Electronic Trade Documents Bill [Lords]

3rd reading
Monday 10th July 2023 Commons Chamber

Bill, as amended in the Public Bill Committee, considered.

Third Reading

19:48

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)]

I beg to move, That the Bill be now read the Third time.

Let me take this opportunity to thank all the Members of this House and in the other place who have spoken in support of this transformational Bill, as well as those who contributed to scrutinising the Bill so deeply and effectively during its passage. The Bill has followed the special parliamentary procedure for Law Commission Bills. That procedure demonstrates that good and much-needed legislation that has already been thoroughly consulted on by the Law Commission can be introduced, debated and amended if required in an efficient and democratic way, but with reduced burdens on an already busy Parliament. Apart from the minor changes made to extend this critical legislation satisfactorily to the whole of the UK, the Bill that is before the House remains the work of the Law Commission. I also thank the officers and Members of the Scottish Parliament for their work in enabling that to happen so smoothly.

The Bill is a fine piece of work. It is informed by experts from academia, the legal profession and, crucially, the industries that stand to benefit most from its introduction and will be the driving force behind its implementation. As English law is the foundation of international trade, the Bill will put the United Kingdom ahead of not only the G7 countries, but almost the whole world. The UK is setting the approach that other jurisdictions will seek to follow, not just on the digitalisation of trade documents but on the future digitalisation of all trade, towards which the Bill is an important first step.

I record my thanks to Professor Sarah Green and her colleagues at the Law Commission, including Laura Burgoyne, Daniella Lupini and Siobhan McKeering, for their diligent work. I also thank Oliver Tones, the Bill manager, and Bobby Lawson, his deputy, along with the committed Government lawyers who have contributed to this, specifically Simon Brandon, Louise Dennison and Chris Callan. Thanks are also due to my private secretary, Jack Collins, who has ably assisted me and the Bill team throughout.

The Bill has global transformational potential. It will place the UK at the forefront of international trade as a thought leader for others to follow, and will save businesses an estimated £1.1 billion over the next 10 years—really tangible benefits, as well as being inspirational thought leaders for global trade. As such, I commend it to the House.

19:51

[Alex Davies-Jones (Pontypridd) (Lab)]

It is a very rare thing in this place to have the pleasure and privilege of responding on behalf of the Opposition to a Bill that we wholeheartedly support. For that reason, I will keep my comments brief.

As we know, the Bill follows a report and recommendations by the Law Commission. As the Minister has said, it seeks to remove the current legal impediment to producing documents in electronic form, allowing them to be legally recognised in the same way as paper documents, provided that they meet certain tests. It also sets out provisions relating to how the change of medium between electronic and paper documents will work in practice. It is an incredibly important Bill, particularly in a post-Brexit world where substantial red tape is having significant consequences for our ability to trade with the rest of the world. Labour sees the Bill as going some way towards unlocking that red tape by hopefully speeding up those processes.

We all know that central to international trade is the moving of goods across borders in order to get them from the seller to the buyer. That process typically involves multiple actors, including those involved in transportation, insurance, finance and logistics. One trade finance transaction can typically involve around 20 entities, and between 10 and 20 paper documents totalling over 100 pages. In a transaction covered by a bill of lading, for example, it is common to find 50 sheets of paper in a package of shipping documents that must be exchanged between as many as 30 different parties.

Despite the size and sophistication of the international trade market, many of its processes and the laws underlying them are based on practices developed by merchants hundreds of years ago. In particular, international trade still relies to a large extent on a special category of document that entitles the holder to claim performance of the obligation recorded in that document, and to transfer the right to claim performance of that obligation by transferring physical possession of the actual document. That document is said to embody the obligation, which may be to deliver goods or to pay money, rather than to merely evidence it. For example, a bill of lading is a document used in the carriage of goods by sea that, when transferred to the buyer or any subsequent lawful holder, gives that holder constructive possession of the goods described in the bill and a right to claim delivery of them from the carrier. The law governing those documents is premised on the idea that they can be physically held, or “possessed”. Industries using those documents are therefore prevented by law from moving to a fully paperless process.

To give a sense of the enormous amount of paperwork that international trade generates, the world’s largest container ships can carry 24,000 twenty-foot containers at any one time on any one voyage. For each of those cargoes, paper transport documentation has to be produced. That documentation must be processed manually to go from the shipper of the goods to the ultimate buyer at the destination, sometimes through numerous intermediaries. The effect of the current law is that much of the documentation needs to be in hard physical copy. The Digital Container Shipping Association has estimated that 16 million original bills of lading were issued by ocean carriers in 2020, and that more than 99% of those were in paper form. The Minister does not need reminding of the significant environmental cost of that way of working.

For those reasons, we support the Bill in its entirety. We see it as a long-overdue reform that allows for the legal recognition of certain types of documents used in trade and trade finance in electronic form. That will mean that parties can finally use the law that currently applies to paper trade documents when transacting with electronic trade documents. It was great of the Minister to confirm in Committee that the Department for Business and Trade will manage this legislation. We were concerned about where responsibility would actually sit, given that the Bill was brought forward by the Department for Science, Innovation and Technology and the Law Commission. We recognise and welcome that clarification and I am grateful to the Minister for it.

Labour sees the Bill as a valuable tool in ensuring that the world of trade and commerce operates as smoothly and efficiently as possible, and that UK businesses are not disadvantaged in any way. Ultimately, that is what we all want to see.

19:55

[Anthony Mangnall (Totnes) (Con)]

I rise fully in support of the Bill, and congratulate the Government and the Minister on the extraordinary work they have done on it. I also congratulate all Members from the House of Lords and the Opposition, and all the individuals and officials, who have done so much to make a Bill that might on its face look very unattractive and unexciting something that I believe to be extremely exciting.

I have made no secret of the fact that, before I got into this place, my background was in trade. I understand well the value of bills of lading and the complexities that come with them, but I also stand here as the representative of one of the largest exporting fishing ports in the United Kingdom, Brixham. There, the concept of documentation and the points that we make about it are absolutely essential to those fishermen’s success, and indeed their profitability.

I will be extremely brief, because time marches on this evening. The Bill will streamline trade—it will allow us to do all the things that we very much need to do in an era outside of the European Union, where signing new trade deals offers us new markets, new opportunities and new horizons. When I speak to my fishermen, one of the biggest and most significant causes of concern is the Electronic Trade Documents Bill and putting forward export health certificates and export documentation, as well as import documentation. The Bill will allow us to streamline those processes to make sure that those goods reach their markets. Whether it is fishing, farming, food, goods or shipping, we must ensure that we take full advantage of opportunities to help small businesses across this country that are exporting, as well as those that are importing.

We must look at how the Bill will relate to the European Union and its implementation of similar policies, and must also consider how the Bill will work with Commonwealth countries. We have made no secret of the fact that we want to work more with the Commonwealth, or that through things like the comprehensive and progressive agreement for trans-pacific partnership, we want to be able to do more in terms of trade. This Bill sets the benchmark—we should be unashamed of talking about the value that it can bring to our economy. The Minister and the Opposition have done very well in producing the Bill and working it through to the stage it has reached, but my final congratulations go to the Minister.

[Paul Scully]

My hon. Friend has spoken eloquently about fishing, and has previously raised the subject of fishing with me. Health certificates are not currently within the scope of the Bill, because they do not relate to possession, but fishermen will definitely benefit from the Bill just as other sectors will.

[Anthony Mangnall]

As ever, the Minister is incredibly gracious. I appreciate his intervention and thank him for that point, because it will send a message of confidence to my markets, and indeed to fishermen across the country.

I do not need to detain the House any longer, other than to say that the Bill is extremely welcome and we must talk it up. Coupled with the Procurement Bill that we passed just a few weeks ago, we are making real progress in the area of trade. We have to be able to get out there and talk about it.

19:58

[Patrick Grady (Glasgow North) (SNP)]

I echo the thanks that have been paid to the Bill teams—the civil servants, both here and in Scotland, who have worked to bring the Bill through. When it was in Committee, a debate on a report from the Privileges Committee was taking place in the Chamber, which seemed to inject a sense of urgency into the Committee proceedings and a feeling that some Members would rather have been elsewhere. Today’s debate comes after the debate on the report from the Privileges Committee has concluded, so there is slightly less pressure, and the Bill is getting the airing it deserves.

The hon. Member for Totnes (Anthony Mangnall) was right to take the opportunity to put his points on the record. The Bill is largely technical and uncontroversial, but it is important to put on record some of the key issues that have been identified during its passage, both about its contents and the way in which the Government have taken it through Parliament.

The Bill will ease significantly the regulatory and bureaucratic burdens on businesses by allowing the legal recognition of electronic trade documents. I think the Government themselves reckon that this could be worth over £1 billion in value to the UK’s international trade over the next 10 years. As we have heard, hundreds of pages of documents previously required to be produced in physical format—which of course will almost certainly have been generated electronically anyway and then printed off—can now be exchanged digitally, more quickly and more securely.

As enabling and facilitative legislation, the Bill paves the way for further innovation. Last week, I had some fascinating discussions with researchers from the University of Lincoln’s Institute for Agri-Food Technology, who were visiting Parliament as part of the annual evidence week activities. They and the many other businesses and academics they work with were very excited about the opportunities this Bill will provide for data sharing and for analytics about the movement of goods, and the opportunities in particular that that could bring, for example, for the reduction of food waste and the environmental impact across the supply chain.

I think I spent slightly longer discussing the Bill with those academics than the Bill spent in its Second Reading Committee, which concluded in just seven minutes, and the Public Bill Committee sat for a grand total of 15 minutes. Their lordships managed slightly better, with a total of about two and half hours of scrutiny across three stages. I think stakeholders must sometimes look at our proceedings with not a little bemusement, and wonder about the Government’s priorities in the allocation and use of time, even if this is an expedited procedure.

Of course, despite the Law Commission’s work to develop proposals for the Bill and the various stages of consideration in the House of Lords, it was only when the Bill got to the Committee stage that the Government were finally able to bring forward amendments that would provide Scottish Ministers with the reassurances they needed to recommend that Holyrood consent to the Bill. Without those amendments, there was a serious risk of yet more legislative overreach by the UK Government, straying into areas of Scots law that have been devolved to the Scottish Parliament for nearly 25 years.

The Bill has also been scrutinised by two Committees of the Scottish Parliament—the Economy and Fair Work Committee, and the Delegated Powers and Law Reform Committee. The Economy and Fair Work Committee took evidence from the Scottish Government’s Minister for Small Business, Innovation and Trade in a session that lasted 23 minutes, which was still one minute longer than the total time taken by this House to consider the Bill until we started this Third Reading consideration.

However, those Committees were ultimately able to agree with the Scottish Government’s recommendation that the Scottish Parliament should in the end grant the Bill legislative consent. But they have both, as indeed have Scottish Government Ministers, expressed concern and disappointment at the time it has taken to resolve the challenges identified by the Scottish Government in the Bill, as first presented both to the Lords and to this House. Consensus has finally been reached and, as the Order Paper notes, on 27 June the Scottish Parliament agreed a legislative consent motion.

I hope that means attention can now turn to the implementation of the provisions of the Bill, the easing of bureaucratic burdens, and the innovation in information and data exchange that producers, traders and other stakeholders in supply chains use to keep us fed, clothed and otherwise going about our daily lives.

20:02

[Jim Shannon (Strangford) (DUP)]

First, thank you, Mr Deputy Speaker, for allowing me to speak on this issue. I will not take too long, you will be glad to hear.

As we are all aware at this stage, the main purpose of the Bill is to provide the shipping industry with the legal mechanism to enable the use of electronic trade documents without the need to engage in complex and often operationally burdensome processes. The hon. Member for Totnes (Anthony Mangnall) referred to the fishing sector, and the Minister replied to him in relation to the concerns that he and I both have about that sector in particular. The fishing sector has always been burdened with the bureaucracy of Europe, and we always hoped that, whenever we got changes, those burdens might be lessened, but for us in Northern Ireland that really has not been the case.

I have long been an advocate of cutting unnecessary red tape. That was often one of my gripes with Europe, as I watched small-scale farmers who knew their land, their herds and their crops like the back of their hand, yet were asked to fill in forms that ranged from 20 to 70 pages, and sometimes more, for their grants. The result of all this is additional stress and the cost of paying consultants to help with what was and is avoidable. For those of us used to being in an office, printing or scanning is simple—so simple, in fact, that we sometimes forget that not every household in the UK has the facilities to do that. This is why I always advocate the need to bring along those who are not tech savvy, not leave them behind, and that is why the Government bringing forward this Bill tonight is so important.

The beauty of Brexit for those who live here on the mainland—we in Northern Ireland do not currently enjoy that release from European machination—was that such unnecessary bureaucracy would cease, and in my opinion that is what this Bill seeks to do. That is why it is welcome to have it before us, and why we are all very happy with where we are.

With that mindset, I welcome anything that cuts unnecessary red tape, but I still wish to satisfy myself that, while the paperwork format has changed, the necessary security and accountability remains. I do believe, having looked at some of the issues relating to the Bill, that this is the case, but the Minister might wish to confirm that at the end of the debate. The reduction of costs associated with the use of paper trade documents and a shift to a more environmentally friendly system are welcome innovations, along with the development of digital products and services within the shipping industry, with a view to stimulating business growth.

In conclusion, an essential component must be increased security and transparency in shipping documentation. I know that has always been the aim of the Government in introducing the Bill, and I very much welcome that. I hope to see fully achieved what the Minister will sum up at the end. We must make way for progress, while still holding on to systems that work well and are in place, and I do believe that this Bill brings those two aims into working order together. With that in mind, I very much welcome where we are.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Northern Ireland Budget (No. 2) Bill (Allocation of Time)

Ordered,

That the following provisions shall apply to the proceedings on the Northern Ireland Budget (No. 2) Bill:

Timetable

(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken in two days in accordance with this Order.

(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.

(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken on the second day and shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.

Timing of proceedings and Questions to be put

(2) (a) When the Bill has been read a second time it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) When the Order of the Day is read for the House to resolve itself into a Committee on the Bill, the Speaker shall leave the Chair without putting any Question and the House shall resolve itself into a Committee forthwith, whether or not notice of an Instruction has been given.

(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.

(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:

(a) any Question already proposed from the chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) the question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;

(e) any other Question necessary for the disposal of the business to be concluded;

and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.

(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(6) If two or more Questions would fall to be put under paragraph (4)(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.

(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

(8) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(9) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (8) of this Order.

Subsequent stages

(10) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (10) of this Order.

Reasons Committee

(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.

Miscellaneous

(13) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.

(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.

(b) No notice shall be required of such a Motion.

(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.

(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.

(16) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(b) The Question on any such Motion shall be put forthwith.

(17) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.

(b) Standing Order No. 15(1) (Exempted business) shall apply to proceedings in respect of such a debate.

(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

(19) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on the motion for this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.

(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Scott Mann.)