Trade Bill

Baroness Jones of Moulsecoomb Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Tuesday 15th December 2020 Lords Chamber

Finally, I note the benefits of the proposal for a multinational investment court in place of secret arbitration under ISDS. Transparency instead of secrecy and a fixed body of professional judges in place of ad hoc arbitrators, drawn often from those who conduct ISDS cases, are improvements. However, the central evil of ISDS is not resolved. ISDS before a panel of judges still remains an assault on the rule of law, parliamentary sovereignty and the principle of non-discrimination.

[Baroness Jones of Moulsecoomb (GP) [V]]

My Lords, one of the things that has often been frustrating in your Lordships’ House in the seven years that I have been here is that we talk about incredibly important things, yet often our language is so obtuse and complex that, although we understand what we are talking about, other people outside do not. Therefore, a lot of these important issues do not get the sort of publicity that they ought to.

Following the noble Lord, Lord Hendy, is a mixed blessing. He gave a devastating outline of exactly why ISDS should not be any part of trade negotiations. At the same time, he has reduced my speech to ashes because that was exactly what I was going to argue. I honestly do not understand how any member of the Conservative Party can support the concept of not just countries but other corporations having any rights over our country. The mechanisms of ISDS are far worse than any charge that could be brought against the EU courts system. I do not understand how the Government think that it ISDS is reasonable.

The rule of law and the right to legal remedy are both important and are best served not by shady arbitration but openness and transparency and our legal court proceedings. The Minister should argue to everyone in his department that ISDS should not be any part of our trade negotiations. Your Lordships should now make it clear that we will reject any treaty that contains ISDS. The Government have made all sorts of promises about reclaiming sovereignty, but how on earth can they claim with straight faces that ISDS is an appropriate mechanism to put in any trade Bill.

While I have the Floor, I should like to say that the Minister in the previous group said something about the Bill being a useful mechanism for fighting climate change. The noble Viscount, Lord Trenchard, mentioned lifting other countries out of poverty through trade. Perhaps he could do something about that in Britain and start lifting out of poverty the millions of people who are on, below or close to the poverty line. There must be some mechanism that this Government could use. In any case, the whole concept of ISDS should be thrown out as fast as possible.

[Lord Purvis of Tweed (LD)]

My Lords, my noble friend Lady Kramer moved this amendment very ably and indicated that, because of the cross-party support and the degree of consistency with Amendment 19, she would be minded to test the opinion of the House. So I will be brief, because I suspect that the only service I could bring would be to undermine her arguments if I speak at length.

I want to pick up on one point. I agree with others that the noble Lord, Lord Lansley, provides us with a service to make sure that we are as on the ball as we can be with regard to making our case. My noble friend’s point about Canada is illustrative in trying to find out what the Government’s intention is for the long term for the replacement of ISDS.

We already know two things. The Minister said at Second Reading:

“ISDS is a subject which often causes excitement … I confirm that ISDS tribunals can never overrule the sovereignty of Parliament … There has never been a successful ISDS claim against the United Kingdom, but our investors operating overseas have often benefited from these agreements”.—[Official Report, 8/9/20; col. 749.]


He gave the impression that the Government’s position is that they are, at the very least, relaxed about ISDS being in agreements, and that they would not seek to move to a multilateral system as a replacement for ISDS.

The second thing we know is that, since 2008, after the European Council made the decision for the EU policy to move beyond ISDS, it has systematically sought to include provisions in agreements going forward; those can include changes to the ISDS mechanism and having a different form of tribunal process. Further, as the EU-Canada joint statement with the signing of CETA said:

“The EU and Canada commit to join efforts with other trading partners to set up a permanent multilateral investment court with a standing appellate mechanism.”


The issue then is: what was in CETA? We know that the changes to CETA included a right to regulate by both parties—the European Union and Canada—across all levels of government, regardless of investment protection; that there would be a clear break from an ad hoc arbitration system and a move to a permanent and institutionalised dispute settlement tribunal; and that members of the tribunal would no longer be appointed by the investor or the state but would instead be appointed in advance in a neutral manner.

My noble friend asked what the Government’s position is regarding the UK replacement for CETA; this is illustrative of where the Government are, going forward. Inevitably, the Minister was not able to share that information in Committee but, as the noble Lord, Lord Lansley, indicated, we have now seen the text of the agreement. It is very interesting. As has been referred to, page 103 of 109 lifted our hopes against the noble Lord’s fear that we would not be in a position to move to a multilateral system. It states:

“Therefore, the TCA represents an important and radical change in investment rules and dispute resolution. It lays the basis for a multilateral effort to develop further this new approach to investment dispute resolution into a Multilateral Investment Court. The United Kingdom and Canada will work expeditiously towards the creation of the Multilateral Investment Court. It should be set up once a minimum critical mass of participants is established, and immediately replace bilateral systems such as the one in TCA, and be fully open to accession by any country that subscribes to the principles underlying the Court.”


That was reassuring from our point of view and it gave a signal, but there is a sting in the tail: this is subject to a comprehensive review within three months. If the noble Lord, Lord Lansley, is correct—he often is—the Government will have acceded to what Canada wanted but are holding their position. They are holding their position for this review so that they are not in a position where, effectively, they will have their sovereignty restricted because they know that, in entering into the CPTPP or any agreement with America, their partners will not be in favour of moving to a multilateral system.

Perhaps this is just like some of the other discussions taking place now. There is what the Northern Ireland announcement called a grace period. There is a grace period for the agreement for moving to a multilateral system, as in our amendment, but the Government are trying to triangulate. The Government need to be clear, because this cannot go on for much longer. The amendment moved so ably by my noble friend Lady Kramer is an opportunity for the Government to be clear. This is such an important issue, which is why we want to press the amendment: to get clarity from the Government.

At this stage, if the Minister can respond clearly on Canada, that would be a reassurance, but it does not negate the issue. The noble Lord, Lord Lansley, made the point that this amendment is perhaps unnecessary; the text of the UK-Canada agreement and the review means that this amendment is even more necessary to replicate in this Bill what the Government indicated in the UK-Japan agreement.