Trade Bill

Debate between Bill Esterson and Gillian Keegan

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 17th July 2018 Commons Chamber

[Bill Esterson]

My hon. Friend is absolutely right. Following the Committee, six major business organisations —the CBI, the British Chambers of Commerce, the Engineering Employers Federation, the International Chamber of Commerce, the Institute of Directors and the Federation of Small Businesses—took the unprecedented step of issuing a joint statement with the TUC, Unite, the Trade Justice Movement, the Consumers Association, or Which?, and other industry bodies, calling for a proper model of consultation and scrutiny to govern the UK’s policy-making process in future.

The Secretary of State delivered his statement to the House yesterday, telling us about future plans for a more transparent and inclusive UK trade policy, but at the same time reminding us that the future process would not apply to the Bill or the agreements that correspond to our existing EU agreements. That is why our amendment 19 is so important: it provides for proper consultation on any substantive new elements in the 40 trade agreements that we need to replace the EU’s existing trade deals. The involvement of the widest possible group of stakeholders is essential if we are to ensure that the new trade agreements are properly designed to give our businesses, consumers, workers and public services what they need.

We argued in Committee that any regulations made under the Bill should be subject to the affirmative procedure in Parliament, not the negative procedure, as originally stipulated in schedule 2. I am pleased to see that the Government have agreed that we were right to insist on parliamentary accountability, as their amendment 75 provides that any regulations made under clause 2(1) will indeed be subject to the affirmative procedure. That is not the further extension to which the Minister referred; it is entirely new, and it removes the need for the triage and scrutiny system proposed in new clause 6. However, it leaves any regulations to be made under clause 1(1), in relation to the World Trade Organisation’s Government procurement agreement, subject to the negative procedure. The Minister did not explain the logic behind that, and I should like him to do so, especially given that amendment 32 will grant the Government the power to extend the disciplines of the GPA to new bodies if they so choose, not just to renamed or merged Government entities.

Worse still, Government amendment 34 will introduce what is effectively a further Henry VIII clause, in that it will grant the Government the power under clause 1

“to modify retained direct EU legislation”

in respect of GPA implementation. Members should note that that is a power in perpetuity, as there is no sunset clause in relation to clause 1. In Committee, we argued for the removal of all Henry VIII powers from the Bill, and we support the further attempt to limit those powers in amendments 6 and 7, tabled by the hon. Member for Huntingdon (Mr Djanogly).

The Government have told us:

“Retained direct EU legislation will operate in a different way to both primary and secondary legislation”,

with

“unique status within the domestic hierarchy.”

The European Union (Withdrawal) Act 2018 distinguishes between “minor” and “principal” types of retained direct EU legislation precisely so that Parliament can apply more rigorous powers of scrutiny to the more important elements. A modification of principal retained direct EU legislation, as envisaged in amendment 34, could therefore have a constitutional significance analogous to that of modifying primary legislation. Introducing to the Bill what is effectively yet another Henry VIII power, with no sunset clause to limit its future application, is a serious challenge to parliamentary democracy, and the Minister has not explained why the House should countenance such a move.

New clause 23 would give the devolved Administrations the right to veto a trade agreement before ratification. I simply point out that international agreements are a competence of the UK Government under the devolution settlement, which is why we will not support that proposal.

In his statement yesterday, the Secretary of State recognised the problems that are caused when Governments sign off trade deals that do not have public legitimacy. However, he has failed to follow the logic of his own statement in respect of the 40 agreements that we need to replace our existing EU deals. Even given the Government’s concessions, the Bill is still woefully lacking in transparency and scrutiny, and such a democratic deficit needs to be addressed. As the CBI representative asked us during the Committee, “If not now, when?”

[Gillian Keegan (Chichester) (Con)]

Thank you, Mr Speaker, for giving me the opportunity to speak in the debate.

I served on the Committee, and it is clear to me that we should pass the Bill in order to build the legal foundations that we need to support global trade by ensuring that existing trade agreements via the EU can continue, providing access to overseas procurement opportunities—an important market worth £1.3 trillion—and protecting our business from unfair practices via the new Trade Remedies Authority.

There is much debate about the shape of the future trading relationship between the European Union and the United Kingdom, but the Bill is required for every situation that our country will face as we leave the EU. It seeks to ensure that we will continue to enjoy the benefits of trade deals that the EU has done with more than 40 countries around the world. There is, however, an inherent assumption that the UK will reach agreement on the terms on which we continue trading with our biggest partner, the European Union. Any “no deal” scenario is likely to have an impact on how rules of origin are calculated in the trade agreements.

This is complex stuff. I think we all understand that we are making big decisions that will have an impact on businesses—both large multinationals and small and medium-sized enterprises—which export to or import from the EU. As someone who has worked in car manufacturing, financial services and technology for nearly 30 years, I am unfortunately burdened with some knowledge of how all this works and of the operating models that have emerged over the last 40 years, making many industries, such as car manufacturing, finally competitive. In the real world there is no such thing as a hard or a soft Brexit; there are just degrees of risk. The Prime Minister is seeking a low-risk Brexit in her Chequers White Paper—one that involves listening to businesses that have built highly integrated supply chains, such as Rolls-Royce in my constituency.

Of course it is possible to find examples of car parts coming from outside the EU without a problem, but the question is one of both scale and financial impact. Only a business will have a truly accurate view on this, but it is safe to assume that introducing costs will have a negative impact on businesses large and small throughout the country. They will want to avoid going back to the days when supply chains were not highly integrated and efficient. They will need to hold stocks in warehouses or lorry parks. I am probably the only person in the House of Commons who has sat in customs waiting to rescue a stranded part while a car production line lay idle. Delays are quite simply the difference between profit and loss. The same applies to agricultural goods. We have a thriving growers’ business in Chichester, and export more than £1 billion of perishable goods to the EU every year. Customs delays and perishable goods are two words that do not belong in the same sentence. That is why I completely support the pragmatic approach to goods set out in the Chequers White Paper and I believe it will also enable us to make future international trade agreements as envisaged in this Bill.

But as well as achieving these outcomes, we have to respect the referendum result. The British people voted to end freedom of movement and to get back control of their borders, laws and money. We can all have views on whether a better deal could be negotiated. These are views, not facts. However, I cannot help thinking that if we had been offered a deal a few years ago that ended free movement, stopped future payments to the EU, continued frictionless trade, and regained control over our fisheries and farming policies with no hard border in Northern Ireland, we would have readily agreed; in fact, we would have bitten the EU’s hand off.

Every successful negotiation requires compromise, and perhaps the Rolling Stones express our current predicament best in one of their greatest songs: “You can’t always get what you want, but sometimes you can get what you need.”

Trade Bill (First sitting)

Debate between Bill Esterson and Gillian Keegan

Committee Debate: 1st sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[Bill Esterson]

Q Tony, I take it from what you have said before that you agree.

Tony Burke: I agree with some of my comrades here. Everybody has got to look around the world at different systems. In Unite, we are focusing on the US system primarily because of our relationship with the United Steelworkers union in the States, which, as I have mentioned before in other areas, almost does this for a living. It has officials on the hill working on this all the time, and at times it is very time consuming and costly. So if there are many mistakes, they can either be rushed in the States, as has been said, or be very slow and very costly. We are looking for a system that works and that can be easily understood. I do not know whether you want to extend the debate into the market economy status for China. I will resist the temptation, but I have to say that that is a major issue for us in our industries.

Martin McTague: The only thing I would add is that in the States there is a temptation—there seems to be plenty of evidence that it happens—for the bigger, more concentrated industries to get dealt with more quickly. What you have got is that the more fragmented industries that are supplied by lots of smaller companies do not get dealt with effectively.

[Gillian Keegan]

Q As I think you said, there is no perfect system today. You have acknowledged that there has been some attempt to go out and find out what best practice is, but what we should be doing is comparing with the system that we have got today. Today’s system probably has some challenges. It is EU commissioners and civil servants who decide. They send out questionnaires to get some of the interested parties’ involvement and input into their decision when we are faced with dumping or unfair trade practices. Surely the TRA represents an opportunity for us to do things better, and to design a system that will improve where we are today and, as you say, evolve over time. What we have today is not what you are describing as the minimum starting standard for our TRA as we move forward.

Tony Burke: The EU system was slow. At times, when we had the situation that I mentioned—going back to steel, when we had a crisis—we were quite concerned about the glacial pace of getting the whole thing moving and recognising what was happening. We are looking for the TRA in the UK to be, as I said, one that we can move forward on, and for decisions to be made that will assist companies and industries fairly quickly, without being too rushed—you need to take opportunities to listen to what people have got to say and take the best advice and evidence.