Trade Bill

Baroness Kramer Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

Finally, many of the proposed amendments do not offer a practical advantage for discernible UK interests, like the railway interests to which I refer, and I wonder whether this Bill is the place to include them all. This is a continuity Bill first introduced in 2017, and we need to get it on to the statute book.

[Baroness Kramer (LD) [V]]

My Lords, I join the noble Lord, Lord Berkeley, and the noble Baroness, Lady Neville-Rolfe, in utter frustration. The Luxembourg Rail Protocol was adopted at a diplomatic conference in 2007 and is due to come into force in 2021 because enough countries will have ratified it by then to create that effect. It creates a worldwide legal framework to support private-sector investment in railways and rolling stock, as the noble Baroness said, by establishing a new international registry for security interests, making it far more difficult for valuable rail equipment to be lost or stolen. These concerns have limited private investment in railway schemes across the globe, especially in the developing world.

Of course investment in rail matters, because it supports economic development and the battle against climate change. As others have suggested, the UK is a beneficiary both as a buyer of rolling stock—bringing down the price is therefore an advantage—and as a manufacturer, which will be able to market itself more effectively across the globe.

The UK is a signatory to the protocol, but it just cannot seem to get around to ratifying it. The noble Lord, Lord Berkeley, has introduced these amendments to try to achieve that ratification. I am very keen that ratification should happen, but I am concerned that the noble Lord is being forced by the Government to choose a route that adds even more unaccountable powers to the Government’s rapidly increasing range of widening and unchecked powers in this Bill and in others. I will be interested to hear the Minister address this issue because I hope that he will explain that I am wrong, that this could be construed as a narrow power simply to allow us to get the Luxembourg Rail Protocol done. I would like to be wrong, but I fear that I am not. We have already been through one shambles—the noble Lord, Lord Berkeley, did not use this phrase, but I will—with the Private International Law Bill, which was supposed to enable ratification of this protocol but turned out to be inadequate.

Let me address the narrow purpose of the Trade Bill. The Long Title of the Bill makes it perfectly legitimate to include language that would enable the Luxembourg Rail Protocol to be ratified. Everyone who has spoken on this subject so far has been a Minister at some point or other. Many of us have seen Bills with a slightly broader purpose dealing with an urgent gap in legislation, so it is not unusual and it does not undermine the character of the Trade Bill at large.

So I really would urge the Government to come back at Third Reading with a clause that allows them to ratify a protocol that they, the Opposition, the industry and those who seek to buy rolling stock across the world want to see ratified. This is an outstanding opportunity; I very much hope that the Government seize it.

Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020

Baroness Kramer Excerpts

Tuesday 27th October 2020 Grand Committee

[Baroness Kramer (LD) [V]]

My Lords, this statutory instrument could have been an opportunity to correct some of the flaws of the Corporate Insolvency and Governance Act. The most notable flaw is the scope for financial creditors to game a moratorium and suck out assets and cash through the lending terms applicable to new lending during the moratorium period. My colleagues and I were particularly keen to see protection for small creditors, who are likely to be the victims of such strategies by financial creditors. We also sought to move into the highest priority for repayment these same small creditors, who lack the deep pockets to cope with a deferral of payments due to them. The Government have sadly missed this opportunity to act and small creditors, usually small goods and services suppliers, are the losers.

The purpose of this SI is to extend measures in the Act related to Covid in order, as the Government say, to relieve pressure on businesses dealing with the virus. That makes sense to us; we do not object to the SI. The need for it comes as no surprise, as the impact of the virus on businesses is far more prolonged and deeper than the Government anticipated in some rather misplaced bravado of June and July. As business groups have indicated, the revised measures recently announced by the Chancellor are welcome but fall short. The combination of the virus, the likely loss for many of the Christmas market and economic Brexit, even with a deal, is so acute that we will sadly return to this matter many times.

On termination dates for measures under this SI and other places in the Act, it is very difficult for business to deal with the uncertainty of dates that keep moving. I wish that the Minister might agree to put pressure on his colleagues to get some good, solid forecasting from the OBR and a full appreciation of the economic difficulties and crisis that we face in order to put in place strategies that might have a rather longer life and do not require constant extension and revision. Although the measures can often be good in themselves, the uncertainty that surrounds them tends to undermine a great deal of their effectiveness, which I think we would all agree is a shame at a time like this.

Trade Bill

Baroness Kramer Excerpts

Committee stage
Thursday 15th October 2020 Lords Chamber

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I support Amendment 80 in the name of the noble Lord, Lord Rooker, which is trying to create levels of transparency in the Trade Remedies Authority similar to the principles of openness and transparency that underpin the Food Standards Agency.

There is no doubt that the TRA must have operational independence to enable transparency and prevent any form of corruption in trade deals. We are in a new dispensation that requires such trade deals to bring benefit and, obviously, to be open, subject to the issue of confidentiality which, I believe, the noble Lord, Lord Rooker, covers in his amendment. In many ways, I suppose there is also that direct read-across with the need for an international trade commission, but that was dealt with in previous amendments on Tuesday in your Lordships’ House.

We are all aware of the concerns about hormone-infused beef, chlorinated chicken and other issues surrounding corruption. We therefore need those high standards of transparency and openness. In that respect, the model of transparency and openness ushered in by previous Governments back in 1999 and 2001 with the Food Standards Act, which set up the Food Standards Agency, provides a useful paradigm for the transferral of those principles.

There is undoubtedly a need for the Trade Remedies Authority. It should publish advice, and any information issued should be subject to issues of confidentiality. I believe that the amendment would enable openness and transparency and help to prevent the concern that pivots around the issue of corruption. I will be happy to support the noble Lord, Lord Rooker, if he wishes to bring the amendment back on Report.

[Baroness Kramer (LD)]

My Lords, I join the noble Lord, Lord Rooker, my noble friend Lady Bowles and the noble Baroness, Lady Ritchie, in favouring transparency, in particular for its salutary effect on the independence of a body such as the Trade Remedies Authority. I say that after looking at the report from the Select Committee on the Constitution, which is hot off the press. It speaks with real frustration when it says:

“We remain of the view that the Bill’s skeletal approach to empowering the Trade Remedies Authority is inappropriate.”


The committee points out that the TRA must have regard to guidance published by the Secretary of State but says, quite accurately:

“There is no further indication of the content of such guidance.”


It emphasises that

“it is not clear why, more than two years after the previous version of the Bill was introduced, the functions and powers of the Trade Remedies Authority cannot be set out in more detail in this Bill.”

So I think we can all agree with the underlying purpose of the amendments tabled by the noble Lord, Lord Rooker, and others that focus on trying to flesh out the contents of the Bill so that this House, and the other House, have a clue about what exactly we are signing off on.

Transparency is particularly crucial when it has direct implications for consumers, especially where safety is a concern. I am sure that is the logic behind the powers of the Food Standards Agency to make disclosures; I would like to see that logic carried over into the TRA. However, as my noble friend Lady Bowles identified, we must recognise that the TRA will be drawn into a wide range of industry sectors, where revelations may well have no safety implications and might be commercially sensitive. So, like my noble friend, I would like a more comprehensive set of criteria than those in the amendment as drafted. I say this in case the noble Lord, Lord Rooker, decides to bring the amendment back on Report. I recognise that, in Committee, we are discussing the principles of an amendment and not the precise wording. I am sure that none of us wishes to discourage applications to the TRA when justified, and nor would we want it used as a weapon of unfair competition. So getting the language right is important, and it is something that could be addressed in a further drafting exercise.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank my noble friend Lord Rooker for his very good probing amendment. He has a habit of picking up on issues which, on first sight, seem not to be mainstream—but he is absolutely right that this is important, and I think it will be of long-lasting concern.

We believe that the creation of the Trade Remedies Authority is both necessary and welcome, but we are worried that, as presently constituted, the TRA lacks the stakeholder engagement or parliamentary oversight and accountability that would give it the visibility and independence that it needs. To this list, thanks to my noble friend Lord Rooker, we should add the question of transparency. It is up to the Minister, when he comes to respond, to explain how independence and accountability will be achieved without the TRA having the power to publish such information as it sees fit. I look forward to his response.

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This is a very sensible amendment. My noble friend’s amendments are about how you effectively make accountability to Parliament and the people have muscle and good effect, as well as rhetoric. I am very glad to support him in his amendment.

[Baroness Kramer (LD)]

My Lords, I drafted Amendment 109 essentially in reaction to Amendment 106 proposed by the noble Lord, Lord Stevenson, which would require the group of non-executive directors of the TRA to include stakeholders. I have no problem with people with those backgrounds and expertise being on that board, but I fear that it could raise false expectations. You could say that this was a particular bête noire of mine: non-execs on a board must act in the interests of the organisation on whose board they sit. Membership is in many ways a gagging order, if they have other interests and represent other relevant parties. The noble Baroness, Lady Noakes, pointed out, as did my noble friend Lady Bowles, that their work is very largely procedural and concerns governance: whether rules have been followed, whether risks have been assessed and what remuneration is right for senior executives. However, I believe that stakeholders, especially given the economic importance and potential impact of the TRA, should be able to speak and persuade freely in the interests of the organisations or different nations of the UK, the businesses they belong to or the consumers they represent. That applies just as much to other relevant groups.

Our proposal in Amendment 106 is to create an advisory committee. In my mind at least—and this is not necessarily underscored in the amendment’s language —it would be like the two-tiered corporate governance systems that we see in many continental European countries. Of course the TRA can set up committees. However, I am concerned that, as they are written in the Bill, they will have a tendency to be ad hoc and lack status, whereas a board that contains representatives with a specific role and status established in legislation has much more impact and is exceedingly important as a flow of information and advice to the TRA. I pick up a comment which I think the noble Lord, Lord Lansley, made, which is that it is really important that advice is balanced, and this would be one of the mechanisms that would help to ensure it.

I join the noble Lord, Lord Stevenson, and others in their call in Amendment 81 for pre-appointment hearings by the Select Committee on International Trade. These would be for appointments to the Board of Trade—and, as the noble Baroness, Lady Noakes, said, TAGs would probably be thrown into that as well. I spoke on this extensively on Tuesday, and I shall not repeat the comments, as the case has been very well made. The same amendment calls for appointments to be made following the governance code for public appointments. We are in a pretty pass when this House has to put such a requirement in a Bill in regard to such key and important appointments. Clearly, it has to do so because No. 10 has been so clear in its intentions to skirt those requirements wherever possible.

The noble Baroness, Lady Noakes—and I saw the noble Lord, Lord Lansley, nodding confirmation—pointed out that the appointments would essentially be limited to members of the Privy Council. I am really shocked at the thought that the Privy Council mechanism is being used to get around what everyone would expect to be a process that came under the governance code for public appointments. The noble Lord, Lord Grimstone, has a long history with that code, and I hope that he will be sufficiently shocked that he goes back to the Government and discusses that issue. All these appointments need to have the absolute smack of integrity, and there must be an absolute absence of cronyism.

Amendment 83 raises the issue of non-disclosure agreements. I was very pleased to see this language in there. I think that the drafting probably needs some work but, again, we are in Committee. Non-disclosure agreements are being widely abused, instead of being kept to their original and narrow purpose of preventing commercial harm essentially by a competitor company, or disclosure of intellectual property, pricing and so on. I have worked with so many whistleblowers who have experienced the impact of these gagging orders, which tend to work very much against the public interest. We need a proper drafting into the Bill of the kind of language that would limit the scope and purpose of non-disclosure agreements to the most restricted kind of necessity that they originally covered, not the expansive use that has become habitual as a way to protect privacy and avoid challenge.

Amendment 110, in my name and that of my noble friend Lady Bowles, again raises the issue of properly funding the TRA, including providing for its inherited liabilities, to protect its independence. I spoke to this on Tuesday, so I shall not repeat myself, but there is a common sense among many of your Lordships that funding the TRA is an issue that has to be challenged. It must not find itself in a position of being short of resource and, therefore, curtailing or basically shaping what it does because of a lack of funding.

Amendments 111 and 112 in my name and that of my noble friend and Amendment 113 in the name of the noble Lord, Lord Lansley, which I think is a very significant amendment, strengthen the reporting requirements of the TRA and finally provide some substance to the report. I spoke on an earlier group of the criticism of this Bill from the Constitution Committee—essentially, of its thinness and skeleton nature. Providing this kind of substance is genuinely critical if the significance of Parliament is to be recognised. As drafted, the Bill, as we have heard on two groups of amendments today, raises issues of transparency and independence. Therefore, like my noble friend Lady Bowles, I find it frustrating and inappropriate that the report of the TRA comes to Parliament only via the Secretary of State. That strikes me as a mark of undesirable dependency. We have been arguing all the way through that the TRA must be visibly, clearly and openly independent. Its ability to report directly to Parliament is surely a litmus test of that.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, we have had a most interesting debate on this group of amendments, particularly touching on many aspects of corporate governance. To put my cards on the table, I am a fervent believer that good corporate governance leads to good decisions. Noble Lords were absolutely right to make their comments about the importance of governance.

I thank the noble Lords, Lord Bassam of Brighton and Lord Rooker, and the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 81, and the noble Lord, Lord Stevenson of Balmacara, for moving it. Noble Lords may be interested to hear that, technically, the only member of the Board of Trade is its president, the Trade Secretary, as it is a requirement that, to be a member, you must be a privy counsellor. The Board of Trade is one of our most historic boards, which is why, as noble Lords can imagine, it was set up that way. My noble friend Lady Noakes was quite right about this, as was my noble friend Lord Trenchard, who added his normal wisdom to our debate.

The Board of Trade advisers are just that: advisers. They are not board members. We brought together experts from business, academia and government, who we hope will use their expertise and influence to help Britain make a stronger case for free trade on the international stage and to encourage more businesses across the UK regions and nations to boost their international trade. They are not policymakers, as such; the board and its advisers take a collaborative approach, focused on promoting the UK regions as destinations to trade and do business with.

The selection process for all advisers is the same: they are first shortlisted by the president of the board; departmental officials then conduct due diligence, in accordance with guidance from the propriety and ethics team at the Cabinet Office. Throughout this, principles are followed that are consistent with those underpinning the Governance Code on Public Appointments, to provide advice on the suitability of appointments. As they are direct appointments, the Secretary of State considers the advice provided and, following No. 10 approval, has the final decision on whether or not to appoint. The board’s sole function is to provide expert and apolitical advice to the department. As such, the role of adviser to the board does not carry with it the responsibility to make decisions, hold senior staff to account or have any role in striking trade deals while representing the UK overseas.

I listened carefully to the comments made by the noble Baroness, Lady Bennett, and the noble Lord, Lord Wigley, about Mr Tony Abbott. As the PM has made clear, the Government do not agree with all of Tony Abbott’s views; nor do his views reflect the views of the Government. As with all advisers, he has been appointed because of his expertise in trade matters.

I thank again the noble Baroness, Lady Kramer, for her kind words about my small role in public appointments and for explaining the need for all public appointments to be made with integrity. Cronyism must have no place in our public appointment system.

Amendment 83, tabled by the noble Lord, Lord Stevenson, relates to the trade advisory groups established by my department. The trade advisory groups will engage with businesses across the whole of the UK to access the strategic and technical expertise necessary to progress our trade negotiations with new partners across the globe. They have a very wide membership, embracing exactly the types of organisations referred to by my noble friend Lady McIntosh. The names of all members and their affiliations can be found on GOV.UK.

Trade advisory groups are just one part of the Government’s external engagement on international trade. We of course recognise the very important position that civil society organisations, such as trade unions, occupy in our society, particularly the unique insight that they can offer on important issues. I confirm that we are deepening our engagement with trade unions in relation to trade matters and we will announce more details of that in due course.

I have heard the concerns over confidentiality, and I reassure the House that we intend to share sensitive information only where it is relevant to current negotiations and where the trade advisory groups are best positioned to provide advice and expertise. This is information which must of course be protected, because if such information were to be released it may compromise our negotiations with key partners.

Trade Bill

Baroness Kramer Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

Moved by

[Baroness Kramer]

78: Clause 6, page 4, line 25, leave out from “TRA” to end of line 28 and insert—
“(c) protect the TRA’s operational independence and its ability to make impartial assessments when performing its functions.”

[Baroness Kramer (LD) [V]]

My Lords, under the Bill, the UK’s current Trade Remedies Investigations Directorate, part of the Department for International Trade, will be replaced at the end of transition by the Trade Remedies Authority. Responsibilities that fell to the European Commission under the common commercial policy during the years of our membership will be ours to decide, but in this arena no one acts in a vacuum. The TRA powers in the Bill reflect three separate agreements of the WTO: the agreement on the implementation of Article VI of the General Agreement on Tariffs and Trade, commonly known as the anti-dumping agreement; the agreement on subsidies and countervailing measures; and the agreement on safeguards.

However, how we position ourselves is not simple. The EU, for example, has in recent years made its own findings of significant distortions in exporting economies, and those decisions may be challenged in the dispute settlement proceedings of the WTO. Where will we in the UK position ourselves?

Our economy, whether the Government like it or not, is deeply interlinked with the EU economy, so that many actions against the EU will also encompass the UK. Some way will have to be found to co-operate with the EU, and, often, to synchronise trade remedies—or, frankly, businesses will be left in a completely impossible position. The European Commission has ongoing investigations in at least 20 cases, including multiple cases against China, the USA and India on goods ranging from steel and biodiesel to electric bicycles and tableware. It is also a complainant and, in other cases, a defendant in a number of cases in the WTO dispute resolution system that have consequences for the UK.

So it is crucial that the TRA is operationally independent and impartial in its assessments as it deals with complaints brought to it by industry or—I hope rarely—investigates concerns brought by the Secretary of State. But, if it is to have standing and credibility, it must be seen to be above international, electoral and party politics. Under the current Government, this is not easy, as illustrated by the article on “shaking up the state” in last week’s Financial Times. In discussing bodies such as the TRA, one of Boris Johnson’s allies is quoted as saying that

“Labour stuffed these bodies with their people; now it’s our turn.”

That is not an appropriate reputation for a body such as the Trade Remedies Authority.

I have done my best to trawl through this Bill, the Taxation (Cross-border Trade) Act 2018 and the raft of related SIs, but I have yet to find any unambiguous statement that the TRA is required to be operationally independent and impartial in its assessments. The Government might say that both are implied in clauses that deal with the behaviour of the Secretary of State towards the TRA. Those clauses include a “must have regard” in Part 2, and again in the “Guidance” paragraph of Schedule 4. However, |your Lordships will be aware that a “have regard” only sometimes has consequences. I have worked for years now with financial regulators who consider a “must have regard” as pretty light touch.

These concerns sit behind Amendments 78 and 114, and the first paragraph of Amendment 104, in my name and that of my noble friend Lady Bowles. They would make unambiguous the requirement for the TRA to be operationally independent and impartial. Amendment 79 is also in my name and that of my noble friend Lady Bowles. It approaches the issue from a different angle. It seeks to require proper resources and funding for the TRA and thereby assure its independence. My noble friend will expand on this issue.

The second two paragraphs of Amendment 104 tackle a rather different problem. I can read in the Bill that the Secretary of State can accept or reject a recommendation from the TRA on dumping, subsidisation or guarantees, but I am unclear whether the Secretary of State can vary a recommendation or act without a TRA recommendation. Could the Secretary of State accept one element of a recommendation and ignore another part? This is a genuinely probing amendment and I hope that the Minister can provide some absolute clarity, because the issue is fundamental. The role and authority of the TRA will be disclosed by his answer.

I turn to the amendments in the name of the noble Lord, Lord Lansley. I assume that Amendments 104A and 108A are essentially tidying-up amendments—my apologies if that is wrong, but that is how I read them. However, I am grateful to the noble Lord for tabling Amendment 105, which would go some way to deal with a serious flaw in the balance between Parliament and the Executive.

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I hope I have been able to reassure noble Lords that government shares their concerns that the TRA should be an independent body and that the measures necessary to ensure that are already in place. I therefore ask them not to press their amendments.

[Baroness Kramer (LD) [V]]

My Lords, I thank the Minister for making it clear that the Secretary of State—

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

I apologise. I think the noble Lord, Lord Lansley, would like to speak after the Minister. I got that message late.

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord, Lord Lansley, for that question. I have some skin in this game, because I was the author of the public appointments code in which these requirements appear. I shall certainly consider the point that he has raised and write to him about it, but, frankly, with no great confidence that I will agree with him when I do so.

[Baroness Kramer (LD) [V]]

When the noble Lord, Lord Grimstone, drew up that framework for public appointments, there was no way in which he could have anticipated this role, so I hope that he will look closely at the role of the TRA chair and listen closely to the noble Lord, Lord Lansley.

I was delighted to hear from the Minister that the Secretary of State cannot vary duties recommended by the TRA and cannot, without the TRA’s say-so, impose those duties. I appreciate that clarification.

I smiled at the thought that there might be “excessive steps” to protect the independence and impartiality of the TRA. It is hard to think of anything that would be excessive if it were to support those principles of independence and impartiality, so fundamental are they to the role.

Given the lateness of the hour, I beg leave to withdraw my amendment.

Amendment 78 withdrawn.

Trade Bill

Baroness Kramer Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020 Grand Committee

[Baroness McIntosh of Pickering (Con)]

In principle, I have some sympathy with the amendments. My concern goes to the heart of the ministerial discretion in appointing and reappointing members of the Trade Remedies Authority. I am attracted to a period of two terms of five years and I would be interested to know the thinking of the noble Lord, Lord Purvis, in reducing it to three years. A maximum of two terms of five years would seem more appropriate. In probing my noble friend’s thinking in this regard, I am obviously wedded to the idea of parliamentary scrutiny and would be interested to know whether he does not share my concern that there might be too much ministerial discretion in appointing and reappointing members, which goes to the heart of the independence of their terms of tenure. I will wind up by saying that I think that five years is more appropriate—unless I could understand better why three years and a maximum of six years was put forward on this occasion.

[Baroness Kramer (LD) [V]]

My Lords, I will be exceedingly brief. My noble friend Lord Purvis of Tweed has made the case and I am not able to better it. I just want to raise an underlying principle. I suspect that every Member of this House is very cautious of any power that enables the Government by regulation to change primary legislation of any kind. Where it is necessary to provide that power, there should generally be a principle that the time period is as short as possible and that power is as limited as possible. Otherwise, we begin to compromise the whole concept of primary legislation and the purpose and meaning of parliamentary legislation.

Three years is surely a perfectly adequate time to be able to make any implementing changes necessary as continuity agreements are negotiated and signed. The underlying principle is one that the House needs to pay attention to. Setting precedents allowing an entire Parliament to pass during which period powers are given to a Government to override primary legislation through regulation, even if it is in a constrained environment, is a principle that we must absolutely challenge.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

The next speaker is the noble Lord, Lord Rooker. I will call him once more; if he does not appear, we will move on. No. I call the noble Lord, Lord Bassam of Brighton.

Trade Bill

Baroness Kramer Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

[Baroness Blower (Lab) [V]]

My Lords, I am pleased to speak on Amendment 17, to which I have added my name.

While the history of trade negotiations may not be completely littered with the fragments of failed attempts, it is certainly the case that the Transatlantic Trade and Investment Partnership, TTIP, failed, after several years of negotiations, to come to any conclusion. In Britain, much of the opposition was on the basis of the perceived—and I believe very real—threat to our NHS: the threat that the NHS would not survive as a public service and that the writ of privatisation would run ever more unchecked. I was pleased to hear a most eloquent speech from the noble Lord, Lord Patel, offering a catalogue of already privatised and outsourced elements from our NHS, and, significantly, pointing out the dangers that this posed.

Equally, the opposition to TTIP, not just in Britain but across Europe, focused, as my noble friend Lord Hendy said, on the investor-state dispute settlement mechanism—ISDS. My noble friend gave chapter and verse on the reasons for opposing ISDS. I concur with his remarks and associate myself with those of my noble friend Lord Hain.

Let me add a perspective from the United Nations, specifically from the United Nations Conference on Trade and Development. As the Committee might expect, ISDS features in UNCTAD reports. In May of this year, we find the following in one of its reports:

“Foreign investors have used ISDS claims to challenge measures adopted by States in the public interest (for example … to promote social equity, foster environmental protection or protect public health)”—


all issues close, I am sure, to the hearts of many in this House. The report goes on:

“Broad ISDS mechanisms typically used in old-generation”


international investment agreements

“provide for the contracting parties’ advance consent to international arbitration and are characterized by broad scope, few conditions for investors’ access to ISDS and a lack of procedural improvements. As ISDS is at the heart of the IIA reform process, in recent IIAs countries have carefully regulated ISDS and at times omitted it”

completely.

UNCTAD goes on to make a number of recommendations, but I shall confine myself to this one:

“Replacing ISDS by settling disputes in domestic courts and/or through State-State dispute settlement”.


In July, UNCTAD returned to the question and said:

“Policy responses taken by governments to address the COVID-19 pandemic and its economic fallout could create friction with existing IIA obligations. This highlights the need to safeguard sufficient regulatory space … to protect public health and to minimize the risk of”


ISDS proceedings.

There are huge problems with the ISDS mechanism, from Philip Morris to the Portuguese metro and so many more. It would therefore be wise for the Government to heed the words of the United Nations—but, more so, to heed those of my noble friend Lord Hendy. ISDS should have no place in our future trade arrangements. I will listen extremely carefully and with great interest to the response from the Minister.

[Baroness Kramer (LD) [V]]

My Lords, I will speak to Amendments 43 and 44, which again deal with dispute resolution. In a way, these amendments need to be seen together, because Amendment 44 is perhaps a patch on the current system, while Amendment 43 takes us forward towards a resolution so that we can structure a suitable mechanism for dispute resolution under trade agreements.

Amendment 44 requires that legal proceedings against the UK under an ISDS would be heard in the UK courts. Essentially, it picks up the point made by the noble Baroness, Lady Blower, that one of the recommendations of dealing with the most egregious aspects of ISDS is to throw the issues back into the domestic courts. It provides a patch that would help us get through this immediate set of problems, because suddenly transparency, fairness and respect for domestic law come into the picture.

I am not going to repeat all the arguments already made very powerfully by the noble Lords, Lord Hendy and Lord Hain, and the noble Baroness, Lady Blower, about the flaws in ISDS. I think we can all accept that it is generally regarded as unfit for purpose in a modern, complex economy, with trade agreements that now cover so many issues. We probably all share the concern that rolling over existing ISDS in continuity agreements is generally very undesirable because it sets such a clear precedent for using ISDS again in future trade agreements. I think we all have a particular eye on the US FTA negotiations and are very concerned about ISDS provisions appearing in that.

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[Lord Grantchester (Lab)]

Amendment 20 is in my name and I thank the noble Baroness, Lady Bennett of Manor Castle, for adding her name to it. It concerns the importance of food safety and quality, and how these issues are administered through government departments and agencies for these matters. This includes the importance of nutrition.

We are all rightly proud of the high agricultural and food standards in this country. Many people believe that trade must not undercut those standards, not only to maintain fair competition for agriculture, the food service and food manufacturing sectors—and the diverse food chain—but to maintain and improve the health benefits to consumers from transparent certified and production regulations. These latter points have been underlined by the Mail on Sunday in a letter from Jamie Oliver, the people’s chef, and PE teacher Joe Wicks. The letter, with wide public endorsement, does not want the Government to

“trade away our children’s futures”.

Alongside the letter, a Delta poll found that 68% of people believed that the most important priority for Britain is to maintain high standards for food, even if that meant some trade deals did not materialise.

Amendment 20 has an overreach into the Agriculture Bill, which passed all its stages in the House last week, now that it includes important provisions on this issue. “Food standards” includes not only food safety but production standards, environmental protections and welfare. In this amendment, these regulated standards are administered by the named government department —the Department of Health—and the other executive agency, the Food Standards Agency, including Food Standards Scotland.

We all know the threat post by a potential trade agreement with America and Australia, for example. Although the Bill technically deals with precursor agreements, nevertheless it is important to clarify that these also pass these most stringent tests as they develop. In the case of Japan, these rollover deals can go further. It is material to this debate that the US has 10 times the level of food poisonings that exist in Europe.

The Global Economic Governance Programme of Oxford University has reported that as the Government transferred the entire acquis of EU law into UK law through the withdrawal Act, substantial decision-making powers were conferred on UK Ministers to amend the legislation. That includes amendments through secondary legislation, which carries far less scrutiny in its procedures than primary legislation. There are anxieties around the claimed certainty of the withdrawal Act, heightened by the Government’s bringing forward the internal market Bill, now with further amendments proposed and inserted into the Bill at a very late stage in its Commons consideration. That is why so little credibility is attached to the many protestations from the Government that their word that they will maintain the UK’s high standards in its negotiations can be relied upon. May I stress to the Minister that he reconsider his often-repeated assurances, since they are not being developed into meaningful, transparent procedures and are in themselves inadequate?

This amendment, under proposed new paragraph (e), also has cognisance of future dangers through antimicrobial resistance—AMR—on which UK agriculture has already demonstrated admirable awareness by reducing antibiotic usage considerably over recent years. I also underline proposed new paragraph (g), which draws attention to the issue of labelling, country of origin specifications and the importance of branding through geographical indicator schemes, which have proven so successful in driving high-quality exports. It would be helpful to have the Minister’s comments on the record that these provisions will continue to be recognised through continuity agreement enhancements.

Although it was not initiated by me, I have added my name to Amendment 23, in the name of the noble Lord, Lord Purvis, and other noble Lords, and I will speak only momentarily to it. The Government themselves brought forward this amendment on Report of the previous Trade Bill, which was so graciously steered through your Lordships’ House by the noble Baroness, Lady Fairhead. It was good to see her attending this Committee, and I look forward to hearing from her later. Our Benches were part of the cross-party consensus on which that government amendment was based. I am sure that, through these amendments, other proposers will underline the key necessity of maintaining statutory protections. Only 18 months on, can the Minister give cogent reasons why the Government should now wish to discard this important safeguard?

I thank the noble Baroness, Lady McIntosh, and other noble Lords for their supporting Amendments 24 and 25; I will speak to my Amendment 56 in this group. I also thank the noble Baroness, Lady Jones of Moulsecoomb, and my noble friend Lord Rooker for adding their names to this amendment. While it may appear onerous, I consider it important that government must produce a register that can ensure equivalence and a transparent baseline for a level playing field. That would be another way for the Government to deliver on their election promise to maintain the UK’s high agricultural, environmental, plant health and animal welfare standards.

My Amendment 67 in this group goes further by recognising the importance of animal sentience. The Government have agreed to introduce a measure recognising this to ensure that all future legislation on the welfare of animals is assessed against that standard. While the amendment does not seek to be the whole answer to this issue and does not define animal sentience, nevertheless it would be helpful to hear from the Minister what now is the Government’s view on this and when they might bring forward a specific Bill.

I thank the noble Baroness, Lady Jones of Moulsecoomb, for her Amendment 74 in this group and commend her for the thorough way she approaches the issues at all times—that ratification of trade agreements must be compatible and have equivalence with UK standards. The key approach of all these amendments is that modern trade agreements allowing imports of food into this country have to reflect the quality of food to which all domestic food must comply. Why allow substandard food that would be condemned here to be imported into the UK? This needs to be enshrined in legislation. I beg to move.

[Baroness Kramer (LD) [V]]

My Lords, I will speak to Amendment 23 in particular. All the amendments in this group have very similar goals—they just choose rather different avenues for achieving them.

Amendment 23 would require that trade agreements maintain UK statutory levels of protection for human, animal or plant life or health, animal welfare, the environment, employment and labour. I join noble Lords in supporting the noble Lord, Lord Grantchester, who, along with the noble Lord, Lord Purvis of Tweed, and I, is a signatory to this amendment. He said that upholding standards should not be a matter of trust. We live in a country where important principles are reinforced in law and in statute. That is exactly what this amendment tries to do; I suspect that the other amendments in this group are trying to do the same.

I particularly support this amendment because, as the noble Lord, Lord Grantchester, said, it uses the exact language of a government amendment agreed on a cross-party basis and introduced into the Trade Bill in 2019. On that basis, one would think that the Government would have no problem with it, yet they have removed that language from the Bill. That act of removal is very powerful. Choosing to omit a clause—in effect, withdrawing it—sends a message. I am sure that those countries with whom we are negotiating trade deals, whether they are continuity deals or future deals, have taken note. I am very sure that the United States has taken note of the decision to remove this language and the clause. As we know, actions speak louder than words. I also take the view that, if Amendment 23 does not apply to continuity agreements, why would anyone negotiating a future agreement suddenly insist that the precedent should be broken?

In this context, I want to pick up a point made by the noble Viscount, Lord Younger of Leckie, in the debate on an earlier amendment. He said that regulatory standards are not set in trade Bills. For many years, I worked in the United States as a banker in two major companies. I can tell the noble Viscount that his description will be real news to American companies, which have a long history of using dispute resolution mechanisms in trade Bills to achieving particular policies regardless of whether they override domestic legislation. As we look forward to negotiating a US-UK FTA, we must be well aware that everything we do will make that conversation either more difficult or easier.

In the United States, a complex mix of federal and state regulators set and uphold a wide range of standards. The fragmentation is one of the reasons why the US is so successful at keeping out imports; few exporters want to take on the highly complex US federal and state court systems. In the United States, where there is a very different culture, in nearly every company, there is a real taste for aggressive litigation. Many companies have deep pockets in which large amounts of money are set aside for litigation, making such companies effective at intimidating negotiating partners. In effect, they export US standards regardless of domestic legislation elsewhere.

We are in a period when trade is a tense issue. Historically, we would probably have said that most major developed countries would avoid trade battles with each other. We are not in that period any more. The US is at present taking a very aggressive view towards trade protectionism, and any kind of loophole or weakness within any trade deal will be fully exploited. When we say that we must have safeguards to protect our standards, I hope that the Government will recognise that that protection must extend to this Trade Bill.

Trade Bill

Baroness Kramer Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, this is the first time I have spoken in the brave new world of Grand Committee. We have lost Moses, and instead we have something that looks like the translation booths that I remember from my time as the UK Minister at the European Council in Brussels—the numbers were about the same, given the number of EU languages, although of course everyone spoke English informally.

As my noble friend knows well, I welcome the Bill and the Government’s global ambitions. Again, I declare my interest as chairman of the UK-ASEAN Business Council. Today, it is with particular pleasure that I support the noble Lord, Lord Berkeley, and the noble Lord, Lord Bradshaw, for whom I think the noble Baroness, Lady Kramer, will speak. Although we sit on opposite sides of the House, the noble Lord, Lord Berkeley, and I share a practical bent when it comes to infrastructure, and especially to railways. Our Amendments 8 and 19 would make it easier for the private sector to finance trade in railway rolling stock, as he explained, and would allow the UK to implement the Luxembourg rail protocol to the Cape Town convention, bringing rail into line with aviation, which is important in the current climate. That would help to build a more dynamic rail sector, harking back to our heritage as a pioneer of rail technology. As someone descended from an engineer who helped Stephenson build the “Rocket”, I find this extremely attractive.

As the noble Lord, Lord Berkeley, has indicated, another way forward that would achieve these aims may have been found. If so, I welcome that. I thank my noble friend Lord Grimstone for his assurances and work on this issue, and I associate myself with the comments of the noble Lord, Lord Berkeley, on the way ahead.

[Baroness Kramer (LD) [V]]

My Lords, I thank the noble Lord, Lord Berkeley, and the noble Baroness, Lady Neville-Rolfe, and bow to their expertise. I am stepping in in the place of my noble friend Lord Bradshaw, who is, unfortunately, not able to speak today. I know that the three of them have had sufficient conversation to enable me to be sure that I can support everything that has been said up to this point.

Many of us are utterly frustrated that, in this era when we are so concerned with climate change, the advancement of rail is frequently constrained by the concerns of rail equipment companies about the security of their rolling stock. This protocol addresses that issue. It provides a public registry for rolling stock, which would hugely facilitate cross-border operations of freight and passenger trains, and the certainty that a registry offers. It would free up financing for rail stock, because it provides mechanisms for repossession of collateral in cases of insolvency.

Stimulating private investment in this arena is absolutely critical. This is not a burden that most countries around the world can carry at government level, so ensuring private participation is crucial. We move now into an era where our concern about climate change means that rail options, in contrast to aviation or road options, are increasingly attractive because of the environmental benefits, and very often it is far more cost-effective for exporters and importers.

As the noble Baroness, Lady Neville-Rolfe, said, the UK has increasingly become a player once again in the manufacture of rail equipment and it needs international markets. It would of course be of benefit if those markets had much greater certainty and confidence in those who are selling.

I am somewhat concerned because, when I last looked—and perhaps the Minister might correct me—only Luxembourg had actually ratified this treaty, although many countries have signed it, as the UK did in 2016. We really want to make sure that there is no obstacle to UK ratification, which would undoubtedly give others the confidence to go ahead and ratify, lifting the whole platform of rail as part of the ongoing future, so that it has much more significant international consequences than even domestic consequences.

I hope very much that we can use this opportunity to bring the issue once again to the Government’s attention. I am very comforted: it sounds as though the Government have found a route for ratification to be achieved. I do not think any of us particularly care what the route is, provided that it is secure and effective. I look forward to hearing the Minister’s comments on this issue.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I am grateful to my noble friend Lord Berkeley for introducing this amendment. I am afraid that it is outside my normal expertise area, and I listened with interest to what he had to say. We should support his argument that if it is possible through this Bill to facilitate the rail sector and its development, we should do so. I am happy to back up the points made by other speakers.

--- Later in debate ---

[Lord Hendy (Lab)]

My Lords, I speak to Amendment 18, which develops one aspect of Amendment 11, so ably introduced by my noble friend Lord Stevenson and the noble Baroness, Lady Bennett.

It is usual in free trade agreements to have a chapter which contains provisions on labour standards. Chapter 23 of the much-discussed EU-Canada Comprehensive Economic and Trade Agreement is typical. It requires each state party to ensure that its labour law and practices embody and provide protection for the fundamental principles and rights at work, which it lists as

“freedom of association and the effective recognition of the right to collective bargaining; elimination of forced labour; abolition of child labour; elimination of discrimination”.

In that free trade agreement, the parties affirmed their commitment to respect, promote and realise those principles and rights, in accordance with the obligations of the members of the ILO and the commitments under the ILO Declaration on Fundamental Principles and Rights at Work, and its follow-up. They undertook that their labour law and practices would promote

“health and safety at work; minimum employment standards for wage earners, and non-discrimination in respect of working conditions, including for migrant workers.”

That is all very well, but it is not enough. The United Kingdom has ratified many ILO conventions, including the core conventions. Indeed, 70 years ago this summer it was the first nation on the planet to ratify fundamental ILO convention 98 on collective bargaining. However, its potential trading partners may not have such a fine record. The USA is sadly lacking in this respect. Any free trade agreement should require a prospective partner to ratify those conventions which the UK has ratified—otherwise, there will be asymmetry in labour standards.

Ratification by partners is not enough. We should insist that our prospective trading partners customarily observe standards we have ratified. That is an obligation in CETA too, which states:

“Each Party reaffirms its commitment to effectively implement in its law and practices in its whole territory the fundamental ILO Conventions that Canada and the Member States of the European Union have ratified respectively.”


That principle should apply to all the international treaty provisions that the UK has ratified, not just those of the ILO. We should therefore include those of the Council of Europe, its convention on human rights and the articles of the European Social Charter 1961, which we have ratified. Non-European states cannot ratify those provisions but they can certainly undertake to implement them. The effect, I hope, will be to uplift the labour standards of some potential trading partners to those we purport to uphold. It will also prevent the creation of an unbalanced playing field on labour rights, contrary to the level playing field that the Government claim to advance. Likewise, the free trade agreement should be compatible in all respects with the ILO conventions that this country has chosen to ratify; otherwise, standards can be watered down.

The amendment is surely uncontroversial in requiring that prospective FTA partners must uphold the sovereignty of Parliament, the authority of our courts, the rule of law and the principle of equality before the law. It is hard to conceive of a rational objection to the proposal that the minimum standards referred to in the amendment are required of any prospective trading partner, whatever may be said about our own Government’s record on these points. I ask the Government to ensure that these requirements are embodied in the Trade Bill.

[Baroness Kramer (LD) [V]]

My Lords, as the noble Lord, Lord Stevenson, explained, the amendments in this group cluster around the importance of issues such as human rights and other rights in trade agreements. I will focus on Amendment 45 in my name and that of my noble friend Lord Purvis of Tweed. It would require human and equalities rights assessments of all trade deals before and after implementation. The linking of trade agreements and human rights has become normal practice in recent years and is evident in almost every trade agreement signed by the EU.

I take heart from the fact that Liam Fox, when Secretary of State for International Trade, made it clear in some of his comments that the UK was fighting to ensure that human rights provisions in continuity trade agreements stayed in place as we transitioned out of the EU. I hope the Government continue to have that deep commitment and understand the importance of those clauses within the trade agreements. However, we had some disturbing comments in the same year. The then Minister for the Middle East, Andrew Murrison, discussed whether or not any future trade agreement with China would include human rights clauses. The question has been raised and I think, it needs to be answered in this legislation.

It is concerning the UK has indicated it does not want to apply the European Convention on Human Rights to its FTA with the EU in any way that is legally binding. This could be an unfortunate and concerning precedent and the Government need to provide an adequate response. There are huge implications if the ECHR is not included in trade agreements. If we take the trade agreement with the EU as an example, it has serious implications for data protection and for the Northern Ireland protocol. I hope we do not see this Government take heart from Dominic Cummings, who has an ideological hostility to the ECHR. The only country in Europe not a party to the ECHR is Belarus. As we all say, the convention was initially a British project to put in place a genuine defence for ordinary people following the horrors of the Second World War.

It is therefore key that appropriate clauses are embedded in the Trade Bill; otherwise, the message will be that the United Kingdom is showing flexibility around these key issues. That is not a position that I would like to see us negotiating.

European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020

Baroness Kramer Excerpts

Wednesday 16th September 2020 Grand Committee

[Baroness Kramer (LD) [V]]

My Lords, sparked by the noble Lord, Lord Foulkes, let me say how refreshing it is that we are debating a part of the European withdrawal agreement that the Government intend to uphold—there is a positive note to start on.

Of course it makes sense to repeal SIs that are redundant and potentially confusing, and we support the changes before us today. However, this debate gives me the chance to press the Government with the same kind of questions that the Minister has heard from other speakers. By the end of this year, EU funds will go into a run-off process over the subsequent few years, supporting existing or agreed projects but not investing in new ones. Like everyone else, I am remarkably short on detail for the UK shared prosperity fund that will replace them. Frankly, that seems a little extraordinary, because we are only three months or so from the end of transition. I thought there would be a major consultation on this. Have I missed it? It is possible that I have, but I attempted to find it and, frankly, I could not.

A number of bodies have raised quite a few issues around the UK shared prosperity fund. One of the hopes is that it will be transparent, simple and flexible—you could accuse the European structural funds of not meeting that test—to enable it to respond to local needs. I ask this because centralisation rather than devolution seems to have become a theme of this Government. I would also like to understand what role Parliament will play, particularly compared to the European Parliament, in holding the Government accountable for what happens with these funds. I am afraid I do not understand that either; perhaps the Minister could enlighten me.

Will the objectives that the Government have articulated for this new fund, such as boosting prosperity and tackling inequality, be adjusted as a result of Covid? That matters because of areas that might not have qualified under the original definitions but which are not dependent, for example, on hospitality, the airlines or on public transport. I pick up the point made by my noble friend Lady Bowles that sometimes a small sector or area can be deprived within an area of overall prosperity, but that still matters. Will those areas that might not have made the original list but now, because of Covid, may be very much in need, be looked at as recipients for this fund?

We could better understand the impact on geographies. My understanding—the Minister can correct me—is that however you look at the analysis, it looks as though areas such as Cornwall, for example, which benefited from the cliff-edge approach inherent in the European funds, will be serious losers in every approach that has been discussed for the new fund. Is that right? Perhaps the Minister can help us.

Again, to pick up on issues raised, the Conservative manifesto promised that each nation would receive as much funding as if we had not left the EU. For how long will that be true? Areas are desperate to know how much money will be available, particularly as we go into very rocky economic times.

To pick up a point made by both my noble friend Lady Bowles and the noble Baroness, Lady Altmann, will we continue with the needs-based criteria or shift, as some have suggested, to an outcomes-based criteria? It makes a very big difference to which parts of the country and which kinds of projects receive funding rather than others.

Generally, I join noble Lords in saying that this is a great opportunity for the Minister to tell us much more about this new future—it would be exceedingly useful.

Trade Bill

Baroness Kramer Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Baroness Kramer (LD) [V]]

My Lords, I join in the welcome to the noble Lord, Lord Grimstone; he brings great experience to our House.

This Bill is a successor to the Trade Bill passed by this House last year, but significant elements have now been stripped out—primarily, the amendments agreed in the Lords. It is a Bill that reaches into the DNA of my party, as free, open and fair trade is the bedrock of our political movement. We will defend those principles as we engage with the Bill. The Bill is also about much more than continuity agreements, as the Government themselves have demonstrated in data-sharing clauses. My colleagues and I will follow the Government’s lead and use the Bill to address UK trade issues more broadly.

The amendments made by this House last year were necessary then and are necessary now. They remain crucial to underpin transparency, the devolution settlement, the future of the NHS, the Northern Ireland border, the movement of people, minimal trade barriers and, above all, safeguarding the status of Parliament with regard to treaties. Given the Government’s negative attitude to international development and aid, development issues will need to be considered in this Bill process, as will regulatory standards, climate change and sustainability, given the alarm bells that have sounded in the Government’s shaping of the Agriculture Bill.

Speaking personally, the issue that exercises me most is Parliament’s role—or the lack of it—in making trade treaties. Trade now shapes much of the economy of this country, yet, under the Government’s plans, Parliament’s role in this key area is largely reduced to that of a talking shop and bystander. When we were a member of the EU, people and organisations in the UK concerned with matters of trade and its impact could follow the negotiations in some detail because of high levels of transparency. Even more importantly, they could turn to elected representatives to challenge and change the negotiating mandate and the final treaty; that was parliamentary democracy. Now, both continuity agreements and new trade agreements will be subject only to the procedures in the Constitutional Reform and Governance Act—CRaG—which the Lords Constitution Committee has described as “anachronistic and inadequate”. In the Lords, this is a particularly weak power without the capacity to delay ratification; in both Houses, of course, it prohibits amendment. Ironically, it also weakens the UK’s ability to negotiate. The USA constantly refuses trade concessions, saying, “We can’t get that concession through Congress”. UK negotiators must have that same leverage.

I particularly express my respect for the Conservative MPs in the House of Commons—notably the Member for Huntingdon, Jonathan Djanogly—who stood up for Parliament and democracy. I hope Members across all parties in the Lords will have that same courage.

Let me say a few words on the trade remedies authority. Why it will get the name “authority” I simply do not understand, because authority is precisely what it will not have. An advisory body is not a regulatory body. It also means that in any dispute the UK position will be seen as politically tainted and not the work of an independent objective body testing against clear criteria. I hope that at the very least in the course of the Bill we will get some illumination on that process.

Those discussions will also help us to understand the implications of the Government’s state aid position. I belong to a free trade party very concerned about the use and distortions of state aid, except in instances of market failure. European rules have provided a constraint on inappropriate state aid. The failure to find a common state aid standard between the EU and the UK will trigger a new wave of competitive state aid and everyone will lose.

We had the bluster on Monday from the Prime Minister announcing that no FTA with the EU would be a “good outcome” for the UK. I am sure that business across the country shuddered. Then came the leak revealing that the internal market Bill will eliminate the legal force of parts of the withdrawal agreement in full cognisance that this will breach international law. I notice the Minister talking about the importance of a rules-based trading system and, frankly, I begin to wonder how those two actions are squared. To me, it sounds as if we are reaching some new low.

Trade is critical to the UK economy so we have to get these deals right, but more is at stake. If the Government set Parliament aside, it will diminish this country and in the end we will all lose.

UK Internal Market: White Paper

Baroness Kramer Excerpts

Wednesday 29th July 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we support the principle of maintaining the UK’s internal market, which is vital for trade, jobs and prosperity across the whole United Kingdom. It is good that the White Paper has been issued, and I am sure that the responses to the consultation will be of value. Will the Minister outline the timetable for the consultation and the legislation to follow, which I assume will have to be in place by 1 January 2021? He will understand that, with the Trade Bill due to start its return journey through your Lordships’ House on 8 September, there is a danger of some overlap, which we should at least identify before we start.

It is already clear from the reactions in the devolved Administrations that there are some knotty problems to be addressed in the consultation, some of which, of course, span beyond internal trade issues, important though these are. The key issue that needs to be addressed is how we establish which powers being repatriated from Brussels can be passed directly to the devolved Administrations. I understand that a lot is agreed, but there are a number of areas where overlapping interests mean that this has not yet been formally determined. What is the current situation on the common frameworks? The unanswered question on this issue is: if a settlement cannot be agreed, or future problems arise, what resolution mechanisms will be used? The proposed independent advisory body is neither flesh nor fowl and will be problematic. However, in previous discussions a number of possible solutions have been canvassed. In this regard I reference the proposal made by the noble and learned Lord, Lord Mackay of Clashfern, who is to speak shortly after me, on the first Trade Bill.

Can the Minister confirm that the solution to this must be de minimis, involving a joint government council, with recourse to the UK Parliament where decisions by the UK Government may impact on areas of competence which are not reserved? Can he further confirm that these arrangements need to be established on the principle of co-operation and transparency? It is surely self-evident that these arrangements will work in practice only if they are based on a secure statutory framework, establishing without doubt a set of high-quality standards which must be applied across the whole United Kingdom— these were, of course, guaranteed while we were in the EU—relating to human rights, employment rights, consumer protection, animal welfare, food safety standards and environmental standards. There must be no question of a race to the bottom here.

There should be an understanding that, where a devolved Administration want to raise standards on an issue on which they have competence, that should be encouraged: the subsidiary principle can and should operate here, possibly to the extent that we could envisage separate devolved administration trade deals in the future. The Minister will have noticed that the Government have resisted all recent attempts to legislate, in successive Bills, for exactly these standards. Will he take this opportunity to look again at the ongoing Agriculture Bill and the soon-to-start Trade Bill and support measures that would achieve this vital underpinning? If not, why not?

Finally, the White Paper raises the question of state aid rules, albeit in the guise of subsidy. We are aware that this issue is one of the key concerns of the current Brexit discussions but, even so, the lack of clarity here is worrying, particularly at a time when state aid has been so crucial to the Covid-19 response and will continue to be so during the recovery. Will the Minister please confirm when further details, including the role to be played by the CMA, will be made available?

[Baroness Kramer (LD) [V]]

My Lords, I agree, as does my party, that an internal market is vital to our economic future, but we are a country of nations, and even this Government must recognise that any internal market requires building a significant consensus between the UK Government and the devolved Administrations. Will the Government commit to an impartial UK body to deal with compliance and dispute resolution, to ensure that the devolved Administrations’ concerns on trade and regulations are respected? How will this proposed legislation operate with the Northern Ireland protocol? I can see no way that unfettered access, which this Statement contemplates, fits with the technical and administrative processes required as a consequence of the protocol. Will the Minister explain how much of the internal market framework is essentially designed to enhance the Government’s flexibility to make concessions without engagement with the devolved Administrations, in order to achieve trade deals with countries such as the United States?

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank the noble Lord, Lord Stevenson, and the noble Baroness, Lady Kramer, for their questions. I pay tribute to the support that he offered for the principles of this legislation, for which I am grateful. He asked about the timetable. As he is aware, consultation on the White Paper closes on 13 August and we are committed to bringing forward legislative proposals following that when parliamentary time allows—likely to be as soon as possible after the Summer Recess.

The noble Lord asked about the continuing discussions on common frameworks. Indeed, those discussions continue, and our proposals will maintain consistently high standards across the whole UK, promoting co-operation between the UK Parliament and the devolved legislatures. He referred to the Agriculture Bill and the Trade Bill. Those are, of course, separate discussions and separate legislation, but let him be in no doubt that we are committed to high standards across the whole United Kingdom. Under our proposals, the devolved Administrations will continue to have the power to regulate within their areas, and they are going to gain a whole load of new powers when we leave the European Union transition period at the end of this year and will continue to be able to exercise their powers in those areas, as long as they do not discriminate against goods and services from other parts of the country. He also asked about state aid. I cannot give him a timetable for that, but it is under active consideration by the Government at the moment.

The noble Baroness, Lady Kramer, referred to the creation of a UK body. We are indeed suggesting that for consultation in the White Paper but we envisage that such a body will act to monitor the operation of the internal market across the country. We do not envisage it as having compliance powers, and of course dispute resolution is ultimately a matter for the courts.

The noble Baroness also referred to trade deals. Again, that will be subject to separate legislation—a separate Trade Bill is coming before your Lordships. However, I reiterate that our commitment is to the highest possible standards across the whole country, and we have no intention of watering them down.