Trade Bill

Baroness Pitkeathley Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

The noble Baroness, Lady Neville-Rolfe, has withdrawn, so I call the noble Lord, Lord Bassam of Brighton.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I am very grateful to the noble Lord, Lord Purvis, for putting forward this amendment. We should also be grateful to other colleagues in the Chamber for asking key questions on this.

Bad trade deals produce clear winners and losers. Surely our task is to make sure that British businesses, including those in Northern Ireland, do not lose out in trade agreements and face unnecessary costs. British businesses have faced an incredibly tough year; the pandemic in particular has seriously impacted on UK trade. We have seen big falls in exports and imports in the three months following April 2020; the ONS found that trade exports fell by £33.1 billion in those three months, while imports fell by £29.9 billion. These were the largest three-monthly falls since comparable records began in 1997. Trade will be vital for businesses in the post-Covid recovery period. The Government should make sure that businesses do not face unnecessary costs arising from trade agreements.

I am glad that the Minister has said previously that the Government have committed to publish their negotiating objectives alongside an initial impact assessment. Can he confirm that a full impact assessment for each agreement will be published by the Government at the end of negotiations? Will this full impact assessment be reviewed by an independent body? Will the Government act on any findings that come as a by-product of the review?

There are clearly major problems for Northern Ireland. Does the Minister expect different costs for businesses exporting or importing goods and services to or from Northern Ireland to result from an EU-UK FTA and any rollover agreement for the Japan agreement? Other businesses in the rest of the UK will clearly be affected by this.

The amendment’s explanatory note also refers to additional costs to businesses operating within the UK’s internal market. Labour firmly believes that there is a need for a strong internal market so that businesses can trade freely across the UK’s four nations, which will be vital for our economy and shared prosperity. This will be discussed at length in the Internal Market Bill, which has some important implications for this Bill.

I hope that the Minister is following these debates closely. I hope that we can be reassured that the impact assessments will be transparently conducted and published, and that the Government will take note of their findings. Rather like the noble Baroness, Lady Noakes, I accept that there are costs both ways, but we need transparency. That transparency will enable our businesses to trade better, more freely and more competitively.

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

My Lords, I welcome this amendment, put down by the noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Suttie. As I told the House on the first day of Committee, and as we have touched on since, our continuity agreements seek to replicate the effects of EU agreements, and the 21 agreements that we have already signed show that we are not diverging or introducing new obligations. These agreements are continuity by name and continuity by nature. We therefore do not think it proportionate to produce impact assessments for trade deals that only maintain the status quo. I emphasise that point because I will come to other free trade agreements later.

This is not to say that we intend to deny Parliament information on these agreements. That is why the parliamentary reports that we have committed to publish alongside signed agreements contain detailed information about the volume of trade, the composition of imports and exports, and the wider economic impact of those agreements. As I have said, we will continue to lay these parliamentary reports voluntarily, with Explanatory Memoranda, alongside each new continuity agreement. The recently signed new agreement with Ukraine will of course be treated in that way.

New FTAs are not included in the scope of the Bill—neither are the EU arrangements—but we have committed to publishing in advance of opening negotiations initial economic scoping assessments for the new FTAs setting out what impact we believe the agreements might have. At the end of negotiations, we will produce an impact assessment for the final treaty, alongside an Explanatory Memorandum, prior to it being laid before Parliament for scrutiny under CRaG. The Government believe that this strikes the right balance.

The noble Baroness, Lady McIntosh, and the noble Lord, Lord Bassam, asked what kind of independent assessment will be made of these assessments. I am pleased to say that those assessments will be made by the Regulatory Policy Committee. I can also let the House know that the International Agreements Sub-Committee has already received these assessments in relation to the Japan FTA, which we signed a few weeks ago. These agreements and reports have been made available to the IAC on a confidential basis. We committed that the committee would have these agreements to review in good time before the CRaG process started; I am pleased to say that I had a good meeting with the IAC yesterday where we talked through these processes. I look forward to receiving its report in due course.

The noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Suttie, asked various questions relating to trade with the EU, particularly on customs arrangements and other contingency arrangements, including Northern Ireland matters that will arise at the end of the transition period. If I may, I will write to the noble Lord and the noble Baroness on these matters.

Given these reassurances, I ask the noble Lord to withdraw the amendment.

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

I have received no requests to speak after the Minister, so I call the noble Lord, Lord Purvis.

[Lord Purvis of Tweed (LD)]

My Lords, of course I look forward to receiving another letter from the Minister. I hope that he can, at least in this one, give me what has so far proved to be very elusive: simple information in answer to straightforward questions on the current level of intermediaries recruited to support our exporters on the new border operating model. The industry had indicated, which Michael Gove had agreed with, that we require an estimated 50,000. HMRC said at the end of July that 600 had been recruited. All I have been asking is what the current level is—I do not think it is unreasonable for us to know. The border operating model itself explicitly encourages our exporters to use intermediaries because the customs procedures under this model are complex and burdensome. That is the point. I am grateful for the support of the noble Lord, Lord Bassam, who gave the context of the real pressures on our businesses exporting.

Let me address the specific and very reasonable questions from the noble Baroness, Lady Noakes. The amendment explicitly states that the costs to businesses are linked to additional regulatory requirements in regulations made under these orders. It simply is not the case that these agreements stay permanent once they have been made. Often, regulations will be required to be made in the lifetime of these agreements. I would hope that the Minister could confirm that any regulations brought forward would ordinarily have an impact assessment on the cost to businesses associated with them. The whole thrust of the last few years has been about not bringing in regulations without an impact assessment on business. That should be a straightforward thing for the Minister to confirm.

The second subsection of the proposed new clause is about new agreements, and again it is for any additional requirements to implement those agreements. There is not the necessity of a counterfactual, because they are to do with how the Government assess any additional costs to businesses from any new requirements on businesses. The reason I did major on the border operating model was this: it has of course become necessary because of us leaving the European Union, but it is a new border operating model for all exports, not just for exports to the European Union. The Kent access permit is not just for anybody wanting to export to the European Union but also to make sure that we have all of these in place. Therefore, it is right to ask what the cost will be for businesses doing that. It is also a simple fact that if they are likely to be necessary for the Kent access permit to be in place, then that will have an impact on our ports of exit for anybody exporting to any third country around the world. It is inevitable that there will be a spillover impact of any exports. I think it is justified to ask the question: what is the estimate of the cost for businesses?

Finally, I turn to what the Minister said, which was linked to the point made by the noble Baroness, Lady McIntosh, on the impact assessments to be carried out on the new agreements coming forward with Japan and Ukraine. That is welcome, and I do welcome it. I was grateful for the Minister notifying me of the Written Ministerial Statement yesterday, which outlined that they would be in place. I welcome them, but the Minister will not be surprised that I think they are insufficient, as we have debated in Committee up until now. But I am grateful that this is on the record and that the Minister confirmed it.

Can the Minister also confirm that they will not simply be an economic impact assessment but a regulatory impact assessment? That is the point of the amendment in this group. It is not just whether it would be considered that there would be net economic benefits for the country, but what the net business costs are for exporters and importers, because they are not necessarily the same. Therefore, sector by sector, it will be helpful to know. If we do not have that information, we will struggle to answer the real point of the questions of the noble Baroness, Lady Noakes: how do we get net benefit for our businesses in exporting, and how are we making them more competitive with others around the world if we do not have that level of business impact assessment for the regulations implementing our trade agreements?

If the Minister wishes to come back on that point, he may. He has indicated already that he will write to me, and I welcome that—if it can be done as quickly as his previous letters, I would appreciate that. I am not yet satisfied before I receive that letter, but, in the meantime, I beg leave to withdraw the amendment.

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[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

We now come to the group consisting of Amendment 46. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment to a Division should make that clear in the debate.

Amendment 46

Moved by

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Amendments 59 to 63 not moved.

[The Deputy Chairman of Committeess (Baroness Pitkeathley) (Lab)]

We come now to Amendment 64. I remind noble Lords, as before, that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment to a Division should make that clear in the debate.

Amendment 64

Moved by