Thursday 8th October 2020
(4 years, 2 months ago)
Grand CommitteeTrade Bill 2019-21 View all Trade Bill 2019-21 Debates Read Hansard Text Amendment Paper: HL Bill 128-V Fifth marshalled list for Grand Committee - (8 Oct 2020)
Lord Bassam of Brighton (Lab) [V]
My Lords, Labour supports the amendments in this group. As we heard, Amendment 28 seeks to reinsert a government amendment made to the previous Trade Bill, which would reduce from five years to three years the period during which the EU FTAs can be rolled over and in which previously rolled-over FTAs can be reamended. Amendment 29 would reinsert another government amendment from last year. If the Government decide to extend the period in which to make regulations under Clause 2, any such period should not be more than three years.
In commentary, I must say that I am surprised that these sunset provisions are not already included. As the noble Lord, Lord Purvis, explained, the Government themselves made the changes last time round. Only last year, they committed to reducing from five years to three years the length of the period in which the implementation power can be used. My argument is simple. Let us put these amendments back in the Bill, so that the Minister can demonstrate the same faith in the department and in the Government as previous Ministers did to complete these rollover agreements in a timely fashion.
What has changed? Why do we face the prospect of not having these rollover periods? What is the problem with having the sunset clause as it is? If it was right last time, surely it must be right this time. I am drawn to sharing the suspicion of the noble Lord, Lord Purvis, that the advent of a larger majority has made the Government think that they do not need these provisions, but that cannot be right either. When this was discussed the last time round, the Government said that the period would be renewable by agreement in both Houses of Parliament and that they were committed to engaging the devolved Administrations in that decision-making process in advance. I hope that those points still stand and I look forward to the Minister confirming that they do, as that seems a sensible way forward, which I am sure would find agreement on all sides of the House.
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)
My Lords, I will now address Amendments 28, 29, 30 and 32, in the names of the noble Lords, Lord Purvis of Tweed and Lord Bassam of Brighton, and the noble Baroness, Lady Kramer. The amendments would reduce the sunset period from five to three years and reduce the period by which it can be extended also from five to three years.
I am afraid that I have to say to the noble Lords, Lord Purvis and Lord Bassam, and to other noble Lords that, after careful consideration, we believe that the current sunset provisions in the Bill strike the right balance between allowing flexibility for negotiators, the ability to keep agreements operable and providing Parliament with appropriate constraints and scrutiny.
As I have said to noble Lords previously, the Government and I are very aware that at the time of the 2017-19 Trade Bill there was uncertainty and concern from Parliament as to the nature of the Government’s continuity programme. That is why the Government brought forward a number of amendments to the 2017-19 Bill. Noble Lords might be rather bored of hearing me repeat the fact that we have now signed 20 continuity agreements, so they will be pleased to know that, as the noble Lord, Lord Purvis, acknowledged, we have now signed 21. The United Kingdom and Ukraine have signed a political, free trade and strategic partnership agreement, which will help to further strengthen the partnership and serves as a foundation for a deeper strategic political and trading relationship between the UK and Ukraine. Trade between the UK and Ukraine was worth £1.5 billion in 2019 and we are committed to protecting and growing that trade. Signing this agreement will no doubt help us to do that.
We have now signed 21 continuity agreements and expect to make positive progress with remaining continuity agreements before the end of the transition period. Indeed, before this Bill completes its passage through your Lordships’ House, perhaps I will no longer have to say 21 but can come back with a higher number. I am pleased that these agreements have given Parliament more certainty as to the practical effects of the Government’s continuity programme.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I was delighted to hear from the Minister that a new trade agreement has entered the books. Could he confirm that the same arrangements that apply to the Japan agreement will apply to that agreement in respect of the ability of the International Trade Committee and the EU International Agreements Sub-Committee to have view of the documentation and to make a response to Parliament, should they wish to do so?
Lord Grimstone of Boscobel (Con)
I thank the noble Lord for that question. The arrangements that we have put in place in discussion with the committees for the Japan free trade agreement relate to the fact that we described it as an enhanced continuity agreement, which is why we have been putting it through enhanced scrutiny compared to other free trade agreements. This latest agreement, the Ukraine free trade agreement, will be scrutinised in the same way as other continuity agreements were previously scrutinised.
Lord Purvis of Tweed (LD)
My Lords, I am grateful for that response to the noble Lord, Lord Stevenson, because I think the Minister—and I hate to say this to him—is wrong. Parliament will not have the ability to scrutinise continuity agreements going forward that it did last time, because the Government have removed the reporting to Parliament on differences.
The Minister has just outlined the Ukraine agreement. I was happy to mention it and pleased to hear the Minister refer to it. If that helps continuity in our trade, I support it strongly, but what the Minister described as the title of the Ukraine agreement is not what we had. As I mentioned before, there were four different criteria or four different categories. We had a deep and comprehensive free trade area with Ukraine, and it does not sound as if we are replicating that. In the past, we had the fact that the Government were bringing forward reports to show any differences between the two. I am not sure if it is in order for the Minister to reply to this, having summed up—I do not think it is—but I am sure I will return to this further on. It might even be on the next group. There are potentially considerable differences and, under the Bill’s proposals, we would see that they are considerably weaker. I hope that the Minister might be able to reflect on that during the course of Committee.
I am grateful for the contribution of the noble Baroness, Lady McIntosh, and can clarify to her that these amendments relate to the sunset clause of the order-making powers. We will come to the TRA elements later on, but she raises good questions that we will discuss under the TRA aspect.
My noble friend Lady Kramer made a strong point.
Lord Grimstone of Boscobel (Con)
My Lords, the amendments that I will speak to now all relate to the crucial role of parliamentary scrutiny. Having listened carefully to the words of the noble Lord, Lord Stevenson, I believe that, if one puts CRaG and the royal prerogative to one side, we are in much closer agreement about what the role of the House and the committees should be in this matter than people might think.
Before I start, let me answer the question posed by the noble Lord, Lord Purvis, on the Ukraine agreement that we have just signed. The noble Lord researches his interventions so carefully that I fear that he was right and I was wrong, but I am pleased to confirm that we will voluntarily publish a report on Ukraine, highlighting the differences between the agreement that we have signed and the underlying continuity agreement. Also before I start, I thank my noble friend Lady Fairhead for her references to me, which were more than kind. I thank her very much for that.
I begin this grouping with Amendment 35, in the names of the noble Lords, Lord Purvis and Lord Fox. As I said, I believe that the noble Lords and I, along with many of your Lordships, share common ground in so far as we agree that it is important for Parliament to effectively scrutinise the Government’s trade policy and have sufficient information in order to do that. As I have made clear, both at Second Reading and subsequently during our debates in Committee, this Bill primarily concerns continuity for our existing EU free trade agreements, although noble Lords may be pleased to hear that I will not restrict my comments in this debate just to those continuity agreements.
This Bill does not and has never been intended to deal with the scrutiny processes for all our free trade agreements, including those with new partners such as Australia. In formulating our approach to scrutiny of future international trade agreements, we have, of course, rightly and properly, considered the approach of international comparators, including the United States and countries with similar Westminster-style democracies such as New Zealand and Canada. The UK Parliament will be able to conduct scrutiny in a way that is appropriate and proportionate to the UK’s constitutional context and in areas goes beyond that of New Zealand and Australia.
The making of treaties, including international trade agreements, is a function of the Executive held under the royal prerogative. At the same time, it has long been held—and I emphasise that this Government continue to hold—that Parliament should have the opportunity to scrutinise treaties effectively. The Constitutional Reform and Governance Act 2010 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, including laying the agreement before Parliament for a period of 21 sitting days for full scrutiny. Continuity agreements will—and in many cases have already been—scrutinised through the framework set out in CRaG. Additionally, noble Lords will know that we have voluntarily published parliamentary reports alongside signed continuity agreements, outlining any major changes with the underlying EU agreement. As I said earlier to the noble Lord, Lord Purvis, I can confirm that we will continue to publish these reports for remaining continuity agreements.
I will set out for noble Lords what the Government have committed to in this area, because I believe that we have moved significantly from our original position, having listened to the views shared by colleagues across both Houses. The Government have committed that, before we begin FTA negotiations, we will publish our negotiating objectives, alongside a response to the public consultation, and an initial economic assessment. In response to the point made by the noble Baroness, Lady Smith, this is the mandate that we give our negotiators and it is covered by the royal prerogative. I understand that the noble Baroness finds this old-fashioned, but that is the way our constitution works. I was pleased that my noble friend Lady Noakes spoke in confirmation of this.
This has already been undertaken for our negotiations with the US, Japan, Australia and New Zealand. In its most recent report, the EU International Agreements Sub-Committee praised the Government’s approach to pre-negotiation information sharing, stating that these publications had been helpful in initiating its scrutiny work. We feel that we have nothing to hide in this area. In addition, the Government have committed to keeping Parliament updated on the progress of negotiations. We have done this throughout current new FTA negotiations, with I and my fellow Trade Ministers having met with a large number of colleagues to update on progress and discuss trade policy issues. I have always been keen—and have held round tables and briefing sessions—whenever there have been new developments to discuss. I can absolutely confirm that throughout, we have engaged and will continue to engage, closely with the EU International Agreements Sub-Committee—the IAC—in your Lordships’ House and the International Trade Committee in the other place. I have taken steps in my department to ensure that we treat the IAC absolutely on all fours with the ITC, which clearly should be the appropriate way that we interact with your Lordships’ committee.
Lord Grimstone of Boscobel (Con)
It must have been hard enough following my remarks without a break, so I hope that noble Lords do not find it even harder now.
Once an FTA has been negotiated, it will need to be implemented and ratified. I remind the Committee that free trade agreements cannot of themselves change domestic law. If changes to legislation are required, Parliament will have the opportunity to scrutinise and approve them in the normal way. I hope that this demonstrates that the Government are committed to Parliament being able to scrutinise future trade agreements. I will amplify these comments in a moment.
Regarding the devolved Administrations, international relations, including the negotiation of free trade agreements, are a reserved matter under the devolution settlements. The suggestion made by the noble Baroness, Lady Finlay, about giving the DAs a formal role would not therefore be appropriate, but as we heard from my noble friend Lord Younger, there are many points of contact between the DAs and the Government on these matters. The UK Government will therefore be acting on behalf of the whole of the UK in free trade agreement negotiations, and our overall principle is to ensure that all parts of the UK benefit from any deal. As a reserved matter, it would not be appropriate to give the devolved Administrations a statutory role, as opposed to an informal role, in international trade negotiations.
Of course, the UK Government recognise that modern trade deals cover an increasingly wide scope and interact with areas of devolved competence. As such, we recognise that the devolved Administrations have an interest in international trade policy and DIT works closely with them to deliver policy that reflects the interests of all parts of the UK. In recognition of the importance of this relationship, we have recently launched a new ministerial forum for trade with the devolved Administrations. This has already met to discuss our approach to FTA negotiations and will meet regularly as negotiations progress.
In line with our commitment, the Government have already published an initial economic assessment for each of the new FTAs we are currently negotiating. Once negotiations have concluded, we will publish an updated assessment based on what has been negotiated. This will be presented to Parliament alongside the final treaty text and an Explanatory Memorandum to aid parliamentarians in their scrutiny role, in addition to the CRaG procedure.
As I have set out, this Bill is not about free trade agreements with countries that the EU did not have an agreement with before 31 January 2020, but, none the less, I trust I have reassured the Committee that the Government are committed to a transparent trade policy and to engaging with Parliament.
Next, I would like to address Amendment 36, which is also in the names of the noble Lords, Lord Purvis and Lord Fox. Noble Lords will be aware that despite the previous Bill falling, we have committed to and are delivering on publishing these parliamentary reports on a voluntary basis to assist noble Lords with the scrutiny of agreements. We have provided this additional scrutiny, over and above the statutory framework set out in CRaG, in response to the genuine concerns raised by noble Lords.
While it is of course true that we have not carried forward the amendment from the previous Bill, we have not done so because it is unnecessary. We have adhered to the commitment we gave, as our record demonstrates. We have not required a legislative commitment to see the benefit of these parliamentary reports, which have been invaluable in assisting noble Lords with the scrutiny of continuity agreements. Again, I can confirm that we will continue to publish reports for all continuity agreements yet to be signed.
Turning specifically to Amendment 37, we fully intend to publish parliamentary reports alongside agreements as they are signed. I hope that noble Lords will judge us by our record and accept our commitment—including my personal commitment—in this area.
With regard to Amendment 38, in Committee in the other place, my colleague, the Minister of State for Trade Policy, made the astute comment that
“trade negotiations … have a habit of going down to the wire.”—[Official Report, Commons, Trade Bill Committee, 23/6/20; col. 199.]
The eminent businesspeople and negotiators in this House do not need to be reminded of that fact. Thus, it is possible that we may sign a continuity agreement very shortly before the transition period ends. This may make it difficult to leave a period of 10 sitting days before any SIs are brought forward if we are to avoid a cliff edge in trading relationships with the country in question. However, I assure your Lordships that we will leave as much time as possible for parliamentary scrutiny before regulations are brought forward. Of course, CRaG allows a period of 21 sitting days for agreements to be scrutinised in Parliament before they can be formally ratified, which—I hope and believe—provides an effective period of time for parliamentarians to scrutinise agreements.
Moving to Amendment 41, while the command paper was published under the previous Administration —since then, of course, we have had a general election and secured our exit from the European Union—I hope that noble Lords will recognise that this Government have continued to give Parliament further opportunities to scrutinise our trade agenda effectively. This Government remain committed to the key principles of transparency and ensuring effective scrutiny of our trade policy. That is why we have made our own commitments, which I outlined in reference to Amendment 35. Noble Lords will notice that those commitments repeat many of the commitments made in the 2019 command paper.
The noble and learned Lord, Lord Goldsmith, spoke about the role of the committee that he ably chairs: the IAC. I carefully read its report on working practice, and I must say that I found it in the main sensible and pragmatic. I commit that we want to work pragmatically with the IAC going forward so that it can do the job that Parliament has asked it to do. The noble and learned Lord asked for my views on the IAC’s report, given that I was not the responding Minister during the Lords debates on it. As he knows, I welcome his committee’s vital scrutiny work. Frankly, I also welcome the praise specifically for my department’s working practices, which the committee, in its wisdom, advised other departments to follow.
On the point made by my noble friend Lady Fairhead, the noble Earl, Lord Sandwich, and the noble Lord, Lord Stevenson, we are not just standing still on this. I reassure noble Lords that we are in active discussions with the ITC and the IAC to ensure that we can work together to ensure satisfactory progress for the scrutiny of FTAs. I hope that those discussions will lead to a pragmatic approach that both committees will welcome.
Lord Lansley (Con)
My Lords, I am very grateful to the Minister but I would like to add one point that arises from what my noble friend Lady Noakes said. It is important that we recognise precisely how the CRaG process works. The Government do not require a positive Motion from the House of Commons to ratify a treaty. However, if the House of Commons has voted that a treaty not be ratified, the Government cannot then proceed to ratify it. The Government can ask the question again as many times as they like, but they cannot ratify it if the Commons has said that they should not. That is why it is such an important issue that, if the House of Commons has received a report from a relevant committee saying that it should consider such a treaty, in my view that debate has to take place before ratification can happen. Legally, however, the Government can use their power to control the timetable and avoid a debate, the period of 21 days can expire, and the Government can ratify. That is the legal position. If the Government have a requirement of urgency, under Section 22 of the CRaG the Government can lay a Statement saying, “This treaty must be ratified”, but that must be apparent right at the outset and not become something to which the Government resort because they wish to avoid a critical Motion in the House of Commons.
We will have to come back to this on Report—we will have to—because there is a risk. It is a small risk, and not something that the Government have been guilty of, but as Angus MacNeil, the Chair of the International Trade Committee in the other place, said a couple of years ago, one has to look at this legislation on the basis, perhaps, that—he said it a couple of years ago—Jeremy Corbyn were Prime Minister. Would we want him to have this power? Therefore, let us just make sure that we think about this, and I invite the Minister also to think about it in the intervening period.
Lord Grimstone of Boscobel (Con)
I thank my noble friend and I will certainly think about it. The comments he makes are perfectly rational. It is not for me to impinge on the prerogative of the Leader of the House and the usual channels to debate on whether time should be found. Of course, in a rational world, one would expect time to be found to debate a matter as important as that. I will consider his comments carefully.
Baroness Finlay of Llandaff (CB)
My Lords, I realise that I should have declared at the outset that I am on the committee advising the Welsh Government, at their request, as we proceed through Brexit. I asked to come in after the Minister to correct the assertion made by the noble Baroness, Lady Noakes. I want to point out that supporting this group—and particularly Amendment 57—is not a last-ditch anti-Brexit move: it is because we have devolved competencies that are deeply affected. Sadly, the Government have not seemed to be adequately discussing with, consulting or bringing into confidence the Welsh Government. Wales voted for Brexit and is unionist. It feels as if the Government have been short-sighted to see the Government in Wales as somehow a cloaked enemy who cannot be trusted to keep confidentiality. The Welsh Government know only too well that the future of Wales depends on these trade agreements and that compromises will need to be made for the future welfare overall, and they respect the vote cast by the people of Wales.
The noble Lord, Lord Stevenson of Balmacara, and the noble Baroness, Lady Fairhead, highlighted many strong points within the amendments, and we must find a way forward. There is a need to bring the devolved Administrations into the inner circle in negotiating if the good of the whole UK is to be achieved. I ask the Minister to please consider that.
Lord Grimstone of Boscobel (Con)
I have noted carefully the noble Baroness’s comments. I am sure that both I and other Committee members will consider them carefully.
Lord Grantchester (Lab)
I have one more small point. The Minister’s reply to the question of CRaG and how it applies to continuity agreements did not really reflect on the remarks of the noble Lord, Lord Lansley, regarding TRQs, as they go wider than just the Japan deal. The status quo underlying EU agreements and continuity agreements cannot really ignore TRQs and any outcomes. Can the Minister respond more fully on TRQs and their differences and how they are reported on under the CRaG process?
Lord Grimstone of Boscobel (Con)
I thank the noble Lord for his question. I will write to him and place a copy of my reply in the Library.
Lord Purvis of Tweed (LD)
My Lords, I thank all noble colleagues for taking part in this debate and the Minister for giving a comprehensive response. If we could legislate to guarantee a rational world, there would be unanimous support for it in the Committee. However, we will have to reflect on where we have got to whereas the noble Lord, Lord Lansley, and others such as myself who welcome what the Government are doing voluntarily, think that it should be the basis of a future statutory framework. I do not impugn the integrity of the Minister or his word, as I did not with the noble Baroness, Lady Fairhead, who spoke so well in this debate. It is very nice to see her making a speech. I am glad that the noble Lord, Lord Stevenson, apologised if he had caused her tears because that means I do not have to—I thought it was me. I hope the fact that I have been citing her quite a lot does not give her more discomfort on trade issues.
While we do not impugn the integrity of Ministers, we want a sustainable mechanism. The noble Lord, Lord Lansley, referenced the attempts in the House of Commons and he is absolutely right that my Amendment 35 started with Jonathan Djanogly MP. I had very good discussions with him but the reason I did not lead on that is that I did not want people to think it was simply a cheeky initiative. It was an initiative by six Conservative MPs in the House of Commons but I think it has genuine cross-party feeling behind it.
I am glad that the Minister gave a reassurance about the report that will come on the Ukrainian deal and on all others, going forward. I am still perplexed as to why the Minister is comfortable giving the assurance that all subsequent agreements will have a report, yet the Government do not want to reinstate an amendment which would guarantee that. We will just have to reflect on that.
The noble Lord, Lord Lansley, and the noble Baroness, Lady McIntosh, made an important point on timing and certainty and I was grateful to her for giving the example. The noble Baroness, Lady Fairhead, will remember the debate that I activated through the CRaG process because the Government had chosen not to bring a debate to the House of Lords. I activated one on the Faroe Islands and the Minister admitted, very graciously, that there could be improvements on consultation because, on a fisheries deal with the Faroe Islands, there had been no consultation with Scottish Ministers. That was quite breath-taking but the fact is that it happened and was corrected, so we were able to move on. It helps that there have been examples of this.
The next point was made by the noble Baroness, Lady Noakes, and I want to address it. My noble friend Lady Smith related the fact that the noble Baroness, Lady Noakes, think some of us are just animals with insatiable appetites to get more and more powers. I am just a wee timorous beastie here; I am just trying to do my best. I am not threatening or insatiable, or anything, but I am glad that she mentioned the Constitution Committee report. I took part in that debate and read the committee’s conclusions. The noble Baroness is right that paragraph 76 of the report said that the committee did not argue for Parliament to have a resolution on the negotiating objectives on any treaties. That is one point. However, she did not state the rest of this paragraph—I hope, Minister, that this is accurate research—but I can quote it. It said that
“for significant or controversial treaties, the Government will want to ensure that it has the support of Parliament at the outset of negotiations in order to secure ratification to the final text of the agreement.”
Now, we are in the realms of how that is done: either through informed consultation and debate, or through having a resolution on objectives in order for the Government to consider their mandate to then be stronger because it has parliamentary backing. That is the area that I am in.
That report was on all treaties. Jack Straw was referring to some of the sensitivities with Spain over the treaty of Utrecht. We consider a huge range of treaties, from relatively minor ones through to nuclear non-proliferation. But, as indicated by the noble Baroness, Lady Jones, and others, there is consensus that deep and comprehensive trade agreements go far beyond simple tariffs and quotas. They will impinge on consequential domestic legislation, and therefore this is justified.
That is why I am so glad that the noble Baroness, Lady Finlay of Llandaff, came back to the Minister. It is why Canada, for example—which the Minister referred to—has a federal-provincial committee on trade and a federal-provincial committee designated to agriculture, for example. The provinces are involved. They have a formal role and there have been federal state clauses in treaties that Canada argued for. Canada has a dualist system, as we do. Australia has a treaties council with the Prime Minister, the chief Ministers and the state premiers, if it wishes to activate it. The Minister sought to respond to my comments on Japan. I am glad he did, but he did not—and I am happy to be corrected—deny that Japan will have a vote in both houses of the Diet on the agreement to authorise the formal signatures.
Ultimately, the Minister asked me whether I am happy that the Government have gone above and beyond CRaG. Yes, I am delighted. I want it not to be, as the noble Lord, Lord Lansley, said, at the discretion of Ministers or for us to allow Ministers to decide whether it is appropriate. Going beyond CRaG once means that it is harder not to do it, and I am pleased about that, but for it to pass the Jeremy Corbyn test, or even the Jeremy Purvis test, I hope to have some kind of discussion on a framework.
Finally, the noble Lord, Lord Stevenson of Balmacara, referred to the fact that my amendment went through the House of Commons. There was a vote on it. The Government also chose not to progress the amendment in his name. We will reflect on this before Report, but I warn the Minister that there has been sufficient support for putting mechanisms that go beyond CRaG on the statute book to warrant this coming back on Report. In the meantime, I beg leave to withdraw Amendment 35.