Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit on the first debate is one hour.
Climate Change Act 2008 (Credit Limit) Order 2021
(2 years, 10 months ago)
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Lord Callanan
That the Grand Committee do consider the Climate Change Act 2008 (Credit Limit) Order 2021.
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I beg to move that this order, which was laid before the House on 13 May 2021, be approved.
The question of how we act on climate change is perhaps one of the most pressing issues of our time. Climate change is here—this Government absolutely accept that and are determined that the UK play its part in upholding the Paris Agreement and driving down our own greenhouse gas emissions. This Government are committed to decarbonising the UK economy while of course, at the same time, driving economic growth, and to meeting our ambitious targets for net zero emissions by 2050. We were the first major economy in the world to set a legally binding target to reach net zero carbon emissions across our economy by 2050, and we have shown that rapid progress on decarbonisation is possible alongside a thriving economy. Our emissions are down by almost 44% across the last 30 years and our economy has grown by 78% during the same period. We are currently in the process of reaching a significant milestone in approving legislation to enshrine the UK’s sixth carbon budget in law, proposing a target that would reduce greenhouse gas emissions by 78% by 2035, compared to 1990 levels. This is a huge commitment and one which the Government are working flat out to achieve.
Turning to the topic of today’s debate, under the Climate Change Act 2008 the Government must set a limit on the number of international carbon units that can be credited to the net UK carbon account for each budgetary period. These carbon credits represent the reduction or removal of greenhouse gas emissions overseas. The legislation we are debating today sets a limit on the net number of international carbon credits that may be used to meet the fourth carbon budget, which runs from 2023 to 2027. The Climate Change Act, passed with near unanimous support in this House, allows for the flexibility of using carbon credits to meet a carbon budget. The order will set the credit limit for the fourth carbon budget at 55 million tonnes of carbon dioxide equivalent, which is about 2.8% of the total carbon budget. This is the same amount of flexibility as the House agreed for the second and third carbon budget credit limit orders. However, I highlight that this legislation does not commit the UK Government to buying international credits: as we have witnessed with previous carbon budgets, the Government have a strong track record of delivering clean growth and have not used any of our allowances on other budgets to date.
We continue to put forward ambitious plans to meet future carbon budgets, including through our bold sector strategies, and are committed to meeting our world-leading targets through domestic action. Noble Lords should be aware that the credit limit set through this legislation excludes any net use of credits that result from the operation of the European Union Emissions Trading Scheme. The exclusion is required because, while the UK Emissions Trading Scheme replaced the UK’s participation in the EU ETS on 1 January 2021, Northern Ireland electricity generators continue to participate in the EU ETS and will therefore receive EU ETS allowances within the fourth budgetary period.
The role of the Climate Change Committee in providing independent expert advice to government on climate change mitigation and adaptation is widely accepted as global best practice. The Government’s net zero target covers the whole of the UK, and all four parts of the union have an integral role to play in delivering the Government’s carbon budgets leading up to 2050. As such, we of course also work closely with our partners in the devolved Administrations in order to achieve our climate goals.
In determining the appropriate credit limit for the fourth carbon budget, which is the subject of the present discussion, the Government have considered the advice of the Climate Change Committee and the views of the devolved Administrations. All parties agree that the purchase of international credits should not replace domestic abatement when delivering our net zero target. While the Climate Change Committee and the devolved Administrations recommended a zero-credit limit, the Government have concluded that it is best to maintain a small amount of flexibility over the fourth carbon budget period.
As a Government, we have undertaken our own robust analysis to validate our position and have considered the range of factors required by the Act, including the economic, fiscal, social, scientific and international circumstances. We judge that this flexibility will continue to ensure that the Government can best deliver our carbon targets more effectively and be resilient to unexpected changes in future emissions.
We are extremely grateful to our independent advisers for their expert analysis and advice, and to the devolved Administrations for their valuable ongoing engagement. We look forward to working closely on the fundamental decisions that we will need to take over the coming years in order to drive forward this progress.
The Government recognise the significant advantages that the net zero transition can bring, in addition to the essential benefits of ending our contribution to global warming. Now is the time to double down and decrease our emissions further and faster. Ahead of COP 26, we will bring forward further bold proposals, including our net zero strategy, to cut emissions and create new jobs and industries across the whole country, going further and faster towards building a stronger, more resilient future and protecting our planet for this generation and those to come.
As for the legislation for debate today, the Government’s sustained drive ensures that we are on track for the fourth carbon budget. However, as we have outlined, in our view it is still prudent to allow ourselves a small amount of flexibility in the future in order to manage the uncertainty in emissions projections and to continue to deliver emissions reductions in the most prudent and fair manner for the whole of the UK. I therefore commend this order to the House.
Lord Bradshaw (LD) [V]
My Lords, the Government are to be congratulated on the progress they are making so far and on not drawing down credits from abroad. However, the going might get tougher now. We have probably taken into account quite a lot of the low-hanging fruit, and getting nearer to the target will demand more and more effort.
The resistance of the transport industry to economy in CO2 is notorious. Interestingly, in a referendum this weekend the Swiss voted not to take on board some of the tougher decisions that need to be made if people really are going to economise in the use of transport. Economy is particularly needed in air transport and in diesel and petrol-fuelled motor transport.
The Minister said that we are keeping some overseas credits at our disposal, but could he venture to suggest whether this will really happen? If we undertake to plant 2 million acres of forest in the United Kingdom, we can be fairly certain that that will be done and measured. If we are relying on other countries to take carbon-hungry technologies or practices out of commission, it will be much more difficult to monitor whether they actually do so and whether the climate in fact ends up benefiting.
So, it is good to see that we will rely more on ourselves, because that is only prudent for an economy that prides itself on being at the forefront in this regard. However, if the going is to get harder and as decisions become more difficult—for example, if there are to be restrictions on how and when people use their cars—we will come up against resistance. The Government will need great resolve if they are to stick to their guns and make sure that we secure the anticipated carbon reductions.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Bradshaw, who has such a breadth of knowledge in this area, particularly in the realm of transport.
I thank my noble friend the Minister for setting out the effect of this order. Before I turn to it, I congratulate the Government on adopting the sixth carbon budget from the Climate Change Committee, covering the five-year period from 2033 to 2037. Doing so will set in law the ambition of slashing emissions by 78% by 2035, based on 1990 emissions levels. Also, significantly, this carbon budget will incorporate the UK’s share of international aviation and shipping emissions for the first time; that is most important. Indeed, this was an issue at Paris and since. I warmly welcome this.
The budget keeps us on track with the Paris Agreement goals. It is important to acknowledge the progress that has been made. We have overachieved against the first and second carbon budgets, and we are on target to outperform against the third. In the light of the significant cuts in greenhouse gases across the economy, in industry in particular and in the power sector, it is worth pausing to congratulate the Government on the success we have had. It is heartening, too, to see the G7 in a better place on this following strong leadership from President Biden and others—including, indeed, our own Prime Minister.
The order relates to the fourth carbon budget, from 2023-27. It limits the net use of carbon units for this budgetary period to 55 million carbon units or 55 million tonnes of carbon dioxide. That sounds concerning, but it follows the approach taken in previous budgets, and we have not used those carbon units at all. I understand that—it provides headroom for flexibility; the only danger, of course, is that it sends out a slightly contrary signal. On the other hand, it is most important that Governments are judged by what they do. Judged on the actions, we have a good story to tell, although more needs to be done.
The Minister and the Government have announced that they do not intend to use this facility, intending instead, as in previous budgets, to draw solely on domestic action to fulfil the ambitious budgets that have been set. I accept totally that this is the Government’s intention, and they are likely to achieve that aim based on past action. I support that flexibility. I accept that there is an argument about the signal sent, but it is more important that we have that flexibility.
Ahead of COP 26, can the Minister please seek to ensure positive action in other areas, in particular promoting electric cars, buses and other forms of transport, and battery storage and production? That is important for achieving our climate change aims, but it would also boost the economy. This follows on from the Stern report during the 2000s, and subsequently it has become clear that it is possible to achieve positive growth at the same time as reducing emissions, as the Government have demonstrated. But it is important that we press ahead with the electric transport market and the battery storage market in particular, in which we can be world leaders.
I want to ask the Minister about two issues. He touched on both but I want to push him a little further, if I may. First, when will we receive the carbon budget for discussion in the House, with a view to ensuring that it is put into legislation? Are we still going to get it by the end of June, as originally intended? If not, when can we expect it? Secondly, will Northern Ireland, to which the Minister referred, continue to be treated separately? I was both an Energy Minister and in the Northern Ireland Office, so I know that the Northern Ireland market is separate. Will a separate position for Northern Ireland present any particular challenges regarding the EU ETS system?
In conclusion, I am keen to encourage the Government to take stronger action ahead of COP 26. We are in a strong position but clearly, more needs to be done. Overachieving in this area is certainly not a bad thing. I strongly support the order before us.
Baroness Jones of Moulsecoomb (GP)
That was a very interesting introduction from the Minister. I would like to explain the whole concept of urging economic growth when we live on a planet with finite resources, but I will have to leave that for another day. I would like to tackle quite a lot of what the noble Lord, Lord Bourne, said. The noble Lord, Lord Bradshaw, said that making reductions is going to require more effort, which is absolutely true. He also asked whether we can trust other countries’ measurements—that is a perfectly true point—and talked about a stronger, more resilient future. I would argue that this Government do not have a clue how to get us to that future. It is going to take government resolve, the noble Lord said. Resolve is not something this Government are very good at. They are very good at making promises—and at breaking them.
The noble Lord, Lord Bourne, congratulated the Climate Change Committee on its budget and said that the Government had overachieved. They overachieved by cheating, essentially, by not including shipping or aviation. That is how they cut carbon emissions. Of course, they have now included those, so we might actually get some more accurate figures. The noble Lord also mentioned the G7 and said how wonderful the Government were. The most leaderly thing I saw at the G7 was President Macron telling the UK to honour its treaty promises. Let us hope that the Government will do so.
For me, this statutory instrument is nothing more than an accounting trick that takes us further away from tackling the climate emergency and runaway global heating. The Government should be ashamed of themselves for not listening to the Committee on Climate Change, which said that these credits should be set at zero, as the Minister said. However, the Government knew better and instead of listening to what the Minister called “independent, expert advice” from the committee, chose to do their own “robust analysis” of the situation and came up with a different answer. Which part of government did that robust analysis? I would really like to know, so that I can target my comments a little more closely.
So, instead of following the advice, which was to set these limits at zero, the Government have allowed for an additional 55 million tonnes of CO2 to be spewed into the UK atmosphere and then bought back from other countries. Essentially, the Government are like a fire brigade that says, “We’re going to let these 55 houses burn to the ground, but it’s okay because we’ve paid for 55 houses in other countries to be saved—and it’s cheaper anyway”. That is the most appalling way to run a country and an even worse way of trying to deal with runaway climate change, which is what we are facing. It is absurd to try to trade these things when we should all be racing towards net zero across the world.
The Government talk about showing global leadership, but then they create loopholes to avoid doing much of anything. I accept that they have made moves in the right direction, including adding shipping and aviation when counting CO2 emissions, but how are other countries going to look up to this Government on anything to do with climate change when they will not listen to their own Climate Change Committee, which gives them independent expert advice? Quite honestly, the Government are cheating the system, and I think it is appalling. Each time I get a glimmer of hope that this Government understand the real emergency we are facing and the damage it could do to all of us, the rest of the planet and every economy worldwide, my hopes are dashed by statutory instruments such as this.
Lord Oates (LD)
My Lords, I thank the Minister for his introduction to this statutory instrument, which could not have been clearer. Its clarity is the reason I oppose the order. It is clear that it is unnecessary, ill-advised and sends precisely the wrong messages about what we as a nation will do when the going gets tough on meeting our climate change targets. As the noble Baroness, Lady Jones, and other noble Lords have said, and as the Minister pointed out, it is opposed by the Climate Change Committee, the Government of Scotland and the Government of Wales.
The Government have two arguments that they deploy in favour of these 55 million credits. First, they say they are on track to meet the fourth carbon budget, but they need to have flexibility just in case they do not. The Minister told us that 55 million credits were in place for the second and third carbon budgets. While I think there should be zero credits, in line with the views of the Climate Change Committee, the least the Government could have done is to begin to ratchet them down as a proportion of the budget. The Minister said that they represented 2.8% of the budget; he could have brought that down to 1% or 1.5%, but he and the Government have chosen not to do and are sending very worrying signals about what they will do.
The Minister said, as the Explanatory Memorandum points out at paragraph 7.5, that the UK is currently projected to meet the fourth carbon budget. The Climate Change Committee says that the Government are not on track to meet the fourth or the fifth carbon budget, so I wonder whether he can explain that discrepancy and who is advising the Government on their projections to meet the climate change budget.
The second argument that the Government use is:
“The ability to purchase credits could also enable the UK to support mitigation action in developing countries. A purchase of credits would contribute to the development of a global carbon market, which would reduce the global cost of action on climate change.”
This is of course an utterly spurious argument. Nothing would prevent the Government, if they set the credit limit at zero, purchasing credits and contributing to supporting developing countries in this way. This measure is a “get out of jail free” card for the Government when they start finding things difficult, and it is clear that things are going to be much more difficult politically if we are to meet our targets. We all know that. We know that the decarbonisation of our economy to date has been driven largely by the decarbonisation of the power sector. Although that has had impacts on the public, they have been indirect, and they are very different from what will happen as we move forward.
We absolutely need a signal of resolution from the Government and not a signal that they have a way out of this, not least because we are talking here about the fourth carbon budget, which, as I have said, the Climate Change Committee says we are not on track to meet. The fifth and sixth carbon budgets are much more demanding. If the Government are giving themselves wriggle room already on these budgets, it sends a very worrying signal.
There is an Arab proverb which I often quote in the context of climate change, because it is very apposite: commitments are cloud, but implementation is rain. This Government are extremely good at making commitments; they are extremely poor at bringing forward the actions needed to implement them. Not only are they bad at acting to implement them; they often do the opposite. Whether it is air passenger duty, coal mines or in other areas, not only do they not act but they do not signal the action that is needed. I hope that we can retain the cross-party consensus that existed when we set these targets, so that we can act to meet them. But we all need to work together and show absolute commitment to doing that, and we must not give ourselves wriggle room to get out of the commitments we have made.
Lord Grantchester (Lab)
Once again, the Committee meets to consider important matters concerning climate change. I thank the Minister for his explanation of the order before us. It follows the well-worn pathway of setting credit limits for the first three carbon budgets of 55 million metric tonnes of CO2 equivalent as flexibility insurance in meeting the UK’s legal obligations. As we have seen, there has been no need to utilise these credits for the first two carbon budgets, and the UK is on target to meet the third carbon budget. The Government are to be congratulated on that. They are also to be congratulated on accepting the advice of the Climate Change Committee on setting the carbon budgets. Last week, the committee approved a sixth carbon budget for the years 2032 to 2037. This CCC advice was endorsed also by the devolved Administrations.
However, there, the congratulations must end. It has not been generally accepted, as the noble Lord, Lord Oates, queried, that the Government are on course to meet the fourth and fifth carbon budgets and they have had to have a reset, with additional targets, to get back on track, as we discussed last week. The Government have gathered in the low-hanging fruit from earlier years, referred to by the noble Lord, Lord Bradshaw, and done the least development possible, paring back the budget and policies from necessary support for climate action.
The Government have now responded on the realisation of the climate emergency by setting net-zero targets for 2050 in accordance with the Paris Agreement to limit global warming, but they continue with self-congratulatory rhetoric, setting targets without clear action plans. As we discussed last week, they must come forward with policies, plans and strategies and engage in meeting these budget commitments.
It must be recognised that this order, which sets the traditional credit limit, goes against the advice of the Climate Change Committee, which was again endorsed by the devolved Administrations. That advice was to set a nil credit limit—that is, not to allow the purchase of carbon credits from overseas. Yes, none has been required in the past, but the CCC is right in its determination that the UK must meet its carbon emissions reductions domestically. It recommended that international emissions credits should not be allowed to be used to meet the fourth carbon budget and, furthermore, that any surplus from the third carbon budget should not be carried forward.
It is recognised that the UK Government intend to meet the new NDC and the 2030 target without the use of international credits. Inventory uncertainty projections and forecast inaccuracies are also recognised —they have always existed—but it is now time for clear actions, real leadership and determined signalling that the UK is meeting its obligations entirely through its own domestic obligations, as well as now taking the lead on international aviation and shipping.
I have just one question on the future development of policy. One necessary priority must be the development of batteries and energy storage; the noble Lord, Lord Bourne, identified this in his appreciation of this order. Can the Minister outline where and in which strategy and plan this priority will be answered by government plans, among the many opportunities they have identified?
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
I call the Minister. Oh—my apologies.
Lord Grantchester (Lab)
I am nearly finished.
The reasons given in the Explanatory Memorandum for continuing with budgetary insurance are no longer convincing. Sufficient flexibility must be managed through domestic commitments; offsetting is not a sustainable way forward. Unforeseen circumstances cannot provide a justification, and the UK has not previously contributed to the development of the global carbon market with any impact. The opportunity to purchase credits will only diminish as the world steps up with commitments to decarbonise. Consider the damage that would ensue should the Government need to go ahead with a carbon credit. They must self-insure and develop robust policies and plans to meet all the carbon budgets with clarity and certainty.
This is a missed opportunity that the Government could have taken as a decisive step, in this decisive decade, toward emissions reductions. This conclusion was also recognised by the noble Baroness, Lady Jones, in her remarks. The 2030 NDCs submitted at the UNFCCC last December should have set the tone. The sixth carbon budget will require more ambition and the pace of change to accelerate over the coming years. The confidence that could have been set by a zero-credit limit in this order needs to be corrected by the determination and announcement of policy developments before COP 26 later this year. I look forward to seeing the UK outperform and deliver. Labour understands the size of the task. The challenge is set.
Lord Callanan (Con)
First, I thank all noble Lords for their extremely valuable contributions to this debate.
This year, we in the UK find ourselves in the privileged position of being the president of the G7 and the host of COP 26. We are determined to use these key international moments, as noble Lords saw at the G7 earlier this week, to promote ambitious action to deliver the transformational change required by the Paris Agreement. In line with this, it is imperative that we continue to be bold and ambitious in not only our commitments but our actions, as the noble Lord, Lord Oates, pointed out, to deliver progress against climate change.
To reiterate what I said earlier, our position remains that the Government intend to meet all our targets through domestic abatement. International credits merely afford us a potential flexibility to ensure a cost-effective approach to reducing carbon emissions when managing uncertainty in historic and future emissions.
As usual, we have had a very interesting debate. I will pick up on some of the points raised. We acknowledge the progress pointed to by the noble Lord, Lord Bradshaw, and other noble Lords, including my noble friend Lord Bourne, and the success we have had so far in decarbonising the UK economy to date. Many developing countries plan to sell credits in future, but my noble friend is absolutely right that these must be of the very highest quality. We are using our international climate finance to ensure that developing countries have the capacity to meet this bar and access finance through the carbon market.
On the action that the Government are taking to decarbonise transport, which my noble friend Lord Bourne also asked about, we recently announced that the UK is embarking on a comprehensive transport decarbonisation plan. This will be a bold, ambitious programme of the co-ordinated action needed to end the UK’s transport greenhouse gas emissions by 2030 and, at the same time, ensure that the transport sector plays its part in delivering our legally binding carbon budgets. The plan will think in terms of not only modes of transport but technology and places. Part 1 of the plan was published in March 2020, with part 2, containing policies and proposals, expected to be published shortly.
We will also commit to communicating our public engagement approach to our net-zero strategy to generate widespread awareness, and, hopefully, acceptance, across the UK, because achieving the net-zero target will be a shared endeavour requiring action from everyone in society—people, businesses and government. Therefore, we are increasing our work on public engagement on net zero, both in communicating the challenge and in giving people a say on shaping future policies.
I have addressed a number of my noble friend Lord Bourne’s questions, but I am sorry to tell him that he missed the debate on the most recent carbon budget. It was debated in this House last week; the noble Lords, Lord Oates and Lord Grantchester, were present, with a couple of other Peers. It still has to go to the House of Commons, but I am afraid that my noble friend has missed his opportunity to contribute to that one.
On Northern Ireland and the emissions trading scheme, Northern Ireland power plants have remained in the ETS under the Northern Ireland protocol, but all other emissions in Northern Ireland remain under the UK Government’s coverage.
The noble Baroness, Lady Jones, asked why we chose not to set a credit limit at zero tonnes, as was recommended by the Climate Change Committee. I can tell her that the Government intend to meet our net-zero target and our interim carbon budgets through cutting our domestic carbon emissions. As I said earlier, we are simply choosing to maintain the limited tools that we already have under the Climate Change Act to ensure that we can deliver on our carbon targets at the lowest possible cost, including the option of using international credits. Our internal analysis reaffirmed that this level is suitable to account for any potential uncertainties.
The noble Lord, Lord Oates, implied that we could have sought to deliver a lower level for the credit limit order. Again, I remind him that our analysis indicates that any lower level might not provide sufficient flexibility to manage the uncertainty associated with the inventory using only credits.
The noble Lords, Lord Oates and Lord Grantchester, asked whether the Government are on track to meet carbon budgets 4 and 5. We are taking decisive action to ensure that we deliver on both. Ahead of COP 26, we will set out our ambitious plans across key sectors of the economy, such as the energy White Paper and the industrial decarbonisation strategy. These will build on the strong recent progress that we set out in the 10-point plan and will culminate with the net-zero strategy later in the year.
The noble Lord, Lord Grantchester, asked about future carbon budgets. I remind him that this current legislation only concerns carbon budget 4, of course. We will consider the limit for carbon budgets 5 and 6 at the appropriate times in the future, using analysis that is relevant to the context at the time.
The noble Lord also raised the use of other flexibilities in the Climate Change Act 2008. In response, I want to make it clear that we have no intention of using any other flexibilities afforded to us through the Act and we intend to meet our ambitious targets purely through domestic action.
I conclude by saying that, as I mentioned in my opening speech, this statutory instrument effectively continues the status quo, setting the same credit limit that we have held but not used for carbon budgets 1 to 3. This status quo has allowed the Government to deliver world-leading emissions reductions and encourage similar ambition in other countries across the world. I therefore commend this draft order to the Committee.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
The Grand Committee stands adjourned. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit for the following debate is one hour.
Conformity Assessment (Mutual Recognition Agreements) and Weights and Measures (Intoxicating Liquor) (Amendment) Regulations 2021
(2 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Conformity Assessment (Mutual Recognition Agreements) and Weights and Measures (Intoxicating Liquor) (Amendment) Regulations 2021.
Relevant document: 2nd Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I beg to move that these regulations, which were laid before the House on 12 May 2021, be approved.
The statutory instrument we are debating today implements important aspects of international trade agreements within the Government’s trade continuity programme, ensuring continuity for UK businesses. This includes certain mutual recognition agreements that have been signed with the USA, Australia and New Zealand along with a free trade agreement with Korea that contains relevant conformity assessment provisions. The UK-Japan Comprehensive Economic Partnership Agreement and the UK-Canada Trade Continuity Agreement also include protocols on the mutual recognition of conformity assessment. From hereon in, I will refer to the mutual recognition elements of all of these agreements as MRAs.
These MRAs support trade in goods between the UK and its partners by reducing technical barriers to trade. Importantly, they do so in a way that protects the UK’s robust product safety system. The UK’s product safety legislation requires certain products to be assessed to ensure that they meet requirements in that legislation; sometimes, this assessment is required to be done by third parties. MRAs can reduce barriers by allowing this conformity assessment to be undertaken by a body based in the UK for export to the relevant country. We make the same arrangements for our partners under the agreement so that procedures carried out by recognised overseas CABs are accepted for our domestic regulations.
This SI also implements one aspect of the UK’s free trade agreements in the broader trade continuity programme. As part of the UK-Japan Comprehensive Economic Partnership Agreement, we will give greater flexibility to importers of a traditional Japanese spirit called single-distilled Shōchū. The SI amends specified quantity requirements applying in Great Britain so that bottles of single-distilled Shōchū may be placed on the market in Great Britain in one of the traditional Japanese bottle sizes of 900 millilitres.
Let me now address each of these areas in more detail, starting with the measures we are taking both to recognise overseas bodies and to appoint UK bodies under these MRAs before moving on to the measures we are taking for single-distilled Shōchū bottle sizes.
To begin, let me address provisions for goods in scope of the UK’s MRAs that are assessed by UK conformity assessment bodies for export overseas. This SI provides for the Secretary of State to designate CABs as competent to assess that certain goods comply with the regulatory requirements of our partners under the MRAs as set out in a schedule to the SI.
For example, this means that where a UK-based CAB would like to be recognised by the Australian authorities as capable to assess goods under Australian machinery requirements, the body can apply to UKAS, the United Kingdom Accreditation Service, to be accredited as fit to test against those Australian requirements. The Secretary of State may then designate the body under the UK’s MRA with Australia to assess machinery for export to Australia. As a result, a UK manufacturer that uses the services of that UK CAB can now use the same body to do its accreditation for the Australian market and does not need to identify and start contracting with a CAB actually operating in Australia. Therefore, manufacturers are able to place products on the Australian market more cost-effectively, potentially passing those savings on to consumers.
I now move on to consider provisions for goods coming into the UK. Under the MRAs, the UK recognises the results of conformity assessment procedures carried out by recognised overseas CABs against domestic regulations. This SI makes it clear that assessments carried out by a recognised body based in one of our partner countries should be treated as equivalent to those carried out by a UK-approved body when relevant products are sold in Great Britain. These regulations do not change the detail of the requirements for third-party assessment, nor do they amend any requirements related to a product’s specifications. This means that the UK will maintain its robust product safety protections while continuing to reduce barriers to trade with our partners. The benefits are potentially significant here: trade with our MRA partners in radio equipment alone amounted to nearly £2 billion in 2019, although, of course, not all of these products will have required conformity assessment by a third party.
The regulations also provide for the Secretary of State to create a register of CABs that the UK recognises under the MRAs, defined as MRA bodies. This is communicated via the UK Market CAB database, a publicly available resource that can be used by businesses and regulators to verify quickly the status of CABs. These regulations also provide for Canadian accreditation bodies recognised by the UK under the UK-Canada Trade Continuity Agreement to be listed on the Government’s website.
This SI also provides that the Secretary of State, or a person authorised to act on their behalf, may disclose information to the other party to an MRA where required by an MRA. For example, we may communicate information regarding goods from the USA which have been suspended by UK enforcement authorities, as part of our co-operation commitments in the MRA with the USA. Disclosure will be made in accordance with data protection legislation.
This SI provides for a product known as single-distilled Shōchū, a spirit which is single distilled, produced by pot still and bottled in Japan, to be placed on the market in Great Britain in an additional bottle size, 900 millilitres. Prior to the UK-Japan Comprehensive Economic Partnership Agreement, single-distilled Shōchū bottled in Japan had been permitted in Great Britain, but only in quantities of 720 millilitres or 1,800 millilitres, in addition to the usual specified quantities for prepacked spirits. Providing for sale of this traditional bottle size was very important to Japan during negotiations of the UK-Japan Comprehensive Economic Partnership Agreement. This artisanal product is already on sale across the UK in other bottle sizes, so this change should not have a significant impact on consumers in Great Britain.
I shall now speak to the territorial scope of these regulations. For some provisions, the regulations will make amendments for Great Britain only, while others extend to the whole of the UK. Regulations 4 and 5, relating to recognition of conformity assessment by relevant overseas CABs, extend to Great Britain only. Northern Ireland will continue to recognise the results of conformity assessment procedures done under the mutual recognition agreements between the EU and the relevant third country. This is in accordance with the terms of the Northern Ireland protocol to the withdrawal agreement. Regulation 6, relating to the Secretary of State’s power to designate UK-based bodies under these agreements, will extend to the whole of the UK. CABs across the UK can therefore be designated under the MRAs.
Regulation 7, relating to information sharing, will also extend to the whole of the UK, to enable the Secretary of State to share relevant information required under the MRAs. Regulations 8 and 9, amending the permitted bottle sizes for single-distilled Shōchū, extends to Great Britain only. In accordance with the Northern Ireland protocol, single-distilled Shōchū will continue to be permitted on the Northern Ireland market in 720-millilitre and 1,800-millilitre bottle sizes, in addition to the usual specified quantities for prepacked spirits.
In conclusion, we are introducing these regulations to give effect to provisions which keep our barriers to trade low with some of our significant trading partners. As I have said, we do this while preserving our robust protections for product safety, as a responsible Government. This SI will provide certainty on the UK’s approach to recognising and designating CABs for certain products under the MRAs, as well as making necessary amendments to allow the 900-millilitre bottle size of single-distilled Shōchū to be placed on the market in Great Britain. I therefore commend these regulations to the House.
Lord Lansley (Con)
My Lords, I am glad to follow my noble friend the Minister, who set out the purposes of these regulations fully and clearly. First, I draw attention to the register of interests in that I am the UK co-chairman of the UK-Japan 21st Century Group. As that may imply, I wish to speak only to Part 3 of these regulations, which relates to Shōchū.
I raised an issue relating to this towards the conclusion of the passage of the then Trade Bill—now the Trade Act 2021—because of the implications of timing. Before I get to that, my noble friend explained Shōchū, which is a distilled liquor that is stronger than sake but not as strong as whisky. As he said, it is an artisanal product in Japan. The bottles in which it is prepared and sold there are an integral part of its overall presentation, so I completely understand why this was something that our Japanese friends particularly wanted to see made available in this country in the same way as it would be sold and marketed in Japan.
For those who are of a certain turn of mind, I realise that I have 10 minutes but I promise not to take up all the time available. One of the perversities of our Hybrid Sittings is that the less you have to say, the more time you have to say it. Last week, I had to talk about the carbon budget in seven minutes, but by contrast I now have 10 minutes to talk about Shōchū. Such is life.
Those with an interest in the media may recall the 1956 American film “The Teahouse of the August Moon”, with Marlon Brando and Glenn Ford, which looked in a whimsical way at the American occupation of Japan after the war. Of course, the teahouse in fact purveyed not tea but sweet potato Shōchū—and a successful film it was, too.
The question that came up in the Trade Bill debates was that, in the UK-Japan Comprehensive Economic Partnership Agreement, the relevant Annexe 2-D—for the benefit of those who want to go and look for it, it is on page 693 of the agreement—makes it clear that the United Kingdom is obligated to make the traditional bottle of five gō available in the United Kingdom; one gō is 180 millilitres, so five gō is the 900-millilitre bottles. The relevant footnote to that obligation says:
“The United Kingdom shall expeditiously take necessary steps to ensure the fulfilment of this obligation and shall notify Japan no later than 90 days after the date of entry into force of this Agreement of the completion of its domestic procedures necessary for the fulfilment of this obligation.”
The point at issue then was that the Trade Bill was going beyond 90 days. In the event, the 90 days were up on 30 March this year, the Trade Bill did not receive Royal Assent until 29 April, these regulations was laid on 12 May and we are approving them on 15 June. I think no harm is done, and our Japanese friends have been entirely understanding at each stage that we have trespassed beyond the 90 days and of why we have done so. For the benefit of those writing trade agreements in future, it would probably be best if they put timetables in and related them to the completion of the parliamentary procedures rather than the entry into force because the entry into force was done under a provisional application prior to parliamentary scrutiny.
The only other point I want to make is that, as my noble friend said, there is a different territorial aspect to this. By virtue of the Northern Ireland protocol, we cannot in this agreement, which is a continuity-plus agreement, vary the rules as they apply in the European Union single market, so the traditional five-gō bottle will be available in Great Britain but will not be available in Northern Ireland. As it happens, this is not strictly consistent with the text of the UK-Japan Comprehensive Economic Partnership Agreement, which states:
“Single distilled shochu … produced by pot still and bottled in Japan, shall be allowed to be placed on the market of the United Kingdom in traditional bottles of four go … five go … or one sho.”
One shō is 1,800 millilitres. There is a discontinuity between the text of the agreement, the treaty as such and what we are able to fulfil in our domestic procedures. That is a pity. Given that this is the first time we have had a continuity-plus agreement implemented into legislation, it has in a very modest way illustrated the complexity of the problems that we will have to encounter if the Northern Ireland protocol continues to impose these kinds of distinctions between the Great Britain market and the Northern Ireland market.
Lord Lennie (Lab) [V]
My Lords, I am grateful to the Minister and the noble Lord, Lord Lansley, for their contributions thus far to this debate.
As we have heard, these regulations give effect to mutual recognition agreements between the UK and the USA, Australia, New Zealand, Canada, South Korea and Japan. The regulations also allow specific products assessed by those bodies in countries recognised under MRAs to be placed on the market in Great Britain and enable the Secretary of State to designate and monitor UK conformity assessment bodies to assess products against the other party’s requirements.
The Secondary Legislation Scrutiny Committee noted that these regulations are the first use of the power to implement free trade agreements under Sections 2 and 4 of the Trade Act 2021. As the noble Lord, Lord Lansley, commented, the instrument also implements Annexe 2-D of the UK-Japan Comprehensive Economic Partnership Agreement by allowing single-distilled Shōchū to be placed on the market in the UK in the new quantity of 900 millilitres. I recognise that this an important statutory instrument for both businesses and consumers, with continuity and certainty even more important now as we look ahead to 19 July and our hopes for the beginning of the end of the current restrictions. I would therefore be grateful if the Minister could provide some clarity on a few areas.
In relation to UK policy on conformity assessment and accreditation of the situation under EU law as it applies in NI, the regulations set out the requirements for the accreditation of market surveillance as it applies in EU law to the Northern Ireland protocol. That continues to be the basis for accreditation policy. If there are any changes to the UK policy in future, will they require an assessment of the implications of any trade barriers between Great Britain and Northern Ireland, and how is that being considered?
In respect of registers of MRA bodies, the statutory instrument states:
“The Secretary of State may … compile and maintain a register of … MRA bodies … their MRA body identification numbers … the activities for which they have been designated; and … any restriction on those activities”.
Can the Minister confirm where he has outlined, or whether he will outline, the activities for which MRA bodies have been designated and what restrictions there are on those activities? The Secretary of State will also be able to designate a conformity assessment body—CAB—to assess products against other countries’ requirements. What criteria will the Minister use to consider whether the body is capable of fulfilling those functions and to ensure that it meets the requirements of a designated body? What parliamentary oversight will that body have?
The statutory instrument states:
“To the extent that these Regulations contain provision in the areas of the protection of human or animal life or health or environmental protection, the provision is consistent with maintaining UK levels of statutory protection in that area.”
However, in Section 2(7) of the Trade Act, UK statutory protection also extends to
“plant life or health … animal welfare … employment and labour”.
Do these regulations not cover those areas?
The Explanatory Memorandum states:
“The main direct cost to business will be the familiarisation cost associated with these Regulations; these are a one-off cost, estimated at £205,000.”
Does this fall equally on large companies and SMEs?
On divergence, the UK MRAs replicate the previous EU MRAs in substance, with the only substantive divergence from the EU being in the permission to allow the additional bottle size for single-distilled Shōchū. This poses the broader question of whether the UK could take a different approach to conformity assessments in future.
On 1 January 2021, the UK introduced its own product safety mark, which broadly mirrors the EU’s CE mark. According to the law firm Bird & Bird, the UK conformity assessment regime
“follows essentially the same principles as the previous CE marking regime, but with the safety and compliance standards, authorised representative/responsible person and notified body requirements all now being valid for the UK only.”
Despite being a UK ask, the EU-UK deal did not include an agreement on the mutual recognition of conformity assessments. This means that most goods produced in the UK that require certification for sale in the EU will have to go through a secondary conformity assessment in the EU in order to be eligible for export, resulting in extra costs to trade with our main trading partner. A lack of MRAs is unusual for comparable deals such as those between the EU and Japan, Canada and Switzerland, which all have MRAs. Even countries such as Australia and the US, which do not have trade deals with the EU, have MRAs. Does the Minister regret not having an MRA in the TCA? Will the UK continue to share information on CABs with the EU? I look forward to the Minister’s response.
Lord Callanan (Con)
My Lords, first, I thank both noble Lords for their valuable contributions to this debate.
It is clear from what I said initially and from the contributions that this SI will maintain our robust product safety framework at the same time as reducing barriers to trade with some of our key trading partners. It does this by providing for the recognition in Great Britain of overseas conformity assessments for certain products under an MRA, while overseas bodies will be recognised in Northern Ireland under their country’s MRA with the EU; providing for the Secretary of State to designate UK CABs to assess against the requirements of our trading partners for certain products under an MRA; and amending rules in Great Britain to allow a traditional Japanese spirit to be imported in a 900-millilitre bottle size. In supporting this SI, we keep our trade restrictions low so that our manufacturers and consumers benefit from arrangements to minimise the duplication of conformity assessments.
My noble friend Lord Lansley noted with regard to Part 3 of the regulations, on Shōchū, that that amendment has been delayed beyond 30 March. As he pointed out, we let the relevant Japanese Ministries know that we were unable to implement the obligation by 31 March. As a fellow parliamentary democracy, Japan understood that it was important that the UK Parliament be able to appropriately debate the Trade Bill before we could introduce that provision. On my noble friend’s question about the distinction between Great Britain and Northern Ireland, he is correct that 5 gō bottles of 900 millilitres may be placed on the market only in Great Britain. I can tell my noble friend that there is express provision in the UK-Japan CEPA that applies in the event of inconsistency between the CEPA and the Northern Ireland protocol.
The noble Lord, Lord Lennie, asked whether changes in accreditation policy would affect Northern Ireland trade. The Secretary of State will consider the UK body’s competence against the partner country’s legislative, regulatory and administrative requirements. In making this judgment, he will of course consider the expert advice of the UK’s national accreditation body. The Trade Act provides for product safety and labour recognition, et cetera, and are they captured, to answer his other question. He noted that there are specifications in the Trade Act, and this SI maintains UK statutory protection. Where the specified regulations relate to protection of human health, human life, animal health or environmental protection, foreign CABs must assess against our existing domestic requirements. This is in accordance with our previous approach to MRAs.
The noble Lord also asked whether the UK could take a different approach to conformity assessments in future. In relation to MRAs, this SI is all about providing continuity for businesses. The UK is able to make its own policy decisions on conformity assessment and accreditation now that we have left the EU. Any future changes would be based on the UK’s best interests, with due consideration, of course, of any impact on the UK’s internal market. The noble Lord asked about the trade and co-operation agreement with the EU. Despite the UK ask, the EU-UK deal did not include an MRA. This is regrettable and will result in an extra cost to trade. As he noted, the UK sought such an agreement, but we were unable to secure it there.
I hope that that answers all noble Lords’ questions on this legislation, and I therefore commend these draft regulations to the Committee.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
The Grand Committee stands adjourned until 4 pm. I remind Members to sanitise their desks and chairs before leaving the room.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit for the following debate is one hour.
Common Organisation of the Markets in Agricultural Products (Fruit and Vegetable Producer Organisations, Tariff Quotas and Wine) (Amendment etc.) Regulations 2021
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Common Organisation of the Markets in Agricultural Products (Fruit and Vegetable Producer Organisations, Tariff Quotas and Wine) (Amendment etc.) Regulations 2021.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, this instrument applies to retained EU law relating to the common agricultural policy, including the common organisation of the markets, or CMO. It uses powers in the European Union (Withdrawal) Act 2018 to correct deficiencies in retained EU law and enable functions to be exercised by UK public authorities.
First, the instrument fixes an error relating to the commencement of Part 4 of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020. There is doubt as to whether the amendments made by Part 4 of that instrument came into force, as intended, at the end of the transition period due to the error in the commencement provision of the instrument. To put this matter beyond doubt and ensure that the retained EU legislation has been amended as intended, this instrument revokes and remakes the amendments that Part 4 of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020 purported to make. Those amendments concerned fruit and vegetable producer groups, fruit and vegetable producer organisations and notifications of agricultural market information to domestic authorities. The instrument also revokes and remakes some provisions made by the Common Organisation of the Markets in Agricultural Products (Producer Organisations and Wine) (Amendment etc.) (EU Exit) Regulations 2020 concerning fruit and vegetable producer organisations that may not have taken effect due to the commencement error in Part 4 of Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020.
Additionally, this instrument remakes amendments to EU regulations relating to the fruit and vegetable and processed fruit and vegetable sectors and the fruit and vegetable producer organisation aid scheme, including, among other things, activities that can be funded under the scheme, the amount of aid that can be claimed and the requirements that the producer organisation must meet to be eligible for funding. No policy changes are made through these amendments; they simply minimise any ambiguity in the rules, which will apply to this legacy scheme in the UK until it is switched off in England.
The instrument also amends retained EU legislation to make specific provision for transnational producer organisations implementing an ongoing operational programme to continue to receive aid in respect of all their members based in the UK and the EU until the end of their ongoing operational programmes. These amendments are required to prevent the retained EU legislation being operationally deficient as a result of the application of Article 138 of the withdrawal agreement to ongoing operational programmes.
The instrument also remakes amendments to EU Regulation 2017/1185 to ensure that Defra and the devolved Administrations can continue to obtain certain production and price data from economic operators. The information is used for market management purposes. Defra and the devolved Administrations intend to maintain the collection and use of this information in the UK.
I turn now to the provisions that concern the administration of tariff rate quotas. The specified EU law relevant to this instrument sets out broad provisions on the administration of export tariff quotas that result from international agreements. The instrument seeks to make operability amendments, which are needed to give the Secretary of State the power to make detailed provisions in a future instrument for the administration of export licences for UK goods imported into third countries under tariff rate quotas, such as UK cheese imported into the United States. This in turn will allow UK exporters to continue to benefit from preferential market access, although other powers will be needed to ensure that traders in the Crown dependencies can access such quotas.
These amendments replace references to “EU” with “UK” and remove references to the administration of import tariff rate quotas, as these are covered by regulations made under the Taxation (Cross-border Trade) Act 2018. No policy changes are made by these provisions.
I turn now to the provisions concerning wine. We have included a minor change to entry 1 of the table at Annexe 9A of retained Regulation 1308/2013. This change will make it clear that the established wines referred to are those recognised as
“established protected designation of origin”
and “established protected geographical indications” of the type referred to in Article 107(2) of retained Regulation 1308/2013.
I hope I have assured your Lordships that this is a simple instrument needed to correct remaining inoperabilities in retained EU law to create an operable legislative framework to manage and administer many aspects of agricultural policy. I beg to move.
Lord Moynihan (Con)
My Lords, I am grateful to my noble friend the Minister for that clear explanation—a fascinating defence of correcting an error. It is in the spirit of recognising that she has clearly done a lot of work on this that I simply want to ask a few questions and draw her attention to a number of issues relevant to the statutory instrument.
I should add that my interests in the wine trade elements of the statutory instrument stretch back to being a member of the Select Committee of your Lordships’ House that looked into the wine trade in the UK and Europe, as well as to my membership of the Haberdashers’ Company wine committee. It is in that context that I wish to ask my noble friend the Minister a number of questions. I do so in gratitude to the WSTA, which has provided some very good briefings over recent months, as we have returned to this subject in the space of just two months to correct the error that my noble friend has kindly brought to the attention of the Committee.
The most significant change from leaving the single market has been the introduction of wine export certificates for English and Welsh wine exports to the EU. While the TCA has introduced a simplified certification regime that can be self-certified by producers without the need for costly laboratory analysis, which would have been the default outcome had the TCA not been agreed, the simplified system is still in my view—and in the view of many in the industry—paper-based but unnecessary. No other category of alcoholic drink is required to have an additional import certificate when entering the EU or the UK. I see no reason to maintain the requirement for wine coming into the UK.
The UK and the EU should surely agree on the forms that should now be scrapped completely for movements of wine between the two but, failing that, there is provision in the TCA to develop an electronic system, which we have debated in previous Committees on this subject. I would be very grateful if the Minister could confirm that that is being developed as a matter of urgency, hopefully by the end of the year.
The second item I want to raise—I am sure that the noble Baroness, Lady Ritchie of Downpatrick, will also raise this when she follows me—is the moving of goods into Northern Ireland. This is still a significant issue, as is well known to the Committee and the House. The Northern Ireland protocol requires goods sold in Northern Ireland to have a Northern Ireland or EU 27 food business operator identified on the label, but UK excise rules require an excise duty stamp as proof of payment of excise duty. This means that English producers must either produce specific labels for Northern Ireland or “oversticker”, which is costly and bureaucratic. Of course, there is a solution: get rid of excise stamps for spirits, since no other category of alcoholic drink requires proof of payment of excise duty.
Attached to the statutory instrument were a number of documents which the Government have published, technical notices which helped people prepare for the end of the transition period. In the spirit of removing ambiguities, I close by gently pointing out that, on the food and drink labelling changes, there is a guidance note on completing the wine exports self-certificate, which everyone now has to complete. It says with regard to box 7:
“Only complete this section if the place of unloading is different from the consignee’s address you entered in Box 2.”
However, box 2 is for the serial number. Perhaps officials could have a little look at that to make sure that the next edition of that form, which is now required, is corrected. But in the spirit of thanking my noble friend for bringing this statutory instrument to the attention of the Committee and removing ambiguities that had otherwise existed, I confirm that I support the statutory instrument and I think that both he and his officials have done some excellent work in clearing up the uncertainty—not necessarily an error, but an uncertainty—that has led to this statutory instrument.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
I thank the Minister for his explanation of these regulations. It is a pleasure to follow the noble Lord, Lord Moynihan, on this issue. I note that this instrument, which is subject to the affirmative procedure, would amend several retained EU regulations relating to the common agricultural policy and the common organisation of agricultural markets for the fruit and vegetable producer organisations aid scheme. Basically, in my humble opinion, they seem to deal with marketing operating measures. I further note that, according to some research, this SI and previous related regulations are essential to prevent significant disruption at the end of the transition period.
The Minister stated that the regulations would not introduce new policy but would preserve the regime for supporting rural development, as well as updating other aspects of retained EU law to reflect amendments made by the EU in 2019 and 2020. In fact, the Minister in the other place, Victoria Prentis, made referrence to that fact and stated it directly as part of her contribution to that debate in the other place. Before moving to the actual SI, which I know is striving to remove those ambiguities as we proceed on the path following our exit from the EU, it is important that economic stability is created within the farming sector. For the landowners, the tenant farmers who are the producers, for the wider rural network and then for the processers, retailers and consumers, it is important that this legislation allows that to happen.
I hope the Minister can provide assurances to the Committee that this will underpin our agricultural and agri-food industry. Maybe she can provide an update on this issue in tandem with the implementation of the Agriculture Act of last year. Only last week, we had a debate in your Lordships’ House on the Hungry for Change report, where we discussed the need for the Government to be working with charitable organisations and other bodies in both the central and local government sectors to ensure greater accessibility to environmentally sustainable food for all at a reasonable cost. I am in no doubt that we all need to work together to develop a food system that becomes resilient to shocks in our system and to safeguard all our communities and people. Will the Minister indicate that this SI will enable us along the road to do just that? Will she provide assurances to that effect?
Moving on to the SI, I note that the regulations contained therein will fix an error relating to the commencement of Part 4 of the Agriculture (Payments) (Amendment etc.) (EU Exit) Regulations 2020. Will the Minister elaborate on the nature of the error, why it has to be corrected and how this correction will contribute to the marked importance of agricultural products to the rural and wider economy?
The noble Lord, Lord Moynihan, referred to the Northern Ireland protocol, the attendant issues that have arisen out of Brexit and the difficulties for products being imported into Northern Ireland from GB because Northern Ireland will still have to adhere to EU rules. Therefore, with the operation of the Northern Ireland protocol, where agri-food products are governed by this instrument, what is the relationship between it and the protocol? I presume that Northern Ireland will continue to be governed under the original EU rules.
We do not want any trading barriers between Northern Ireland and GB and vice versa. Therefore, could the Minister indicate whether, in negotiations with the EU, the Government will pursue a Swiss-style arrangement with it, which would eradicate a large proportion of the problems for SPS?
Furthermore, will this instrument ensure that Defra and the devolved Administrations continue to obtain certain production and price data from economic operators, and how will this manifest itself? What will be the intersection between this statutory instrument and the common frameworks for agricultural support; food labelling and compositional standards; plant health and varieties; and seeds? I indicate my interest as a member of the Common Frameworks Scrutiny Committee. Can the Minister provide an update in relation to this matter as well?
It is worth noting that many of these SIs, which deal with EU exit matters, coincide with many of the issues of divergence that are covered by common frameworks. It is further interesting to note that a large proportion of these frameworks relate to Defra and are at very early stages. Perhaps the Minister will be kind enough to indicate when we will receive the final frameworks for scrutiny. Why are they being held up? Perhaps she could write to me on those particular issues—I look forward to that.
Baroness McIntosh of Pickering (Con)
I am grateful and delighted to follow the noble Baroness, Lady Ritchie. I commend my noble friend for so eloquently introducing the regulations before us today and correcting, in her inimitable way, the earlier error, which we appreciate greatly. I always hesitate when any noble friend responding to these debates claims that these are technical not policy changes: there is one policy change that I hope that my noble friend will look favourably on when these regulations possibly come before us again.
I have a number of questions for my noble friend. Paragraph 10.2 of the Explanatory Memorandum states:
“Defra has engaged with the Devolved Administrations on its approach to CAP legislation under the European Union (Withdrawal) Act 2018”.
My first question is: what has the nature and exact form of that consultation and engagement been? I do not just refer to the devolved Administrations: what representations have been heard by, or consultation had with, the relevant agricultural representatives covered by the regulations?
My noble friend said that the existing regulations will eventually be switched off. What will the timeframe for the regulations be? Is it bound by the new reforms that we are currently looking at in the form of ELMS and replacing the CAP provisions? It would be interesting to have that confirmed.
Like my noble friend Lord Moynihan and indeed as my noble friend the Minister encouraged us to do yesterday, when she so wittingly and carefully looked at this—I have taken a leaf out of her book and am grateful to her for making this suggestion—I have taken the opportunity to look at some of the technical notes. I particularly looked at those on the UK transition —I am not sure whether I am entirely the wiser as a result—and the food and drink labelling changes.
My first question relates to the provision for honey. The guidance states that GB honey is no longer to be called EU honey but a “blend of EU honeys”, a “blend of non-EU honeys” or a
“blend of EU and non-EU honeys”.
Can my noble friend make a guesstimate of the cost of this? I note that paragraph 12.3 of the Explanatory Memorandum says that no impact assessment has been prepared and that the department is
“confident that the changes … fall below the £5m per annum threshold for net direct costs to business”.
However, if it applies to honey—I will come to the wine industry in a minute—it could be a sizeable cost. It would be interesting to know why no impact assessment has been done.
Assuming that there is a cost to having these labelling provisions, because one label will be prepared for the EU/Northern Ireland market and another prepared for the British market, could these costs not be extinguished if we signed up to the SPS provisions of the EU? If the Government felt unable to do that, could we not sign up to the less onerous provisions agreed under what I call the New Zealand version, as a deal has been done between New Zealand and the EU with what I understand are less onerous provisions than the SPS provisions of the rest of the EU? A lot of producers would like to know why, if they are good enough for New Zealand and the EU, they are not good enough for British exports to Northern Ireland and the EU.
I will briefly come on to wine—and who would not want to? It is interesting to note that the original reason many people were persuaded to join the European Union was to get cheaper wine. Now we are told that we should embrace the UK-Australia free trade agreement because we will get cheaper wine. I hope we will get more exports of Scotch whisky to Australia by the same token. With reference to the requirement for different SKUs for the different markets—which for wine means different labels, provisions and costs—which I am sure my noble friend will recall we discussed when this matter was last debated some weeks ago, a very simple provision could be introduced which would require a UK address on the label, as is currently allowed for food and drink, making one UK label acceptable for both the UK and the EU market.
I respectfully ask my noble friend why we cannot do this for wine. I know that my honourable friend the Minister in the other place, Victoria Prentis, has met the wine industry and warm words were exchanged. While warm words are welcome, we need hard action. I hope my noble friend will look favourably on the suggestion which, I repeat, has been made on a number of occasions by the wine sector and would save it an awful lot of bother and cost. We could simply make that provision in the new label.
Lord Bhatia (Non-Afl) [V]
My Lords, this instrument, which is subject to the affirmative procedure, would amend several retained EU regulations relating to the common agricultural policy and the common organisation of agricultural markets, which is a fruit and vegetable producer organisation aid scheme. It fixes an error relating to the commencement of Part 4 of the agriculture payments EU regulations 2020.
This instrument remakes some amendments made by the common organisation of the markets in agricultural products regulations relating to fruit and vegetable producer organisations that did not take effect due to the commencement error outlined previously. It makes amendments relating to transnational producer organisations taking part in the fruit and vegetable producer organisation aid scheme. It amends legislation relating to trade provisions to allow for the administration of tariff quotas for agricultural products.
There was an error in the previous instrument. The error included in the regulations led to doubt as to whether the provisions included in Part 4 took effect on the implementation period’s completion date. If Part 4 did not commence on the implementation period’s completion date as intended, it could have a knock-on effect for some provisions included in the regulations. This instrument puts this matter beyond doubt and ensures that there is legal certainty that the retained EU legislation has been amended as intended.
Finally, the Agriculture Minister has stated that the regulations were essential to prevent significant disruption at the end of the transition period. The Minister also stated that the regulations would not introduce new policy but would preserve the regime and support development. Can the Minister explain who made this error and what it has cost?
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The noble Baroness, Lady Gardner of Parkes, has withdrawn, so I call the noble Baroness, Lady Jones of Whitchurch.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for her helpful introduction to these regulations. They are, as she says, broadly technical in nature, correcting, in that now familiar phrase, “errors and deficiencies” in previous SIs. While I cannot claim to have reread all the previous SIs that are corrected here, I looked back at the Common Organisation of the Markets in Agricultural Products (Producer Organisations and Wine) (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1446), as the EM suggested in paragraph 7.5 that they should be read in conjunction with each other. Then I discovered that the earlier SI was correcting errors and deficiencies in a previous SI. Now we seem to be correcting errors and deficiencies in previous errors and deficiencies. It makes one wonder how the organisations affected by these changes ever keep abreast of the layers of these amendments. I am sure that the Minister will agree that this is far from an ideal situation.
Given where we are, I have a few questions to follow up. Some of them have been raised by other noble Lords in the debate. First, the Explanatory Note states:
“There is doubt as to whether the amendments made by Part 4 of those Regulations came into force, as intended, on IP completion day”.
Further on, it states that part of the earlier SI
“may not have existed due to the error in the commencement provision”.
Again the Minister explained this in her introduction. What has been the impact of these errors? Have businesses or producer organisations been adversely affected by the fact that these regulations have not been watertight and might not have been introduced in a timely way? Is there any recourse to compensation when errors are found to occur in this way? For example, has there been an occasion when the fruit and vegetable aid scheme might have been invoked because of market failure but payments were unable to be made?
Secondly, this SI seems to require the head office of a producer organisation to be sited in the nation where the majority of its marketed production takes place. Does this change the provision for transnational producer organisations that we have previously discussed? Will they still be able to access funds in the UK even if their head office is elsewhere?
Thirdly, I shall pick up an issue raised by other noble Lords about the market for established wine designations and GIs for UK wine, particularly the implications of the trade and co-operation agreement which was signed in December after we had agreed the previous SI. Do we now have an established UK process for approving new designations and retaining the reputation of UK wines, which was envisaged at that time? In the previous debate, the noble Lord, Lord Gardiner, said:
“Our aim is to ensure that imports of third-country wines continues unaffected while continuing to increase domestic wine production.”—[Official Report, 18/11/20; cols. GC 710-11.]
Do UK wines now have the flourishing market in the EU and third countries unhindered by tariffs and red tape that was envisaged at the time by the Minister? Have the Government now reached an agreement with the Wine and Spirit Trade Association, which at that time was very unhappy with the certification process for shipments of EU wines into the UK, which it felt to be overburdensome? That point was raised by the noble Lord, Lord Moynihan, and the noble Baroness, Lady McIntosh. I look forward to the Minister’s response.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The noble Baroness, Lady Bakewell, has scratched, so I call the Minister, the noble Baroness, Lady Bloomfield.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank all noble Lords for contributing to this short debate. I agree with the noble Baroness, Lady Jones, that this situation is far from ideal. However, to put it in context, since July 2018, Defra has laid 340 SIs subject to parliamentary procedure, 216 of them relating to EU exit. Current estimates are that we have at least as big a programme in mind for the current year. The 340 instruments Defra has laid since July 2018 represent nearly one-quarter of the UK’s entire EU exit and transition period SI programme. I am afraid that some errors were always going to happen given that volume of work.
I was asked specifically by the noble Baroness, Lady Ritchie, and the noble Lord, Lord Bhatia, what the error was. It was a drafting error in the commencement provisions of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020. There is some uncertainty as to whether Part 4 of that SI, the amendments that relate to retained EU legislation, came into force as intended on IP completion date as that part of the SI was stated to come into force immediately before IP completion date. That resulted in Part 4 of the SI purporting to amend retained EU legislation that did not exist immediately before IP completion date. I hope that that answers the question.
My noble friend Lord Moynihan asked a number of questions to do with wine, as did my noble friend Lady McIntosh and the noble Baroness, Lady Jones. The Government have met the Wine and Spirit Trade Association. Defra Ministers had useful discussions with Miles Beale and his team at WSTA. The WSTA was keen to press its concerns about VI-1s and raised a few other issues, including labelling and electronic certification, which officials are actively looking into.
On my noble friend Lord Moynihan’s questions, the UK wine sector prepared well for Brexit, with the result that trade has continued largely unaffected by the new arrangements. However, like some other food sectors, wine has encountered ad hoc problems with exports to certain EU member states in terms of customs arrangements and wine certification. We have worked with the companies involved, their agents, the Foreign, Commonwealth & Development Office and the member states concerned to resolve immediate issues and to establish what can be done to ensure that the matter does not reoccur on future shipments. Leaving the EU gives the UK Government scope to review and change policies so that they may better suit the needs of our people and businesses, so there may be the opportunity to review the need for VI-1 certification for imports. We keep all these areas of retained EU wine law under review to ensure that they meet the needs of consumers and the trade and are generally fit for purpose. It is possible to transmit wine certification via electronic means. We will consider all aspects of the process and transmission as a matter of urgency.
My noble friend Lady McIntosh asked about stakeholder engagement. The SI was drafted in active consultation with policy officials from all devolved Administrations, who were given the opportunity to comment at each drafting stage. Affected fruit and vegetable producer organisation stakeholders are aware of and engage with Defra’s plans for the sector. Defra has proactively engaged with transnational producer organisations affected by the UK leaving the EU and the operability amendments that that requires.
I think that I have already answered the question about wine importer labelling, but I should add that the Government have introduced an easement that allows an EU importer or bottler to be displayed on wine marketed in the UK until 30 September 2022. Similar arrangements are made for food products and are designed to support the industry’s transition to new rules. In the intervening time, we continue to work with industry to review the current wine labelling arrangements and replace them with something more practical if that is possible.
The noble Baroness, Lady Ritchie, asked a number of questions about Northern Ireland trade, some of which I will answer in writing if I am unable to do so here. In terms of trade disruption, the UK has always been clear that implementing the protocol had to respect Northern Ireland’s place in the UK customs territory. We have protected and respected that important principle. Through the UK trader support scheme we are ensuring maximum continued ability for Northern Ireland businesses to export both to the EU and to GB and therefore keep disruption over the next few years to a minimum. In the long term, the prosperity of Northern Ireland will depend on the whole set of economic measures that the Government implement, of which agriculture and agri-food is only one part. I should add that agriculture is, of course, currently devolved, but we are very keen to work with all the DAs because we all want the same thing: an environmentally sensitive, sustainable food system.
Turning to the questions asked by the noble Baroness, Lady Jones, on the impact on the food and vegetable producer organisations aid scheme, there is actually no impact on this scheme. The UK continues to follow EU legislation as it applies to EU member states for the duration of the current operational programmes implemented by producer organisations. They have continued to implement their approved operational programmes and receive all payments due. The retained legislation, as amended by this SI, will apply to any new operational programmes implemented by UK POs. This is likely to be from 1 January 2022 onwards. We hope to begin negotiations shortly with the EU to agree to switch to retained legislation before the end of the current programmes, but this SI will be in force before that happens. This means there will be no gap between legislation, and therefore no impact on producer organisations.
The noble Baroness, Lady Jones, also asked whether there were occasions when fruit and vegetable producer organisation legislation could have been invoked if the relevant amendments had been in force. The answer is that they could not: EU legislation continues to apply to existing operational programmes. She also asked about requirements about where head offices are sited, whether they change the position for transnational producer organisations and whether they can still access funding. As we are continuing to follow EU legislation for the duration of current operational programmes, transnational producer organisations can continue to receive funding in respect of all actions carried out by their members, no matter where in the UK or the EU they are based. If we switch to retained EU legislation following agreement with the EU, this SI will mean that UK transnational producer organisations will continue to receive aid in respect of all their EU-based members for the remainder of their current programmes.
The noble Baroness, Lady Jones, also asked whether the market for wine has recovered following the transition period. The UK market saw a slowdown at the beginning of the year, as many companies had moved supplies of wine as a contingency for a no-deal Brexit. Similarly, the hospitality sector has been hit at a global level due to Covid, which has also impacted on transport costs. We are seeing the sector recover now, and the opening up of the hospitality sector will help. In answer to the question about whether the UK has a fully functioning GI scheme, the UK has a fully functioning GI scheme covering food and drink, wines, spirits and aromatised wines. We also have a new logo for products protected under the UK scheme to use, which I recall was dealt with in an earlier SI when we met one another. On third-country wine imports and exports, we have taken steps to ensure that wine products can be imported and exported freely. We have recently extended the easement whereby any wines arriving from the EU will not need to have associated wine certification to 1 January 2022. This will provide time for the sector to adjust to the new trading arrangements, including those set out under the UK-EU Trade and Cooperation Agreement.
Lastly, I reiterate that we are in continual discussions with the Wine and Spirit Trade Association. I think I have now answered most of the questions, barring those from the noble Baroness, Lady Ritchie, which I will answer in writing. I apologise to my noble friend Lady McIntosh that I am unable to answer her specific questions on honey, which I recall was also covered by a previous SI: I fear that the honey team is not in its hive today. I will look at Hansard in case there are other points I have missed. In the meantime, these regulations are worthy of your Lordships’ support, and I commend this statutory instrument to your Lordships.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, the Grand Committee stands adjourned until 5 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit for the following debate is one hour.
Public Procurement (International Trade Agreements) (Amendment) Regulations 2021
(2 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, this instrument will ensure domestic public procurement regulations give legal effect to the UK’s international procurement obligations, specifically those covered in the UK third party international trade agreements signed with non-EU countries that had an agreement with the EU before exit day on 31 January 2020. Therefore, when contracting authorities carry out public procurements, this could be covered by an international agreement. If so, suppliers from those countries are required to be treated no less favourably than suppliers in the United Kingdom. It also means that UK businesses will continue to benefit from access to public procurement markets overseas.
We have agreement with the devolved Administrations that this instrument will be laid on behalf of Wales, Scotland and Northern Ireland. This will ensure legislative efficiency and consistency across the four nations.
We are implementing this change because the UK Government, following our exit from the EU, have, as far as possible, committed to providing continuity in existing trade and investment relationships with our existing international partners. We have already helped to ensure a continuation of global procurement through the World Trade Organization’s Agreement on Government Procurement, following the UK’s accession to the agreement as an independent member, and we have laid separate legislation to implement that.
Without this instrument, the United Kingdom would not be able to implement its international procurement obligations in trade agreements with third countries. This would leave the UK Government open to legal challenge and damage our reputation as an international trading partner.
This instrument will be made using powers set out in Section 2 of the Trade Act. The instrument will create a new schedule within existing procurement regulations, listing the international agreements signed by the United Kingdom. It will be limited to UK trade agreements with countries that had a preceding agreement with the EU before exit day. Of those agreements in effect, those with substantive procurement provisions to be listed in the schedule are Albania, the Andean countries, Canada, the CARIFORUM states, central America, Chile, Georgia, Israel, Japan, Kosovo, Mexico, Moldova, North Macedonia, the Republic of Korea, Serbia, Singapore, the Swiss Confederation, Ukraine and Vietnam.
The instrument is, I believe, uncontroversial, each of those agreements having already been scrutinised via the procedure set out in the Constitutional Reform and Governance Act 2010. Furthermore, parliamentary reports have been voluntarily laid alongside each continuity trade agreement. They explain our approach to delivering continuity with each partner as the United Kingdom left the EU. If we have made any significant changes to the trade-related provisions of our existing agreements through entering into the new ones, we have explained them in those reports.
Moving forward, further affirmative statutory instruments will need to be laid, using the powers in Section 2 of the Trade Act, each time the UK signs a new trade agreement with a third country or any of the agreements mentioned here are updated, to give them legal effect. Future trade agreements with countries where there was no free trade agreement with the EU before exit day—which could include Australia and New Zealand—are not covered in the Trade Act and will require separate legislation.
I commend the regulations to the Committee and beg to move.
Lord Haskel (Lab) [V]
My Lords, this is a difficult time. We are faced with difficult political, social and economic problems, including the pandemic, Brexit, climate change and a sense that the economy is failing many people. We keep hearing from the Government about their ambition to build a better future by building in more resilience so as not to return to the same world as we knew it. They can do this through legislation. I would have thought that this is so pressing that no legislative opportunity would be lost. After all, it is actions that count, not words. In this regard, the Government have a big chasm to cross.
It seems to me that, with these regulations, the Government have an opportunity to act. Admittedly, the regulations deal only with public procurement, but it is a start. They deal with our place in the world of public procurement after Brexit and confirm that we will stick to the same rules as we did when we were members of the European Union regarding transparency, non-discrimination and the equal treatment of all suppliers and contractors in countries that, like us, are members of the Agreement on Government Procurement.
When we were members of the European Union, we did well in winning contracts for public procurement but, as with the rest of our European business, we are being disadvantaged by increased bureaucracy. Could we not use these regulations to help us win public procurement contracts in Europe with the same minimal bureaucracy as we had when we were members? After all, we are agreeing to the same rules as we had before we left. This would be one small step towards cutting bureaucracy when dealing with our European neighbours.
Could we not do better? Could we not introduce an element of sustainability in these public procurement deals? This element is being introduced more and more. It is becoming a feature of financial markets with ESG investment and the Bank of England is monitoring the record of our banks and major companies on sustainability by having them report on responsible investment. This is all part of the developing relationship between business and government to achieve social objectives by arguing for resilience over efficiency. Indeed, this was mentioned at the CBI climate conference yesterday.
In a way, we have set a precedent for this with British Standard 95009, which was introduced in 2019. This standard, which is becoming more and more widely used, specifies how an organisation can demonstrate that it is a suitable provider for the public sector. Could we not extend this standard to the UK’s legal obligations under the Agreement on Government Procurement so as to include sustainability and other social and economic objectives?
I understand from what the Minister said that further regulations are being drafted to give effect to our procurement obligations under WTO rules. If it is too late to include these points in these regulations, can they be considered for those in preparation? The Government have come in for a lot of criticism recently, being accused of bias in the awarding of public contracts. Enlarging these regulations in this way could be a way of deflecting that criticism.
Lord Lansley (Con)
My Lords, I am glad to follow the noble Lord, Lord Haskel, although, unlike his interesting and wide-ranging remarks, I am afraid that that I am going to be very specific and quite pedantic. This is not in any particular spirit of criticism of these regulations; in introducing them, my noble friend was clear about their purposes. They are indeed entirely noncontroversial and, to a large extent, much anticipated and much welcomed to implement the continuity agreement so far as government procurement and access to public procurement in the United Kingdom is concerned.
I want to make two points. The first is for those who are often prone to saying that it is our Government’s intention to expose the National Health Service to competition pressures. Whether or not they think that is detrimental, I will not argue; the point is that, here, as in other public procurement measures, the Government have taken the opportunity to make specific exemptions for clinical healthcare services, which indeed they did in the EU-UK Trade and Cooperation Agreement. So those who talk about the exposure of the NHS to competition should look at that and recognise that the Government have, if anything, moved in the opposite direction.
The pedantic point I want to make is that, in introducing the instrument, my noble friend reflected what is said at paragraph 7.2 of the Explanatory Memorandum, which may have been the intention when it was written:
“This instrument will only affect trade agreements that have already been scrutinised via the procedure set out in the Constitutional Reform and Governance Act”—
that is, CRaG. This is almost entirely true, but it is not true in relation to the agreement with Serbia. The Serbia agreement was signed on 16 April using powers under Section 2 of the Trade Act, which was given Royal Assent on 29 April. This statutory instrument was created and laid on 13 May. The Serbia agreement was laid under CRaG on 11 May and, I understand, was provisionally applied on 20 May; the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments looked at it on 25 and 26 May. It might have been anticipated that the CRaG scrutiny period would have ended by now but it has not because the Whit Recess intervened and the CRaG scrutiny period expires on 23 June. The International Agreements Committee, of which I am a member, will examine the UK agreement with Serbia tomorrow. So there is an exception to this point.
Does it matter? I think the short answer is that it does not. The provisional application is in place, as one would expect in order to minimise any discontinuity in our trading relationship with Serbia because we have been operating on quasi-WTO rules since the turn of the year and the provisional application was quite right. So it does not matter but there is a point here: if instruments are laid with Explanatory Notes, the timing and sequencing need to be very clear. In this case there is, I think, no controversy, but if there were controversy, and if we were in a position where the House was being asked to put in place implementing legislation in circumstances where the CRaG scrutiny had not concluded, that would be regrettable. I just want to note this because we are all finding our way with all these processes but I hope that care will be taken to understand the sequencing for future occasions.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friend for the opportunity to debate these regulations, which I presume are the first that we are looking at under the Trade Act 2021. I welcome that agreements have been reached with such a wide range of countries—I particularly note Vietnam, Japan and Singapore. Could my noble friend again confirm the limit to the public procurement under the global procurement strategy to which he referred—it was the equivalent of €100,000 or $100,000? Like my noble friend Lord Lansley, I welcome the fact that we have not gone down the path of opening up competition to the National Health Service.
As my noble friend Lord True will recall, when we debated these issues earlier, my one regret was I had hoped that, now that we have left the European Union, our farmers and producers in particular would benefit from selling their produce—meat, fruit or vegetables—and being a source of more domestically grown produce for our public institutions, such as hospitals, schools and others. That being the case, and given the fact that the cost of exporting to many of these countries, and the carbon footprint, would be quite large, does my noble friend envisage that there may be opportunities for our agricultural producers and horticulturalists to export to some of the countries covered by this agreement?
Paragraph 7.2 of the Explanatory Memorandum says that the instrument specifically does not apply to future trade agreements, as my noble friend set out so eloquently—he specifically mentioned Australia and New Zealand—and that separate legislation will be required. I understand that we are only entering into the finer details of our negotiations with Australia, but when does my noble friend expect that legislation to come before the House in that regard?
I will follow up the point that my noble friend Lord Lansley raised about the CRaG procedure. Obviously, there is an issue that the Select Committee should have the earliest possible opportunity to consider the detail of future trade agreements. I add to that my concern: my understanding is that the Trade and Agriculture Commission has not yet been appointed as a new body —it has no chairman or members—yet we are proceeding apace with existing rollover continuity agreements and proceeding to negotiate new ones. Does my noble friend have an idea of, and timetable for the appointment of its new chairman and members?
I reiterate the point made by the Trade and Agriculture Commission’s outgoing chairman, Tim Smith, in the report that it submitted: he specifically states that the timing is absolutely key and that, in exactly the same way as the Select Committees on international agreements of both Houses, the Trade and Agriculture Commission should have the earliest possible opportunity to look at these agreements. Will my noble friend confirm that the new Trade and Agriculture Commission will not be presented with a fait accompli in the case of a trade agreement with Australia, New Zealand or the United States, but rather that it will be able to do the work that we are asking it to do and will—if it will not be consulted on the negotiating mandate, which I would prefer—have the earliest possible notice or sight of it?
My noble friend will be all too familiar with the fact that, in part 1 of the National Food Strategy report, the government adviser Henry Dimbleby and all those who served in producing it made these points very eloquently and forcefully. I understand that, regrettably, the Government have responded privately to part 1, and it would be helpful if we could all see the contents of that reply. With those few remarks, I welcome the opportunity to have debated these agreements, and I look forward to reviewing further ones.
I have one final question. Paragraph 6.2 of the Explanatory Memorandum states:
“The section 2 power is in place for five years from IP completion day, and can be extended for a further five-year period by Parliament, subject to the agreement of both Houses.”
If it were to be extended, would we have the opportunity to look at these regulations again, or is this a one-off? I also note that paragraph 10.1 states:
“There has been no consultation on this instrument.”
From what my noble friend Lord True said at the outset in so ably moving these regulations, I understood that the Government have the authority to work on behalf of the devolved Administrations of Wales, Scotland and Northern Ireland. What was the forum giving that consent?
With those few remarks, I am delighted to support these regulations.
Baroness Hayter of Kentish Town (Lab) [V]
I thank the Minister for his introduction, but I am afraid the main question I would like to put to him—to which I fear I cannot expect a reply—is whether all those arch- Brexiteers really did all that campaigning just to spend time on a sunny summer afternoon on SIs which simply put in place exactly the same rules that we had before exit day? I do not expect him to answer that.
However, that is what this looks like, as a result of rolling over EU agreements, some large, some small, as the Minister mentioned, with Chile, Switzerland, Israel, the CARIFORUM states, Colombia, Ecuador, Peru, central America, Singapore, Korea, Georgia, Kosovo, Ukraine, Japan, North Macedonia, Canada, Mexico, Vietnam, Albania and Serbia—I look forward to the Minister’s response to the noble Lord, Lord Lansley, on that one, given that it does not appear to have gone through CRaG. These regulations simply seem to retain our public procurement rules, in line with those the EU already has with these countries and which therefore applied to us before we left. We are going through all this just to maintain what was there beforehand.
As the Minister said, the Trade Act 2021, which authorises these regulations, covers deals with countries which have trade agreements with the EU—in other words, the ones they are rolling over—so we just continue as before. As he rightly says, we have to agree this to honour the existing deals we have chosen to continue to operate, and to ensure that any UK relevant public authority treats the suppliers of services or economic operators in the countries listed no less favourably than home competitors.
We are where we are, and we are just continuing it. But the interesting question—to which I would prefer an answer over my tease at the start—is that posed by my noble friend Lord Haskel: if, as we keep hearing, the whole point of Brexit was to give us the freedom to sign our own deals, why not add into these a requirement that all public procurement from domestic or overseas suppliers includes sustainability clauses, fairness to SMEs, worker protection and consumer rights?
I do not want the Minister to have given up his nice sunny afternoon in vain, so some thoughts on how the Brexit freedom can be translated into our public procurement would be enlightening. Even as I absolutely signify our acceptance of these uncontroversial regulations, as he called them, it would be interesting to know whether the Government will be a little more ambitious than it appears from this.
Lord True (Con)
I thank all noble Lords and noble Baronesses who have spoken for their general welcome for this measure. Some of it was slightly tempered, but in the docile environment of a statutory instrument Grand Committee upstairs, I shall not let my temper be provoked by it. I simply say that, having been called an arch Brexiteer, I would rather describe myself as an arch musketeer now on behalf of the British interest. That operates come rain or shine. Part of the context which has not been referred to—it was referred to by my noble friend Lady McIntosh of Pickering but not by the noble Baroness, Lady Hayter—is that the sun was certainly shining in Downing Street earlier today, when my right honourable friend the Prime Minister and Mr Scott Morrison announced exactly the kind of way forward to a better future which both the noble Lord, Lord Haskel, and the noble Baroness were asking for. This Government are ambitious on behalf of the national interest and of all those who work and produce in our country. We remain unashamedly of the opinion that free trade is an enormous boon to mankind. Over the decades and centuries, it has contributed to the raising of the condition of the people in nations across the world. That is as far as I will go on the political element of the discussion.
On the specific points on which I was asked, my noble friend Lord Lansley raised an important issue in relation to Serbia. These are not minor points; parliamentary scrutiny is obviously of fundamental importance—I think that we all agree on that. I do not think that there has been any attempt to do anything untoward, but I shall undertake to write to my noble friend on the detailed point that he has raised, if he will accept that as a response.
On the specific point raised by the noble Lord, Lord Haskel, about the WTO—which I referred to— perhaps my remarks were slightly infelicitously set, because I gave the impression that there was a forward-looking element here. As for the WTO, a separate statutory instrument, the Public Procurement (Agreement on Government Procurement) (Amendment) Regulations 2021, was made and laid under the negative procedure on 12 May 2021 using powers in Section 1 of the Trade Act. That has given effect to the UK’s independent membership of the Agreement on Government Procurement, which is a WTO function and institution.
My noble friend Lord Lansley, with his immense experience in this area, reminded us that the Government are not involving the National Health Service. These continuity agreements will ensure that the transition of existing FTAs will not impact on how the UK currently delivers healthcare services or standards of care in the NHS. No trade agreement has ever affected our ability to keep public services public, nor has one ever forced us to open up the NHS to private providers. We have always protected our right to choose how we deliver public services in trade agreements and we will continue to do so. I came armed to give longer reassurances on that point and could expand further, but I think my noble friend picked that out accurately from the documents before us.
I agree with my noble friend Lady McIntosh that there are opportunities for agricultural producers, our own producers, as free trade is extended. I do not think we should always see issues as incoming; there are opportunities outgoing as well. I believe that that will be widely seen and acknowledged in the years ahead. My noble friend asked when specific legislation will come forward in relation to the Australia provision announced today by the Prime Minister and the Secretary of State, Liz Truss, who I believe deserves enormous credit for the extraordinary effort she is making on behalf of the country. I cannot advise specifically on timescales for that, but I can assure my noble friend that there will be full scope for the kind of parliamentary scrutiny she is seeking.
My noble friend also asked about the timing of appointments. I cannot at this point advise her on that, but I will try to give her some better guidance outside this discussion.
I am grateful for what has been said. It is a warm afternoon but the musketeering never stops, and I pay full credit to noble Lords who have taken the trouble to take part in this debate to secure the future of British trade and, yes, steps towards the kind of better future that the noble Lord, Lord Haskel, challenged us to work for in his opening remarks. I must tell him that I have slightly more confidence than he has about the prospects for the future, and we will work to disabuse him of any doubts he has. I was very grateful for his input into the debate and that of all noble Lords.
The Government have committed to providing continuity as far as possible in existing trade—we make no apology for that—and in investment relationships with non-EU countries now we have left the EU. I repeat that, for this reason, we think that, as others have said, the instrument is uncontroversial, allowing for the continuation of current procurement practice. That has been the sense of your Lordships’ committee. I hope I have answered noble Lords’ questions. I have undertaken to respond to a couple which are very detailed. I hope I have clarified the implications of the amended legislation and I trust that noble Lords will, as they said, support the statutory instrument. I am grateful to them for that.