks at the figures, he will see that France and Germany have increased their trade at a much faster rate than we have while being in the single market. The reason is that, sadly—we know that it is a big handicap for us all—productivity in this country has risen much less fast than that of Germany, France and other members of the EU.
Lord Lilley
It is quite true that other countries within the single market have increased their exports to each other more than we have—but that is not purely because of differences in productivity. Indeed, our GDP over most of that period has grown rather more rapidly than that of many other members of the single market. I do not know what the factors are but I would not just assume that it is all due to the wonders of the single market that somehow have not yet reached us.
The Minister of State, Department for International Trade (Baroness Fairhead) (Con)
My Lords, before addressing the amendment directly, I too warmly welcome the noble Lord, Lord McNicol of West Kilbride, who is making his first contribution at the Dispatch Box today. I share the view of the noble Lord, Lord Purvis, that it probably will not get any easier, but I very much look forward to our debates.
I am grateful to the noble Lords, Lord McNicol and Lord Purvis, for tabling Amendment 31. As the noble Lord, Lord McNicol, said, it is a short amendment, but it covers an important area. I confirm that the Government share the objective of the amendment. We are committed to ensuring that the rules of origin used in our continuity agreements enable businesses to continue to operate, as much as possible, through their established value and supply chains. That is particularly important where integration with EU supply chains is significant.
I wish to reassure noble Lords about the concerns that may have prompted the amendment. As I have stated, there are technical issues in continuity agreements that cannot be simply cut and pasted. Rules of origin are among those. We are continuing to work with third countries to deal with the issues involved, with the objective of ensuring continuity for businesses and consumers when the UK leaves the EU.
The noble Baroness, Lady Kramer, asked about negotiations with partners without involving the EU. Just to clarify, the ROOs for each agreement are negotiated bilaterally between the parties. The sequence of such agreements is such that we need to negotiate bilaterally with partners before negotiations open with the EU. EU producers and exporters will benefit from EU content being treated as UK content in our continuity trade agreements, as their business arrangements will not be disrupted. I can confirm that the UK does not need to ask the EU for permission to do this.
Our approach includes using standard rules of origin mechanisms to remain as closely aligned with the status quo as we possibly can. Importantly, as Amendment 31 advocates, this approach includes seeking to ensure that UK and third-country exporters can continue to make use of EU content in their exports to one another. As my noble friend Lord Lansley correctly said, this is referred to as cumulation.
As with many other aspects of international relations, our partners understandably view our negotiations and discussions as sensitive, so we are unable to give precise details on progress at this time. Nevertheless I will reassure the Committee that discussions on rules of origin are progressing constructively. As my noble friend Lord Lilley pointed out, because there is mutual benefit there is a willingness to engage.
Lord Purvis of Tweed
The Minister is clear that it is the Government’s intention unilaterally to say to all third countries that components from the EU would be considered part of UK goods. What comes with that is certification, and showing the evidence from the European Union suppliers. Currently, the European Union has its set of certifying conditions as to where products originated. Is the Government’s position that we are unilaterally saying that those component parts should be considered as from the UK? Will we be using in perpetuity all the European certification and proof of origin processes?
Baroness Fairhead
Let me clarify for the noble Lord. As he will be aware, rules of origin determine the origin of goods. Regulations then implement those rules of origin in domestic legislation, under the Taxation (Cross-border Trade) Act 2018. The certification and verification of the ROOs of each good will be consistent with current practices under the EU’s trade agreements. Exporters will need to certify the origin of their goods, as they do currently.
Lord Purvis of Tweed
May I press that point a little further? Currently, a British exporter will require a movement certificate—EUR1, or EUR-MED if it applies to the pan-European Mediterranean cumulation that we have already discussed under this group of amendments —or a declaration of an invoice or commercial document, such as a packing list or consignment note. These are European Union certificates, which are recognised solely by the European Union. If we are no longer in the EU, how will our certificating process match the EU process, given that it would concern exactly the same component part?
Baroness Fairhead
I hoped and believed that I had addressed that question. The answer is yes: that certification would continue as it currently does. That is the information I have but if the situation is any different, I will write to the noble Lord.
Lord Lansley
I hope my noble friend will forgive me for interrupting. Just so that we are absolutely clear on which question we are having answered, it is about reciprocity. If, in relation to these agreements, we in this country are treating EU content as UK content and having it accepted as such, the question that we are looking to have answered is: will the EU’s continuing agreement with that same third-party country mean that UK content is treated as EU content for the purposes of its origination?
Baroness Fairhead
I believe my noble friend is posing a slightly different question. I will come on to the EU negotiations. The response was about third countries and the certification required.
Baroness Kramer
The point made by the noble Lord, Lord Lansley, is crucial, because otherwise there is a huge incentive for anyone in the EU to find an alternative supplier. Finding alternative suppliers in the UK for a product produced in Poland, Spain or wherever else is quite difficult because frequently we do not produce those particular goods. However, across the whole of the 27 it is likely that there would be a number of alternative suppliers. Our companies need to know if they are in jeopardy, which is why the question matters.
Baroness Fairhead
It is of course for the EU to determine what they recognise. Our priority for the EU/UK trading relationship is for it to be as frictionless as possible. What the UK has proposed is no tariffs, no quotas, no routine requirements for rules of origin for goods traded between the UK and the EU, and cumulation provisions with trading partners. Clearly the final outcome will be for negotiation between the UK and the EU.
Lord Liddle (Lab)
I am sorry to intervene. I was not here for the opening speech, which is very bad of me. As I understand it, at the moment, on the assumption that we are going to reach an agreement with the EU, the EU is being very co-operative in saying that British goods should be treated as EU goods for the purposes of our agreements with other countries. There is of course a problem if we have no deal, particularly if we have an acrimonious no deal. What would the situation be then? I cannot believe that the EU would exercise the degree of co-operation on this question that it is presently demonstrating the willingness to do.
Baroness Fairhead
That is exactly why the Government are clear that the preference is for a deal. That is what we are trying to achieve, because it is in the best interests of the UK.
Amendment 31 also aims to tie Ministers’ hands and compromise their ability to reach agreements that are in the best interests of the UK. As the Committee will be aware, it is neither beneficial nor appropriate for this House to fetter the Government’s capability in that regard. Therefore, as it is already an objective of the Government to seek continuity through cumulation or any other technical process, it is neither necessary nor appropriate to place a legal obligation of this kind in the Bill.
Lord Purvis of Tweed
The Minister might be able to help me. Clause 6(1), as introduced into this House, states:
“It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement, which enables the UK to fully participate after exit day in the European medicines regulatory network partnership”.
Why does that not bind the Government’s hands and restrict their freedom, when the Minister says that exactly the same language used in this amendment seems to bind the hands of the Government? Either the Government will seek to change the language in Clause 6 or they should have no problem with the language in these amendments.
Baroness Fairhead
As the noble Lord, Lord Purvis, will be aware, that was an opposition amendment, with which the Government did not agree. The Government are reflecting on those words and I do not think he can assume that they will necessarily accept that.
My noble friend Lady McIntosh raised the issue of what would happen in a no-deal scenario and asked whether non-discrimination would apply. The noble Baroness, Lady Kramer, is correct; there is no reciprocal obligation if we set our tariffs at zero. That is why the Government have been clear that a deal is the best thing and we are doing all we possibly can to achieve that.
Amendment 51, tabled by the noble Lord, Lord Purvis, seeks to secure a binding commitment from the EU on the EU’s own future trade agreements. As I said, our priority for the UK-EU relationship is for it to be as frictionless as possible. Regarding the objective of this amendment, we believe it is inappropriate for one sovereign state to seek such a commitment from another sovereign country or territory. Moreover, the EU would not offer the UK such a binding commitment because the EU’s own trade agreements are a matter for negotiation between the EU and its third countries. For this reason, the objective of this amendment would be an empty one for the Government. Furthermore, if the EU chose to recognise the UK content, it would be for the EU to choose how to implement that with its trading partners.
I come again to the point from the noble Baroness, Lady Kramer, on the cost of certifications and certification of origin. The certificates of origin used to export to each partner country will be the same as they are now. Businesses will use those certificates as they currently do. For UK-EU trade, the UK is proposing no routine rules of origin, so no additional burden will be placed on business. That of course will be for negotiation with the EU. I am grateful to my noble friend Lord Lilley, first, for his expertise on this matter, but also for pointing out the report—which I confess I had not read either—on the costs of compliance.
Baroness Kramer
May I ask something? I do not know the answer to this question. We are talking about a no-deal scenario here, obviously. Under WTO rules, if the UK says that it will import from the EU without any requirement for rules of origin, is it required to extend that same preferential treatment—not just a tariff preference but preferential treatment—to other countries outside the EU? I thought that was embedded in the WTO regime, but I could be wrong.
Baroness Fairhead
My understanding is that, because it would be part of an overall agreement with the EU, it would therefore be a trade agreement under WTO terms and the same rules that apply to any other FTA would apply. Therefore, that would be accepted as one of the terms.
Baroness Kramer
I am sorry, but I was asking about a no-deal scenario, because that is what this legislation is about—preparation for no deal.
Baroness Fairhead
I stress one more time that this legislation is not about no deal. It is about making sure that we have the capability and powers to implement, whatever happens. Plan A is for a deal and the clauses in the Bill aim to achieve the powers and make sure that we can put them into effect. We have to be prepared for no deal. I reiterate that it is not the desired outcome, but we have to make sure that the Bill has the ability to cover both.
I hope that the statement I have made, and my answers to questions, have provided clarification and some reassurance to the Committee, and I therefore respectfully ask the noble Lord to withdraw—
Lord Lansley
If my noble friend will permit me, I wanted to ask one question. I know we are not debating future agreements but the manner in which rules of origin are to be established in UK legislation in future. We should work with the chamber of commerce movement to try to make that work with the business community as well.
My noble friend might also like to note that Clause 6, which was new Clause 17 on Report in the other place, was an amendment tabled by Dr Phillip Lee, the Conservative Member for Bracknell.
Baroness Fairhead
I thank my noble friend for that clarification. I should have said that it was not a government amendment. But I take the point.
I meant to respond to that question. We are trying to do whatever we can to provide help to SMEs and other organisations to help trade. That includes working with them on procedures and practices which will reduce the cost of, and barriers to, trade. I confirm that we are actively engaging with the chambers. If it is not on this particular point, I will take that back to the department and make sure that we include this too.
Lord Stevenson of Balmacara (Lab)
My Lords, what is now Clause 6 was an amendment introduced by a Conservative Back-Bencher in the other place. Did I hear the Minister correctly when she said that it was still the Government’s contemplation that this might be amendable? I point out to her, in case she is in any doubt, that this would require a government amendment, which I have not seen on the Marshalled List so far. Is she saying that this is something they are actively considering for Report?
Baroness Fairhead
The Government do not endorse the wording of the amendment, and consider that the wording has legal and technical difficulties, so we are reflecting on what should be done.
Lord McNicol of West Kilbride
I thank the Minister for her response, and the noble Lords, Lord Purvis of Tweed and Lord Lansley, and the noble Baroness, Lady McIntosh of Pickering, for their contributions and kind words. This is an important amendment, as it looks to protect the current benefits of rules of origin classification. As the noble Baroness, Lady Kramer, said, there are benefits for both the UK and our EU partner countries, through cumulation and clarification of local goods.
A lot has been said, so I will read Hansard with interest. I beg leave to withdraw Amendment 31.
“Trade agreement impact assessments
(1) Before the end of the initial five year period after an international trade agreement has been implemented under section 2 of this Act, the Secretary of State shall lay before both Houses of Parliament—(a) an assessment of the qualitative and quantitative impact of the agreement on—(i) the economy, broken down by the different parts of the United Kingdom and different regions of England,(ii) the environment,(iii) human rights standards,(iv) labour standards, and(v) individuals with protected characteristics under section 4 of the Equalities Act 2010,in the United Kingdom; and(b) an assessment of the qualitative and quantitative impact of the proposed trade agreement on—(i) the economy,(ii) the environment,(iii) human rights standards,(iv) labour standards, and(v) individuals with protected characteristics under section 4 of the Equalities Act 2010,in any other state which is a proposed signatory to the agreement.(2) Before the end of the initial five year period after an international trade agreement has been implemented under section 2 of this Act, the Secretary of State shall lay before both Houses of Parliament an assessment of the extent to which the provisions of the agreement conflict with, or are consistent with—(a) the provisions of international treaties ratified by the United Kingdom;(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;(c) the provisions of the United Nations Guiding Principles on Business and Human Rights;(d) domestic human rights law;(e) international human rights law and international humanitarian law, including but not limited to—(i) the International Convention on the Elimination of All Forms of Racial Discrimination,(ii) the International Covenant on Civil and Political Rights,(iii) the International Covenant on Economic, Social and Cultural Rights,(iv) the Convention on the Elimination of All Forms of Discrimination against Women,(v) the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, (vi) the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families,(vii) the International Convention for the Protection of All Persons from Enforced Disappearance,(viii) the Convention on the Rights of Persons with Disabilities, and (ix) the Convention on the Rights of the Child;(f) the United Kingdom’s obligations on workers’ rights and labour standards as established by the United Kingdom’s commitments under the International Labour Organisation’s fundamental conventions, including but not limited to the Declaration on Fundamental Rights at Work;(g) obligations relating to animal sentience by which the United Kingdom is bound, or any principles relating to animal sentience to which the United Kingdom adheres, and any provision in domestic law (including retained EU law) relating to animal welfare standards and the welfare of animals in the production of food;(h) the principle of eliminating poverty;(i) the United Kingdom’s environmental obligations in international law and as established by, but not limited to—(i) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change,(ii) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and(iii) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety;(j) offences under section 1 of the Modern Slavery Act 2015 (slavery, servitude and forced or compulsory labour);(k) the sovereignty of Parliament;(l) the legal authority of UK courts;(m) the rule of law; and(n) the principle of equality before the law.(3) The Secretary of State must make arrangements for the assessment to be laid before the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly.(4) In preparing the assessment under subsection (1), the Secretary of State shall consult—(a) the Scottish Ministers, the First Minister or the Lord Advocate,(b) the Welsh Ministers, and(c) a Northern Ireland devolved authority.”
Lord Stevenson of Balmacara
My Lords, we move from future prospects and problems around definitions and what other partners will do to a matter which will lie very much in the hands of the Government as we go forward. As and when trade agreements become the responsibility of this Parliament, there need to be procedures for establishing how and on what basis these are agreed, but also, as is the subject of Amendment 32, for reviewing our progress in carrying these forward.
The amendment is rather full. It contains a long list of issues so it is perhaps not a probing amendment, but I hope the Minister will accept that we would be open to further discussion on the wording. It is meant to set out broadly all the issues that we think need to come into play on this issue but the detail itself could be subject to discussion.
I hope all Members of the Committee will agree that we need to have a system under which we have confidence that any trade negotiations taking place on behalf of the people of this country are subject to effective periodic review of the issues involved, what the process will be and how many dimensions are involved in the consultations and engagement with the devolved Assemblies and Parliaments, as well as the involvement of those affected by the negotiations, such as consumers, those who work in the industries concerned and the companies themselves.
Of course, there is an issue about what impact these trade agreements will have regionally, not just across the national regions but within England in particular, with variations that will need to be picked up. We need to make sure that Parliament, in assessing how these trade deals are done, has access to all the information that is required.
The whole process is set out in Amendment 32. Amendment 81, in the name of my noble friend Lord McNicol—he did so well with his previous amendment that we have given him the afternoon off to recover, so I am speaking for him on this amendment; we are working together, of course, as noble Lords would expect—sets out in more detail the question of independence for the responsible body. There are many candidates for that. We do not need to go into it, but it is important that there is separation between those who set up and agree trade agreements and those who review them for the benefit of the public interest.
This issue can be developed across various activities. I think there will be contributions from those who will wish to see more stress placed on the social rather than the economic issues. The Government are involved in international treaties that will come into play on this. There is a great deal to be said about how you would do this, with what process and everything else. The amendment attempts to set that up. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I shall speak to Amendment 64 in my name in this group. I also welcome the noble Lord, Lord McNicol of West Kilbride, to the joys of tabling amendments. They provide the ability to lead scrutiny and discussion of significance in a very freewheeling way. I was also going to say “succinct”, except that the previous group, on rules of origin, took nearly an hour.
My amendment is inspired by Amendment 32, which was just moved by the noble Lord, Lord Stevenson. However, having studied other amendments to the Bill and the Government’s reaction to them, I have opted for a simpler formula in the hope that this might attract support across the Committee. It provides for a review, after five years, by the Secretary of State of the impact and effectiveness of each international trade agreement under Clause 2, but it deliberately omits the long list of criteria in Amendment 32. That is because I believe in simplicity. I do not believe we should lay down detailed areas that the review should cover, worthy though they may be. As we know, policy priorities change over time and the review should be conducted from a contemporary perspective.
I pray in aid a precedent that the noble Lord, Lord Stevenson, will remember well: the report on innovation and economic growth provided for under the Intellectual Property Act 2014. I believe that was the result of an amendment that he tabled during the passage of that Act. As a Minister, I found the process of producing the report every year very helpful, as did the Intellectual Property Office. In fact, its CEO confirmed that to me only last week.
I have some doubts about the wisdom of setting up a special compliance monitoring agency, as proposed in Amendment 81, which is also in this group. It seems a big stick, given the Bill’s scope. However, on a separate point, compliance would appear to be in the purview of a general review of effectiveness. I have provided for such a review to be laid before the devolved Parliaments, to which the noble Lord attached importance, because I believe this would be a good way to keep them up to date, ensuring that the reviewers, looking back, think about their interests as well as English and UK interests. Such a review would also cover SMEs, which we discussed in another long debate last week. I look forward to hearing from my noble friend the Minister.
Lord Purvis of Tweed
My Lords, I have great sympathy with Amendment 81 in the noble Lord’s name. It struck me, as a former Member of the Scottish Parliament, that one result of our leaving the European Union will be that we have, in effect, a single market within the United Kingdom, while, for the implementation of trade agreements, some elements of those agreements will be under the auspices of the devolved Administrations. Therefore, if it comes to compliance, the body that has entered into the agreement with the third country will be the United Kingdom if the United Kingdom Government are also a regulatory body to the devolved Administrations for areas for which they have executive and legislative competence. That is potentially an uncomfortable situation. There is merit, therefore, in considering how the United Kingdom might have, in effect, the equivalent of the European Commission. What will be the bodies that operate across the United Kingdom that will consider compliance with trade agreements? It sits uncomfortably if the UK Government are that body when it comes to the component parts of the UK that have both ministerial and legislative competence for those.
Turning to my Amendments 52 and 60, one of the issues concerning what the Government call continuity agreements, which they are seeking, is that they might not just be temporary rollover agreements: they might last a long time. They will be treaties in their own right which, by definition, will be permanent, but the regulations that come with them to translate them for ratification could well be permanent or, at the very least, operate for three-year terms, which could be indefinite if they are renewed. On the point that the noble Baroness, Lady Neville-Rolfe, made about a five-year period, the option I have put forward is that, in advance of Parliament being asked at the end of the initial three years about the impact on the United Kingdom, before decisions have been taken on whether they should be renewed or whether the Government might seek to go back and consider the contents of those agreements, that is the appropriate time for reporting to be carried out. Therefore, it is important at that stage, in advance of the end of the initial three-year period, that a review is carried out of the impact on the UK and specifically on the nations and regions. We know from both Governments’ data, information from the devolved Administrations and academic research that trade deals with countries that have a particular bias in certain sectors affect some parts of the United Kingdom more than others, whether car manufacturing in the north-east of England or food and drink in Scotland. Therefore it is very important to specifically mention the nations and regions.
It is also important, as suggested in subsection (2) of my proposed new clause in Amendment 52, that we have a means by which we can test what has been said repeatedly—that we could trade with those countries better if we were not part of the single market than if we had continued to be part of it.
Amendment 60 looks forward to any proposed future trading relationship between the UK and the EU and its impact on the British economy. I hope that the Government will be sympathetic to this amendment because it has already been agreed in principle to publish modelling of what the impacts on the British economy would be for some of these areas, even if—and this is the most charitable way of describing it—the Government had to be persuaded to publish this information rather than allowing MPs to enter a darkened room to study it in private. Now that this information is out in the public domain and the principle is there, economic modelling of the impact of our relationship with the EU, depending on the way forward and the options taken on that trading relationship that are to be negotiated, is very important. After last night’s vote in the House of Commons, it is even more important, given that whatever alternative arrangements are considered which have an impact on our future trading relationship, we will need to know what kind of impact they will have on the British economy and its different parts.
Regardless of that, it is necessary now for us to consider what architecture we put in place to consider the impact of our trading relationships with countries around the world on the different parts of the United Kingdom and then on the United Kingdom as a whole. It will be even more important given that the European Union has been and will continue to be our biggest trading partner, so that we do not repeat the process we have had over the last two years and try to reverse engineer what the likely impact will be. We are starting to establish some of that framework now, which is why Amendment 60 has been tabled. I hope that the Government will be sympathetic to it. If it is not accepted in this precise language, I hope that the Minister may be able to present in some form of language that there will be consideration of the architecture of how we look at the economic impact across the UK of the future relationship with our biggest trading partner.
Baroness Thornton (Lab)
My Lords, I will intervene on the Bill, which is not my normal territory, although I have 20 years’ experience of working on equalities issues in your Lordships’ House. I will speak in support of Amendment 32, in the name of my noble friend Lord Stevenson, which requires the Government to lay before Parliament a qualitative and quantitative assessment, after five years, of the impact of new international trade agreements on human rights standards and people with protected characteristics under domestic equality law, among other things. It also provides transparency on the impact of such agreements on fundamental rights. As far as I can tell, the UK Government are a party to all the bodies mentioned in this amendment, so this should not be an issue and there should be no question about it. I should like some assurance from the Minister that, over the next five years, we will comply with all these international treaties on human rights and equalities.
I agree with noble Lords who said that compliance with equalities has to be judged by an independent body—I certainly know that. It should not be judged by the Government themselves. I thank the Equality and Human Rights Commission for its briefing on this subject. Its concern is that we,
“retain the UK’s equality and human rights legal framework as we leave the EU”,
and we ensure that,
“the UK remains a global leader on equality and human rights”,
after we leave the European Union. That is consistent with the UK being an open and fair place to live and do business. Certainly, if the Government do not accept the length of this amendment, I hope that they will accept the spirit of it, and that that will be expressed at the next stage of the Bill.
Baroness Hooper (Con)
My Lords, I also have sympathy with the concept of impact assessments. After all, they will apply equally to rollover agreements and future trade agreements, so it is perfectly appropriate to raise this issue and discuss it at this stage of the Bill. I also agree that it is important to have an independent body and not the Government themselves as a monitoring body, and that there should be arrangements to cover all parts of the United Kingdom equally and fairly. I am persuaded by the argument for simplicity in all this; therefore, I support my noble friend Lady Neville-Rolfe’s amendment in particular. There is a danger in making lists, because they can become out of date.
Lord Lilley
My Lords, the amendment tabled by the noble Lord, Lord Stevenson of Balmacara, and others of the same gist are remarkable. In my 35 years in Parliament, I do not recall Parliament ever having subjected any trade agreement negotiated by the European Union to the level of scrutiny which it is proposed that future trade agreements negotiated by ourselves should be subjected. This is remarkable evidence that the Opposition are converted to the merits of having an independent trade policy because it will mean that we can influence it and work it to our own advantage. Of course, that would not be the case if we had a customs union-type arrangement similar to Turkey. Turkey does not participate at all in the negotiation of European free trade agreements with others, but is simply a pawn in those agreements. We would be too, if we were in a customs arrangement with Europe but not part of Europe—in other words, if the policy of the noble Lord’s party were to become effective, as I am sure he would agree—and those sorts of assessments would become irrelevant.
More substantively, in the past when I was involved in negotiating the Uruguay round, for example, one thing that disturbed me was the difficulty of becoming accountable to the House—then the House of Commons—for what I was doing. It is quite difficult for Ministers to be accountable for something that they are negotiating, because they can always come back and say, “We got the best possible deal. If it hadn’t been for my brilliant negotiation, it would be even worse”. It is very hard for the House to respond to that. That left me feeling uneasy. If we can find a way to ensure that negotiations are properly reported, assessed and held accountable to the House, that is a good thing. One of the bad consequences of them not being accountable is that officials did not take the job of being accountable to Parliament at all seriously. They felt they were accountable to the international organisations with which they were negotiating. One needs to be worried about that and it is why it is important that we have accountability. If Parliament holds Ministers accountable, officials will be responsive to Ministers and to what the House wants—not to what international organisations and their peers in other organisations want.
That is not a party-political point. When I made that point in the Commons, my Labour opposite number came up and said it was exactly the sort of thing she experienced, not in trade matters but in other matters. Where she was not responsible to the House, officials did not take that responsibility seriously. The noble Lord and his colleagues are on to something important with their approach, which I prefer to the simplicity of the approach of my noble friend Lady Neville-Rolfe. When we have our independent trade policy, it will be important to find ways to hold Ministers to account.
Lord Bilimoria (CB)
My Lords, these amendments strike at the heart of the issue, because the Bill contains no provision for greater parliamentary involvement in trade agreements. Parliament’s role in UK treaties is much more limited than the democratic scrutiny given to EU trade agreements. It has no formal role in negotiations, does not have to debate, vote on or approve them. I follow on from what the noble Lord, Lord Lilley, said: for EU trade agreements, the Council gives the European Commission a mandate to negotiate on behalf of member states and authorises the signature and conclusion of agreements. The European Parliament does not take part in the negotiations but is kept fully informed at all stages, questions the Commission and can issue non-binding but politically important resolutions. The European Parliament’s consent is usually required before trade agreements can be concluded. National parliaments also scrutinise EU trade negotiations through their own EU scrutiny processes. In the UK, draft Council decisions on signing, provisionally applying or concluding an agreement are deposited and scrutinised by the EU scrutiny committees in both Houses, and may be debated on the Floor of the House or in committee.
Baroness Kramer
My Lords, I thank the noble Lord, Lord Bilimoria, as he has said a great deal of what I was going to say, and I am not going to repeat it. I would underscore, to the Minister, the general frustration at this point in time of knowing that we, the UK Parliament, know far less about the negotiations that are proceeding with these rollover and continuity agreements than we would have known had we been in the European Parliament and this was a trade deal that was being negotiated by the EU. We would have been far more informed, consulted and engaged. That loss of democratic input is exceedingly frustrating. This is not a terribly good sign for the future. I hope very much that, having decided secrecy is the way forward for these continuity arrangements, the Government change their mind before they go on to any new arrangements.
Amendment 60, in the name of my noble friend Lord Purvis, would insert a new clause, “Additional review of the impact of the proposed future trading relationship with the EU on the United Kingdom economy”. Another general frustration is that, at this point in time, we still do not have the Government’s assessment and analysis of the impact of the deal that Theresa May has negotiated—never mind the one that she may negotiate—on the future economy of the UK.
If noble Lords will remember, in November the Government published EU Exit: Long-term Economic Analysis, which modelled a number of scenarios including the Chequers deal, but did not actually model the deal that was on the table. I am sure it was inadvertent—I said it on the day—but the Chancellor, when speaking on various media outlets, therefore quoted the economic consequences that came from an analysis of the Chequers deal, not from an analysis of the deal that Mrs May had then staked as her option and choice. The numbers were starkly wrong as a consequence. All of us had advice from various different institutions—I cannot remember whether it was the IFS in this particular case—that, if we wanted to dig through the numbers and find something close to the May deal, we had to choose a set of numbers called “modelled White Paper with 50% non-tariff barrier sensitivity”. We were told that would give us better numbers, and they were dire compared to the numbers that were in the charts for the Chequers deal. I never want to see a Chancellor of the Exchequer—I fully believe it was inadvertent—quoting and talking to the British public about a set of outcomes which his own document counters significantly.
It seems to me that, if the Government were to undertake to provide us with accurate figures or their best estimate of an accurate forecast, that would be exceedingly helpful for the complicated discussions we are involved in. It would be helpful, even today, to have the figures for the May deal, never mind the May deal as it is to be adjusted. I am really quite shocked that, having known they handed us wrong numbers in November, the Government have not given us reasonable and rational numbers now.
Baroness Fairhead
My Lords, I thank the noble Lords, Lord Stevenson and Lord Purvis, for tabling Amendments 32 and 52. I note the noble Lord’s statement that we should not focus too much on specific wording. I am very taken by the suggestion of my noble friends Lady Cooper and Lady Neville-Rolfe that simplicity is a good approach, but I would welcome any conversations about specific wording.
As the House is aware, we are seeking continuity as far as the existing EU trade agreements are concerned. This means the existing impact assessments of the existing trade agreements that the EU is in will continue to be relevant. They have already enabled Members of both Houses, as well as the public, to consider the impact to the UK. There is an impact assessment, for example, of the EU’s free trade agreement with South Korea. It is online, and it has been available since February 2010, alongside many others that are also available online.
As for a broader evaluation of policy, the Government also undertake evaluations of the impact of their policies as a matter of course. In addition, I am happy to confirm that we are developing proposals for how monitoring and evaluation can best be conducted when the UK takes responsibility for our own trade policy. I would be happy to meet noble Lords to reflect their views, and I take to heart my noble friend Lady Neville-Rolfe’s suggestion of a contemporary approach.
Further, the Government have already committed, through Clauses 3 and 5 of the Trade Bill, to lay in Parliament a series of reports explaining our approach to delivering continuity in each of our existing trade agreements. They will also explain, if any, significant changes to and the economic impact on the new UK bilateral agreement when compared to the existing impact assessment. We believe that this is proportionate and better suits this unique programme, which seeks to preserve existing benefits rather than establish new ones. In the earlier debate before Committee, we made a firm commitment to bring forward proposals on our future trading relationships. We have been clear: we will ensure that Parliament plays an appropriate role when the UK has its own independent trade policy.
I am not trying to avoid the questions of my noble friend Lord Lilley and the noble Lord, Lord Bilimoria, about future parliamentary scrutiny. On the Floor of the House, I have been clear that we will bring forward proposals because we understand fully how critical proper parliamentary scrutiny is. I have stated, and am happy to restate, that I am open to suggestions. We are looking at the suggestions of the ITC in the other place and waiting for input from the Constitution Committee. This issue will be covered in much more detail by my noble friend Lord Younger in the debate on the next group of amendments, so with the leave of noble Lords I will leave that to him.
On Amendment 60, tabled by the noble Lord, Lord Purvis, the Government have met their commitment to provide Parliament with a robust and extensive analysis of the long-term economic impact of our future trading relationship with the EU. As I understand it—we can discuss this if I am incorrect—the amendment asks for a short-term analysis. However, as the Chancellor said in his letter in reply to the Treasury Committee, the cross-government group is not suited to provide analysis of short-term impacts. Within their statutory mandates, the Bank of England and the OBR produce short to medium-term forecasts for the UK economy. The Bank of England has already provided the Treasury Committee with its analysis of short-term impacts and the OBR will continue to update its forecast in line with its mandate.
The amendment also asks for the economic impacts of the backstop to be modelled but, as the Chancellor made clear, the backstop is an insurance policy that neither side wishes to use and, if triggered, would be explicitly temporary. Furthermore, there is not yet sufficient specificity on detailed arrangements for modelling purposes. This would be a matter for further discussions through the joint committee; without such detail, the Government would not be able to model its impacts meaningfully. Ahead of further discussions on those arrangements, Ministers have a responsibility not to release information that could reveal or imply potential negotiating positions.
Lord Hannay of Chiswick (CB)
I am sorry, but the Minister has rather shocked me by saying that she will not handle the next amendment. It is probably the most important amendment we will discuss, concerning negotiation mandates and so on. The Minister gave an answer on the Government’s thinking that her noble friend will, I am afraid, find inadequate if he repeats it. I assume she is aware that this House has said that the Report stage will not proceed until the Government have tabled amendments on this matter. Can she confirm that that is the Government’s understanding?
Baroness Fairhead
I am happy to confirm that.
I turn to Amendment 64. Trade continuity agreements, which Clause 2 would be used to implement, simply continue the effects of existing EU trade agreements. Many of the benefits are already being reaped by UK businesses. I hope that my noble friend can take comfort from my reassurance in my responses to Amendments 32 and 52, and I would like to reassure her further by confirming that any impact assessments published at the time the agreements we are transitioning came into force remain valid. On the international agreements referenced by my noble friend, I can confirm that we have not changed our commitment to them. The process of exiting the EU will not alter the UK’s commitment to upholding either international laws or our international commitments. These include commitments on climate change and the sustainable development goals.
The noble Baroness, Lady Thornton, and my noble friend Lady Hooper both raised issues in a number of areas such as human rights, labour and environmental standards around the world. In an earlier debate in Committee we confirmed that we will proudly continue to comply with those international obligations. In response to the comment of the noble Baroness, Lady Thornton, on monitoring by independent bodies, I can confirm that that too will continue.
I turn now to Amendment 81, tabled by the noble Lord, Lord McNicol. Let me be clear that the Government will continue to ensure that Parliament and the devolved Administrations play a crucial role in the scrutiny of the UK’s trade agreements. We are in discussions at both official and ministerial level on this.
Specifically in relation to compliance, I must stress that the UK will not bring into force any international agreement without first ensuring that it is fully compliant with its obligations. Where we are transitioning existing ratified EU trade agreements, we have been complying with those agreements as a member of the EU. We are working hard to ensure that we continue to be compliant after leaving the EU, for example by using the powers in the European Union (Withdrawal) Act to make UK law operable without reliance on the European Communities Act 1972. Any secondary legislation necessary to ensure that we are in compliance will be made before ratification, following the usual parliamentary processes. This means that we will start from a point of being in compliance with our agreements. We would expect the same of our international partners. This is simply what is required when it comes to making international treaties.
Normally within trade agreements there are mechanisms for monitoring and reviewing the agreement through bodies such as joint committees. This applies both to our compliance and the compliance of our partner countries. We will of course look to replicate the functions of these existing mechanisms. The noble Lord, Lord Purvis, mentioned that we should make sure that we reflect the regions and the devolved Administrations. Again, I am happy to meet with him to discuss how that can be done. We will operate the mechanisms according to the terms specified in the relevant agreement. These will of course differ by agreement, but we will be accountable for compliance overall. I hope that this reassures the Committee, and I would ask the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
My Lords, it is pretty much an open secret that amendments of the type we have just spoken to are usually tabled by Oppositions when they have very little to say about a topic. You call for a review and that usually ties up the civil servants for days trying to work out what that is supposed to do. It gets the Minister into a knot and allows you to have a relatively easy passage, especially if the Bill is a bit boring at that particular point. That is not what has happened today, and indeed we have been reminded that it has worked in the past. I recall the discussion during the passage of the Intellectual Property Act and it has worked out well.
There is a case here for thinking really hard about what we want to see happen as a review. I accept absolutely that my amendment is ridiculously overspecified and gold-plated. I am happy to learn from noble Lords who have served as Ministers and those who have experience of this on the other side. We could probably with advantage put together quite a sensible, minimalised amendment which would cover the ground. The Minister spoke about wanting to meet to discuss this; that would be worth while. If we can get sensibility, scale and scope in a reasonable approach, we can make some progress here.
I do not think this can just be left to the passage of time. It is true that the Bill as currently drafted has considerations of reviews, but these were late additions and are not well drafted. We have already noted earlier in Committee that while Clauses 3 and 5 make provision for reports to be provided, Clause 4 provides an opportunity for Ministers to duck out of that; and they deal with the process of agreement, not of review. I therefore think there is a bit of a lacuna here in the Government’s approach. We may be able to resolve it by statements in the House, but there may be a case for having at least something in the Bill to cover it.
Other points were made in this very rich debate. I do not think we need to look too hard—I was going say to the noble Lord, Lord Lilley, but he is not in his place. The EU model, although it exists and operates, is not perfect, and there is already much documentation on how it needs to be improved if it is to be effective. The question of independence is not dealt with in the current drafting of the Bill. I think there is a sense around the Committee of a coming together on this issue. We should take advantage of that—a meeting would be very useful—and I look forward to being able to make some progress on this in a relatively easy way. I beg leave to withdraw the amendment.
“Establishment of Committee on Trade Agreements
(1) A body corporate called the Committee on Trade Agreements is to be established consisting of nine members who are to be drawn both from the members of the House of Commons and from the members of the House of Lords in accordance with the provisions in Schedule (Committee on Trade Agreements).(2) Negotiations towards a free trade agreement may not commence until the Secretary of State has laid a draft negotiating mandate before the Committee and it has been approved by a resolution of that Committee.(3) Prior to considering a resolution approving a mandate relating to the negotiation of a free trade agreement, the Committee must produce a sustainability impact assessment in accordance with the provisions in Schedule (Committee on Trade Agreements). (4) Before either House of Parliament may approve by resolution the text of a proposed trade agreement in accordance with the Constitutional Reform and Governance Act 2010, the Secretary of State must lay the text of the proposed agreement before the Committee and that text must be approved by a resolution of that Committee.(5) Prior to considering a resolution approving the text of a free trade agreement under subsection (4), the Committee must produce a report setting out a recommendation in relation to the ratification of the agreement.(6) The Secretary of State must lay the report produced under subsection (5) before both Houses of Parliament.(7) Schedule (Committee on Trade Agreements) contains further provision about the Committee.(8) In this section, “free trade agreement” refers to any agreement between the United Kingdom and one or more partners that includes components that facilitate the trade of goods, services or intellectual property including but not limited to—(a) Free Trade Agreements (FTA);(b) Interim Association Agreements, Association Agreements (AA);(c) Economic Partnership Agreements (EPA);(d) Interim Partnership Agreements;(e) Stabilisation and Association Agreements (SAA);(f) Global Agreements (GA);(g) Economic Area Agreements (EAA);(h) Cooperation Agreements (CA);(i) Comprehensive Economic and Trade Agreements (CETA);(j) Association Agreements with strong trade component;(k) Transatlantic Trade and Investment Partnerships (TTIP);(l) Investment Protection Agreements.”
Lord Stevenson of Balmacara
My Lords, in moving Amendment 33 I will introduce some of the discussion topics raised by the other amendments in this area. I look forward to the response from the noble Viscount, Lord Younger, who is standing in on this issue. The subject of the amendment is, as previously described by the noble Lord, Lord Hannay, a key—probably the most important—part of the Bill. I take his advice and am happy to try to man up and make sure that I establish the case in the sorts of terms he would like to see. We have also had contributions from the noble Lords, Lord Lilley and Lord Bilimoria, and the noble Baroness, Lady Kramer, which have set out some of the scene, so I do not think we need to go right down to the very basics of it. I would like to focus on some of the principles that are important in trying to assess this issue.
We are talking here about how Parliament and wider civil society get engaged with a process that we in this country have not really had much direct involvement with since 1972 because the function we are talking about—trade—has been a sole competence of the EU. Yes, there have been occasions when issues have come back but, as we heard in earlier discussions, they have not been very detailed and there has not been proper scrutiny. I think there is a general feeling that the procedures set out in the CRaG Act 2010 do not now satisfy those with an interest in this area.
I have eight principles that I think should inform our discussion. These are: how do the Government intend to ensure that formal consultation with external stakeholders, in advance of any negotiation mandate being drawn up, is exercised? How do the Government intend to ensure proper transparency of trade negotiations and negotiating mandates, and what role will Parliament play in that process? How do the Government intend to ensure maximum transparency in advance of those consultations? Obviously, they are constrained to some extent by issues that would be regarded as necessary to be taken under some level of secrecy if they involved security or other issues, but how will that transparency happen? In particular, how will the Government prepare proper impact assessments and make these available to inform the debate?
There is a general question about reviewing reporting on trade agreements after a specified time period, but also in relation to progress—we touched on this earlier, but it is part of a principle that we need to build in from the beginning. How do the Government intend to ensure that parliamentarians are able to access the negotiating texts? Without knowledge of the texts, very little scrutiny can take place. Some texts will be very sensitive, but nevertheless it is important that there is a mechanism under which they can be reviewed and discussed.
What will be the formal process or procedure for the ratification of trade agreements? The current arrangements under CRaG are not satisfactory. What will be the formal procedures for changes that need to be brought forward—not new trade agreements but how, particularly in light of the need for broader discussion and debate, we amend and change agreements found to be deficient, unfair or working badly in relation to any aspect of our economy or our part of the country?
Those are the issues the amendment seeks to open up. Again, it is gold-plated—I accept that—but it is important that we see the full range and depth of the issues raised and I hope to have a good debate around that. I beg to move.
Lord Hannay of Chiswick
I support Amendment 33, about which a great deal was said in the debate on the previous amendment, although some of the contributions more properly belonged to the discussion of this amendment. I have no hesitation whatever in suggesting that this is probably the single most important article in this legislation—except that it is not there, of course, at the moment, but it needs to be there.
Why is it so important? It is because until now the British Parliament has had no clear role in giving mandates or setting out the broad lines under which the Government should negotiate trade agreements, nor has it had any proper system for oversight of them. Possibly that did not matter in the far distant days before we joined the European Union, but it certainly matters now when free trade and other trade deals are, as the Government have said again and again, at the heart of their Brexit strategy. Britain’s ability to negotiate on its own on trade is at the heart of the Government’s pleading to back their deal.
This is really urgent now because the Government have made it urgent by refusing to take no deal off the table. If they took no deal off the table, as the Spelman amendment passed by the House of Commons did last night, we would have time to look at this. However, if no deal remains on the table—and the Prime Minister has said that it does—we have to realise that the Bill we are now discussing may be operational in 60 days’ time on 30 March this year. As currently drafted, the Bill says nothing about approving mandates before the Government can negotiate on trade with a particular country. That is a lacuna which cannot be left unfilled.
When he replies, I would like the noble Viscount the Minister to repeat what the noble Baroness the Minister said: that the Government will table amendments before Report and explain how they believe that Parliament’s authority should be established in the context of an independent trade policy. I agree that it may not be needed on 30 March and we would be mad to leave without a deal on 29 March. But the Government have decided to go on saying that we may and therefore we had better be prepared. I hope the noble Viscount will deal with that point as soon as he starts his response.
The substantive issue at stake relates to the provisions—or lack of them—for parliamentary mandating and oversight of all negotiations with third countries once we are able to conduct them on our own. They are important because without them, if the Bill remains as it is currently drafted, together with the provisions for the approval of international agreements, the only say that Parliament will have will be after the Government have conducted and concluded negotiations and then put before Parliament an up or down, yes or no agreement to what is in them. That is what we call in this House, when we are talking about statutory instruments, the nuclear option. It would be absurd if we went into the conduct of an independent trade policy with nothing for Parliament except the nuclear option. What does the nuclear option mean if it is ever deployed? It means that the Government would in good faith have negotiated with a third country—reached agreement with it, settled all the tariff details and the non-tariff barriers—and then the deal gets rejected. How much negotiating credibility would we have left after that? Zero.
Lord Purvis of Tweed
My Lords, I shall speak to Amendments 59 and 71 to 74. They are quite distinct. Amendment 59 most certainly does not meet the Hooper test of brevity but I can dispatch it fairly quickly—no doubt to the great relief of colleagues in the Committee—because it may be considered a continuity amendment. It replicates the need for a meaningful vote process for the future relationship with the EU as we go through the withdrawal agreement process. It need not be controversial but it provides for the necessity for Parliament to authorise the agreement. It provides for that to be in primary legislation and sets out the procedures should the Commons resolve against the agreement. If we leave, this will be necessary for our future trade agreement with the EU to avoid a repeat of the “running down the clock” situation. Therefore, it is right that we have this put in place now.
Amendments 71 to 74 are perhaps the core of that element and have formed part of the discussions so far about the role of Parliament going forward. In a moment I will come to a live case study of a continuity agreement to show that this is not just about the future policy but is relevant now. Fundamentally, the reason that Parliaments around the world—the elected bodies other than simply the Executives—are now involved at early stages of trade negotiations is that trade negotiations are now markedly different from how they were 30 or 40 years ago.
By definition, the European Union now enters into discussions on deep and comprehensive trade agreements. In the past, the agreements were primarily about tariff rates and little else, but now trade agreements take into consideration the impact on domestic law of environmental standards. The social, economic, environmental, gender, human rights, labour, development and regional impacts are all core components. If you look at the most recent trade negotiations that the European Union has carried out with British participation, whether it is with Singapore, Japan or Canada, they have included sections on the development and sustainability goals. There are now clear positions when it comes to human rights, labour development and the impact on local communities. These are core parts of the trade negotiations that we have embarked on, and that is why the United States, Australia and the European Union have a much wider role for their Parliaments throughout the process. The Government’s position is in stark contrast to that: we would simply use the existing treaty provisions, which are not only out of date but will prove ineffective.
The only other aspect of ratification of treaties under the Constitutional Reform Act concerns what Mr Hollingbery, the Trade Minister, said in oral evidence to the International Trade Committee. He said that, although he did not want Parliament to have binding votes on these agreements, there was one aspect where he thought that Parliament should have an overrule. He said:
“But I do believe that Parliament should be able to opine upon the outline approach”.
Parliament being able to opine on the outline approach of trade negotiations might be a slightly unfortunate turn of phrase but the Government have given some indication that they are willing to consider it. I think that on the previous group the Minister gave an indication of that kind, and I agree. We are looking forward to hearing the Government’s position on the amendments to the Bill and to them giving a clear steer.
In the spirit of assisting the Government, these amendments in my name, with back-up from many civil society organisations, suggest what I consider a quadruple lock of parliamentary involvement from the outset in considering the sustainability impact so that there is a degree of transparency for all the different aspects that I mentioned earlier—the social, economic, environmental, gender and human rights impacts and so on.
One reason why that is important to me is that when I co-chaired with the Nigerian Trade Minister a commission for an all-party group on trade and development in the Commonwealth, it became abundantly clear to me that, to be a force for good in the world, trade also now has to take into consideration all those components. The British trade approach could be an especially good force for good for development around the world. We know that until recent years trade agreements have not been proactive in the areas of gender, human rights or those parts of society that have not been economically empowered. We could see trade agreements not simply as protective measures or as things where we are fearful of giving away British negotiation positions; we could see them as potential forces for good.
The second element of Parliament being involved in setting a mandate by resolution is a proactive mechanism for that. It is why this is now established in the European Union and I believe it would be of great merit for our Parliament to be involved in it. The third component proposed in the amendments is transparency, involving Parliament and the people, whom ultimately we all represent, because they are likely to be a key part of these trade negotiations. We know from the previous examples how difficult some trade negotiations can be, and that is when we look at the impact on both our communities and those of the country with which we are signing up to an agreement. The final component is scrutiny before signing, which I believe to be of fundamental importance. That quadruple lock is important. In essence, it is simply a way of replicating British representation through the European Union.
We have elected representatives in the European Parliament who take part in the early stages of negotiations. There is a very helpful document called Negotiating EU Trade Agreements: Who Does What and How We Reach a Final Deal. It is very straightforward and simple. It shows that even in preparing the position that it will take, the Commission publishes its negotiating directives online and sends them to the Parliament. The Parliament is informed at the earliest stage of the process and even prior to that. After each negotiating round, reports are presented to both the Council and the European Parliament, as was the case in the latest round involving Australia. I tried looking on the British Government’s website to find out about our discussions that led to the mutual recognition agreement with Australia but there was nothing. That was in stark contrast to the position with the Commission.
The fourth stage is that, when the Commission plans to table negotiation proposals, it informs the European Parliament about them, and it then informs the European Parliament at every stage of the developments, keeping it updated. The Parliament is then able, through its Committee on International Trade, to pass resolutions on the progress of those processes. When the negotiators from the two sides come close to finalising the text, the Commission tells the Parliament. The Commission also informally sends the text to the Parliament. In finalising the process, the chief negotiators of both parties usually initial the text of the proposed agreement to mark the end of the negotiations and that text is sent to the Parliament. The 10th element of the process is that, after both sides sign, the Council examines the proposal for conclusions and sends the agreement to the Parliament for its consent. The 11th stage is consideration by the committee of what to recommend to the plenary, and consent or no consent is then given to the agreement. There are 12 parliamentary stages in the negotiating process.
We understand that the Government have made only two agreements so far. One is with Switzerland. The text from the Swiss party was immediately put online; the text from the British side came subsequently. But we should do a case study of the announcement last week of what our Government said was an agreement in principle to sign a free trade agreement with Israel, while the Israeli Minister, Eli Cohen, said that the text was “concluded” on 23 January. I asked the Library to find a copy of that agreement—but there is none. I understand from the Government that the text will be placed in the House alongside an explanatory memorandum and an associated parliamentary report in due course, once the agreement has received signature.
Viscount Waverley (CB)
The noble Lord has drawn attention to the issue of scrutiny by the European Parliament. In listening to him, it occurs to me—he may wish to agree—that one of the difficulties is that the UK Parliament is so underresourced. Do we have the resources to carry out the type of scrutiny to which he draws attention?
Lord Purvis of Tweed
I believe we do. Not only are we resourced in Parliament, but we are resourced in this House. Our committees do a remarkable job in scrutinising both European legislation and secondary legislation. As we approach the Bill, many noble Lords stand ready to scrutinise proactively and constructively some of the proposals. But we cannot do that if our role is only at the last stage. Indeed, the Government would be much more effective in securing final agreements on such arrangements if Parliament were involved at the early stages. If that principle had been applied to the process of negotiating our withdrawal, we might now be in a different position.
Lord Fox (LD)
The noble Lord, Lord Lilley, before he had to hurry off, spoke of transparency as if it were a threat to negotiation. Speaking to another amendment earlier, the noble Baroness, Lady Neville-Rolfe, who has more contemporary experience than the noble Lord, spoke of her regrets about the TTIP negotiation, and the fact that the NHS brouhaha that blew up around it scuppered, or terminally injured, that negotiation. Transparency is not a prerequisite just because it is a good thing; in the modern world it is needed to get consent for such things to happen. In the world we live in today, such negotiations can be stopped—and if we think the TTIP negotiation was an example of that, we have not seen anything until we have seen a US treaty being negotiated. Transparency is not just a good thing; it is an enabler, which allows us to have such treaties.
Viscount Younger of Leckie (Con)
My Lords, forgive me for stretching the definition of repetition, but before I address the amendments in detail I would like to underline the fact that the Bill concerns continuity for our existing EU free trade agreements as we leave the European Union. I mention that without wishing to revisit the emphasis that we placed on the word “continuity” on Monday last week. Scrutiny of new free trade agreements is not part of the Bill, nor is scrutiny of our future relationship with the EU.
Lord Hannay of Chiswick
I really plead with the noble Viscount not to say that again. We all know that if, through inadvertence or incompetence, the Government take us over the cliff on 29 March, this Bill—by then, presumably, an Act—will be the only instrument we have to guide our trade policy. Therefore, will he please stop saying that it is only about continuity and admit, as his noble friend Lady Fairhead did when replying to an earlier amendment, that it is meant to be capable of providing for both eventualities? Will it provide not only for the eventuality in which it is a continuity measure that lasts for the transitional period—what is sometimes laughingly called the implementation phase, in which nothing is implemented—but for circumstances in which we have to operate an independent trade policy on 30 March 2019?
Viscount Younger of Leckie
I had only just started, and I stand by my words, because I was about to go on to say that, none the less, I understand the desire of noble Lords, including the noble Lord, Lord Hannay, to debate these issues today—and that is what we have just done. I also appreciate the desire to understand how the Government intend to fulfil our commitments to transparency on and scrutiny of future FTAs as we exit the EU.
The amendments on future FTAs pursue many aims, which the Government understand. To be helpful to the House, during my remarks I will give as much information as I can on progress and process on FTAs. I will also answer the question raised earlier by the noble Lord, Lord Hannay—but not just yet—and will agree with the remarks made by my noble friend Lady Fairhead.
Amendments 33 and 99, which the noble Lord, Lord Stevenson, spoke to, seek to ensure that Parliament has a significant role in free trade agreements via the creation of a new Joint Committee. Amendments 71 to 74, which the noble Lord, Lord Purvis, spoke to, seek to achieve similar outcomes through imposing obligations on the Government in relation to mandate-setting, transparency and scrutiny before signature. I will address those amendments together.
First, I shall give a little context. Brexit does not change the fundamental constitutional principles that underpin the negotiation of international treaties. The making of treaties, including international trade agreements, is a function of the Executive. At the same time, it has long been held—and this Government continue to hold—that Parliament should have the opportunity to scrutinise treaties effectively. In 2010, the Constitutional Reform and Governance Act confirmed, after a process of consultation, the respective roles of the Government and Parliament in treaty-making. The Government will continue to support and facilitate parliamentary scrutiny of treaties under CRaG.
The noble Lord, Lord Purvis, asked about the Israeli trade agreement. There is agreement in principle on an FTA, but subject to—
Viscount Younger of Leckie
If I may be allowed to complete this point, I will then give way to the noble Lord. There is agreement in principle on an FTA, but it is subject to a few remaining technical issues so the final text is not quite ready. When a continuity agreement is finalised, it will be laid with an Explanatory Memorandum and report.
Lord Bilimoria
I thank the Minister for giving way. He mentioned that the Government are for scrutiny, so why are these amendments required? The amendments have been tabled because there is a complete lack of parliamentary participation in the Trade Bill. Surely he can understand the uneasiness of this House. The Government tried to railroad the implementation of Article 50 without the permission of Parliament, and the case had to go all the way to the Supreme Court for Parliament to have a say. The Government then tried to withhold a meaningful vote from Parliament, and Parliament had to fight for that. The Government tried to hide their legal advice and Parliament had to fight for its disclosure. Now we have Henry VIII powers being implemented left, right and centre and a Trade Bill acting in a similar way over future trade agreements.
Those agreements are going to be hugely difficult to negotiate. They take a long time to implement, as I know. India has only nine bilateral free trade agreements with other countries, and not one with a western country. This process is going to be hugely difficult, and it looks as if Parliament is going to be cut out of it altogether. We are wrecking the constitution of our country and the balance between the legislature, the Executive and the judiciary. I do not think the Minister can just say, “We are allowing scrutiny”.
Viscount Younger of Leckie
If the noble Lord will allow me to continue, he will see that I am not saying that Parliament has been cut out of this altogether; far from it. I said at the beginning of my remarks that I would give as much information as I could, and I hope it will give reassurance to the noble Lord and indeed the whole Committee.
Baroness Kramer
I am sorry to trouble the Minister but I have one question. I did not quite understand what he meant just now by the word “finalised” when he talked about the treaty with the Israelis. If he meant that the treaty would be a signed done deal and would then be brought to Parliament so that we could look at it, would we scrutinise it? Would it be like an SI, whereby we cannot impact the terms in any way, so we simply have the nuclear option of accepting or rejecting it? The message of this House has been that we regard scrutiny as something far more contributory than that, involving engagement in the process at a much earlier stage. That is why we are extremely troubled. Will the Minister clarify exactly what he means by “involving Parliament”—after the fact or before the fact?
Viscount Younger of Leckie
As I said earlier, I have some more remarks to make about the process for future trade agreements. What I said about the Israeli agreement was that when a continuity agreement is finalised, it will be laid with an Explanatory Memorandum and report and will be under the affirmative procedure.
I will briefly touch on what we have already committed to in this area. My right honourable friend the Secretary of State for International Trade reiterated in an Oral Statement that Parliament should have a crucial role to play in future free trade agreements. The Government will ensure that parliamentarians are given the opportunity to consider the level of ambition of the Government’s approach to negotiations and the potential implications of any agreements. We will lay our outline approach to each negotiation before both Houses in order to facilitate that before we begin negotiations. During negotiations the Government will keep both Houses updated on progress, including providing analysis of appropriate points. Once an FTA has been negotiated, it will need to be implemented and then ratified. I remind the House that free trade agreements cannot of themselves change domestic law.
To implement a new trade agreement with a new partner, the Government will bring forward a bespoke piece of primary legislation for each new trade agreement that requires changes to legislation where there are no existing powers. Parliament will have the opportunity to scrutinise the new legislation in the normal way.
Lord Purvis of Tweed
I am grateful to the Minister for giving way; his contributions are helpful. This may be a technical point, because we have had an element of that statement from the Government at Second Reading. There could be a marked difference regarding a trade agreement that could have a big impact on our country, but which does not require any changes to primary legislation. If a trade agreement does not require any changes to primary legislation because that is still on the statute book, the Government are proposing that no measures be brought to Parliament to approve—only the primary legislation, if that does not currently exist. The case made by noble Lords is that a trade agreement in its own right needs to come forward for authorisation, regardless of whether it requires additional primary legislation. That is the point we need to get across.
Viscount Younger of Leckie
The noble Lord makes a good point. I reassure him that what is also very important is that the negotiation and scrutiny of these trade agreements has to allow for a certain flexibility. I will go on to say a little more about the process, because implicit in it is that treaties between different types of countries using different types of products can be extremely different, as the noble Lord will be aware, so flexibility is very important.
The legislation must be brought forward before ratification, as I was saying. The same will be true of our future relationship with the EU, which will surely require detailed implementing legislation. I hope this demonstrates that the Government are already committed to Parliament being able to shape and scrutinise future trade agreements. I listened carefully to what the noble Lord, Lord Purvis, said about current processes and steps in considering trade agreements. However, since July work has been taking place in both Houses to consider Parliament’s role in future free trade agreements. The Constitution Committee has an ongoing inquiry into the parliamentary scrutiny of treaties. The Joint Committee on Human Rights is inquiring into human rights protections in international agreements, and that touches on Parliament’s role. In the other place, the International Trade Committee published a report just after Christmas that makes a number of recommendations in this area.
To assist the noble Lord, Lord Hannay, the Government are listening carefully to these views and we are conducting our own work. We have little quarrel with his remarks and aspirations, and I hope there is agreement there. We recognise, not least following the resolution of this House on Monday, that more detail is needed on how we envisage Parliament—and particularly this House—being involved in the scrutiny of trade agreements. The question of how Parliament scrutinises future FTAs must be answered, with the benefit of close and considered dialogue between the Government and Members of Parliament. I have listened to the contributions of noble Lords today, and I assure the Committee and the noble Lord, Lord Hannay, that we will reflect on them seriously. I confirm again that we will bring forward our proposals with more detail before Report.
Lord Purvis of Tweed
That is very helpful. As the Minister knows, the devolved Administrations have also submitted evidence to the International Trade Committee in the Commons and are participating in the revision process. The devolved Administrations were mentioned specifically in the resolution of this House last Monday. I wonder if, in advance of the Government bringing forward any of their proposals, they could write to noble Lords or give a clear statement on how they envisage the devolved Administrations, and potentially the regions of England and the combined authorities, having an active role.
Viscount Younger of Leckie
I thank the noble Lord for that. It does indeed take us back to the debate we had last week, and I hope he remembers that I gave certain reassurances on that point. What I can say—without having the details in front of me—is that, as he knows, there is ongoing dialogue with the devolved Administrations to ensure that they are kept fully in touch with what we are doing. That will be the general tenor of the ongoing discussions as we look forward to FTAs.
I would like to pick up on some of the remarks made by the noble Lord, Lord Bilimoria, in the last debate as they are relevant to this point. He asked how our approach differs from the role of the European Parliament in EU trade negotiations. He may well know this but I shall spell it out: the European Parliament’s role operates in relation to EU trade policy. We are offering scrutiny for the UK Parliament at every stage of the process in a way that is appropriate and proportionate to the UK constitutional context. In the UK, the power to make treaties is a power held by government, but the context of the negotiations will be different. The European Commission negotiates free trade agreements representing the interests of the 28 member states. It is given the mandate to do so by the Council, and final agreements are approved by the European Parliament and the Council before they can come into force. UK-only free trade agreements will be negotiated by the elected Government in the best interests of the UK. The Ministers responsible for the negotiations are directly accountable to Parliament.
Lord Lansley
My noble friend might also reflect that there is some truth in what the noble Lord, Lord Kerr of Kinlochard, reminded us of in previous debates. American negotiators often find there is significant benefit in having what I think they describe as “Congress reserve” in negotiations—what we might call “parliamentary reserve”. That sense of engagement with Parliament during the course of negotiations is important in itself. What happened last night in another place might give anybody engaged in such negotiations pause for thought; it is important that they know during the negotiations that they can take Parliament with them.
Viscount Younger of Leckie
I said at the beginning that this is likely to be a wide-ranging debate; my noble friend’s remarks will indeed be fed into the processes being considered at the moment.
I would like to address a question raised by the noble Lord, Lord Stevenson, who asked what access parliamentarians would have to negotiating texts. We take seriously our commitment to keeping Parliament apprised of the Government’s negotiating intentions. That is for the purposes not just of transmitting information but of inviting scrutiny and allowing Parliament and its committees to take informed views. While we support Parliament’s important scrutiny role, Ministers have a specific responsibility, which Parliament has endorsed, not to release information that could undermine our negotiating position. On transparency more generally, I reiterate our commitment to a transparent approach. We are developing proposals for the release of updates on negotiations; we will bring these forward shortly.
Let me say more about the consultation process, an issue raised by the noble Lord, Lord Stevenson. The amendments also seek to ensure wide consultation on FTAs, which is a good idea; indeed, that is the approach the Government are taking. We conducted one of the largest consultation exercises ever undertaken for the new FTAs we are considering with partners without an existing FTA with the EU—the US, New Zealand and Australia—and for our potential accession to CPTPP. This included a 14-week public consultation open to all businesses, individuals and other organisations in the UK and abroad, and 12 outreach events throughout the UK, including in each of the devolved nations. We have also conducted ongoing engagement with stakeholders on trade policy, including “town hall” style briefings, roundtables with different groups of stakeholders, regular stakeholder briefings and webinars designed to engage with smaller and regional stakeholders.
I would also like to touch on impact assessments. I do not propose to address—
Lord Purvis of Tweed
I am grateful to the Minister for giving way; he is being very tolerant. He may recall that I mentioned on Second Reading that I took part in one of those consultations, posing—if that is the correct word—as a Scottish business and taking part in the Government’s consultation on the prospective trade agreement with the United States. I mentioned then and repeat now that in that consultation, I was presented with no information about what the parameters of any trade arrangements with the United States were likely to be. In effect, I was being asked questions the parameters of which I did not know. That is not meaningful consultation. Can the Government reflect on the consultation process they have carried out? I do not believe it was sufficiently meaningful.
Viscount Younger of Leckie
I am listening to the noble Lord. I do not know the details of that negotiation, but I will take that back and reflect on it. There may have been some very good reasons why the information was not forthcoming, but I will reflect on that and write to the noble Lord with some information.
Lord Hannay of Chiswick
I am very grateful to the noble Viscount for some of the remarks he made about what the Government are likely to do before Report in tabling their own amendments on the negotiating process. That was helpful and it will be good to look forward to that. However, in everything he said, I am afraid I detect an unwillingness to give Parliament a role at a time when it would really help. Everything he said involves decorating the final stage—the approval of an agreement already negotiated—with all sorts of wonderful bells and whistles. We all know that then you have only the nuclear option. You have concluded the negotiations and, if Parliament objects, you cannot amend the text that has been negotiated with the third country. If it objects, it can reject the agreement and that will be very damaging for the national interest and the relationship with that country.
I listened very carefully to the noble Viscount. At one stage, he claimed that the Government would negotiate on trade as the Executive and under their right to do so. That is just the problem. The word “mandate” did not come into a single thing he said. All I can say—politely, I hope—is that when the Government table their amendments, the word “mandate” had better be there. If it is not, I think they will get badly stuck. It is not magic. The mandates under which the European Union negotiates are quite general; they are not specific about this or that tariff, but they are very helpful in setting the parameters under which the negotiations are conducted. I believe the Government would benefit from that, so please think a little about the word “mandate”.
Viscount Younger of Leckie
Again, I listen carefully to what the noble Lord says. The best way to answer him is to say that I will indeed feed back his views. They are somewhat negative—somewhat too negative, I would argue. I have spent a lot of time spelling out the details of processes and procedures, as far as I can. Before I give way to the noble Viscount, I also mention that the noble Lord, Lord Hannay, said that we were going to table amendments on Report. I want to make it absolutely clear that I have pledged to come forward with proposals before Report. I give way to the noble Viscount.
Viscount Waverley
I thank the noble Viscount. With the greatest respect, I think it would be fair to describe the Government’s record on bringing ratification processes before Parliament as patchy. When the noble Viscount goes back to his department, I ask him to consider the Government’s record in the ratification timing process, so that that can be included in some way, either in this amendment or the Bill at large.
Viscount Younger of Leckie
That is a helpful contribution from the noble Viscount. I think he has some experience in these matters, so I will certainly pass that on. I would like to move on fairly rapidly to talk about impact assessments, but I do not propose to address the aspects of these amendments regarding impact assessments in this speech, as the issue was addressed in earlier Committee debates and I believe the Government’s position is clear. Nor will I revisit the assurances that we have already given on our absolute commitment not to lower standards through trade agreements.
Let me move on to the future relationship with the EU. One amendment in this group—Amendment 59, tabled by the noble Lord, Lord Purvis—is targeted specifically at our future relationship negotiations with the EU. I appreciate what the noble Lord is trying to do here in replicating Section 13 of the European Union (Withdrawal) Act 2018. However, Section 13 was drafted for the very particular context of our withdrawal package under Article 50. It is not an appropriate or necessary mechanism for Parliament to approve our future relationship treaties with the EU. With Section 13, we knew what form of documents were coming to us for approval. We then judged it necessary to create a role for Parliament over and above the existing provisions of the Constitutional Reform and Governance Act 2010, or CRaG, to ensure that the withdrawal agreement treaty and the accompanying political declaration could be considered as one package.
This amendment, however, is grappling with the difficulty of trying to legislate for a treaty or treaties where the number and form of those treaties is not yet known. The amendment attempts to bypass this issue by linking its provisions to any trade agreement that,
“gives effect to any or all of the provisions set out in the framework for the future relationship so far as they relate to trade”.
However, this leaves it unclear which treaties would be caught and whether it would remain active long into the future, beyond the conclusion of our future relationship negotiations. The Committee can be reassured that our future trade agreements with the EU are bound to be subject to the provisions of the Constitutional Reform and Governance Act 2010. Furthermore, those agreements will almost certainly require detailed implementing legislation, which means that the arrangements could not come into force without the authorisation of Parliament. No doubt this is a question to which we will return. I hope this reassures the Committee and that noble Lords will withdraw, or not move, their amendments.
Lord Stevenson of Balmacara
My Lords, I am grateful to the Minister for his extensive response. He has been attempting, within the constraints he is undoubtedly under, to give us as much information as he can. I will need to read Hansard to be absolutely sure what we have and have not been promised. I certainly heard the word “amendment” in one of his sentences, but it may have been a misunderstanding on my part. If there are not to be amendments to this Bill, I am intrigued—that is parliamentary language for “a bit confused”—about what exactly the Government are going to offer us to resolve the obligation placed on the House by the Motion passed in the name of my noble friend the Leader of the Opposition relating to progress on this Bill, which is a point that the noble Lord, Lord Hannay, has also raised.
We can hope that the two aspirations at play here come together, because despite the Minister’s valiant attempt to remind us that this is a continuity Bill—an aspiration negated in the second amendment after we started this process, and continually ignored in every amendment we have discussed so far—we should get real and understand that the mess we are in will not be helped by having an artificial distinction between what is a continuity issue and what will be a non-continuity issue, or, in other words, the real world in which we live. We need to get this right, and we on this side of the House have offered—I am sure the party on my left has also offered—to work through this with the Government, and that offer remains on the table. We will meet at any time, at the Government’s request, to see if we can come together to make something of this that will work for the future, because it is that important.
That said, I endorse what has been said by others: any attempt to rely on the procedures in the Constitutional Reform and Governance Act 2010 will be doomed to failure. The Government have to get over that hurdle before we can make significant progress. The 2010 Act is inadequate as a process, and would be inadequate under any terms, because it allows the Government to use the negative resolution procedure for secondary legislation, so that the treaty we agree comes into law automatically, irrespective of any opposition or amendments Parliament might want to make, provided it has been laid before Parliament for 21 sitting days. That is not the right process, as we are talking about trying to get Parliament to engage with the process by bringing it back to the mandate arrangements, and allowing Parliament plenty of time, lots of information, a good process and a proper committee structure for proper decisions to be reached in the public interest. The Government should not play games with procedures and say, “We’ve got that already, so why are we bothering about it?” This needs to be dismantled and rebuilt in a way fit for the 21st century.
A new system is required, and the time has come. If there is any doubt about the interest in that, the Minister should be aware that six major business federations—the CBI, the BCC, the EEF, the ICC, the IoD and the FSB—have taken the unprecedented, in my experience, step of bringing forward a joint statement with the TUC, Unite, the Trade Justice Movement, the Consumers’ Association, Which? and other industry bodies calling for a proper model of consultation and scrutiny to govern the UK’s policy-making process in the future. The Government cannot ignore that; it has to be something that they will do.
We will come back to this, whether in the form articulated by the Minister, or in amendments we consider at later stages. I hope there will be a Report stage, because the Bill is important and needs to go through, but the danger is that delay or difficulty in coming forward with something clear enough for this House to respond to will mean the Government finding themselves in real difficulty on the Bill. I do not say that lightly; the last thing we want to do is use procedural issues to hold back what is, at its heart, a good piece of legislation, which we support. I beg leave to withdraw the amendment.
Lord Grantchester
“Division of agricultural tariff rate quotas
It shall be the objective of an appropriate authority to take all the necessary steps to ensure that after exit day the division of agricultural tariff rate quotas with the European Union remains at the same level as prior to exit day.”
Lord Grantchester (Lab)
My Lords, I declare my interests as stated in the register. Tariff-rate quotas have been set for mostly agricultural products, to allow some countries preferential access to the EU single market below the tariff rate set for those products. The UK does not have its own national tariffs but merely shares in the amounts set for all member states across the EU. This is most important to the agricultural sector and industry, as it sets out the quantity that comes into the EU at preferred competitive rates, bearing in mind that products still have to be compliant with the relevant EU standards.
On exit, these TRQs at EU level will need to be split between the remaining states and the UK. The proposal agreed between the EU and UK is that the product quota should be split according to the relevant usage or consumption of the product in the UK and EU. The difficulty arises on the specific quantities, as there is a lack of data to inform the division. Although there is detailed information on the point of arrival of products into the EU, there is not the same detail regarding where the product may be consumed. The EU and UK, in bilateral discussions, have agreed to adjust the schedules without triggering renegotiations under Article XXVIII of GATT. This was submitted in October 2017. However, it was almost immediately challenged by the large exporting countries, such as the US, Brazil, Australia and New Zealand.
I cannot overstress how critical this issue is to British agriculture and the nation’s consumers. It is revealing that so many glib answers are often proposed in the current impasse over Brexit. From a lack of information and knowledge, poor judgments are made, leading to a lack of appreciation of the consequences. I am sure I do not need to explain to the Minister the delicate balances in the market, where price volatility results from small changes in supply, quite irrespective of the huge discrepancies in tariffs under preferential treatment and other third countries that have allowed managed change to take place.
To give one example, Britain’s sheep exports, with large implications for the Welsh economy, comprise more than one-third of production, with almost all of it destined for Europe. This trade is virtually one-way, with minimal imports from the EU. Without agreement, and a smooth transition, tariffs to the EU would render this trade immediately uneconomic. The seriousness of the issue was underlined by a joint letter from the British Retail Consortium, signed by the chief executives of all the major supermarkets—Sainsbury’s, Asda, M&S and Waitrose, among others—only two days ago. The BRC stated that it wanted to maintain the same tariff-rate quotas. The wording of the amendment signifies that it is a probing amendment to ask the Government to provide some certainty in their answers to the challenges, and their approach to the future.
Amendment 54, in the name of the noble Lord, Lord Purvis, calls for a report to Parliament, and I look forward to the noble Lord’s remarks. The concern is that access to the home market—and, hence, the vibrancy and well-being of agriculture and the rural economy—will be sacrificed as a pawn in negotiations in rolling over trade deals to be ratified by third countries in the future, especially in relation to the interests of other industries. The Committee has already debated the fear that standards would also be under jeopardy. It is imperative that the UK Government continue to maintain the present TRQs. I beg to move.
Lord Purvis of Tweed
My Lords, Amendment 54 is in my name. As the noble Lord, Lord Grantchester, pointed out, the division of the tariff-rate quotas is of great importance to parts of the UK economy, especially the rural economy, but it is also important to our trading partners. Some likely trading partners when it comes to agriculture have already stated their concern about the agreement the UK and EU have reached.
I admit that this amendment was prepared with the expectation that there would be more than a month between the Act coming into force and exit day. That was a naive hope. I thought that the Government might have been able to have this legislation on the statute book long before, but with the delays that have occurred I admit that one month would be tight between the Act receiving Royal Assent and potential exit day. Nevertheless, the core element of the amendment, which seeks to get clarity on the UK’s position, is important. Clarity is sought in two areas: first, what our current position is regarding discussions with third countries about the division of the tariff-rate quotas; and, secondly, how the Government would consider the impact of these decisions on our economy.
As the noble Lord, Lord Grantchester, indicated, agreement was reached between the UK and the EU in 2017. He was right that that provoked immediate objections. The countries considered that the changes proposed by the EU and the UK for the division of the tariff-rate quotas amounted to more than simple rectification of the schedules. The European Parliament said in a report to its own committee that the changes had,
“involved less flexibility and market access for their exporters”.
Its stated objections to the EU-UK quota subdivision, saying that,
“other concessions should compensate for the loss of market access”.
These are the questions that the European Parliament is asking the Commission about what concessions there are likely to be. The questions the European Parliament is asking the Commission are ones that this Parliament should be asking our Government.
The expectation might be that we will want to trade on certified WTO schedules. As the Minister said previously, it is not necessary for us to trade under these, but they are desirable because they mean that the negotiations, on which concessions could be provided, are not ongoing, and that concessions have either been provided and then accepted and settled, or that there are ongoing negotiations in which we have to monitor what concessions are being offered to secure the prize of certification. My amendment asks for a report from the Government to be clear about what that position is.
As with the debate we had on the previous group, I was able to secure information about what had happened at the WTO market access committee in October, and the position of the other countries and of the EU. I was able to see the text of a Council regulation, EC32/2000—the proposal to modify the implementation of the tariff-rate quotas bound in the GATT. The discussions that took place between the Council and the European Parliament have been reported on. On 14 November the Parliament decided to enter into inter-institutional negotiations based on the Council’s report on its proposal. In none of that has it even been suggested that there could be a role for our Parliament in discussing with the Government the potential impacts of the concessions offered to secure approval for our TRQ division. The provisional agreement reached with the Council at the Parliament on 10 December to discuss what the European Union’s position would be is in stark contrast to this place, where there have been no equivalent proceedings with the British Government.
If we are not going to be involved as the European Parliament is on the European side, at the very least we need a report on what the likely impact will be after the Bill becomes an Act, if it does so. On that basis, I hope the Government will accept that we need much more information not only about the current standpoint but, similar to what the European Commission has provided to the European Parliament, on what the likely impact will be.
Baroness Byford (Con)
My Lords, I declare my family’s farming interests. I have read and reread the amendment of the noble Lord, Lord Grantchester. I have a couple of queries, so I have to ask whether he and my noble friend the Minister can help me.
My worry is this: the amendment would surely tie the UK Government to whatever the rate is at that moment and not look towards the future. There is no timeframe or limit on this, as far as I can see. My concern is whether this means that the negotiation would not allow for the improvement of the UK’s share in a particular agricultural tariff-rate quota. As a result, would the amendment close the door to meaningful discussions of recent changes to the UK share of a particular quota?
I heard what the noble Lord, Lord Grantchester, said. He is a great ambassador of long standing for standards and equality, and on fair trading for agricultural goods in general; I hope I am as well. He is quite right to raise the whole question of fair trade and the standards that are set for our producers. When we first discussed this last Monday—I think; I lose track of where we are at—we talked in great depth about the expectations of a product, how it is produced and the responsibilities and standards set.
I do not think I need to ask the Government to pay exceptional attention to the needs of the agricultural industry, but the noble Lord raises a very important point regarding sheep farmers in particular. Sheepmeat is not eaten as much in this country as it used to be, but it is exported widely. Trade with Europe is very important and I hope there will be trade beyond Europe, but I wondered whether he could explain the way the amendment is written, because I have apprehensions about it. Will my noble friend the Minister be able to explain? Maybe she does not share my slight concerns but I felt they were worth raising. The thrust of the amendment is right but I am not sure that the wording is.
Baroness McIntosh of Pickering
I congratulate the noble Lord, Lord Grantchester—on what I think might be his birthday—on moving the amendment. I repeat my concerns relating to the earlier group of amendments, not just for the hill farmers of Wales but for the hill farmers of the north of England, including North Yorkshire, County Durham and Northumbria, and Scotland, as well as other parts of the United Kingdom. The noble Lord raised his concerns in an interesting way but I have to echo my noble friend Lady Byford’s concerns, which she so ably addressed. It would be helpful for the Minister to explain whether our understanding is correct and what the relationship is between this amendment and the earlier tariffs we discussed, and whether, if we were to introduce the zero-rate tariff, this would equally be of concern with this amendment.
Lord Whitty (Lab)
My Lords, I would like to put in a brief word here. The noble Baroness, Lady Byford, will recall that, towards the end of the time when she and I were crossing swords on agricultural policy, the issue of agricultural trade multilaterally fell down in the Doha round precisely on this issue of tariff-rate quotas. The amendment of my noble friend Lord Grantchester—who was also present on those occasions—is a probing amendment to see how we are going to deal with the situation for imports.
Our exports, to which the noble Baronesses, Lady Byford and Lady McIntosh, referred, are also vitally important, but we need to have a line from the Government in relation to the existing tariff quotas for European imports with a number of our trading partners. It is not necessarily in the interests of those trading partners to preserve what is de facto the UK share of imports from them to the whole of the EU. Some of them are fly enough to actually notice that their bargaining position in relation to the UK on its own might be slightly greater than their bargaining position in relation to the EU as a whole. It is therefore not entirely surprising that, in these existing potential rollover treaties, there might be some attempt to change the amount of imports that the tariff quota allows into the UK. That itself, of course, is potentially a danger to our domestic production in many of these areas. However, assuming that it will be an easy task simply to roll over all of these existing EU-wide treaties is one of the features of the Government’s complacency.
Of course, the issue becomes even more important when rather bigger agricultural producers might actually be approached by us, or approach us, for a free trade agreement down the line, when their interests will undoubtedly be to press for very high import quotas— from Brazil, America or Australia—in any potential free trade agreement that we are seeking to make primarily on behalf of our manufacturing and service sectors. It might well be something on which we need to put down a marker now.
The Government might have some difficulty with the wording of my noble friend’s amendment, but we need to know what their position is on this. Otherwise, we will be presented with a whole series of treaties that incorporate the existing division, which might not be to our benefit and, more importantly, will set a precedent for how we are going to deal with future treaties and agricultural trade within that context.
Baroness Fairhead
My Lords, I thank the noble Lords, Lord Grantchester and Lord Purvis, for tabling Amendments 34 and 54 and for giving this House the opportunity to discuss this important area. I entirely agree with the concerns that have been raised, particularly on areas such as agricultural products, affecting farmers and rural areas, which were addressed by the noble Lord, Lord Grantchester, and my noble friends Lady Byford and Lady McIntosh. I would like to take these two amendments together, because there is a fair amount of overlap in the questions that each amendment raises. I would also like to do so in some detail, because they cover a very technical area and I hope that my clarification will help—that is the aim of what I am trying to do.
We have tariff-rate quotas both in the existing EU FTAs that we are working to roll over and in our WTO schedules. A different approach is required for each, which I am happy to explain. In doing so, I will also address each amendment first as it refers to the EU FTAs and then as it relates to the WTO TRQs. I will first address TRQs in EU free trade agreements. The EU has been clear that it will not revise its free trade agreements with third countries as a result of the UK exiting the EU. This is because usage of those quotas tends to be low. The UK is therefore engaging directly with our trading partners to agree new TRQs to apply under the continuity agreements, and we are making good progress. We are agreeing TRQs for the same products at levels that protect existing trade flows. We will continue to report fully to Parliament on the TRQs agreed as part of our Clauses 3 and 5 reports on changes to the agreements. Amendment 34 would therefore be impossible to implement in respect of EU FTAs, as there is no division with the EU to refer back to.
On Amendment 54, as I mentioned, the Government have already committed to lay before Parliament for each transitional FTA a report that sets out any substantial changes to trade-related matters. These reports will include details of changes to the TRQs. Let me assure noble Lords that the reports will also include an indication of the impacts associated with the changes to the TRQs. However, we would not expect there to be substantial business impacts from changes to TRQs, as we are maintaining TRQs for the same products sized at a level which protects existing trade flows.
On the EU Council decision relating to the modification of TRQs, to which the noble Lord, Lord Purvis, referred, I am happy to write to the noble Lord on that point and I will put a letter in the Library.
I turn now to the TRQs found in our WTO schedules. Here, the Government have taken quite a number of steps, and in addressing these amendments I believe it would be of value to noble Lords if I walked through them. To prepare to leave the EU, the United Kingdom has had to establish its own schedules of goods and services at the WTO. In doing so, we have taken the approach that we should maintain our current obligations as far as possible. This was announced to both Houses through Written Ministerial Statements on 5 December 2016. While much of our goods schedule is directly replicable—for example, our bound tariff rates—some parts, such as tariff-rate quotas, are not. Quotas are not directly replicable because they are a quantity coming into the EU 28, as your Lordships will know, and if they were exactly replicated this would lead to an expansion of market access into both the EU and the UK. This is why the Government agreed a co-operative approach with the EU to apportion WTO tariff-rate quotas, based on historic trade flows. This was agreed in October 2017 and communicated publicly through a joint letter by the UK and EU ambassadors to the WTO.
The UK schedule was finalised in July 2018. We sent it to the WTO on 19 July, and once again both Houses were informed through Written Ministerial Statements. Our schedule then began its formal three-month certification period on 24 July. That period was completed on 24 October. While most WTO members agreed with our approach, as I and the Secretary of State for International Trade once again explained through Written Ministerial Statements laid on 25 October, some WTO members have argued that their market access has been reduced by our approach to TRQs. This is why we announced the Government’s intention to enter GATT Article XXVIII negotiations on TRQs at the WTO to establish whether the apportionment we have proposed is a fair representation of the UK’s current rights and obligations.
Between October and 21 December, when the Government formally launched the Article XXVIII process, work was completed to prepare the necessary trade data and the notification for our Article XXVIII process to begin. We are now in the first phase of this, a 90-day notification period that lasts until 21 March 2019, during which WTO members can examine our TRQ trade data and register an interest in negotiating with us. After this, the UK will examine those claims and determine with whom and on which commodities we will be negotiating under Article XXVIII.
I should also mention briefly the EU’s corresponding transition at the WTO. The EU has launched its own Article XXVIII process, as it, of course, apportioned the EU 28 TRQs with the United Kingdom. It formally started this on 22 July 2018. The reason it was able to do so before the UK is because it did not have to establish a new schedule of its own. Our process and that of the EU are legally distinct and are being pursued separately. However, they are linked in that they derive from the same initial obligation, and WTO partners will need to be convinced that their access to the EU 27 and UK markets will be no less favourable once both processes are complete. So our processes are separate but complementary.
Lord Purvis of Tweed
The Minister has been exceptionally helpful and very clear, but I hope she will be able to address one question. If we leave without an agreement with the EU and this process of negotiation is under way, what will bind us to have the same position as the EU when it comes to what is being queried: namely, the methodology of the division of the timeframe and the statistics? It seems that if we leave without an agreement, there is no mechanism whereby we can consistently have the same position as the EU. At the moment, we have the same interest because of the agreement signed, but that is not a binding agreement that we have with the EU going forward. What, then, would link us to ensure that we have the same position? If that is not in place, a third country, quite rightly, would have doubts as to whether the EU position would be the same as that of the UK, and vice versa.
Baroness Fairhead
My understanding—again, I will write to the noble Lord if this is not the case—is that the apportionment approach that was being used is utterly within WTO provisions and normal practice. The WTO laws will dictate how that process works and, therefore, as I said, the EU is pursuing its own Article XXVIII and we are pursuing ours; they are separate legally but obviously complementary. On the noble Lord’s specific question about what else oversees that, I think it is more the WTO, but if that is incorrect, I will write to him.
Lord Purvis of Tweed
I am grateful for that, and the Minister is helpful. That leads on to my next point, which is that the countries themselves have said that other concessions could compensate for the loss of market access. Negotiations are therefore, by definition, discussions about whether the UK and the EU continue to hold to their agreement or whether other compensation concessions could be offered. My question applies similarly to that. At the moment, we have a united position with the European Union. If we leave without an agreement, nothing is in place to ensure that concessions that could be offered to compensate for the loss of market access will be united between the UK and the EU. That raises questions about whether, when it comes to the discussions with third countries, they will seek different concessions from the UK. That opens up the whole issue that we are fearful about: will we offer different concessions to other countries which would potentially have a negative impact on our own industry?
Baroness Fairhead
I said that I will write to the noble Lord. I tried to address that in my first answer, and this is an inevitable follow-on question from that, should my answer not have been correct. However, they are two separate legal processes.
Baroness Kramer
The Minister has been tolerant. Perhaps I lack all the understanding I should have in this area, but my understanding is that, to be effectively a member of the WTO, it is necessary that the schedules are approved by all the existing members—the Minister can correct me if that is wrong. There can be temporary permissions when one is progressing along a path, but in effect any member country has a veto, and that does not have to have a reasoned basis. If any country felt that these new arrangements—the split of the tariff-free quotas, if you like, that was on offer to them—was not fair, it could not only argue that the arrangements were unfair but could simply say, “I don’t like this. Give me something better. And if you don’t give me something better, I’m not going to sign off on your schedule”. That means that we are then hampered in functioning, even on WTO rules. Can the Minister help me with that relationship?
Baroness Fairhead
I will try. First, the UK is already a member of the WTO; it was a founder member and it is a member. When its schedules have been lodged, they become the schedules, and even if they are not certified, we can continue to operate on that schedule. I committed to respond to the noble Lord, Lord Purvis, following a conversation we had following some press reports about certification and whether one country could operate; I have the draft of the letter and am about to sign it, and again, I will put a copy of that in the Library. It is clear that a country can operate on an uncertified schedule; indeed, the EU 28 are currently operating on a schedule which is not an EU 28 schedule. All that is set out in detail in this letter, which I hope will provide satisfaction.
Having now laid before your Lordships the steps the Government have taken at the WTO, I turn again to Amendments 34 and 54. We have made our proposed apportionment of WTO TRQs on the basis of the best data available to us regarding recent patterns of trade in the relevant products, so that any apportionment does not distort existing trade patterns. However, we have always said that, should trading partners have alternative data, we would be prepared to examine that in order not to distort trade flows in these commodities. If allowed, Amendment 34 would prevent us doing this, and, in doing so, would undermine one of the UK’s obligations to our WTO partners at the moment when we are re-establishing and reasserting ourselves as an independent member of the WTO.
Amendment 54 requests a report detailing our progress on GATT Article XXVIII negotiations. I trust that the Government’s frequent updates on our WTO transition reassure this House that the Government are committed to keeping Parliament informed at every stage of this process. We will continue to update Parliament as we progress and complete our Article XXVIII process.
The report in Amendment 54 also requests an assessment of whether the objections raised by other countries that gave rise to our Article XXVIII negotiations affect the UK’s ability to trade on our goods schedule after we leave the EU. I hope that I addressed that in my previous answer to the noble Baroness, Lady Kramer. We will be able to use and base our trade policy upon our goods and services schedules even if they remain uncertified at the point they become operational—whether that be after the conclusion of the implementation period or in a no-deal scenario in April 2019. We are also able to negotiate, sign, ratify and bring into force trade agreements with uncertified WTO schedules. This situation is not without precedent. Indeed, the EU has done precisely this for years while signing several trade agreements, including with Canada and Japan.
Given the broader work already in train, the impact these amendments may have on that and the Statements that the Government have made and will continue to make throughout our trade policy transitions, I ask that these amendments be withdrawn.
Lord Grantchester
My Lords, I thank the Minister for her answers and explanations. Once again, I am grateful to the Committee for allowing me to come forward with this probing amendment to understand better the processes and procedures that the Government are currently undertaking. They will be of great importance to large sections of our economy. They were put forward in the context of continuity—very much, as the noble Baroness said, of rolling forward existing trade flows. Hence, I was very happy to take questioning and probing from the noble Baronesses, Lady Byford and Lady McIntosh, on the amendment’s meaning. The answer is that I wanted to get the subject matter down for debate and to understand it better—and, indeed, to underline the difficulties of the word “improvement”, which the noble Baroness, Lady Byford, used for how we might want to change things and go forward. Obviously, improvement means different things to different stakeholders in the process.
I am very grateful to my noble friend Lord Whitty for explaining the background so comprehensively. What is really referred to is market access. Does improvement mean better market access, and for whom? How does this affect other stakeholders and the balance of interests between the countryside, the food chain and consumer interest and consumer prices? I was not really coming from the angle of an importer or an exporter, but I wanted to have the issue debated. The Minister has provided a lot of background interest and information that will certainly take a lot of reading and reflection.
Finally, the process outcome still seems far from clear. We will be talking about the apportionment that can result from it and how this may still give rise to anxieties and the balancing of those interests. Having made those remarks, I am very grateful to the noble Lords and noble Baronesses who have taken part in this little debate. I beg leave to withdraw my amendment.
Lord Grantchester
“Internal energy market
It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement which enables the United Kingdom to fully participate after exit day in the European Internal Energy Market.”
Lord Grantchester
My Lords, Amendment 35 seeks to set the objective that the UK should fully participate in the European internal market after exit from the EU. This wording may also need to be examined. However, it is once again merely a probing amendment to enable the Government to provide more clarity on their intentions in the Bill and in future scenarios. Full participation may be said to imply continued membership in the internal energy market. While the Government have now been clear that leaving the EU will also include leaving Euratom, they took some time to explain what the close relationship with Euratom would mean. We now know that it means full duplication of regulations and regimes. However, what is the situation regarding the internal energy market, and—turning to Amendment 36—how does this outcome bear on the internal all-Ireland energy market?
Once again, an industry is calling out for clarity over trading arrangements as the UK leaves the EU. In the event of no deal, the outcomes become even more precarious and pose risks to the functioning of the UK energy market. Energy and climate should be among the first topics covered in negotiations to preserve security of supply and aid completion of the modernisation of the UK’s energy system, which requires tens of billions of pounds in investment in a smart power grid, low-carbon transport and heating to underpin the competitiveness of all UK business. Electricity and gas cross-border trading is an increasingly important part of efficient markets. Net imports of electricity accounted for 4% of the UK’s power supply in 2017 and 47% of gas arrives via pipelines from Europe. Increased interconnection and a proposed doubling of these connectors with neighbouring markets are planned—for example, from Peterhead—and will help balance the security of power supplies.
I am grateful to my noble friend Lord McNicol for tabling his Amendment 36, to which I am also speaking in this group. It draws attention to the challenges posed by the integration of the island of Ireland’s single electricity market. Also included in this group is Amendment 46, which proposes that there should be no hard border between Northern Ireland and the Irish Republic. Will the UK continue to participate through membership of the internal market to avoid disruption across both Ireland and the UK and maintain a low-cost, efficient power supply through integrated systems under common international environment laws? Losing access could lead to higher bills for consumers and potential disruptive effects, and raise critical issues regarding the EU emissions trading scheme. It is important that the Government provide clarity. I beg to move.
Lord Purvis of Tweed
I am not speaking on behalf of my noble friend Lord Teverson, the absolute expert on these Benches on these issues, but simply to ask a number of questions in support of those raised by the noble Lord, Lord Grantchester. He rightly points out that one of the core relationships that currently exists between Britain and Northern Ireland, and the United Kingdom and the Republic of Ireland, is energy. It is something that has perhaps not had the same profile or publicity as border checks, but it is very significant to consumers on both sides of the Irish Sea. It is of interest to me, as someone who represented a Scottish Borders constituency, that Northern Ireland’s security of electricity supply depends on the supply of natural gas from Moffat, which is just outside my former constituency and supplies 100% of its gas requirements. After the UK’s exit from the EU, Northern Ireland will continue to source 100% of its gas from Great Britain. As a consequence, the integration of the energy market for the Republic of Ireland and Northern Ireland now depends on an integrated single electricity market. The interconnectedness of energy is something that political agreements will have great difficulty disentangling. The request for clarity on the current position is very important. It is even more important given that there is now a real prospect of leaving the European Union with no agreement. The Government have said in their position paper on Northern Ireland and Ireland that,
“the new framework relevant to the energy market in Northern Ireland and Ireland should … facilitate the continuation of a single electricity market covering Northern Ireland and Ireland”.
But how this is to be done separate from the European Union raises significant questions. I hope the Minister is able to respond to this.
The evidence provided by Minister Richard Harrington to the Lords committee is interesting. He said:
“Whether we are in the EU or not in the EU, it is in the interests of both Northern Ireland and the Republic of Ireland to continue a shared electricity system … We are held up in sorting this out only by the progress of the general talks in Europe”.
The question mark over where we currently are with these general talks in Europe means that it is urgent that we have clarity on the current position on securing agreement on a shared electricity system. The real question in leaving without an agreement with the EU is whether that raises issues with regard to maintaining the single internal energy market.
The final point on which I ask for clarification from the Minister is that it is not just the operation of the market on a regulatory basis that is of importance. The market operates primarily because of the free movement of people and professionals and the regulatory systems that surround it. We also know that when it comes to the operation of the market there is the jurisdiction of the European Court of Justice. What is the Government’s position on the jurisdiction of the legal supervision of how such integrated electricity markets will operate?
Free movement of people and clarity on jurisdiction are core elements of why we believe that moving from the European single market will cause real damage. The integrated single electricity market is a case study in itself in how it operates effectively at the moment and why question marks over its future need to be addressed. Clarity, as sought by the amendment, is necessary. I hope we can secure it from the Minister’s response.
Lord Hain (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Purvis, who made some important points about the energy market, especially on the island of Ireland.
Amendment 46 is consistent with the provision of the EU withdrawal Act after a near-identical amendment passed by your Lordships’ House was accepted by the Government last summer. The central purpose of the UK’s, Ireland’s and the EU’s shared objective of avoiding a hard border is to protect the hard-won peace and reconciliation. That peace process was begun by the Good Friday agreement of 1998 but is still just that: a process—which is now, I think, sadly in reverse. Although it would be wrong to overstate the link between that and recent dissident IRA activity, specifically the car bomb in Derry/Londonderry, it does demonstrate the willingness of paramilitaries to exploit the current Brexit uncertainty and devolved government limbo to undermine the fragile peace, as the noble Lord, Lord Empey, said last week in this House.
The border is often described as the Irish border. It is not just that: is the UK’s land border with Ireland and the EU. Therefore, it is our responsibility as much as it is Ireland’s and the EU’s. Some 110 million person crossings take place over the border every year. Northern Ireland, with a population of 1.8 million, exports £3.4 billion over the border. It is by far its biggest export destination outside the UK and the first export destination for new and growing enterprises. At least 5,000 Northern Ireland companies, and probably many more, trade with their neighbours over the border. Tens of thousands of people live on one side and work on the other. Supply chains operate across the border without impediment. For instance, each year, more than 400,000 lambs and 750 million litres of milk are exported from Northern Ireland to Ireland for processing; 4.6 million heavy goods vehicles and light vans cross the border every year, along with 22 million cars. These crossings take place all along a 300-mile border with 300 crossing points.
A little-noticed document published on 7 December by the Department for Exiting the European Union lists no less than 157 different areas of cross-border work and co-operation on the island of Ireland, many of which have been facilitated by Ireland and the UK’s common membership of the EU. Almost every one of those areas concerns people’s everyday lives, and almost all are linked to the European Union and Ireland’s and the UK’s common membership of it since 1973.
Life has become pretty normal for most people in Northern Ireland over the past 20 years or so. Like anyone else in the UK, people there go to jobs near to them or in the next town. They go to doctors, chemists and hospitals near to them. They buy local fresh food. They use trains, buses and roads to get around.
The difference is that for many in Northern Ireland, the next town can be in a different jurisdiction. If we get Brexit wrong, it will cause serious inconvenience and cost. But for British and Irish citizens living in Northern Ireland, getting Brexit wrong will bring immediate and harsh consequences; many aspects of normal life will be much harder or even impossible. People live on one side of the border and work on the other. Because of EU rules that the UK helped to make, cancer care and ambulance services are run jointly across that border. You can get a prescription on one side and medicines on the other because of more EU rules that we share. Cheaper energy and more choice across the island of Ireland again exist thanks to those common EU rules. Cross-border work and co-operation on the island of Ireland, facilitated by EU laws, covers livestock movement on farms straddling the border, food safety, tourism, schools, colleges, farming, fighting crime, tackling environmental pollution, water quality and supply, waste management, GPs, blood transfusions, bus services, train services, gas supply, electricity supply and so on.
All those things add up to making life feel normal after, just 20 years ago, the Good Friday agreement all but finished the violence and murder which killed thousands of people, including many in Britain. The border being invisible today is a big part of that peace process and we must not let Northern Ireland go backwards by putting up any new barriers.
It is those very low-level, ordinary aspects of daily life that are the real signs of the precious achievement of the peace process. Although I strongly reject the Prime Minister’s deal, I cannot and will not join those attacking what is known as the Irish backstop. Any Brexit deal of any kind must include this insurance policy or backstop. It is an insurance policy: a rainy-day back-up plan in the event that a new UK-EU trade deal is not ready by the end of 2020—or beyond. It is a sensible policy to be used only if needed—and everyone hopes it will not be—to ensure that the border between Northern Ireland and Ireland remains open and invisible.
It is not just that Ireland and the EU will not accept it any other way; nor should we in the UK. Whatever happens with Brexit, it is vital we protect what we have achieved together in Northern Ireland in the past 20 to 30 years and avoid any hardening of the border in any way. I call on our fellow politicians to stop playing politics with Northern Ireland, as so tragically happened in the House of Commons yesterday, and insist on an insurance policy regarding the border. We should also demand an end to attacks on the Irish Government, who, in insisting on the backstop, are merely fulfilling their obligations under the Good Friday agreement, as we in the UK should also be doing.
The UK and Irish Governments, along with the EU, were right to prioritise the Irish border in the Brexit negotiations. Your Lordships’ House has rightly focused on it too, not least because the blunt truth is that maintaining an open border always was the Achilles heel of a hard or no-deal Brexit.
Experts argue that there are four key ingredients for successful border management: first, trust and co-operation between authorities and agencies on both sides; secondly, the harmonisation of these agencies’ approaches; thirdly, the application of common standards to minimise the need for checks and controls in the first place; and, fourthly, the use of technology to improve efficiency. Those arguing that technology can solve all the Irish border Brexit problems are plain wrong. It may help, but whether a border is frictionless depends on the rules being applied to movement across it being the same either side—it is the rules themselves, not so much the means used to facilitate enforcement of those rules. Yet Brexiteers seem unwilling to acknowledge that leaving means a growing divergence of the rules on either side of the border. Their conundrum is that divergence is something they favour to build their free-trade, deregulated, low-tax nirvana— fantasy, I think—otherwise, they argue, what is the point of Brexiting?
The UK and Ireland have their common—I stress, common—obligations under the Good Friday agreement to ensure peace, stability and progress. The agreement contains two approaches to this that directly affect the border: intensification of British-Irish and north-south co-operation, and de-securitisation. De-securitisation meant not only the removal of security installations but the British Government’s commitment to bringing about measures appropriate to and compatible with a normal, peaceful society. The last remnants of the militarised border were removed only 12 years ago.
It is simply no good politicians or commentators saying, “Nobody wants a hard border so there won’t be one”. There will be if we do not stop it, because if we Brexit without a deal or without a backstop, both Ireland and the EU will have responsibilities to ensure protection of the single market and customs union. The UK will have its own responsibilities, including meeting World Trade Organization requirements, which in turn mean a hard border.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, I need to manage noble Lords’ expectations as to what I am going to be able to say. The noble Lord, Lord Hain, has given a polemic based on his deeply held views on the situation in Northern Ireland, born of great experience and service. I do not think I will be able to persuade him on this issue and Amendment 46, so he will doubtless come back to it on Report. I will, however, put some important points on the record regarding where, as of today, Her Majesty’s Government stand on these crucial issues.
The noble Lord, Lord Grantchester, talked about the internal energy market. Again, I have to be careful: I am not able to give him an answer at this stage, beyond that set out in the political declaration. I know he has read that carefully, along with the explanatory note; section XI deals with energy co-operation.
Let me first put some comments on the record about the nature of the internal energy market, and then I will turn to the single energy market and north-south co-operation, addressed by the noble Lord, Lord Purvis. The Government continue to support the development of energy interconnectors—which bring benefits to countries at both ends of the cables, including improved security of supply and the lowering of prices for businesses and consumers—and support efforts to decarbonise. That is why we set out in the political declaration that both the UK and the EU should co-operate to support the delivery of cost-efficient, clean and secure supplies of energy and gas, and to ensure as far as possible that efficient trading over our interconnectors continues. Our aim is to secure the best possible future arrangements for trade in energy, and which achieve the objectives set out in the declaration, to which I referred.
On the effect of the shared wholesale market, the all-Ireland single electricity market provides significant benefits to consumers and the economy in both Northern Ireland and Ireland, as the noble Lords, Lord Purvis and Lord Hain, alluded to. It is also an example of north-south co-operation on the island of Ireland. The Government are firmly committed to facilitating the continuation of a single electricity market in any EU exit scenario. The agreement reached on the single electricity market annexe, as part of the Northern Ireland and Ireland Protocol to the withdrawal agreement, should ensure that the SEM is maintained. We also expect to reach an agreement with the EU on a future economic partnership that will maintain the SEM without engaging the backstop. As set out in a technical note on electricity trading, published in October 2018, which the noble Lord, Lord Purvis, referred to, we will take all possible measures to maintain the SEM in the event that we are unable to reach an agreement. Even in this scenario, which I stress—
Lord Purvis of Tweed
Perhaps I might add some clarification. The Minister has just said that not all of the Northern Ireland protocol is now up for renegotiation—as the Commons have voted for—only part of it. He said that the energy component of it is going to carry on. So which parts of the backstop are being renegotiated and which parts are not?
Lord Bates
I have been on the Front Bench long enough to see a curveball lumbering down the crease. If the noble Lord will forgive me for not taking a swing at it, at such a delicate time, I do that in all seriousness because I want to get the wording precisely right in relation to this. The noble Lord has heard the remarks that I made in relation to the annexe to the Northern Ireland protocol, and that is the position. If we have more to say, I will certainly say that ahead of Report, but even in the worst scenario—
Lord Purvis of Tweed
I did not intend to bowl a curveball or even a googly—or anything. It was a genuine point. The Government’s position now is that they are seeking to renegotiate the whole protocol, commonly known as the backstop. If that is not the case, Parliament needs to know, because we understand that the Government are now seeking a renegotiation of part of the agreement. We know that the European Commission has said that this is not up for renegotiation. If the Government are telling the Committee that only part of it is being renegotiated, that is really significant, because at the moment we understand that the whole element is being renegotiated.
Lord Bates
I am happy to put some additional comments on the record for the noble Lord, in that spirit. Last night, the majority of MPs said that they would support a deal with changes to the backstop, combined with measures to address concerns over Parliament’s role in the negotiation of the future partnership relationship, and commitments on workers’ rights. We will now take this mandate forward and seek to obtain legally binding changes to the withdrawal agreement that deal with concerns on the backstop while guaranteeing no return to a hard border between Northern Ireland and Ireland. We are keen to work with the Government of Ireland to ensure that the SEM will continue in any scenario, and welcomed their statement in December that they were engaging intensively with the EU to ensure that the single electricity market would continue. I hope that this provides some reassurance.
On the point made by the noble Lord, Lord Hain, we have been consistent in our commitment to avoiding a hard border between Northern Ireland and Ireland, upholding the Good Friday agreement and maintaining the conditions for north-south co-operation. We are delivering on those commitments. We negotiated a withdrawal agreement that delivered on those commitments in good faith; we have worked hard to build support for it in Parliament over many months. It was clear to the Prime Minister, having met parliamentarians from all parties, that a change to the backstop would be necessary to get the agreement through. The Prime Minister was clear that there are a number of ways to do that and that she will work with colleagues from all parties, and with the EU, to secure changes that command the support of Parliament. Although the Government will seek to secure legal changes to the backstop, their commitment to avoiding a hard border and maintaining the necessary conditions for north-south co-operation remains undiminished.
In a paper published earlier this month, the Government set out their commitments to Northern Ireland, including: a legal guarantee that the backstop could not be used to alter the scope of north/south co-operation; a role for a restored Northern Ireland Executive in UK-EU discussions, through the Joint Ministerial Committee, on matters concerning Northern Ireland; a commitment to seek the agreement of a restored Northern Ireland Assembly before new areas of EU law could be added to the protocol; and a legal guarantee that Northern Ireland businesses will continue to enjoy unfettered access to the entire UK market.
Let me be clear: the Government are committed to ensuring that any arrangements to avoid a hard border on the island of Ireland respect the devolution settlement in Northern Ireland. The UK recognises our unique relationship with Ireland. The UK-Ireland relationship should continue to operate through the well-established three-stranded approach set out in the Good Friday agreement. At this stage, I am unable to add to the remarks I have already put on the record, but I thank noble Lords for the opportunity to make them. I know that we will come back to this issue on Report, but in the meantime I hope that the noble Lord will feel able to withdraw his amendment.
Lord Grantchester
I am grateful to all noble Lords who have contributed to the debate. As the Minister said, this issue relates not only to the energy market but to crucial aspects of the UK border on the island of Ireland, as spoken to by my noble friend Lord Hain, whom I thank for his remarks.
Returning to the amendments on energy, I am sure that co-operation between industries from member states will continue on a practical basis, but against the challenges of modernisation with low-carbon energy, a clear commitment from the Government could settle the issue. Interconnectors are not the only relevant things here, as the internal energy market provides challenges to the Government on other aspects, such as continued participation in the EU emissions trading system. I note that the Minister was most careful with his words, which the Committee will study with interest. I beg leave to withdraw the amendment.
Mental Health: Children and Young People
(5 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Tyler of Enfield
To ask Her Majesty’s Government what assessment they have made of the recent concerns expressed by general practitioners that children and young people with mental health problems are unable to access National Health Service treatments; and what steps they will take to address them.
Baroness Tyler of Enfield (LD)
My Lords, there is a growing consensus that children’s mental health services need to improve radically to address the ever-increasing incidence of children’s poor mental health. This matters because poor mental health during childhood shapes the rest of our lives: over half of lifelong mental ill health starts before the age of 14, and three-quarters by the age of 24.
As has been widely chronicled, mental health problems among children are on the rise. Recent data from NHS Digital show that: the prevalence of mental health disorders among five to 15 year-olds has risen from one in 10 in 2004 to one in nine in 2017; two-thirds of five to 19 year-olds with a mental disorder had contact with a professional in the past year because of worries about mental health, but only a quarter had contact with a mental health specialist; and the number of referrals to specialist children’s mental health services has increased by 26% in the past five years.
Many of these children receive treatment far too late or, in many cases, not at all. According to a recent report by the University of Birmingham’s Mental Health Policy Commission, the average wait for children between their first symptoms developing and being able to access support is 10 years. Following referral, the Children’s Society estimates that young people wait an average of 58 days until they are assessed, then a further 41 days until they begin treatment, although waiting times vary significantly across the country.
In a recent survey, 1,000 GPs expressed their concerns about access to children’s mental health services. It found that 78% of GPs were worried that too few of their young patients would get treatment for mental ill health, and a staggering 99% of them feared that under-18s would come to harm as a direct result of these delays in care. These concerns are not limited to GPs. According to a YoungMinds survey of more than 2,000 parents and carers, three-quarters of them said that their child’s mental health had deteriorated while they were waiting for support from CAMHS. Despite the clear need for alternative forms of support during this waiting time, such as peer support or drop-in facilities, two-thirds said that neither they nor their child had been signposted towards any other sources of support. It is hardly surprisingly, therefore, that a PAC inquiry published earlier this month concluded that most young people with a mental health condition did not get the NHS treatment they needed, and that this will be the case for years to come while many face unacceptably long waits. I make no apology for starting this debate with rather a lot of statistics because it is vital that the severity of the situation is laid bare.
As well as battling long waiting times, many children get lost in the gap between primary care and child and adolescent mental health services. The children who need these services are often too ill to be dealt with by primary care but not ill enough for CAMHS. Many GPs end up referring patients to CAMHS despite knowing that they will be rejected, but knowing that they need more support. According to the British Association for Counselling and Psychotherapy, as many as one in four children were rejected for treatment last year. Of utmost concern, the children and young people rejected as “not ill enough” for CAMHS include young people who have self-harmed and others who have experienced abuse.
For many of these children, the only way to access the care they need is for their mental health to deteriorate to crisis point or for them to turn to private care. In fact, almost two-fifths of GPs surveyed said that they would recommend patients whose families can afford it to go private. It is completely unacceptable that we have such a growing divide between those who can pay for treatment and others who are left waiting. Seventy years after the creation of the NHS, families should not be forced to pay for the mental health care that their children so desperately need.
The problem is indeed stark but what is to be done? There is a lot to welcome in the NHS Long Term Plan. For example, the new commitment that funding for children and young people’s mental health services will grow faster than overall NHS funding is clearly a step in the right direction. However, the plan remains silent about the current thresholds that need to be met by children presenting with mental health problems. Although I welcome the commitments in the plan that 100% of children and young people needing specialist mental health care will be able to access it in the coming decade—a far more ambitious target than the 35% access-to-treatment target in the Five Year Forward View—the reality is that only three in 10 currently receive NHS-funded treatment. There is a very long way to go. My overriding point today is: where is the money and the workforce coming from to achieve the 100% target? There are huge challenges in ensuring that funding reaches the front line to enable these ambitious targets to be met amid continuing staff shortages and cuts to children’s social care.
In summing up the debate, can the Minister set out what steps the Government are taking to ensure that they meet the 10-year target for 100% of children and young people who need specialist mental health care to be able to access it? Can she also outline how progress towards the 10-year target will be measured and reported to Parliament? Indeed, I call on the Government today to ensure that this should take place at least annually. Will the Minister also commit to a timetable for introducing the proposed new four-week waiting times for CAMHS services nationally and an implementation plan to ensure that these new waiting times do not result in threshold increases?
The NHS Long Term Plan pledges that children and young people experiencing a mental health crisis will be able to access the support they need. This is welcome since the lack of children’s crisis care is of escalating concern. A survey of emergency departments carried out by the Royal College of Emergency Medicine showed that only a third had specialist CAMHS services available in the evening and only 27% had such services available on weekends. The lack of services means that, according to a recent “Panorama” programme, 1.5 million children live in an area without access to 24-hour crisis care. This is totally unacceptable. As with physical health, mental health problems occur at all times of the day and night, including at the weekends. The plan includes a new crisis hotline delivered through NHS 111, training for ambulance staff and other provisions such as sanctuaries and crisis cafés. However, it is not clear whether these commitments will be extended to all children and young people and whether they will be part of, or separate from, adult services. Could the Minister clarify these arrangements in her reply?
We all know that workforce is a huge constraint on progress. The recent Public Accounts Committee report found little change in overall mental health workforce numbers since Future in Mind was published in March 2015. According to a recent National Audit Office report, slow progress on workforce expansion is emerging as a major risk to delivering the Government’s ambitions for children’s mental health services. To make the NHS Long Term Plan a reality, the NHS will need to both recruit and retain more staff, attract returners to the profession, offer rewarding jobs and a more supportive culture, and look at job redesign. This is particularly pressing given that the number of child and adolescent psychiatrists working in the NHS in England has fallen by some 6% in four years. Of course, with Brexit looming, the prospect of finding the more than 23,000 additional staff needed to treat all young people with mental health problems seems very unlikely.
Alongside supporting children with pressing mental health problems, it is essential that we take a preventive approach. Schools clearly have a key role to play in this. The Government’s Green Paper, which was published over a year ago, seeks to increase the support available within schools through new mental health support teams and a designated senior lead for mental health in each school. As the Commons Education Select Committee and Health Select Committee concluded last May, while laudable, these plans lack ambition and the very lengthy implementation, rolling out only to up to a quarter of the country by the end of 2023, will leave hundreds of thousands of children unable to benefit from the proposals for years to come.
The Mental Health Policy Commission at the University of Birmingham has found that children with high resilience are half as likely to have a diagnosable mental health condition and concluded that early intervention schemes are greatly cost effective. There are many other early intervention approaches which have not been the primary focus of this debate, such as the importance of counselling in schools and other community settings, peer support schemes and open access drop-in mental health hubs with no waiting lists of the kind being piloted in some areas, often by the voluntary sector, which can help to prevent problems escalating to the point where specialist mental health treatment is needed.
I call on the Government to ring-fence the new money announced for mental health in the NHS Long Term Plan, so that the much-needed investment in mental health services actually reaches the front line. I also call for this to be monitored by the introduction of a strengthened mental health investment standard for children, with sanctions imposed on those clinical commissioning groups which fail to meet the standard without a valid reason. I greatly look forward to hearing the speeches of other noble Lords, who I know will have much to contribute to this debate.
Baroness Chisholm of Owlpen (Con)
My Lords, I thank the noble Baroness, Lady Tyler, for initiating this debate because it is such an important issue, as there seems to be an epidemic of mental health problems among young people. It is impossible to read or watch the media without seeing and hearing of mental health issues among this group. There are many reasons for the increase, including poverty, neglect, stress, bullying, poor physical health, social media and trauma.
Most children attend primary care. Children in the UK see their GP probably on average once a year, usually even more often. GPs have an understanding of the context of the issues of the families on their books and they are in a strong position to discover childhood mental health problems, but there are barriers which more often than not make this a difficult process. Parents may not realise that their child has a problem. Their attendance to see the GP may be for a physical health reason and, as an appointment usually lasts for only nine minutes, it is clearly difficult for the primary care specialist to get a clear picture in that time. GP recognition is the key step in assessing specialist services. Indeed, GPs are the main referrers to specialist services and failure to detect disorders may delay effective interventions. Parental perceptions of problems play an important role. Their awareness of a possible mental health issue is then relayed to the GP, which is a great advantage, and we know that GPs’ recognition of a mental health problem increases when parents express concern. There is a need for an awareness campaign for parents on the signs of possible mental health issues, along with increased training for healthcare professionals.
The majority of mental health issues start in childhood so early identification has not only a financial benefit but, much more importantly, the quality of life for the sufferer is substantially increased. Once an issue has been picked up there are gaps between mental health and childcare services creating a barrier for effective help for both children and parents. Services are patchy, with no access to psychiatrists and long waiting lists for CBT and counselling. There is a need for a community psychiatric nurse and a social worker in every practice along with an accessible community psychiatrist. There is a requirement for a joined-up approach between the department of health and the Department for Education, where career guidance at schools and colleges can be given to encourage students to go into these professions. Specialist training for GPs to identify problems, along with an expansion of primary care-based mental health services, would clearly relieve the pressure on GPs.
I can only touch on social media, but the Secretary of State issued an urgent warning on the potential dangers. They cannot be blamed for all mental health problems, but the platforms have a responsibility to sort themselves out along with an awareness campaign for parents on the dangers, signs of problems and safe use. Technology can be a force for good but how many more young people must be harmed or die before we get a grip on the problem?
I welcome the Government’s plans for new mental health support teams over the next five years working in schools and colleges, bringing early intervention opportunities along with better information and data sharing. I also welcome the fact that spending on children and young people’s mental health must increase as a percentage of CCGs’ overall mental health spend.
As mental health teams are rolled out, we need co-ordination with the child health workforce to avoid replication of the existing fragmentation, along with an increased frequency of data capture and improved transitions from children’s services to those for young adults. In the end it comes down to more highly trained professionals on the ground, joined-up thinking with the Treasury, the department of health and the Department for Education, leading to more students training in the required professions. That in turn requires financial backing to make sure that training places are available in all areas of the country. I have run out of time.
Baroness Massey of Darwen (Lab)
My Lords, I thank the noble Baroness, Lady Tyler of Enfield, for initiating this debate. Her concern for the health and well-being of children and young people is well known, and her speech today has confirmed that concern.
I share the anxieties of GPs, many of whom are struggling to help young people in the face of extraordinary stresses. Also under stress are services—not only youth services but health, education, social services and the police—and here lies the problem. Young people’s mental health is rarely sudden or one-dimensional. Mental health issues are embedded in experiences such as poverty and from their contacts with parents, families, friends, education, youth services, the police and health. Youth services are disappearing, while many schools are focusing less on activities such as sport, music and art as more are driven by an academic curriculum which places students under stress. This is an issue recently raised by the chief inspector of Ofsted. Of course GPs and other services are under pressure. Will the Minister agree that child mental health is the responsibility of a number of agencies and that those agencies, like schools, also need support and more emphasis on PSHE programmes, good pastoral care—such as school counsellors—and working together to focus on young people?
Two years ago in Portcullis House, I facilitated a Council of Europe-UK Parliament seminar on child mental health and child-friendly justice, with young people aged 14 to 23 and many NGOs. Children and young people were listened to and consulted respectfully. They were clear and articulate in their concerns about services and could identify factors that had gone wrong for them, now and when they were younger. Their main complaint was that services were too little and too late. They wanted services that were appropriate to their needs. One young woman, responding to an Association for Young People’s Health survey, said:
“Very often there’s no help available until the problem has become totally unmanageable”.
Above all, they want a consistent, sympathetic adult to relate to.
Apart from access to treatment, treatment for children and young people has to be customised. It is simply not acceptable to have under-18s put into treatment services designed for adults. Some young people have very specific needs for mental health, such as in relation to youth justice. A high proportion of young people in the criminal justice system have mental health problems, which may not be addressed and can only get worse. Services are a vital part of addressing mental health needs in the population. I am concerned about funding at a local level, the co-ordination of services locally and young people having to fill in questionnaire after questionnaire for different services. I ask the Minister: will the Government be imaginative and forceful in tackling this issue and encourage dialogue with young people and co-ordination between services?
The Lord Bishop of Carlisle
My Lords, this is a very timely debate, and I thank the noble Baroness, Lady Tyler, and congratulate her on securing it. We have heard some of the alarming statistics on children and young people with mental health needs, and we know that current NHS services are unable to meet this disturbing increase. In an ideal world, we would be asking ourselves why there should be such an increase—some of the reasons were mentioned by the noble Baronesses, Lady Chisholm and Lady Massey—and doing our best to tackle the causes rather than just attend to the consequences. But that is another debate.
For the moment, I would like to use the brief time at my disposal to focus on some of the most vulnerable young people in our society: those with moderate to severe learning difficulties, whose mental health needs can be either missed or inappropriately treated in hospitals. I believe that they and many other people with mental health needs would benefit hugely from the provision of good services in the community rather than in hospitals or other institutions. I was greatly encouraged to find that the NHS Long Term Plan, which we will debate tomorrow, comes to a similar conclusion in its treatment of this subject, on pages 50 to 53. In particular, it emphasises the need to embed mental health support for all young people in schools and colleges—a strategy that has already been shown to be therapeutically effective and cost-efficient and that was mentioned by the noble Baroness, Lady Tyler.
We also know that a lack of good support for children with learning disabilities and behavioural challenges can lead to crises in families and a lifetime of restrictive, high-cost, often residential treatments for individuals when they become adults. The charity Mencap is deeply concerned about this and reports that, over the last few years, the number of children with learning disabilities admitted to mental health hospitals has gone up rather than down. Between March 2015 and May 2018, the number of children under 18 in in-patient mental health units doubled, from 110 to 250. There were another 465 young people aged between 18 and 24 in in-patient units last year. The average length of stay has remained the same, at 5.4 years, since 2013. These figures contrast rather starkly with the laudable and ambitious Building the Right Support campaign launched by NHS England in October 2015. Its aim was to close up to half of the in-patient beds across the country for people with a learning disability and to ensure that local areas develop the right community support by March this year. To date, only about 20% of those in-patient beds have been closed, and I have already referred to the way in which local community mental health services are severely overstretched.
In other words, as we have already heard, we have a long way to go before the good aspirations of the NHS Long Term Plan for all young people with mental health needs—and those with learning disabilities in particular—will remotely be achieved. Given the urgency of the current situation, I would be most grateful if the Minister would comment on the proposed timeframe for closing beds in institutions and making sure that effective mental health support for children and young people is available in all our communities.
Lord Leigh of Hurley (Con)
My Lords, I also congratulate the noble Baroness, Lady Tyler of Enfield, on securing this debate. I think it is almost four years to the day since we last debated this subject in your Lordships’ House, and I read the speech the noble Baroness gave then with great care. She commented then on the need for much greater awareness of the issues and recognised the commitment to parity of esteem for physical and mental health, which of course is now enshrined in legislation—they do listen to us sometimes. No doubt this debate was in the Chancellor’s mind when in his last Budget he announced that funding for mental health services will grow as a share of the overall NHS budget for the next five years.
Although I have not spoken on this or related matters regularly in this House, it is an area of interest to me. Until recently, I was a trustee of Jewish Care, which incorporates Jami, the mental health service for the Jewish community. More recently, my wife and I have tried to spend some time helping mental health charities such as the Mental Health Foundation.
The Government have, of course, committed to provide an extra £20.5 billion to the NHS by 2023-24 and have introduced the first ever mental health waiting targets. The NHS Long Term Plan in England addresses some of the gaps in the Five Year Forward View for Mental Health, and it is particularly encouraging to see a greater emphasis on perinatal mental health care services.
It is true, as the aforementioned YoungMinds has claimed, that many local health bodies are diverting some of the new funding they have received for children’s mental health to other priorities and that, while some CCGs have made big increases in their spending, many others are using some of the new money to backfill cuts or to spend on other priorities. It seems that organisations such as the excellent YoungMinds are the safety net when the NHS, and particularly CAMHS, fails to catch young people.
However, at the very least, the NHS is to be congratulated on much better provision of data from April 2016 on mental health provision. As this was mentioned in Oral Questions this afternoon, I spent some time looking at the monthly statistics and learned that 600,000 mental health service appointments for children in the year to 30 October were unfulfilled, which means patients did not show up. Will my noble friend the Minister assure us that steps will be taken to improve this statistic?
I turn to my main point. Preventing problems from emerging in the first place must be the best way to ease the pressure on services. Early intervention is also more compassionate, as it reduces distress and prevents people reaching a crisis point. The big gains in protecting and improving mental health are to be had in our schools, communities, workplaces and, generally, the non-clinical spaces where we spend most of our time. There are some programmes that are helping to take the challenge on. The Mental Health Foundation’s Peer Education Project is a good example.
To make a real difference to the mental health of children and young people, we need to reach children before they need services and there needs to be better support for those who do not reach the diagnostic criteria for CAMHS. I have to agree with the Mental Health Foundation when it calls for greater attention to be paid to early intervention and prevention and for the investment of more resources in this area.
Lord Brooke of Alverthorpe (Lab)
My Lords, I too thank the noble Baroness, Lady Tyler of Enfield, for this debate on access to NHS treatments for children and young people with mental health problems. Doctors on the front line have long complained about the dire situation and inadequate resources. This in itself is a massive issue. It is placing ever-increasing demands on already stretched services.
Let us put ourselves in the shoes of a child encountering these services, possibly for the first time, at hospital A&E units. A child experiencing a mental health crisis out of hours—perhaps a looked-after child having difficulty adjusting to their new surroundings or having an argument with a parent—and brought to A&E by their guardian as the only safe place to seek assistance often has real difficulties. Self-harm is often a coping mechanism to which they turn in this kind of situation. It is not an unusual occurrence and once the child has, in many cases reluctantly, been brought to A&E they will often have to wait for hours to see a member of the psychiatry liaison team, which is already stretched to full capacity seeing the adults they are more properly equipped to manage. In most cases the healthcare professional will not have the expertise to manage the situation with the child given that most psychiatry liaison staff are not trained in child mental health. NICE guidelines recommend that they then have to admit the child overnight until the appropriate team member can come to the A&E.
Imagine then that this is a Friday night and the team member will not be available until Monday morning. I am advised that this is not a rare event and often happens in A&E. Staff are dissatisfied, A&E departments are dissatisfied, as are the children and their parents. Where are we going with all this without the appropriate resources to address the growing number of children with mental health problems turning up at A&E?
Again considering this same child, once the assessment hurdle has been surmounted the challenge remains of accessing the necessary service required. With an increase in referrals of 26% over the past five years this has stretched resources to the limits. Worryingly, however, parents questioned for a recent YoungMinds survey reported that this intervening period between the first referral and acceptance on to the clinician’s caseload can be a risky time, with 75% reporting that their children’s mental health had deteriorated further while waiting for the services to be given to them. In fact, the longer they were left to wait the more likely it was, the parents said, that the mental health of their child would deteriorate even further. There are many cases where people had waited up to six months and some had waited up to a year.
As many as three-quarters of those surveyed reported that they were not signposted to any other service during the time they were waiting for the appointment, so during this period the child’s mental health will almost invariably deteriorate, possibly leading to self-harming, dropping out of school or having suicidal thoughts which they might act on. The parents’ mental health may also be impacted on with the stress that they suffer during this period. What may begin as a seemingly relatively minor mental health crisis—perhaps an argument with parents or something like that—has the capacity to escalate into an issue which becomes pervasive in all aspects of the patient’s life or, worse still, lead to something worrying, such as thoughts about suicide and ill health later in life.
This lack of signposting further compounds GPs’ fears about a patient’s interaction with mental health services. They feel that there is little else that can be offered. However, we now have of course the new 24-hours-a-day crisis hotline, which through phoning 111 can triage children and young people. Let us hope that this will make a significant change.
Yes, we have more money coming in, which is welcome—the Government are moving in the right direction—but we need to know when the training is going to start to find the extra staff needed. Perhaps the Minister will address that issue.
Baroness Parminter (LD)
My Lords, I wish to focus my remarks on children and young people suffering from eating disorders, which are the most deadly of all mental health illnesses and which are affecting a rising number of young girls and boys.
I shall use the illustration of one young teenager suffering from anorexia to highlight the historic underfunding in this area. When she got to crisis point last year and required in-patient care, no beds were available. She was put on a general ward in the local hospital and while the care team were trying desperately every day and ringing round for beds—which is what they have to do rather than caring for other children—she was left there for nearly a month. When a bed became available, it was more than 100 miles away from her home. With eating disorders you are not talking about children being in in-patient facilities for weeks; you are talking about months and months. If she had been a child with a physical illness, that would not have been acceptable. We need more specialists in eating disorder facilities, and we need them now.
It is welcome that the NHS Long Term Plan, at paragraph 3.26, refers to additional investment being made in this area. When will further information be given about the size of that investment, and can the Minister clarify that it will be ring-fenced for eating disorders?
The second point I wish to raise is around waiting times. It is fortunate for children and young people who need to be referred to eating disorder services that there are waiting times in place. We are aiming to get to 90% by 2020—we are around 80% at the moment—and where I live in Surrey I am pleased to say that the CCG has found £1 million to improve the waiting times for access to treatment. However, there are huge variations around the country, as my noble friend Lady Tyler mentioned. What will the Government do to address the huge variations in waiting times for children and young people suffering from eating disorders?
As I said at the beginning, these are the most deadly of all mental health illnesses and we know that early treatment for children is critical, as it is for other mental health illnesses, as other noble Lords have said. Early treatment is essential and we need that money. I therefore ask the Minister to explain when we will get clarity about the amount of money that is going to children and young people’s eating disorder services and what the Government are going to do about the geographical variations in waiting times access.
Baroness Wyld (Con)
My Lords, I shall try to make four points in four minutes. The first point is about funding. At the moment we are often working backwards, as other noble Lords have said, to help those who are already at crisis point. The Government have shown great leadership on this—I welcome the additional funding—but I am still extremely worried when consultant psychiatrists and others in the system to whom I have spoken say that the extra investment is not getting to the front line for specialist services. I am not someone who thinks that public spending is the answer to every problem, but sometimes a big part of the problem simply does come down to money, and this is one of them. I back up the point made by the noble Baroness, Lady Tyler, on this and ask my noble friend the Minister how the mental health investment standard, which is excellent, will help to make absolutely sure that funding is targeted at the services most under strain, particularly specialist CAMHS.
My second point is about early interventions and I will be brief. School counselling services clearly can play an important role in preventing mental distress from escalating. I have seen some brilliant examples in schools. Even at primary school level, if you put yourselves in the shoes of a child, that is still quite a late intervention. I agree with the point made by my noble friend and I urge the Government to keep up the momentum on helping families—and I stress families—in the peri and post-natal stages.
We need to be careful about a narrative where we think that A plus B will definitely prevent C. It will not, unfortunately. We should look at early intervention but some children will end up in crisis. Mental health illnesses can strike out of the blue and we need to make sure that each part of the system works properly.
My third point is about culture change. I spend a great deal of time talking to people about this. I know that some people worry that we are medicalising normal childhood or adolescent experience, as if by encouraging young people to talk about their mental health we are somehow putting ideas in their heads and stimulating a false demand that should not be there and that we cannot address.
This shows that as a society we are on such a steep learning curve—that, unbelievably, we are still at an early stage of understanding mental well-being and, at the same time, we are trying to teach our children. For me, it is the very opposite of creating epidemics of mental illness—it is about stopping them, by teaching children that anxious or unhappy feelings at certain times are normal, but they need to be given tools to manage them. We talk a lot at the moment about what sort of a country we want to be. I want my children to grow up in a society where all those who are able to be are in control of their own mental well-being. Philip Larkin famously said that:
“Man hands on misery to man”,
and while he is my favourite poet, I have never particularly liked that poem. There is always a chance to break cycles and hand on resilience rather than misery.
My last point is about joined-up government. There are so many other points I would have liked to have covered—I am running out of time—including the new Ofsted framework, transition to adult services and welfare reform. In broad terms I am delighted to see that the Government have moved to a birth-to-25 strategy, but how will this be led across government departments in practice? When I talk to people in Whitehall they emphasise how complicated this is, with many root causes and considerations. Because that is true, it is the very reason that cross-government working needs to be gripped. Every person at every level working on this should understand which interventions are intended to solve which problems, where responsibility lies and how success will be measured. We should be following the life of a child, not the silos of departments.
Finally, at my daughters’ school they often sing a song from “Matilda The Musical”. It is called “When I Grow Up”. One of the closing lines is:
“Just because I find myself in this story, it doesn’t mean that everything is written for me”.
When I watch the kids I often remember the most harrowing calls I took as a Samaritan volunteer over a decade ago from children who simply had nowhere else to turn. Sometimes children need help to write a better story. That is our job.
Lord Bradley (Lab)
My Lords, I also congratulate the noble Baroness, Lady Tyler of Enfield, on securing this very timely debate. I also declare my health and education interests, as in the register. In the short time available I shall touch on three issues: funding, workforce and crisis care, which GPs have raised many times with me.
First, in the NHS Five Year Forward View the NHS budget was about £120 billion but mental health received only 15% of the total. As we know, one in four people will suffer some form of mental health problem during their lives and, critically, children’s mental health services receive only about 7% of the 15%, which is totally unacceptable. There is growing evidence that there is a huge rise in the prevalence of poor mental health, particularly among young women over the last decade, and a much faster rise in help-seeking and referrals to specialist CAMHS services.
The 10-year plan pledges that funding for children and young people’s mental health will rise faster than the average for the NHS and by more than it will for adult mental health services. Can the Minister indicate today the profile of this funding escalation up to 2023? Unless it is honoured, the thresholds for access to services, which GPs are so concerned about, will continue to rise.
Further, as has been mentioned, GPs have raised concerns that funding allocations to clinical commissioning groups have not always been spent on mental health services but have sometimes been used to cover deficits elsewhere in the system. This, again, is totally unacceptable. Can the Minister give further details of the mechanisms that will be employed to deliver the 10-year plan’s commitment to ensure that local NHS commissioners are held to account for the increases in funding for mental health services?
Secondly, to deliver the ambitions of the 10-year plan for mental health it is crucial that a robust and imaginative new workforce plan is published. As we have heard, the Royal College of Psychiatrists has pointed out that one in 10 consultant psychiatrist posts is vacant and the latest training programme data shows that 60% of training places for child and adolescent psychiatrists are unfilled. The Royal College of Paediatrics and Child Health, the Royal College of General Practitioners and the Royal College of Psychiatrists have highlighted that currently under half of GPs have received mental health training, while 82% of practice nurses feel ill-equipped to deal with mental health problems. Yet 90% of people with mental health problems are served in primary care settings. Can the Minister tell us when the new workforce plan will be published? Many of us were disappointed that it was not published at the same time as the 10-year plan.
Thirdly, and quickly, from my own work on the development of liaison and diversion services, I am well aware that it is essential that children in crisis need to be assessed and supported in an appropriate setting. Police cells have now been banned for the assessment of children who find themselves in some way connected with the criminal justice system but A&E departments can be equally inappropriate and a very poor environment for proper assessment. It is obviously welcome that the 10-year plan recognises this and the importance of investment in community-based crisis response services, and commits to ensuring that children and young people experiencing crisis will be able to access crisis care 24 hours a day, seven days a week. Can the Minister indicate the timescale for the delivery of that?
Finally, it is essential that we have a spread of in-patient beds across the country for people who need them, in their localities and not some distance away.
Baroness Thornton (Lab)
My Lords, I declare my interest, as in the register, as a lay member of a CCG. I congratulate the noble Baroness, Lady Tyler, on bringing us this debate. I know that we had a slightly false start getting here but we are here. The fact that so many noble Lords put their names down to speak in this debate, meaning we have only a few minutes each, shows that this is seen as an important issue across the House and that many of us are very concerned about the mental health of our children and young people.
I thank YoungMinds, Beat and the Royal College of Paediatrics and Child Health for their briefings. I also thank the Library. Like many noble Lords, I clicked on the links in the Library briefing and suddenly realised that they showed the journey we have been on for the last few years with some excellent reports that have been there for five or six years. The House of Commons Public Accounts Committee published its report in January. The Stem4 GP survey was published in December 2018. There was the excellent briefing from the House of Commons Library on children and young people’s mental health services. The National Audit Office published Improving Children and Young People’s Mental Health Services last October. The Care Quality Commission’s Are We Listening? A Review of Children and Young People’s Mental Health Services was published in March last year. There were debates in both Houses all the way through last year, averaging about one every couple of months or so. There was the National Health Service’s five-year forward plan, a publication on mental health well-being trends and so on.
I asked myself what the common thread running through all this was. It is the recommendations that noble Lords have highlighted in today’s debate. It really is time to stop talking and to start delivering. When will the number of weeks that children and young people are having to wait be reduced, by how much, and by what date? In a child’s life, 26 weeks is a huge amount of time and has devastating effects. My noble friend Lord Brooke and the noble Baroness, Lady Wyld, mentioned this. This seems to me to be a priority. When will the workforce be increased? The figure of an additional 4,500 was mentioned in the House of Commons PAC report of last December. Are the Government on track to deliver those relatively modest figures?
Finally, the last recommendation in the PAC report reads as follows:
“By April 2019, the NHS should set out to the Committee”—
that is, the PAC—
“what arrangements are in place to collect the data it needs to: set up a robust baseline, and monitor progress on children and young people’s mental health services in the ten-year plan … reliably measure patient outcomes; and fully evaluate … the Green Paper pilot areas to inform the national roll-out of services, including information from outside the NHS”.
That is by April, which is two months away. Are the Government on track to achieve that?
Baroness Manzoor (Con)
My Lords, I start by thanking the noble Baroness, Lady Tyler, for introducing this debate and for giving us the opportunity to discuss a very important issue. I know that she is a great campaigner on this issue. Regrettably, it remains true that many young people who seek help find it difficult to access the right support at the right time, as she has clearly identified.
I also thank all other noble Lords for their contributions to this incredibly important debate. As the noble Baroness, Lady Thornton, said, there certainly is not sufficient time to address all the very important issues that have been raised today in the four minutes that Back-Benchers have been given to speak.
I reassure my noble friends Lady Wyld and Lady Chisholm and the noble Baroness, Lady Tyler, that this Government are committed to ensuring that our children and young people, and their families, get the support they need at the right time from the NHS, schools, colleges, local authorities and our dedicated partners in the voluntary sector. As part of this long-standing commitment, we have already laid strong foundations for a step change in the quality and scale of support available through improving and expanding NHS mental health services for children and young people, and through the 2015 Future in Mind strategy, the 2016 five-year forward view for mental health and the NHS Long Term Plan, published earlier this month, as noble Lords have identified.
I say to the noble Baronesses, Lady Tyler and Lady Massey, and other noble Lords that we know that the current system is not perfect but we are working tirelessly to improve the quality and availability of support for children. This will take time. The noble Baroness, Lady Massey, rightly identified that collaborative working across the system is key to ensuring that we get it right.
I am grateful that noble Lords have recognised the additional funding going into mental health services. As my noble friend Lady Chisholm noted, after years of underinvestment, NHS funding for children’s and young people’s mental health services is now rising and will continue to rise as we work towards the goals set out in the NHS Long Term Plan.
I reassure my noble friend Lady Wyld that mental health services will grow faster than the overall NHS budget, creating a new ring-fenced local investment fund worth at least £2.3 billion a year by 2023-24. In addition, the plan includes a new commitment that funding for children’s and young people’s mental health services will grow faster than both overall NHS funding and total mental health spending. This transformative investment will mean that by 2023-24 an extra 345,000 children and young people up to the age of 25 will receive mental health support via NHS-funded mental health services.
I say to the noble Baroness, Lady Parminter, that we recognise that the standard of service provision varies for children and young people around the country, and I acknowledge the arguments that she has made. An increasing proportion of young people are seeking help from the NHS. We are responding by already ramping up capacity, and the NHS Long Term Plan has set out further priorities for the years ahead.
I hope that the noble Baroness, Lady Thornton, is reassured that we are on track to meet our commitment to improve access. By 2020-21, 70,000 more children and young people will be accessing treatment each year. This equates to 35% of children and young people with a mental health condition.
I say to the noble Baroness, Lady Tyler, the noble Lord, Lord Brooke, and the noble Baroness, Lady Parminter, that we have introduced the first ever access and waiting standards for mental health services, as they acknowledged, including two relevant to children and young people—on eating disorders and on early intervention for people experiencing a first episode of psychosis. Indeed, we have a target to ensure that treatment begins within two weeks for more than 50% of people experiencing their first episode of psychosis. Nationally, the NHS is exceeding the target, with 78.5% of patients having started treatment within two weeks by October 2018.
More young people are getting the treatment that they need for eating disorders, and there has been a significant improvement in treatment times for NHS care. An extra £30 million is going into children’s eating disorder services every year, with 70 new or expanded community-based teams covering the whole of the country. We are nationally on track to meet the target of 95% of children and young people with an eating disorder accessing treatment with a one-week referral for urgent cases and four weeks for routine cases by 2020-21. The most recent data shows that 80.2% of young people started treatment for a routine case within four weeks.
The noble Baronesses, Lady Tyler, Lady Massey and Lady Thornton, and my noble friends Lady Chisholm and Lady Wyld also noted the importance of recognising that there is no single defined service or model that can address the needs of all ages and developmental needs across mental health, and that existing services will need to work together. I am of course in total agreement.
An example of how this Government are encouraging partnership working between services is the Green Paper on children’s and young people’s mental health, which will deliver a new schools and college-based service to help children and young people and will be staffed by a new workforce. This brings together health and education to provide early intervention mental health support for children, as advocated by the right reverend Prelate. We are taking cognisance of preventive services for mental health, which is key and fundamental. Every school will be encouraged to have a designated senior lead for mental health, as well as access to mental health support teams that will sit in and around colleges and schools. This commitment was confirmed in the NHS Long Term Plan and will be rolled out to between one-fifth and a quarter of the country by the end of 2023.
This new schools-based service is in addition to existing provision for children and young people with mental health needs. Last month we announced 25 trailblazer sites, which will run the first wave of mental health support teams. Twelve of those sites will also test a four-week waiting time for children and young people to get mental health support from the NHS.
The workforce is, of course, integral to everything we are doing. I agree with the noble Lords, Lord Brooke and Lord Bradley, on the issues that they raised. We have always recognised that a skilled and confident workforce is at the heart of delivering improvements to mental health services. That is why we have set an ambition to create 21,000 new posts in the mental health workforce in priority growth areas to be occupied by 19,000 NHS staff. The Children and Young People’s Improving Access to Psychological Therapies programme has trained both new and existing staff in evidence-based therapies. Our ambition is to have 1,700 newly trained therapists working in children’s mental health services and 3,400 existing mental health staff trained in evidence-based interventions by 2021.
As the noble Baroness, Lady Tyler, and the right reverend Prelate the Bishop of Carlisle said, some children will, unfortunately, experience a mental health crisis and will need rapid mental health support. I want to thank the noble Baroness for contacting my noble friend Lord O’Shaughnessy on this important matter last month, when he was the Minister. Like the noble Baroness and the right reverend Prelate, I am pleased with the strong focus on crisis care in the NHS Long Term Plan, which sets out around £250 million of investment in crisis care by 2023-24.
Improving provision of children’s and young people’s urgent and emergency mental health care is a priority for NHS England as part of the wider transformation of mental health support. We have supported the development of children’s and young people’s urgent and emergency mental health care services and intensive community support services, including testing and evaluating models for crisis support. The NHS Long Term Plan is clear that the expansion of age-appropriate crisis care services for children and young people is vital, and I share that view.
I am conscious that I have only two minutes left, but there are lots of questions to which I want to give answers—I have been told to keep going.
Baroness Manzoor
I have four minutes; that is good. I shall answer some specific questions. The noble Baroness, Lady Tyler, asked how the target in the long-term plan of 100% access would be measured. The NHS will publish further details about how the long-term plan will be taken forward, in an implementation plan due this spring, with more detailed plans in the autumn. She also asked about the timetable for introducing the four-week waiting time. As she may know, we have recently announced 12 areas that will test how we might introduce the four-week waiting time without the risk of perverse incentives, such as raising thresholds. Fuller plans will then be drawn up, informed by learning from those pilots.
The right reverend Prelate the Bishop of Carlisle asked about better community service and support for those with learning disabilities. I agree that we need to increase community services, particularly for those with learning disabilities. That is why the long-term plan’s significant investment in children’s mental health services is so crucial. As I said, by 2024 an additional 345,000 children will receive this support.
My noble friend Lord Leigh and the noble Lord, Lord Bradley, also raised the issue of CCGs perhaps diverting funding for mental health services to other things. I reassure them—and the noble Baroness, Lady Thornton, who will probably know more, because she sits on the board of a CCG—that in 2017-18, 90% of CCGs met the mental health investment standard, which requires them to increase funding for mental health at least in line with their overall financial allocation.
I can tell the noble Lord, Lord Brooke, and others who raised crisis care and A&E that we are committed to rolling out liaison mental health services to every A&E by 2021. The long-term plan builds on this by committing to 70% of these teams meeting the “core 24” standard by 2024. We are committed to developing alternatives to hospital.
I have already addressed the issues around eating disorders. Of course, it is vital that we continue to build on the good progress that has been made. More details of the implementation plan will be available in the spring.
To conclude, we are aware that there is much work to be done, but I am enormously proud of the work that the Government are doing to improve access to mental health services, ensuring that many more children and young people can access high-quality vital mental health support. I am confident that by continuing record levels of investment, improving access and waiting times, and championing parity of esteem through high-quality mental health support services, we will provide a brighter and healthier future for our children and young people. They deserve nothing less.
Trade Bill
Wednesday 30th January 2019
(5 years, 9 months ago)
Lords ChamberRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 127-III Third marshalled list for Committee (PDF) - (28 Jan 2019)
“Bilateral system of civil judicial cooperation
(1) It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement which enables the United Kingdom, after exit day, to fully participate in a bilateral system of civil judicial co-operation for the purposes of facilitating trade between the United Kingdom and the European Union. (2) A bilateral system of civil judicial co-operation under subsection (1) shall include agreed conditions on—(a) jurisdiction, including applicable law and choice of jurisdiction; and(b) bilateral enforcement and recognition of judgments.”
Lord Marks of Henley-on-Thames (LD)
My Lords, Amendment 37 in my name and that of the noble Lord, Lord McNicol of West Kilbride, would make it the objective of an appropriate authority to secure a bilateral system of civil judicial co-operation between the UK and the European Union, to include arrangements for the choice of jurisdiction, the choice of law and the bilateral enforcement and recognition of judgments.
The amendment is relevant to the Bill in at least three ways: first, to new free trade agreements with third countries that currently enjoy FTAs with the EU, and therefore with us through the EU; secondly, to bilateral FTAs with third countries that might enter such agreements with us in the expectation of further trade through the UK with the EU member states; and, thirdly, in the event of no deal, when, as the noble Lord, Lord Hannay, pointed out earlier, the Bill—which will then be an Act—after exit day will be the only legislation bearing upon the arrangement of future FTAs.
In moving the amendment, we have every reason to believe that we are pushing at an open door. In debate after debate since the 2016 referendum, mine has been just one of many voices arguing that if we leave the EU we must maintain the whole gamut of the arrangements for cross-border judicial co-operation that we presently enjoy as a member of the EU. Every time, the Government have responded that they recognise and will maintain the benefits of these arrangements for the United Kingdom. Only yesterday we considered SIs laid by the Government on this topic. The noble and learned Lord, Lord Keen, was very clear that the SIs were laid only against the undesirable possibility of a no-deal Brexit, and accepted that should that occur we would be losing a significant benefit; I refer to columns GC 231 and GC 233 in yesterday’s Hansard. We would be forced to fall back on less effective, more costly, extremely inconvenient and altogether inferior alternative arrangements.
Whatever outcome emerges from the current impasse, we should do all we can to replicate all the arrangements for civil and commercial cases that we currently enjoy. These stem largely from the Brussels regime and its provision for the determination of jurisdiction and for the mutual recognition and enforcement of judgments. The Brussels regime principally comprises the Brussels Ia EU regulation and is supplemented by the 2007 Lugano Convention, which provides similar arrangements for Norway, Switzerland, Iceland and Denmark. Choice of law in contract cases, which make up the vast bulk of commercial litigation, is governed largely by the Rome I regulation, and Rome I applies throughout the EU except in Denmark, which has an opt-out for judicial co-operation.
If we failed to replicate the arrangements of the Brussels regime, what we would lose is well summed up in two bullet points in the Explanatory Memorandum to yesterday’s SI on civil jurisdiction and judgments. The first refers to,
“a system of uniform jurisdictional rules to identify the appropriate court in which to bring a civil or commercial claim”.
The second refers to,
“a simplified mechanism to recognise and enforce the judgments of EU Member State/EFTA state courts in civil and commercial cases, with a view to reducing costs for litigants and increasing efficiency. The possibility for such simplified and almost automatic treatment of the judgment of one such state in another is based on the ‘mutual trust’ that each state will have applied the uniform rules of jurisdiction”.
These arrangements have been built up over decades and British lawyers, jurists and judges have played a major part in their development. The European Judicial Network in civil and commercial matters, established in 2001 by the European Council, is an important forum for cross-border co-operation between courts across the EU. It seems to me that there is no significant reason why we should not be able to negotiate some continued access to the European Judicial Network after we leave the EU.
Throughout the European Union, citizens and businesses now know where cross-border disputes are to be determined. They know what law is to be applied. Crucially, they can be confident that court orders obtained in one member state will be recognised and enforced without fuss, delay or extra proceedings throughout the Union. This system has been of incalculable benefit not just to those who use our legal system but to our economy as a whole, because it is widely understood that all member states respect the arrangements and decisions of courts in other member states.
It often seems to me—I hope I can say this as a lawyer without special pleading—to be largely overlooked that our legal system has contributed significantly to Britain’s commercial success during the decades of our EU membership. One reason the United Kingdom has been so successful in attracting both inward investment from outside the EU and trade from elsewhere within the EU has been the fact we have not just excellent financial services and a sophisticated financial architecture—another plus is sometimes said to be political stability but I somehow doubt that at the moment—to add to the benefits of the English language and a convenient time zone, but a well-respected commercial legal system, one that functions without undue delays and at cost levels that are reasonably competitive in the international market, and which produces outcomes that are relatively predictable and generally accepted.
A very important component of that success is that our legal system functions internationally in supporting cross-border trade and international commerce. If we lose that, however frictionless we may make our trading arrangements, we will have compromised our future both as a destination for international investment, attracted to the United Kingdom as a gateway to the European Union, and as a trading partner for member states of the EU and the EEA. Put shortly, at a time of major upheaval, we will have needlessly thrown away a significant competitive advantage. That is something we cannot afford to do and it would be folly indeed. I beg to move.
The Minister of State, Department for International Development (Lord Bates) (Con)
I thank the noble Lord, Lord Marks, for moving this amendment and raising this very important issue. He is right to highlight the contribution which UK law has made to the commercial contract area and the success of trade and financial services.
We have long made clear our intention to negotiate a new relationship with the EU which covers civil judicial co-operation. The political declaration provides a positive means for discussion on this. It makes it clear that the UK and EU have agreed to explore a bilateral arrangement on matrimonial and parental responsibility and other related matters. This goes further than the arrangements that the EU currently has with any other third country to date.
The UK also remains committed to future co-operation on civil and commercial matters with the EU—recognising that this is in both our interests, for the reasons the noble Lord, Lord Marks, set out—and to similar co-operation with other international partners. In this area, the UK will, as a minimum, continue to prioritise joining Hague 2005 in our own right and seek also to accede to the Lugano Convention. The UK will engage with EU partners to ensure that these important issues, which provide vital protections for citizens, are the focus of detailed negotiations with the EU.
On the specific issues which the noble Lord referred to, co-operation in this area makes clear that the UK and EU have agreed to explore a bilateral arrangement on aspects of law. This goes further than any arrangements that the EU currently has with a third country. The UK also remains committed to international co-operation in future.
The noble Lord asked what would happen in the event of no deal. As a responsible Government, we are preparing for all outcomes, hence the statutory instruments debated in Grand Committee yesterday. We have published a dedicated technical notice for civil judicial co-operation, detailing how the rules would change in the event that we cannot reach a deal. This is not our preferred outcome—we remain focused on getting a deal that works for the UK and the EU. The rules on civil judicial co-operation rely on reciprocity. After exit, even if the UK were to apply these rules unilaterally, there would be no requirement on EU member states to apply the same rules in the UK. Without the guarantee of reciprocity, our broad approach is to repeal existing EU instruments and revert to applying the rules which the UK currently applies in relation to non-EU matters.
I am grateful to the noble Lord for raising this important matter, and I hope that I have provided as much reassurance as I am able to at this stage.
Lord Marks of Henley-on-Thames
My Lords, I am grateful to the Minister for his response, and I will be withdrawing the amendment, with your Lordships’ leave. The plain fact is that the arrangements the Government have in mind in the event of no deal are what I described yesterday as “thin gruel indeed” compared with what we have. They are inferior, bitty and involve a great deal of scope for satellite litigation where parties are having to litigate on issues such as enforcement and jurisdiction in different jurisdictions. This is so important because it highlights an area which has had far too little attention in the event of no deal. It is a significant danger for us—no deal will deprive us of the competitive advantage we enjoy as a member of the EU.
I share the Minister’s confidence that, in the event that we secure an agreement, we will also secure an agreement on judicial co-operation during a transitional period, because it is in the EU’s interests as well as ours. The danger is that people float into no deal by accident, and cost us everything involved in losing judicial co-operation. It is a significant feature that ought to weigh heavily in the minds of all the policymakers involved. With that warning, I beg leave to withdraw the amendment.
“UK participation in Common Transit Convention
It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the United Kingdom to participate in the Common Transit Convention after exit day.”
Lord McNicol of West Kilbride (Lab)
I rise to move Amendment 38, and thank the noble Baroness, Lady Randerson, for her support. This grouping includes many amendments along the same vein. Your Lordships will be pleased to know that I am not going to speak to each one individually, but I will address the common themes of this group of amendments, pulling out a few specific details. I am sure that a number of noble Lords will be speaking in more detail to their amendments within this group.
This group seeks the inclusion of new clauses after Clause 5 which will put on the face of the Bill a host of organisations, agreements and arrangements which are vital to the continuing smooth operation and functioning of life, organisations and businesses post Brexit. As I am sure the Minister is aware, many of these amendments have come from organisations, trade unions and businesses that are concerned about how they will be affected post Brexit and are seeking ways to mitigate any harm. Many of these amendments do not fully resolve the problem of Brexit, nor all the costs associated with leaving, but if the Government were to accept them it would offer a level of protection and certainty that is currently not there.
Lord Fox (LD)
My Lords, I am grateful to the noble Lord, Lord McNicol of West Kilbride, for introducing this group. As he pointed out, there are 17 amendments that cover objectives for future free trade agreements. The noble Lord, Lord Hannay, is not in his place right now, and I would never disagree with him. He identified a different group of amendments as being the most important part of what we are debating, but, for many people and for the impact that this is going to have out there in the country, this group of amendments is the plumbing. They cover the day-to-day operations of life, so I consider this to be a most important group of amendments.
I am not going to speak to all 17 amendments, but I am going to speak to four of them, which means that, unfortunately, I will break my own rule of brevity, but I will try to be efficient in what I say. I am going to speak to Amendments 39, 43 and 44, to which my name is attached, as well as Amendment 69, to which my noble friend Lady Jolly added her name. She is unable to attend.
Amendment 39 requires the UK to negotiate with the EU an international trade agreement that creates a system for the mutual recognition of professional qualifications, as the noble Lord, Lord McNicol, set out. It must be at least as exhaustive as our current system and allow people to work across borders, allow workers to demonstrate the necessary requirements where qualifications diverge, and provide for co-operation between regulators. The noble Lord, Lord McNicol, used the example of architects; looking at the other side of the coin, 20% of the architects in this country come from an EEA or Swiss background. That is just one profession—one activity. The Government have the stated aim of building 300,000 houses; they will not have enough architects if we are not successful with this activity.
Under the current mutual recognition arrangements, for doctors, nurses, vets, dentists, midwives, pharmacists and architects the recognition is automatic, providing that conditions on minimum training and professional experience are met. For others, there is a general system whereby regulators cannot ordinarily refuse applications to practise from other EEA or Swiss nationals in this country if they hold the qualifications required by their home state. Since 1997, the UK has recognised over 142,000 EU qualifications. This is a big job. Noble Lords should remind themselves that there will be a lot of work to do around this, including for lawyers, social workers and engineers. Over 27,000 decisions to recognise UK qualifications have been taken in the EU.
The political declaration states:
“The Parties should also develop appropriate arrangements on those professional qualifications which are necessary to the pursuit of regulated professions, where in the Parties’ mutual interest”.
I suggest that replicating the system to be at least as good as the current one is in the interest of this party—the United Kingdom. On that basis, I hope that, as the noble Lord, Lord McNicol, said, we are pushing on an open door here. The four principles set out in this joint amendment are the same as the Government’s four priorities for a future mutual recognition regime. I hope that the Minister can confirm that that is the Government’s understanding; perhaps they can settle some nerves by putting this amendment in the Bill.
Clearly, a no-deal Brexit situation would make life much more difficult. A statutory instrument is running its way through the system; it has been published, but it is subject to the affirmative process and has yet to be debated in the House. I look forward to that; I say that because there are so many SIs, but I look forward to that process, because this is an important part of what we need to do.
The point made by the noble Lord, Lord McNicol, about UK workers working in the EU is equally important and vital. Clearly, if we leave the European Union with no agreement, we cannot mandate what happens to all our professionals in the EU 27, EEA and Swiss territories. However, I urge the Government to explain what representations they will be making in the event of a no-deal Brexit to carry over the qualifications at the very least, and then, of course, to put in place a regime that works.
Amendment 43 requires the UK to seek to negotiate an international trade agreement with the EU that binds the UK to EU rules on open and fair competition. We have had some discussion around state aid in the debate on a previous amendment, so I will not repeat that. However, this also includes mergers and anti-trust behaviour. The political declaration states:
“The future relationship must ensure open and fair competition. Provisions to ensure this should cover state aid, competition, social and employment standards, environmental standards, climate change, and relevant tax matters, building on the level playing field arrangements provided for in the Withdrawal Agreement”—
clearly, now we do not know what that agreement will be—
“and commensurate with the overall economic relationship”.
We have had this discussion in a different context, but a binding undertaking that there will be no regression on standards is important to a lot of people in this House, and other noble Lords who are not here today have made this point with strong arguments.
On Amendment 44 and REACH, the noble Lord, Lord Hain, spoke about regulatory divergence; if there is ever an opportunity for regulatory divergence, it will be around the complexity of something like chemicals legislation. I will not go into huge detail about UK REACH, but this House needs to understand the scale and the scope of this activity. I have experienced it from a business side, and the commitment of European businesses in sitting on literally hundreds of sub-committees, debating and working through the nature of chemicals, how they should be used, and the associated risks, laws and regulations is absolutely huge. I can see looks of consternation.
Baroness McIntosh of Pickering (Con)
My Lords, I shall speak to Amendment 63 in my name and those of the noble Lords, Lord Dykes and Lord Browne of Ladyton. I thank them for lending their support to the amendment, which relates not just to Amendment 39 but also, I would argue, Amendment 45—it is bizarre that they are not in the same group.
The amendment relates to lawyers in particular and the right to provide services, establish yourself in the legal profession and practise. I am a currently non-practising Scottish advocate but, as a young, recently qualified advocate, I went to Brussels to practise European law without having to take a separate qualification. I am greatly indebted, as I think are your Lordships, to the noble and learned Lord, Lord Keen of Elie, for moving the relevant statutory instrument, the Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2019, which the House adopted. I shall quote him because I cannot put it better than him. He said:
“In the event of us exiting without any deal, there will be no reciprocal rights—which was one reason why, as I indicated, these regulations are required. They are necessary in order that we can establish a position in which all third-party country lawyers will be on the same standing in the absence of a free trade agreement or other agreement with a third-party country. There will be no reciprocity—that will be a matter for the relevant EU country to consider—but clearly it is a matter that we would wish to address in future negotiations consequent on our exit from the European Union. This is dealing with the position in the United Kingdom in light of the existing regulatory regime under EU law. Clearly, and quite patently, you could not address the question of how the EU 27 are going to treat our lawyers going forward”.—[Official Report, 15/1/19; col 177.]
What concerns me greatly is that the next generation of young, budding advocates will qualify on 30 March or 30 April and will be unable immediately to ply their trade, or to continue to ply their trade after 29 March, if we crash out of the European Union without a deal. I could not find it in Hansard, but I took a note of what your Lordships said. I would not like to attribute it to my noble and learned friend Lord Keen, but we learned when the regulations were passed that Ireland’s professional body has taken the opportunity to increase the cost of qualifying as an Irish lawyer to practise there from £300 to £3,000. That is quite an increase. I think we learned from the Liberal Democrat Benches that, in another EU member state, a rule was passed to prevent the sharing of an office or creating a partnership with a British or other third-country lawyer wishing to practise in that country.
We will have a two-tier system. Having passed the regulations, we have, quite rightly, granted those EU lawyers who currently practise here or are qualified and wish to continue to practise here rights to continue or enable them to do so. How can that possibly be? I ask that the Minister use her good offices to ensure that that position is not sustained beyond 29 March.
I entirely endorse what the noble Lord, Lord McNicol, from the Labour Benches said in moving Amendment 38, and I look forward to Amendment 45 on much the same lines. I hosted a meeting here of all the professions that are deeply concerned: architects, dentists, lawyers, nurses and so on. I remind your Lordships that the mutual recognition directive took 21 years to agree in the case of architects. That is not a position to which we would wish to return.
I had a meeting with the Irish Commissioner, Phil Hogan, who was kind enough to receive a group of us from the House of Commons when I was on the Select Committee there. I am currently a member of the all-party parliamentary racing group, and in that capacity and others I attend race meetings. I also had the privilege to represent Thirsk Racecourse, and trainers throughout Thirsk and Malton and the Vale of York, during that period. I am grateful that Amendment 48 is being discussed this evening. If the tripartite agreement existed in its own right before it became part of the arrangements of the European Union, would it not make sense if it reverted immediately to that—a backstop, if you like? Is that the Government’s intention? I see no benefit in taking the tripartite agreement forward as part as existing arrangements. It will get lost in the wash, as it has done this evening in this group of amendments—I have not counted how many of them there are. That would be a very neat way forward. I am sure it would get the agreement of the French and the Irish, and it would be very much in the interests of the business. I remember, when Ireland reduced the rate of VAT, the number of trainers and owners that left this country. Personally, it has been to my advantage because the cottage I live in when I am in North Yorkshire was vacated by a trainer, Sue Bramall, who I understand has had great success training in Ireland, but obviously it is to the UK’s detriment. I would hate to see that happen again here.
I was aghast when I heard the Minister say earlier that the Government sought to revisit Clause 6 on the European Medicines Agency. One of my outside appointments is to work with the Dispensing Doctors’ Association, whose headquarters is based in Kirkbymoorside in North Yorkshire. We are in this curious position where we are going to follow the falsified medicines directive unless we crash out with no deal. That is the only benefit I can see of crashing out with no deal. The GPs in Ireland have been deemed to be self-employed, so they are going to be exempt from the provisions of the falsified medicines directive. Why is there this dichotomy—that we do not wish to be part of the European Medicines Agency, but we do wish to be part of the falsified medicines directive? I would like a route to understanding. I would be very happy to accept a letter on why that should be.
I am not going to rehearse and itemise all the agencies in Amendment 70, but I would make a particular plea for the EASA, the European Food Standards Agency and European Environment Agency. As I have mentioned previously—I have not yet had satisfaction on this point—we should commit to remaining part of the European rapid alert system, on incidents of food hygiene and food poisoning. The need for this was never more apparent than during the 2010 Horsegate scenario. We were lucky that that was a case of food fraud, where horsemeat was passed off as beef. Whatever happens to Clause 6, I hope that the Minister will confirm this evening that we will remain part of the European rapid alert system for such incidents.
Lord Lansley (Con)
My Lords, I refer to Amendment 62 in my name, which is part of a series of amendments in this group concerning mutual recognition— mutual recognition of good manufacturing practice, in this instance. I was prompted to table the amendment not least because many people in the pharmaceutical industry see this issue as an important part of our future economic partnership arrangements with the European Union, whether we continue to be EU members or in the single market or not.
Like Amendment 42 on the mutual recognition of authorised economic operators, Amendment 62 relates to instances of where the European Union has substantial mutual recognition agreements with third-party countries. In the case of authorised economic operators, those countries include Switzerland, Japan, the United States and similar countries—although not China in the instance of good manufacturing practice. It would be deeply perverse for us to start with standards that align entirely with those of the European Union, whether on authorised economic operators or good manufacturing practice, looking at the two amendments. If we lost that relationship with the European Union, it would make obvious good sense to maintain that mutual recognition.
In that context, the amendments commend themselves to my noble friends on the Front Bench because they are about continuity and trying to maintain the existing structure of agreements. Of course we want mutual recognition of good manufacturing practice with not only the European Union but the United States, Japan and Switzerland because, if we leave the European Union, four of the five largest pharmaceutical companies will be outside the European Union, with two in Switzerland and two in the United Kingdom. This issue matters a great deal to this important industry. Unfortunately, given the uncertainty and the way in which the European Commission sent advice to companies on their responsibility to prepare as if there would be no deal, pharmaceutical companies have, of course, already invested a considerable amount in ensuring that their batch authorisations and conformity assessments—and the authorisations associated with those—can be conducted inside the EU 27. That has cost quite a lot of pharmaceutical companies quite a lot of money already.
The noble Lord, Lord Fox, was quite right: this group of amendments is about the plumbing, the innards, of this issue. I am afraid that day by day, evidence of the enormity of the cost—in time, energy and money—of trying to stay as close as we can to the position we would have been in if we had stayed in the European Union is mounting. It does not do to dwell on that but there we are.
Finally, I am really surprised that some of our Brexit-supporting colleagues are not here to laud Amendment 38—the lead amendment in the group— on the common transit convention, which will assist significantly with customs simplification and the achievement of some reduction in the friction that might otherwise occur in trade. It is achieved with third-party countries and is not something that the EU absolutely has to offer. However—although I stand to be corrected by my noble friends—as the noble Lord, Lord McNicol, has said, it appears to have been agreed not only that we would remain within the common transit convention after exit day but that we would continue to remain in it even if we were to leave without a deal. That is a positive development.
Associated with it is the new computerised transit system which will help us to try to make progress on some of the customs simplifications that, whatever happens, will be important to the reduction of business costs. I commend to my noble friends Amendment 62, which should certainly be an objective of the Government in their current discussions about the future relationship with the European Union.
Lord Risby (Con)
My Lords, I will speak to Amendment 48. I am a director of the Horserace Betting Levy Board as a government appointee, and a former Member of Parliament for Newmarket, which, after all, is historically the world headquarters of racing. Equine matters are very dear to my heart.
The situation we have, which is a tripartite deal, developed before the European Union became involved. There is some level of involvement on the part of the European Union and negotiations have been going on in Brussels between the British Horseracing Authority and the Commission. It is important to highlight this because the system has been in existence for many years and has been absolutely seamless. The relationship between the United Kingdom, France and Ireland has flourished. We can think of Irish horses winning in large numbers at Cheltenham, French successes at Ascot and Newmarket, and our own recent victories in the Prix de l’Arc de Triomphe.
The real key is this. The system of horse passports and documentation is managed in the United Kingdom by our highly respected industry bodies: Weatherbys, the Thoroughbred Breeders’ Association and the British Horseracing Authority, with the approval of Defra and the Animal and Plant Health Agency. It works extremely well and is therefore something that should be cherished. It is particularly important to the economy of the Republic of Ireland. People in the equine industry in Ireland are extremely anxious about this situation being damaged in any way.
As a result of the support over the years of our Governments for the equine industry, stretching right across party divides, it has turned into a great success story and is the best-managed and best-organised racing industry in the world. It contributes to the pleasure of millions of people who watch horseracing either at racecourses or on television. All our facilities have been upgraded and the industry should be supported.
I will refer to the comments made by my noble friend Lady McIntosh. If it were somehow possible to retrieve this from where it seems to have landed up and see it go back to its original tripartite status, which was actually free of the European Union, that would be excellent. However, the reality is that for whatever reason there has been a process of greater and greater involvement by the European Union; in which case, I will ask my noble friend two simple questions. What will happen during the transition period in this area of activity which is so important to us? What is our negotiating objective for the longer term as far as the work of the British Horseracing Authority with our own Government is concerned?
I conclude by expressing my admiration for many colleagues both in your Lordships’ House and in another place who have done so much work over the years to keep this industry up to the highest possible standards of governance and popularity. Finally, I will praise one particular individual. When the Single European Act came in and there was a change in the way that VAT was dealt with, we nearly lost the racing industry altogether. We had a huge fight, but it was saved by the former Chancellor of the Exchequer, my noble friend Lord Lamont. For anyone who is interested in and has a passion for racing, he of all people is someone to whom we owe a great deal.
Baroness Randerson (LD)
My Lords, I start by craving the indulgence of the Committee and offering an apology for the fact that I missed the start of the speech of the noble Lord, Lord McNichol. I was racing back from Cardiff, but noble Lords will know that that involves the Great Western Railway. The train was only a few minutes late but that was the time I needed in order to hear the beginning of the noble Lord’s speech.
I have three amendments in this group, all designed to ensure that we try to keep the transport system running as normally and smoothly as possible after Brexit. I will start with Amendment 41, which relates to road haulage. We have heard the story many times about the dangers to our road haulage system. Indeed, last week the leaked Border Force document estimated that there could be a decline of up to 87% for three to six months after a no-deal Brexit if some arrangements were not put in place. We have had the preparation for the ECMT certificates that would have to come into place if we had no deal: roughly 1,200 certificates for a haulage industry that involves 30,000-plus hauliers. Clearly, this is totally inadequate. We have had the fiasco of the ferry-less ferry services to try to smooth the process.
We have talked many times in this House about Dover, but I want to say a word about Holyhead, the second-largest roll-on roll-off ferry port in Britain. Some 500 lorries per night go through Holyhead—that is three miles of queues, and the route to the port is through the town. In other words, any kind of queuing system caused by a no-deal Brexit would make it impossible for the town to function. I have had meetings with representatives of the Road Haulage Association, who have alarmed me with some information about the way in which the modern haulage industry works. They pointed out to me that an Amazon lorry can have 8,000 individual shipments on it, which—if we do not have arrangements in place—could lead to an individual customs declaration in each of those 8,000 cases. Each customs declaration has 36 different fields that have to be completed. They estimated that it would take 170 staff one day’s worth of work to deal with one lorry. We all know that Amazon will adapt, but it cannot adapt in two months.
There are numerous other cases and examples of the disruption that no deal would bring, so in this amendment I seek to ensure, in relation to road haulage, that we do not have no deal and keep the arrangements as close as possible to what we have now. We should bear in mind—I was told this by a representative of the freight industry—that it is in what it describes as a huge hole. They said, “The moment we do not apply the rules, we lose control of the border”. So it is no good for our Government to say that we will not do the checks and will take it on trust. The point the freight industry is making is that the moment we start taking things on trust, without the checks, we will have serious problems.
In Amendment 57 we move on to aviation. Many noble Lords will recall that last week the airlines came in for criticism because they had been selling tickets without drawing attention to the fact that, if there is no deal and we leave on 29 March without any arrangements, they felt that those tickets might not necessarily be honoured. That was the criticism and yet the Government have claimed that the aviation situation is arranged and organised.
Viscount Trenchard (Con)
My Lords, the hour is late and a large number of amendments are being debated. I shall not touch on more than one or two. I was impressed by the mention by my noble friends Lady McIntosh and Lord Risby of Amendment 48, on the tripartite agreement. I declare an interest because my brother-in-law is a racehorse trainer near Newbury and he is worried that he will not be able to move his staff and horses round Ireland and France as is necessary for his business. I see no reason why this agreement should not be grandfathered through because it existed before the European Union was founded. I fear, as my noble friend Lord Risby also intimated, that the tentacles of the European state have already embraced Ireland and France to such an extent that they will not have the freedom unilaterally to decide to continue the agreement. I hope, though, that our United Kingdom will have such freedom after Brexit but perhaps we can find a way to preserve this tripartite agreement for the future.
It is clear that all of us would like as little disruption to current arrangements as possible, but most of these amendments should not be in this Bill. They have nothing whatever to do with its purpose. I simply wish to comment on Amendment 55, tabled by the noble Baroness, Lady Kramer, who has not, I believe, spoken to it. Does she not realise that the City of London has suffered from the imposition of several barriers to trade in financial services as a result of having been forced to implement some new European regulations in recent years, such as parts of MiFID II, AIFMD and others? One of the benefits of Brexit is that the City will be free to adopt proportionate and sensible regulation that will enhance its business in years to come.
Brexit also provides an opportunity for the UK to play an enhanced role in the development of proportionate regulation at the global level, balancing the need to protect the consumer and the environment against the requirement to provide an innovation-friendly environment that will enable us to abandon some of the more cumbersome and restrictive parts of the European regulatory regime to which we have become progressively shackled and which is, in places, more about harmonisation and protectionism than about the genuine protection of consumers.
I shall give one example. I have known the chief executive of a Japanese pharmaceutical company for more than 30 years. He told me that when Brexit came along he was not happy, but he has spent more than $8 million upgrading his European network and is now confident that he will be able to research, manufacture and distribute medicines in both the UK and EU27 after Brexit, just as he does now, on whatever basis we leave. He told me that now that he has spent the money, he would like to see the upside of Brexit. He says that the upside is that he expects us to return to what I believe is a more natural state for this country, in which we will have a less cumbersome regulatory regime that will be more helpful for a life sciences company such as his to innovate in new therapies, new drugs and new medicines. What worries me is that, although we are about to leave the European Union, we will, through this type of amendment, promise to continue to align entirely with EU regulation, which in places relies too much on the precautionary principle, and in that case there will be absolutely no upside to leaving. Therefore, we must have a balance here.
Baroness Kramer (LD)
My Lords, perhaps it is sensible to come in right after the noble Viscount, Lord Trenchard, following that invitation. I will try to be brief.
Amendment 55 stands in my name. In the past two and a half years I have been shocked by how little attention has been paid to financial services and to what would happen to our access to the EU 27 in the field of financial services after any Brexit. I do not suppose that I have to rehearse for this Committee the significance of this industry. It accounts for something like 80% of GDP; it pays £76 billion a year in taxes, which support our National Health Service; and it has created 2 million jobs spread over the country. It is absolutely critical but has been very largely ignored. I make a plea to the Government that they should begin to get serious about financial services and understand their significance.
If I were to describe the industry in the UK, it basically breaks into thirds. Financial services range all the way from the smallest fintech companies, through insurance, asset management and banks, right up to the global sector of the London Stock Exchange and the London Clearing House. It is huge and varied, but roughly a third is domestic-facing and relatively untouched by Brexit.
About a third is intensely based on the industry’s EU 27 clientele. About half of that business has already gone or is in the process of leaving, and if anyone speaks to government on a day when they are being honest, basically they do not think that we have much chance of keeping much of that one-third in the UK over the medium term and certainly not over the long term.
We come to the final third, which is absolutely critical and where the decisions made in the coming weeks and months will have a great impact. I refer to the global piece, which one could think of in a way as being bigger than but represented by the London Stock Exchange and the London Clearing House. The future of that final global third has a real question mark hanging over it.
I say to the noble Viscount, Lord Trenchard, that London is a global centre partly due to its long-standing experience and partly due to good regulation, but critical to it is that it is the global financial centre for the euro—the second most significant global currency. That is what underpins London and its global role. Unfortunately, in all finance, where we know that risk exists, the ultimate protection and backstop in a time of risk is liquidity, and for all euro-denominated transactions that source of final liquidity is the European Central Bank. Therefore, from a European perspective, to be exposed to that level of risk, which is in euro trillions, with no ability to control the regulation, monitoring or supervision of a major global financial centre is really serious and significant.
I believe that fundamentally the Government have never looked at this issue from a European perspective and that they completely underestimate the medium and long-term interest in the European Union in pulling back much of that activity to an area where it can regulate, monitor and supervise because it carries the ultimate risk. Suggestions that have come from the City, which have been kicked around in government and in this House, have come largely from a very small Brexiteer think tank. I know the people well and have been to many of their meetings.
Viscount Trenchard
I totally agree that the bulk of the settlement of euro-denominated transactions takes place in London but, in a similar way, London is the most important centre for the settlement of offshore dollar-denominated securities—or even renminbi, or yen. That is because London is the leading global financial market in the world. I have not seen any moves by the United States Fed or Japan’s FSA to try to repatriate London’s role in their currency securities.
Baroness Kramer
I assure the noble Viscount that from the perspective of the dollar, far more of the transactions clear through New York. It is a bigger market. I know we often say that we are the largest, but if we look at the table comparisons, New York is frankly bigger. Certainly, dollar dominance is exercised through New York. The yen is less of a controversial player, and there are not a lot of renminbi. If anybody thinks that China is going to allow its currency to develop a real global presence and not be regulated, monitored and supervised by the Chinese state, they have missed any understanding of how China works. We are convenient but temporary, and we need to recognise that.
People talk about the growing market, but essentially the global markets function in the dollar, the euro and—in the future—the renminbi. They will not function in small African or South American currencies. Those are not players; they are minor currencies. Sterling is treated by the industry as a minor currency. There are two, and there will be three, major currencies that essentially underpin global activity. At the moment one is dominated by New York and the other by London—and the one dominated by London is the euro.
What worries me is that the think tanks that have been going through this process have an underlying conceit and arrogance, and imagine that somehow we are fundamentally and in the long-term superior, that no one else will have the capabilities that we have, and that in the end, Europe needs us more than we need Europe. But Europe works on a five to 10-year strategy to gradually bring back choice pieces of that industry—and we can see it.
I have a real question for the Minister in all this. The right-wing think tank came up with a solution called “mutual recognition”, which basically required the European Union to change how it made regulation and to change its legal framework completely. The think tank thought that was entirely reasonable. It was irrational, and has been abandoned. The Government have finally recognised that it was complete nonsense. There is now an idea that third-country equivalence could be the mechanism that will apply. However, we all know that third-country equivalence can be cancelled for no reason at 29 days’ notice. That is a very unstable way to provide access for a key industry.
Various attempts have been made, but little thought, effort, discussion or energy has gone into trying to find solutions. I am exceedingly worried about that. Looking at that global sector that I talked about, as I understand it, the European Union has provided an equivalence ruling for the London Clearing House for 12 months only. I am sure that it will extend the ruling beyond that—but it is a message. I understand that, as of this moment, no equivalence has been put in place for the London Stock Exchange. Again, that may come, and it may come very much at the last minute. But there is a deep message in all this. I make a real plea to the Government to take our amendment seriously and to recognise that they will have to get totally engaged and make some real compromises—I suspect around their own red lines. If they do not, they will be making absolutely sure that, over five to 10 years, significant parts of the industry will be sucked back into very capable hands in Frankfurt, Paris and Amsterdam.
This is not an instant crisis, although there may be some areas of instant crisis. But it is an area where the Government need to move now, and not lock themselves into a position from which they will see this industry, not perhaps disappear altogether, but lose its global leadership, when they could, with more intelligence and flexibility, have provided some degree of protection.
Baroness Hooper (Con)
My Lords, I apologise for being tail-end Charlie in this discussion—at least, I hope I am. I agree that this is a very important group of amendments. I shall concentrate particularly on Amendment 39 because that is the overarching amendment giving mutual recognition of qualifications, which has been so important for frictionless commercial activities and relationships throughout our membership of the European Union. I trust and hope that the mutual recognition and—dare I say it?—harmonisation to some extent of professional qualifications will be able to continue, to give the continuity to which my noble friend Lord Lansley referred, but also, for example, in the field of education, where university qualifications and degrees have been based on mutual recognition of qualifications and the ability to work in professional fields in more than one country.
My own interest in this is that as a solicitor I went to work in Paris in 1973, a year after we joined the European Community. Although I did not need a carte de travail—a work permit—at that stage, I still needed a carte de séjour, but that was progress. There have always been particular difficulties for the legal profession simply because of the difference between the common-law system and the civil law system. That has led to a different approach to our understanding of what we have been trying to do within the European Community throughout our membership.
I may not be up to speed on all the detail. There may have been discussions, and possibly solutions, about continuing the recognition of professional qualifications, but I am not aware of them. I am surprised that the Law Society, for example, has not provided any briefing in this respect—at least not to me. Still, I would like to hear what the Minister has to say about this. At the next stage of the Bill I would hope that we could be given more certainty about what may happen in future. I am curtailing my remarks because it is a late hour, but I feel that this would be so important, not only to British and Scottish lawyers—I look to my noble friend Lady McIntosh in this respect—but to all the European Union lawyers who have set up offices and are operating in London and other parts of the country, making our commercial activities ever more possible.
Perhaps, as a sort of PS, I might refer to Amendment 48 and the tripartite agreement. I am not sure how this applies to polo ponies. As your Lordships will know, I take a great interest in Latin America and Argentina. Polo ponies are not only from South America and the UK; they have passage rights within the EU. I do not think the tripartite agreement itself applies to polo ponies but I hope that any consideration of this element of the debate could include that important aspect.
Lord Foster of Bath (LD)
My Lords, the noble Baroness, Lady Hooper, hoped that she was tail-end Charlie, and I apologise for depriving her of the appellation. In introducing this group of amendments, the noble Lord, Lord McNicol, described them as being about the smooth organisation of business post Brexit, while my noble friend Lord Fox described them as the necessary day-to-day plumbing of post-Brexit life. As we have heard, the amendments cover a wide range of issues, including mutual recognition, not least of qualifications, but also seeking a way to have the maximum continued relationship with many EU bodies, expert groups, agencies and so on. In that regard, Amendment 70 is perhaps the most comprehensive. I share the view of the noble Lord, Lord Lansley, that it is of mutual benefit to ourselves and the European Union if we can find ways of staying as close as possible to many of those bodies. If we fail to do so, there will be some serious difficulties. I believe we need to take positive steps, as is suggested in Amendment 70, for instance, to achieve that close working relationship. If we do not do that, I believe there will be very significant problems.
To illustrate that very briefly, I will touch on two of the bodies that are referred to in Amendment 70: the Body of European Regulators for Electronic Communications—BEREC—and the European Regulators Group for Audiovisual Media Services, or ERGA. It is worth remembering that the telecoms industry in this country has revenues of something like £40 billion a year and our broadcasting industry is probably one of the best in the world; both are critical to the UK’s economy and their success depends to a large extent on close co-operation with the EU 27 countries. That is because, in the case of the telecoms industry, for instance, many of the bodies regulated by our own regulator, Ofcom, are members of subsidiaries which operate in many of those other countries—Virgin Media, Vodafone, Three and Telefónica are very good examples. In broadcasting, we have our own domestic channels, but Ofcom also acts as host to something like 500 channels which are not shown in the UK, but are regulated here and shown in other countries. Therefore, it is very important that our regulator continues to work in a way that allows close alignment with the regulations that will apply across Europe. That means having close involvement with those two bodies, BEREC and ERGA.
As such, my questions for the Minister are about how that will be achieved. I suspect he will reject most of the amendments in this group but that he will say it is important to have close relationships, as the noble Lord, Lord Lansley, said. It is worth reflecting that in the other place, the Minister for Digital and the Creative Industries, Margot James, said that Ofcom intended to “seek observer status” within BEREC. As I pointed out on another occasion, that is no longer possible following changes to BEREC’s regulations in December last year. For us to have observer status in BEREC, it would now be necessary for a formal agreement to be made between the UK and the European Union. I am not entirely convinced that that will be easy under the current arrangements without very active steps being taken by the Government.
In Grand Committee last week, the Minister, the noble Lord, Lord Ashton of Hyde, said he was confident that Ofcom would be able to be part of BEREC. He said that during the transition period,
“the UK will no longer be a member state of the EU but, as is set out in the terms of the withdrawal agreement, common rules will remain in place. That is why we expect Ofcom to continue to participate in BEREC”.—[Official Report, 23/1/19; col. GC 96.]
That is what they are expecting, yet it is in stark contrast to what the withdrawal agreement actually says. In Article 128, it says—I will paraphrase—that with only one caveat, we cannot participate in decision-making or even attend meetings of expert groups or similar entities. The caveat says—again, I paraphrase—that UK representatives or experts may, upon invitation, exceptionally attend meetings or parts of meetings of bodies such as BEREC or ERGA, provided that either the discussion concerns the UK or UK residents or,
“the presence of the United Kingdom is necessary and in the interest of the Union”.
The noble Lord, Lord Ashton of Hyde, saw this as a green light, and declared that there was “every reason” the EU would want Ofcom on these bodies because,
“Ofcom is one of the leading telecoms regulators in Europe—if not the leading one. The interchange between Ofcom and other European regulators has been extremely beneficial … There is every reason to think that they would wish to continue that”.—[Official Report, 23/1/19; col. GC 97.]
That is not an interpretation of Article 128 which any rational person can give. It actually says that we can be involved only in a small way, in exceptional circumstances and when it is necessary, so I do not read Article 128 as meaning that we will easily be able to participate in that particular organisation. The same case could be made for all the other organisations which the Government may wish for us to continue to have close relationships with. My question for the Minister is simple: does he agree with my interpretation, or with his noble friend during the debate in Grand Committee? If he agrees with my interpretation of Article 128, are the Government willing to take the positive steps referred to—for example, in Amendment 70—to achieve that close working relationship which is so important?
Lord Stevenson of Balmacara (Lab)
My Lords, I have to say a few words because my noble friend Lord Grantchester, who would have spoken to a couple of amendments which have not been touched on, unfortunately is unable to be with us this evening as he has a family illness which he had to attend to. I am sure your Lordships will want to send best wishes to him.
The two amendments which have not been referred to are Amendments 47 and 49. One is on time-sensitive goods and the worries here concern the arrangements, particularly around the Channel Tunnel, for goods that are required for immediate delivery. The question underlying the amendment, which the noble Baroness, Lady Neville-Rolfe, also put her name to, was whether the Government had any further information about developments, since if the current arrangement is not going to work, other arrangements will need to be brought into place, as time-sensitive goods are what they say on the tin.
Other noble Lords have spoken about medical isotopes. On behalf of my noble friend Lord Grantchester, I wanted to mention the time-sensitivity of these, not only in the general sense but particularly with air travel, which is often used to transport them. We have experience of problems which have occurred, particularly in Northern Ireland, because the route for radioisotopes required in Northern Ireland is through Coventry Airport, and even under existing arrangements, we have had delays which caused problems for patients, including the cancellation of treatments. Again, any comments from the Minister would be helpful.
On Amendment 49, the pet travel scheme has raised interest among those who travel to Europe with pets, particularly dogs and ferrets, which are the two main groups carried. The existing scheme is thought not to be very effective, and there is a chance to revisit it when it collapses after Brexit. Are Ministers aware that the BVA has set out 16 recommendations on changes to pet travel rules after Brexit? Many of these are sensible and needed, and this would be an opportunity to give the Committee an update on where they are on this matter.
Lord Bates
My Lords, I thank noble Lords who have taken part in this debate. The noble Lord, Lord Stevenson, referred to the pet travel scheme. The noble Lord, Lord McNicol, started the debate by talking about transport. The noble Lord, Lord Fox, referred to arrangements for UK-EU chemicals through REACH in particular. My noble friends Lady McIntosh and Lady Hooper talked about legal services. My noble friend Lord Risby talked about horseracing and the tripartite agreement. The noble Baroness, Lady Randerson, talked about transport. My noble friend Lord Lansley talked about authorised economic operators. My noble friend Lord Trenchard talked about horseracing and financial services. The noble Baroness, Lady Kramer, focused very much on financial services. The noble Lord, Lord Foster, talked about telecoms and broadcasting.
That is a flavour of the catch-all that we have here, with 17 amendments. I am looking at the representatives of the usual channels: I am not sure how the grouping of these amendments happened, but they cover a very wide range of agreements. We have heard 12 excellent speakers. They have ranged extensively and generated some 24 questions, to which it falls to me to respond. I am conscious of the time. I will bring my best endeavours to this, but I have the feeling that rather a lengthy letter will be winding its way to noble Lords.
Lord Bates
Yes, of course. I will probably miraculously sit down sometime around 10.39 pm. I think that is the convention. Let me go through as much as I can. I apologise to Members of the Committee and to the reporters of our proceedings for the pace at which I am going.
The noble Lord, Lord McNicol, and my noble friend Lord Lansley referred to the common transit area. As my noble friend hinted, this is an area where we have some good news, because the UK has agreed the common transit convention with the secretariat. Letters were received on 19 December 2018. That is taking shape.
The noble Baroness, Lady Kramer, talked about financial services. The Government are seeking a close future relationship on financial services with the EU that reflects our uniquely integrated markets and respects UK and EU autonomy. The political declaration includes commitments to close and structured co-operation on regulatory and supervisory matters, grounded in the future economic partnership. There will be a certain Groundhog Day feeling to the answers to a lot of these questions, because I will simply say that they are a matter for the future economic relationship, which we hope will be deep and extensive across all these headings. Of course, that is for another piece, or other pieces, of legislation.
The noble Baroness, Lady Randerson, spoke to her amendments. On haulage, the Government have been clear that we want to maintain the existing levels of access for UK and EU hauliers. A mutually beneficial road freight agreement with the EU will support the objective of frictionless trade. I very much take the point that the noble Baroness made about us often talking about Dover in the context of roll-on, roll-off, but there is strategic importance, particularly on the island of Ireland, for Holyhead and movements through there. However, we understand that we need the reassurance that we will have in place the arrangements needed to maintain continued access. On that basis, we welcome the contingency proposals being made by the European Commission on the basis that the Government are seeking a very close partnership based on reciprocal and binding agreements that protect the rights of road hauliers to access EU markets and vice versa.
The noble Lord, Lord McNicol, also talked about rail services, which are mentioned in Amendment 40. The Government are carefully considering the potential implications of leaving the EU, including implications for the continuation of cross-border rail. The noble Lord, Lord Fox, also referred to this through the Channel Tunnel and on the island of Ireland. I assure noble Lords that we understand the importance of maintaining the continuity of these important cross-border rail services, and we will continue to negotiate with our European partners to secure the best possible outcome.
In addressing Amendment 43, the noble Lord, Lord Fox, talked about open and fair competition. The Government recognise that commitments to open and fair competition are fundamental to all trading relationships; continuing the control of anti-competitive subsidies and creating a UK-wide subsidy control framework are crucially important. To support the desire for a future relationship, we propose rule alignment on state aid to be enforced by the Competition and Markets Authority, which already has a strong reputation in the UK. We also have strong proposals in other areas, including non-regression provisions for the environment, social issues and employment to ensure that we maintain the highest of standards, as my noble friend Lord Lansley requested.
Turning to Amendment 62, my noble friend Lord Lansley and the noble Lord, Lord Stevenson, said that it raised important issues for the future relationship with the EU, by providing that the patients should not be disadvantaged. We have given commitments that patients should not be disadvantaged; industry should be able to get its products into the UK market as quickly as possible, and we continue to play a leading role in promoting public health. The Government have already set out their aim to secure participation in the European Medicines Agency. The political declaration sets out the mutual commitment of the UK and the EU to explore working together in future medicines regulation and negotiating the UK’s ongoing co-operation.
Lord Purvis of Tweed (LD)
Will the Minister clarify what he said about seeking to participate in the European Medicines Agency? The noble Baroness, Lady Fairhead, in an earlier grouping, said it was the intention to remove Clause 6 from the Bill, or at least bring forward different language about what that participation means. It is pertinent to the point my noble friend Lord Fox made. If it is the Government’s intention to participate in many of these institutions, what do they envisage that participation mechanism to be? If the Government are seeking to change Clause 6, they have to be clear about how they intend that participation to operate.
Lord Bates
My noble friend Lady Fairhead made very clear our hesitation in the other place when this amendment was proposed, but it is now in the Bill. We see the commitment to all necessary steps in relation to the European Medicines Agency. We have been very clear that we do not wish to see that extended to other agencies, but it is there in the Bill at present.
Lord Purvis of Tweed
Just so that we know what might be coming on Report, is it the Government’s intention to bring forward amendments, as the noble Baroness, Lady Fairhead, said, to remove this?
Lord Bates
Our position is simply that we are committed to as close a relationship as possible with the European Medicines Agency. We see its value, we are committed to it, and it is in the Bill. We have made our positions clear on that, in terms of how we would view it if similar amendments were proposed for other agencies.
Amendment 39, on mutual recognition of professional qualifications, was spoken to by my noble friends Lady Hooper and Lady McIntosh and by the noble Lords, Lord McNicol and Lord Fox. The Government have clearly set out their objectives for mutual recognition of professional qualifications in the future relationship with the EU. We recognise the importance of mutual recognition for many sectors of our economy and the public sector. It offers all individuals working in regulated professions a means of having their qualifications recognised so that they can continue to provide valuable services. However, Her Majesty’s Government must be in a position to negotiate the best possible outcome. I note the risk that this amendment could undermine that objective and compel Her Majesty’s Government to reject highly beneficial agreements on mutual recognition simply because an agreement delivered its possible outcome in a way that differed from the detailed requirement set out in this amendment.
Lord Bates
I reassure my noble friend the Chief Whip that I have no problem in keeping it going for as long as he indicates is necessary—such has been the quality of the debate.
I have had a note passed to me which might be important. On Amendment 39, on mutual recognition of professional qualifications, I may have said “Ireland” but I meant to say “Iceland”. I thank the officials for being so attentive.
Lord Fox
The Ireland/Iceland point is actually very important. The noble Lord, Lord Hain, made a point earlier about cross-border activity—of midwives who live in the north of Ireland and practise in the Republic, for example—which is now in jeopardy. I am less excited about Iceland, with all due respect, given that the island of Ireland’s economy is driven on the ability to have the mutual recognition of all these skills. I enjoin the Government to work quickly on that one.
Lord Bates
The Government are very happy to give that undertaking.
On legal services, raised by the noble Baronesses, Lady McIntosh and Lady Hooper, the outcome of the negotiations of course lies ahead of us, but I assure noble Lords that the Government will push very much for a strong relationship in this area. As EU and EFTA lawyers will be subject to domestic rules in the UK, UK lawyers in the EU and EFTA will be subject to the national rules and regulations of individual EU and EFTA member states, if the UK leaves the EU without a deal. This will vary between member states and within member states, where there will be multiple regulators.
The noble Baroness, Lady McIntosh, asked specifically about close participation in the European Medicines Agency. I think I have already dealt with that one and I do not want to tempt further interventions at this point. However, I am pleased that the Government have been clear that we want to remain part of the EMA, which will include remaining part of the falsified medicines directive.
Let me turn to horses—galloping into the final straight with Amendment 48. I am grateful to the noble Baroness, Lady Hooper, who spoke particularly about polo, and the noble Baroness, Lady McIntosh. I also thank the noble Lord, Lord Risby, who talked about his connections with Newmarket, and the noble Lord, Lord McNicol, who asked about this as well. Amendment 48 dealt with the tripartite agreement on the movement of horses. As part of our ongoing preparations for EU exit, the Government aim to ensure that the movement of horses will continue with minimal delay and bureaucracy, while safeguarding biosecurity and animal welfare. Let me reassure noble Lords that we are already working closely with the equine industry to retain the benefits of the tripartite agreement after the UK leaves the EU. The Government actively support a long-term industry-led proposal to allow horses of high health status from third countries to travel to the EU under the TPA arrangements.
I had a note on the pet travel service. As part of the ongoing preparations for EU exit, the Government aim to ensure that the movement of pets will continue with minimal inconvenience to pet owners while safeguarding the UK’s biosecurity and the welfare of travelling animals. We are already working closely with stakeholders in the veterinary and pet travel industries to ensure that the benefits of the EU pet travel scheme are retained after the UK leaves the EU. The Government will submit their application for listed status within the EU pet travel scheme imminently. The UK is seeking technical discussions with the European Commission on its application. Should the UK become a part 1 listed country, there would be little change to current pet travel arrangements. Only minor changes to documentation would be needed.
I hope that noble Lords will feel that in the time available I have dealt with as many issues as possible, and that the noble Lord will therefore consider withdrawing his amendment at this stage.
Lord McNicol of West Kilbride
I have a good 20-minute speech here—no, I am joking. I thank the Minister for his response and all noble Lords and Baronesses for their input to this rather large group of amendments. As I said in my introduction, there is widespread support not just across the House but outside, from organisations, businesses, trade unions and relevant bodies. My takeaway from nearly all the contributions is the mutual benefit that organisations and businesses inside the UK would get from the adoption and inclusion of the amendments. The other word which came from the Government Bench was that their adoption would lead to continuity—a word that has been used many times in the previous two days. With that, I beg leave to withdraw the amendment.