Trade Bill

Baroness Fairhead Excerpts

Monday 21st January 2019 Lords Chamber

While these amendments deal with the standards and conditions that UK trade agreements must comply with, my noble friend Lady Young and the noble Baroness, Lady McIntosh, also raised the question of the process whereby these deals will be assessed and measured—the framework around compliance, which has so far not been clarified by the Government. Parliament needs a strong voice in this process. International trade offers opportunities for prosperity and benefit to the economy, but that cannot be at the expense of domestic standards in food, animal welfare and the environment or of international best ethics and practice.

[The Minister of State, Department for International Trade (Baroness Fairhead) (Con)]

My Lords, the richness and intensity of this debate demonstrates the expertise in this Committee and the importance of getting this right. I assure the Committee that the Government are committed to upholding and strengthening our high standards in food safety, the environment and animal welfare as we leave the EU. In her Florence speech, my right honourable friend the Prime Minister reconfirmed this, saying we are,

“committed not only to protecting high standards but strengthening them … we will always be a country whose pitch to the world is high standards at home”.

The European Union (Withdrawal) Act 2018 will not only provide a functioning statute book on the day we leave the EU but will ensure that all existing EU laws on standards continue to apply in the UK. Leaving the EU means we now have a unique opportunity to design a set of policies to drive environmental improvement with a powerful and permanent impact tailored to the needs of our country.

Amendment 8 was tabled by the noble Lord, Lord Purvis of Tweed, and was spoken to by the noble Lord, Lord Grantchester. I reassure noble Lords that this amendment is not necessary. The process of exiting the EU will not alter the UK’s commitment to upholding international laws and our international commitments. This includes commitments on climate change and the sustainable development goals. The UK is a world leader in our strong commitment to human rights, labour and environmental standards around the world. We will continue proudly to comply with our international obligations, a point I am happy to reiterate.

Additionally, my right honourable friend the Secretary of State stated during the passage of the Trade Bill in the other place that our aim in undertaking this transition programme is to seek continuity of effect of existing trade agreements. This is not an opportunity to renegotiate terms. We are clear that, given the time pressure to have these agreements in place before we exit, there is neither the intention nor the opportunity for the UK Government or our trading partners to change the effects of the existing agreements. This is a technical exercise to ensure continuity in trading relationships. It is not an opportunity to renegotiate the current agreements. As my noble friend Lady Neville-Rolfe said, we have to make sure that we do not make it overly cumbersome. Third parties to whom we have talked on all the continuity agreements have stressed their interest in continuity; it is in our mutual interest. That is where the hypothetical hits reality: this is in their interest and the interest of their consumers and businesses.

The noble Lord, Lord Purvis, referred to investor protection dispute settlements. There is a later group of amendments in this Trade Bill debate relevant to that and, in the interests of time, I wonder whether we can move discussion of that to then. I see that the noble Lord is happy with that suggestion.

Turning to Amendment 9, let me reassure the House that the scope of the Trade Bill is to ensure the continuity of effect of existing EU trade deals. The noble Lord, Lord Kerr, asked about standards in deals with India and China. I reiterate that the power in Clause 2 could not be used to implement a trade agreement with those countries because the EU does not have trade agreements with them and the Clause 2 power is limited to countries with which we have a trade agreement.

As the Clause 2 power is intended only as a vehicle for changing UK law as a result of our entry into continuity trade agreements, it is clear that it will not be used to make changes to UK standards. This is in line with public commitments that the Prime Minister and Ministers from across Government, including from Defra and DIT, have made on the maintenance of the current standards. It would not be logical for the UK to lower our rigorous levels of protection in order to secure a trade deal, as demand for UK exports is based on our reputation for quality. As the Secretary of State for International Trade said:

“Let me tell the House that Britain will not put itself at the low-cost, low-quality end of the spectrum, as it would make no sense for this country economically to do so, nor morally would it give us the leadership we seek. I believe there is no place for bargain-basement Britain. High standards and high quality are what our global customers demand, and that is what we should provide”.—[Official Report, 6/7/17; col. 1365.]


My noble friend Lady Hooper stressed that powerfully.

My noble friend Lady Byford talked about future free trade agreements but they are not part of the Bill. This is all about continuity of the existing ones. We will bring forward proposals for future free trade agreements in the coming weeks, and I am happy to reiterate the commitment made in the other place by the Secretary of State for International Trade that Parliament will have the ability to inform and scrutinise those agreements in a timely and appropriate manner.

We want to achieve the same outcome of maintaining our standards, but if we were to amend the Bill in this way, we would be likely to delay ratification of agreements—something that neither we nor our partner countries want. We appreciate the concern about scrutiny of agreements. On earlier amendments we covered the scrutiny procedures at length and the need to make sure that the House has the ability to look at these continuity trade agreements. The amendment would duplicate some of that process. I would argue that, particularly given the time pressure, there will be good opportunities for Parliament to scrutinise the trade agreements that are being transitioned.

Amendment 10, tabled by my noble friend Lady Neville-Rolfe, would ensure that the Clause 2 power would not be able to make provisions in international agreements that restricted the ability of public sector employees to deliver public services. I hope that I have already been clear that the Clause 2 power will not be used to do such things, as it will be used only to deliver continuity. These changes would require reopening negotiations with third countries and that would constitute a change in policy, which would not be continuity. I reassure my noble friend that the UK Government, not our trade partners, will continue to make decisions about public services. Public sector jobs are under no threat whatever from this agreement or any other.

[Baroness Kramer]

The Minister has just said that our public services are not at threat from this agreement or any other, but the United States has been very clear that its two primary objectives in a free trade deal with the UK are access to the full range of public services and for there to be a private option. It has been very clear about that—one can talk to any of the healthcare companies. That surely falls into the category of other agreements that she has just described.

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[Baroness Fairhead]

I would refer to the Comprehensive Economic and Trade Agreement with Canada, for example. Nothing in CETA prevents the UK regulating in the pursuit of legitimate public policy objectives, such as in relation to the NHS, whose protection is of the utmost importance for this Government. We will continue to ensure that decisions about public services are made by UK Governments, not our trade partners. Moreover, rather than negatively impacting the public sector, our trade continuity programme will safeguard jobs and support our public services.

[Baroness Neville-Rolfe]

I completely understand what my noble friend the Minister says about the United States. That is for the future, not for today. Before we get to Report, it would be helpful to be clear about whether there are provisions in the other agreements that we are rolling over that might have a deleterious effect on this choice that we want British Governments to be able to make on whether to put a procurement project into the public sector or the private sector. I suspect that the answer is that there is not a problem at all, but it would be good to have that clarified.

[Baroness Fairhead]

I can clarify that the UK’s public health sector is protected by specific exceptions and reservations in all EU trade agreements. As we leave the EU, the UK will continue to ensure that those rigorous protections are included. My noble friend Lady Neville-Rolfe alluded to this when referring to the mistakes that were made in TTIP. The noble Lords, Lord Fox and Lord Grantchester, also talked about the importance of making sure that those specific exemptions and reservations continue, which they will.

[Baroness Jones of Moulsecoomb]

I apologise for interrupting the Minister when she has gone past what I was particularly concerned about, which is the protections on health, animal welfare and that sort of thing. The Minister talked again about intentions—“The Government intend”—but I did not hear her say, “The Government will do this”, that they will allow these protections to continue to exist. It is all about intentions, not reality.

[Baroness Fairhead]

I am seeking to reassure the House because what we are agreeing in the withdrawal agreement is that all those obligations that we are party to come over as a result of the EU withdrawal Act. We remain parties to exactly the same international commitments made before, during and after we leave the EU. Nothing in that changes. I am trying to convey that this is about continuity of the existing obligations. We are not changing them; they are therefore being brought across as they stand.

I turn now to Amendment 13, tabled by the noble Baroness, Lady Henig, and Amendment 14, tabled by my noble friend Lady McIntosh, which focus again on standards. Amendment 13 restricts the use of the Clause 2 power if it has the effect of lowering market standards for agricultural products below EU standards. Amendment 14 extends this to animal health, hygiene or welfare standards for agricultural products. I hope noble Lords will let me try to address any concerns over trade agreements leading to a change in standards for those agricultural products.

Our trade agreements must work not only for UK consumers, businesses and farmers but also for the environment. The global demand for British products is based on our high standards; people buy British not because it is cheaper but because of its high quality. To disregard standards would be to undermine the future of our farmers and of the British exporters. The Government have already announced a new environment (principles and governance) Bill to ensure environmental protections will not be weakened as we leave the EU. We have finished a consultation on a new body, which promises to hold the Government to account on the environment, and have published our 25-year environment plan which sets out our goals.

[Baroness Young of Old Scone]

There is one small flaw in the short term, which is that we will not have that Bill completed or the new agency established if we leave the EU at the end of March. How will the Government ensure that the duties and responsibilities which that organisation and that Bill would have delivered are not lost sight of during the period—which we do not know the length of—before they come in to being?

[Baroness Fairhead]

The noble Baroness raises an important point. That is why we are seeking an agreement and implementation period which will allow that timing. I can say that the Government will establish our own world-leading green governance body, the “Office for Environmental Protection”, or OEP, to champion and uphold environmental standards in England.

[Baroness Kramer]

I am sorry, but I have a question for the Minister—this may be my mistake in not having followed other legislation closely enough. My understanding is that this will have far fewer teeth than its existing European counterpart, so that it can say things, but it cannot in any way enforce. I understand that the British Government demanded that it should not have enforcement powers.

[Baroness Fairhead]

My understanding is that the OEP will be an independent statutory environmental body that will hold the Government to account on environmental standards once we leave the EU.

[Baroness Kramer]

I think the Minister understands that there is a difference. It is often said that this body can hold the Government to account, for example through an affirmative statutory instrument. It cannot actually stop the Government doing anything, because there is no mechanism that enables it to enforce against the Government. My understanding is that this is a different example; this new body will not be able to enforce. That is completely different from its current equivalent in the European Union. I would hope that the Minister at least recognises this, even if she defends it and says that the difference does not matter. I would be interested to know why she might think it does not matter, but I hope that at least she recognises it.

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[Baroness Young of Old Scone]

That well illustrates the fact that the Minister and the Government should not pray in aid a body not yet agreed by Parliament or approved in terms of its powers and responsibilities, and which is not going to be in existence for some time. It is probably not very safe for the Government to assume that that body will necessarily go in the direction that they want it to.

[Baroness Fairhead]

I thank my noble friend Lady Byford for saying those words. This is a Bill, and the whole purpose of it going through will be that it gets scrutinised. These concerns and changes will be raised, and it will go through in the usual way. I am happy to write to the noble Baroness, Lady Kramer, about where we are on the Bill but, like all legislation, when it is going through that is the right time to challenge it, and that Bill will be challenged in the same way as I would expect others to be.

The Secretary of State for Environment, Food and Rural Affairs said last year:

“I have been very clear that Brexit will not lead to a lowering of our high food, animal welfare and environmental standards. This will remain at the heart of our approach as we negotiate both with the EU and with new trading partners around the world”.

[Baroness McIntosh of Pickering]

The whole point of this group of amendments is to have that commitment written into the Bill. Does the Minister agree to do that? Otherwise I think we might revisit this issue on Report.

[Baroness Fairhead]

The view of the Government is that it is very clear under the withdrawal Act, as well as under our existing international commitments, that we do not need to add them in because it will happen as a result of the withdrawal Act and would therefore be an unnecessary addition. We have made it clear on animal sentience, for example, that we will continue to maintain and enhance our reputation and ensure that any necessary change required to UK law is made in a rigorous, comprehensive way to ensure that animal sentience is recognised after we leave the UK.

Clause 2, as I keep stressing, is to enable the continuity of the existing relationships. It is to ensure that we can continue the effect of the existing EU third-country agreements that the UK already participates in as an EU member.

[Baroness Jones of Moulsecoomb]

If the Government agree with everything that we are saying, why not put it in the Bill? Why not make it specific so there is absolutely no confusion?

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[Baroness Fairhead]

My guidance is that it is because it will already happen as a result of the withdrawal Act so it is unnecessary. There is also the risk of including some but maybe leaving one out. That is my understanding, but clearly this may be a matter that we take up on Report.

The vast majority of these EU agreements are already in operation and have not resulted in a lowering of standards on animal welfare, the environment or food safety. The powers in the Trade Bill will be used not to lower standards but only to implement obligations. As I said before, it is not the intention—nor do we have the opportunity or time—to make changes; it really is about rolling over. I can hear from the mood of the House that this may not satisfy or reassure, but it is certainly the guidance that we have had. I am sure that this will get brought up again on Report.

I will move on to Amendment 15, tabled by the noble Baroness, Lady Jones, and supported by the noble Baroness, Lady Young. The EU has pushed to include trade and sustainable development chapters, including provisions on environmental protections, in its free trade agreements since the free trade agreement completed with South Korea. In general, these point to commonly held international standards on environmental protection, agreed through multilateral environmental agreements, and commit each party not to reduce these protections in a manner affecting trade. Again, these commitments will be retained as we transition these agreements. However, these commitments do not prevent us improving our protections as we see fit. The UK will be bound by international multilateral environmental agreements to which it is party and we are committed to upholding those obligations. We will continue to collaborate with our European and global partners to protect our environment.

The withdrawal agreement contains non-regression clauses on environmental and labour standards. The UK already has some of the highest standards in the world in place and noble Lords should be confident that we will maintain high regulatory environmental standards once we leave the EU. A reciprocal non-regression commitment would mean that neither party could lower its regulatory standards below current levels. The UK will maintain its high regulatory standards for the environment and we are committed, as I said, to upholding our obligations.

With reference to Amendment 15, I reassure the noble Baroness, Lady Jones, that the Government will ensure that our high environmental protections are maintained. We will also transition all EU FTAs, including the provisions on environmental protections provided within these and the commitments not to reduce our commitment to international standards. I hope that this reassures the noble Baroness and the noble Baroness, Lady Young of Old Scone, who sought an answer on this.

Turning to the concerns raised on standards in Amendment 25, this amendment would ensure the UK could ratify trade agreements with third countries only if those agreements ensured that imports complied with food safety, environmental and animal welfare standards set in primary and subordinate UK legislation. I have already pointed to the requirements of the CRaG, which ensures that Parliament can block trade agreements. As a result, we are absolutely clear that all existing commitments relating to standards and regulations will remain in place. Far from reducing standards, this Bill is about preserving the beneficial arrangements that consumers and businesses enjoy. This includes the high regulatory standards embedded in our existing agreements. I say again that the Bill is not about making provision for future free trade agreements; this amendment goes beyond the purpose of this Bill.

[Lord Fox]

I am sorry, I know it is late. To use CRaG as the safety net for this seems to be rather the wrong way around. We should be getting any future agreement right, rather than relying on the CRaG process to fix it. I think perhaps the Minister should look at this the other way around and get it right the first time.

[Baroness Fairhead]

Earlier in the debate, we went through the process for agreeing these continuity agreements. We have not talked about the scrutiny for future trade agreements, but maybe there was some confusion in how I articulated this.

The noble Lord, Lord Kerr, and my noble friend Lady Byford raised a number of important points about future free trade agreements but I think we agreed to defer those to later in Committee. We have already been clear that we will introduce bespoke legislation as necessary to implement those future free trade agreements. The Secretary of State for International Trade has already launched four consultations on prospective future trade agreements and announced that the Government will introduce bespoke primary legislation as necessary to implement these.

Turning to Amendment 26, tabled by the noble Baroness, Lady Jones, the Government have listened to representations from stakeholders both within and outside Parliament on this point. In response, the Government have already amended the legislation in the other place so that the interests of producers are explicitly stated as one of the factors for consideration, just as the new clause before us seeks to do. This completed the list of core considerations when setting the tariff, while not making it unmanageably long.