Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Debate between Gareth Thomas and Matt Western

2nd reading
Monday 29th January 2024 Commons Chamber

[Gareth Thomas]

As I think the right hon. Gentleman may have heard—perhaps he was not listening—I did acknowledge that one of the benefits that will come from CPTPP accession is better rules of origin. However, I gently say to him that we should not exaggerate the benefits of those, because the benefits are not likely to be that huge. They are important to have, of course, given the economic mess he and other former Ministers helped to create, but those benefits are, none the less, modest.

As I said, the temptation for Ministers to exaggerate the significance of what this Bill ushers in is understandable, given that over the past 10 years Britain has had the worst export record of any member of the G7 apart from Japan. That partly explains why the British people have lower living standards now than they did when Labour left office. It is one reason why the British people have become, on average, £10,000 worse off since 2010 and it is key to why the UK is forecast to have the lowest growth in the G7 this year.

Ministers have published no trade strategy and provided no clarity about how the Bill fits in with wider trade ambitions. They have axed support for businesses to get to trade shows and cut funding for business groups to lead trade missions. There is little obvious planning to help businesses use the limited extra opportunities opened up through this Bill and other trade deals. Sensible policies to improve trade with Europe and cut red tape have been vetoed. Sadly, it is therefore not surprising that the independent OBR now expects our trade to grow by just 0.1% this year and in the next two years—that is a shameful record.

[Matt Western]

When, in a former life, I served on the Select Committee on International Trade, one thing we talked about was giving Parliament greater ability to scrutinise trade deals before they were validated. Does my hon. Friend think that we, in this place, should have more opportunity to scrutinise these deals? As he is describing it, what is being presented today is negligible in its contribution to UK growth, as has been explained.

[Gareth Thomas]

I share my hon. Friend’s opinion. He aired it during consideration of the Trade Bill a couple of years ago and I hope he might be willing to air it in this Bill’s Committee.

There is little sign either of a plan to ensure that this Bill helps CPTPP accession boost trade in the nations and regions of the UK. The Resolution Foundation published analysis last week showing that, despite all the promises of levelling up, more than 50% of services exports are concentrated in just one region of the UK. Ministers have never been interested in tackling those huge imbalances. Labour Members all remember the broken promises on trade: the “oven ready” Brexit deal; levelling up through trade; and 80% of the world being covered by new trade agreements. One by one, each of those promises that the Conservative party made to the British people have been broken.

No one outside Conservative circles will be surprised that this Bill is not going to lead to a huge boost to economic growth any time soon. The negotiations to join CPTPP were led by the same people who gave Australian farmers everything they wanted, by the same Ministers who boasted about a trade deal with Japan that will help their exporters four times more than ours and which has been championed by the very same Ministers who negotiated a trade treaty with Europe that has hiked up trade barriers, increased the cost of food and generated huge bureaucracy for business.

On the arrangements for scrutiny of this Bill, one would have hoped that Ministers would have learned lessons from previous trade Bills this House has considered, and that scrutiny arrangements before and after negotiations might have improved. We have, at least, not had the spectacle of Trade Ministers at war for a little while or of their failing to turn up to a Select Committee to answer basic questions about trade agreements. I appreciate that Lord Frost is not quite so popular any longer, but when even he can lament, when debating this very Bill in the other place, that scrutiny of trade agreements was better when we were in the European Union, there is clearly some way to go.

That is all the more the case because Ministers appear to be using this Bill to solve an apparent problem with intellectual property treaty rules, which may or may not be linked to CPTPP—the Minister in the Lords did not seem too clear on that; a mere two weeks ago, and only after pressure in the other place, Ministers rushed out a consultation document on this provision of the Bill, which is contained in clause 5 and potentially gives American and other overseas businesses huge sums that would otherwise have helped emerging British artistic talent. That consultation will not be finished until 11 March, and there is absolutely no clue as to when Ministers might have finished considering the responses and deigned to let us all have their thoughts on the way forward.

During bilateral trade negotiations, the Government were widely accused of giving in to the demands of Australian negotiators far too easily, creating dangerous precedents for those wanting to get access to our agricultural markets through other trade deals. It appears that Ministers are in danger of doing something similar with the copyright provisions in this Bill: giving away, when there appears to be no reason to do so, extra rights to receive payments to foreign performers—for example, those in America, which is cited in the consultation document and is not currently a member of CPTPP. That would reduce the earnings of our artists and our businesses here, which could hold back the development of the next generation of British musicians and artists.

Industry figures argue that there is nothing in CPTPP to justify the need to give foreign rights holders and performers payments where they do not currently receive them. If Ministers think those industry voices are wrong, I look forward to the Minister for Trade Policy spelling out, when he winds up, what specifically in CPTPP requires the change. Nothing in the trade deals with Australia or Japan, despite both of them being CPTPP members, required such a legal change then, so why do we need this now? It looks like Ministers are trying to sneak through changes to rules that are, at best, only loosely related to CPTPP by using this legislation instead of a separate and proper process and debate about why such changes are needed.

In winding up the debate, will the Minister explain to the House why changes to the way in which foreign record labels and recording artists qualify for payment rights—changes which, let us be clear, could cost British artists more than £100 million over the next decade, according to the Government’s own figures—are necessary now?

In Committee, we will also want to explore why Ministers have not sought exemptions to the ISDS provisions in the CPTPP as our allies in Australia and New Zealand have done, and as Canada did with the US during the United States-Mexico-Canada agreement negotiations. It is all the more surprising as Ministers were specifically trying to avoid ISDS provisions in the now collapsed UK-Canada FTA negotiations.

There has been a significant increase in legal disputes using ISDS provisions, and a series of cases have had a chilling impact on a range of progressive public policies on environmental issues, labour standards and public services We are yet to hear a convincing explanation from Ministers as to why ISDS is still needed—a point that the hon. Member for Totnes (Anthony Mangnall) referenced in relation to the Select Committee meeting next week.

Trade Bill (Seventh sitting)

Debate between Gareth Thomas and Matt Western

Committee stage & Committee Debate: 7th sitting: House of Commons
Thursday 25th June 2020 Public Bill Committees

[Gareth Thomas]

It is good to have you back in the Chair, Mrs Cummins. On Thursday afternoon, when you were not with us, we had one or two moments of light. The hon. Member for Stafford clearly began to feel nervous about whether the Bill was properly drafted, asking me to go into further detail about what was wrong with the Bill. The Minister helpfully confirmed that Command Papers published by his Department are not worth the paper they are written on once 12 months have passed and that there is absolutely no guarantee that the House will get either a debate or a vote on any future UK-US deal.

It is therefore a particular pleasure to have the chance to return to the subject of continuity or roll-over agreements and to speak to these amendments. As you will remember, Mrs Cummins, the Minister and his colleagues have presented the Bill as being purely about rolling over agreements already long since negotiated with the European Union. Effectively, they say, it is just a matter of changing “EU” to “UK”, putting a comma in a different place, dotting the odd i or crossing the odd t, or making some other little tweak—in practice, minor changes to deals that have already been done. Indeed, so confident was the former Secretary of State for International Trade about that, that he committed to get all 40 trade agreements with the European Union rolled over into UK-specific trade deals by March last year.

Imagine our surprise on seeing in the Bill clause 2(7), which suggests that a period of five years might be needed after implementation day, with the option to extend by another five years, to conclude those roll-over agreements. Bear in mind that we were told that deals such as the South Korea, Japan and Canada deals were going to be easy to complete and should be done by Brexit day—certainly, we were led to believe, by implementation day.

[Matt Western (Warwick and Leamington) (Lab)]

To elaborate on that very simple point, I recall very well that Lord Price even tweeted about this—it would be just a simple cut-and-paste job. We have all been misled, haven’t we?

[Gareth Thomas]

I am relatively new to the Trade Bill and am only catching up with the discussions that my hon. Friend and others have had about these continuity agreements. Something odd certainly seems to have happened. It is true that the Minister has managed to get a deal done with the Faroe Islands.

[The Minister for Trade Policy (Greg Hands)]

On a point of order, Mrs Cummins. I think that the hon. Member for Warwick and Leamington just accused Lord Price, a Member of the other House, of misleading people. I do not think that that is a permissible term to use in our debates. I invite the hon. Gentleman to withdraw that term.

[Matt Western]

I will certainly withdraw it; I recall that I used the word, now that the Minister mentions it. What I was trying to say was that Lord Price was suggesting that there was a simple procedure of cutting and pasting, and that was clearly not the case.

[Gareth Thomas]

It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.

[Gareth Thomas]

If my hon. Friend will forgive me, I will come to South Korea in due course.

The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.

The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:

“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.

Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:

“Turkey…probably will not be carried over, regardless of the Bill.”

He went on to say that the Bill would allow the continuity and trade agreement to happen,

“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”

He went on to underline a similarly important point:

“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]

We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.

Let us take the UK-Japan continuity agreement. Again, we are led to believe that this is simply a matter of two very close allies sitting down together briefly and changing the words “EU-Japan” to “UK-Japan”, as well as perhaps changing the odd comma here or there, and dotting the odd i and crossing the odd t. In practice, however, something very different appears to be taking place. Just on Tuesday, the Financial Times carried a story saying that Japanese negotiators have given Britain an ultimatum: “Do the deal with us in six weeks, or we will not be able to get it through our Parliament and there will be no continuity trade agreement in place by 31 December.”

Bear in mind that Professor Winters, in his evidence to the Committee on Tuesday 16 June, at Question 31, said in response to the probing of my hon. Friend the Member for Sefton Central that

“with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 26, Q31.]

Again, when the Minister gets to his feet, it would be helpful if he gave us a little more detail on the substance of what is going on in those negotiations. I thought we were told that when we left the European Union, we would stop being a rule taker any longer, and here it appears that Japanese negotiators are telling us: “Do a deal or you don’t get your trade agreement in time.”

[Matt Western]

My hon. Friend is making an extremely important point. Hiroshi Matsuura, the Japanese lead negotiator, is saying that their only focus for the next six weeks is the UK, whereas the UK is trying to negotiate with the US, the EU, Australia, New Zealand and so on. Yet we do not even have the full complement of Department for International Trade trade negotiators in the policy group: we are about 10% down on where we should be.

[Gareth Thomas]

My hon. Friend is right. Let us bear in mind another point before I come on to Canada. Negotiations are going on not only with the US in relation to the transatlantic partnership with the EU, but we still have not concluded a continuity trade agreement with Andorra, as I understand it. Presumably, one of the Minister’s civil servants is sitting in a room somewhere, worrying about what will be in the UK-Andorra agreement, when they could be properly deployed to trying to sort out whatever the problems are in the UK-Japan agreement. Again, I remind the Committee that we were told that that agreement would be incredibly simple to sort out. I think the Minister said it was just a continuity trade agreement or just a roll-over agreement.

Let us come to the UK-Canada talks—one of the great favourites of the Minister. He had a little fun with us, it would be fair to say, on Tuesday afternoon. Again, however, there does not seem to be any sign of the UK-Canada talks being completed by 31 December. The Minister has been at pains to sell us the great virtues of the EU-Canada deal, and presumably—I would ask him this—there will be similar virtues from a UK-Canada deal, but why is there no obvious sign of any progress towards a signing ceremony for a UK-Canada deal?

In the quote from the Canadian Government regarding why negotiations have not advanced at a more rapid pace, they made it very clear that they were waiting to see how EU-UK talks got on. One got the strong sense that Canadian negotiators are sitting out in the garden smoking a cigar and planning their holidays. They are in no rush whatever to complete a trade deal with the UK, notwithstanding the studiously unspecific comments the Secretary of State gave us at questions last Thursday about how good natured the conversations had been with whoever she had spoken to in the Canadian Government.

Trade Bill (Fifth sitting)

Debate between Gareth Thomas and Matt Western

Committee stage & Committee Debate: 5th sitting: House of Commons
Tuesday 23rd June 2020 Public Bill Committees

[Gareth Thomas]

With due respect, the coffee that the hon. Gentleman had this morning may not have quite kicked in at the beginning of my remarks, when I set out what the Queen’s Speech defined as the purpose of the Trade Bill. As I said, it made clear that the Bill was designed to set the tone for the future of UK trade policy post Brexit, which it quite clearly does not if all the Bill serves to do is to explore the scrutiny of roll-over agreements. Our contention is that we need a proper parliamentary scrutiny process for future trade deals that we negotiate, including with the US and the Trans-Pacific Partnership—on which more anon.

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend makes some powerful points. To broaden this a little, because it would be easy to become extremely focused on the US-UK trade deal, he knows very well that these sort of issues—food standards and production, and safeguards for consumers—apply to other countries, such as Australia. Any UK-Australia trade deal will face exactly the same issues as those we are talking about between the UK and the US.

[Gareth Thomas]

My hon. Friend is absolutely right. There is not the option at the moment for proper parliamentary scrutiny of a trade deal with Australia. If the Government were to bring forward a trade deal with China, there is as yet no scope in Parliament for proper scrutiny of such a deal. That is why amendments 4 and 5 and those linked to them are so important.

[Matt Western]

I just want to elaborate on that point. It is really important that the public are fully aware of what we are talking about. Hormone-fed beef applies to Australian-produced beef as much as to US beef. When it comes to egg production in Australia, they use battery hens, caged hens and so on. It is really important that consumers are made fully aware of what will happen with these trade deals if they are opened up in the way that the Government would like.

[Gareth Thomas]

My hon. Friend remakes my point for me. We need to have proper parliamentary scrutiny locked into the Bill. As we have been told, this the only trade legislation that is likely to come before this Parliament. There has been no hint of any other legislation to improve the parliamentary scrutiny of future trade agreements. That is why this group of amendments is so important.

--- Later in debate ---

[Gareth Thomas]

Not surprisingly, my hon. Friend is ahead of me in making that concern clear. I underline the issues about negative listing that he sets out, which I will come to. To finish the point about medicine pricing, Donald Trump’s chief negotiator has made it clear that they wish to use a trade deal to challenge the NHS’s current purchasing model for NHS drugs. That could be done through them securing specific market access provisions or other clauses aimed at helping the US pharmaceutical industry. Again, surely it is the responsibility of the House, and indeed the other place, to have in place the scrutiny mechanisms to check whether that concern is justified.

My hon. Friend set out the concerns about standstill clauses and ratchet clauses in trade agreements, which can lock in levels of privatisation and other forms of liberalisation and accelerate them, which will limit the scope of future Governments to take sensible steps, when services are not being properly provided, to bring them back into the public sector. He rightly set out concerns about negative listing, which emerged in particular in the EU-Canada deal, which we will explore in more detail in the debate on amendment 9. There are concerns that NHS management data services could be opened up to US corporate giants as a result of a UK-US trade deal. Surely it is Parliament’s responsibility to explore those concerns.

If a UK-US deal were concluded by the Government, MPs would not be guaranteed a vote or a debate on the signed deal. The proposals in the Command Paper, which Ministers were forced to publish in February last year, allow a scrutiny Committee to recommend one, but leave it at the Government’s discretion whether to hold one.

The deal is being negotiated in secret, even though it could have huge implications for Britain’s post-Brexit future. Negotiations with the US are particularly controversial, yet after six rounds of preparatory talks and one round of formal negotiations, we still are in the dark, at least from a UK perspective, about the substance of what is being debated. It is true that the Secretary of State made a statement to the House. However, apart from listing the major areas of the talks, which were hardly revealing, and reassuring us all that the meetings were positive and constructive, again, no substance was offered on the real concerns that members of the public and organisations outside this House have set out on food, import standards and medicine prices. As Mr Lawrence from Trade Justice Movement reminded us all in last Thursday morning’s witness session, there will have been more scrutiny of the decision to proceed with High Speed 2 than there will be, as things stand, of a UK-US deal. Our amendments would help put that situation right.

[Matt Western]

When those of us on the International Trade Committee were hearing evidence about potential trade agreements with Japan and South Korea and the Government’s failure to be transparent, to be open, to set objectives and to consult, we discovered in that process, online, that the Koreans had already shared publicly what was going on and where they were in the negotiation. It was secret from our side but open on theirs. It was not until we discovered that information online and Google Translated it that we knew what the Government were up to. Isn’t that extraordinary?

[Gareth Thomas]

That is an extraordinary position, but sadly, it is becoming clear that that is how Members of Parliament are likely to find out about the substance of these trade negotiations. Let us again take the US as an example. We are finding out through evidence to Congress what many of the concerns of UK business organisations are in terms of the desire to secure access to UK markets, which is surely an entirely outrageous situation for the House of Commons. We were promised we would be taking back control after Brexit, yet the Houses of Parliament and the British public are being left in the dark.

There are real concerns from a UK-US deal about the potential for ISDS.

[Gareth Thomas]

We should thank the TUC for its work with American trade unions to help inform British workers and the British House of Commons, and for that little bit more of an insight into what is really going on in the UK-US negotiations. I hope Ministers will be sufficiently embarrassed by the British people’s reliance on what is being told to Congress to open up more scrutiny opportunities for this Parliament.

ISDS clauses have been favoured by the US in many of its existing trade deals. They potentially allow new investors, if included in a UK deal, to sue our Government over measures that harm their profits. We know that ISDS lawyers are already talking up the possibility of compensation for corporate giants whose profits have been hit by Governments taking lockdown measures to tackle the covid pandemic. In case Government Members think that is not a real threat, the American firm Cargill won more than $77 million from the Mexican Government after they introduced a tax to deter high-fructose syrup to tackle serious health issues in Mexico.

ISDS provisions create regulatory chill—the temptation for Governments not to introduce necessary public health or, indeed, other environmental measures, for fear of being taken to an ISDS tribunal by a big overseas investor. They create a two-tier system, since it is rarely small and medium-sized enterprises that are able to access these secret courts. There is normally no appeals system for the Government to access, and there is extraordinary secrecy around the nature of the settlements.

The irony is that there is little obvious benefit to businesses from those clauses being included in trade agreements. Indeed, the Government under David Cameron published an analysis of the pros and cons of ISDS clauses and could not find any great pros to champion. Business organisations tell us—although this tends to be in private—that ISDS clauses do not matter much to them; what they take serious notice of is the business environments.

There are real concerns about the labelling of geographical indicators, where products in the UK have a geographic indicator that prevents their being imitated: one thinks of Welsh lamb, Scottish salmon and Armagh Bramley apples, for example. The American negotiators do not like those types of food label and will seek to get rid of them. Surely it is the responsibility of this House of Commons to explore whether those concerns have merit and to push the Government to protect those labels.

[Matt Western]

That labelling is so important because throughout this process the public have been led to believe, because the Government have insisted on this point, that they as consumers will always be informed about what it is that they are buying. The only way they can be informed of that is by labelling, but that is not going to happen because, as my hon. Friend says, the US negotiators will not allow it to. When I approached KFC—other leading fast-food outlets are of course available—and asked, “Will you be informing the consumer where the chicken has come from that has gone into those nuggets or whatever the product is?” there was no reply, but clearly it will not be doing so, which must be a profound concern.

[Gareth Thomas]

I have made my point already about chlorinated chicken, and my hon. Friend raises that concern again.

The point that I was specifically referring to is the significance of GIs for many British products, and I think particularly of Welsh lamb and Welsh beef, where the Welsh Government have concentrated much of their promotional effort around the agriculture industry in Wales on talking up the benefits of those GI-protected products. There is real concern that that is at stake in some of the trade negotiations that the Government are taking part in.

It is surely right that this House have the opportunity to scrutinise whether such concerns would be appropriate with respect to a UK-US deal, a UK-Australia deal or a UK-Japan deal. At the moment, we, as the House of Commons, will not have the chance to explore in detail whether that is a concern, or have the opportunity to force Ministers to take action. Our amendments would put that right.

One last concern to flag about a UK-US deal is Donald Trump’s hostility to action on climate, and therefore the possible lack of potential for Ministers to make progress on bringing carbon dioxide emissions down and helping to tackle the climate and nature emergencies that the world and our country face. Those are the potential concerns being talked about around the headline free trade agreement being negotiated by Ministers, which merit proper parliamentary scrutiny.

Amendment 4 would put in place a structure for proper parliamentary scrutiny of free trade agreements. New clause 5 sets out the process for scrutiny of those free trade agreements before they could be signed, including giving parliamentarians a vote on whether to approve the start of negotiations. That would help to lock in scrutiny of trade negotiations from the very beginning of the process.

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[Gareth Thomas]

My hon. Friend is right. I fear that if Ministers persist with their refusal to give the House of Commons greater opportunities to scrutinise and vote on trade deals, her membership of this Committee may be her only opportunity to vote on concerns about a future UK-US deal. She rightly also opens up a concern about immigration. One of the trade-offs in trade deals, under so-called mode 4 agreements, is often the requirement for Governments to give ground on immigration requirements, yet we hear no mention of that from Ministers.

Ministers give the impression that it is a win-win-win and there are no trade-offs, but trade agreements are not benevolent arrangements in which our negotiators can simply rock up to another country’s trade ministry and pick up some wonderful new bargain deals. We cannot just take what we want. That is the nature of negotiations.

Another analogy might be that Ministers talk about trade agreements as if they were the Christmas sales; they only have to turn up and there are amazing bargains to be had. They have not bothered to explain that the negotiator sitting opposite them will want something in return, which will not necessarily be a comfortable choice for us as a country. All the more reason, therefore, for us to have proper scrutiny to consider whether the downsides of a potential trade agreement are not as significant as the gains.

To listen to some sceptics about a UK-US deal with Donald Trump’s Administration, our farmers will be undercut, standards of food production will be lowered, the NHS will be on the table, climate change will not feature, big corporates will be even more powerful and labour rights will be undermined. Ministers will say that is an outrageous and scurrilous description of the likely benefits of a UK-US trade deal. Those are the potential downsides, however, so we should be able to consider whether the trade-offs of a UK-US deal, or indeed any deal with any other country, outweigh the benefits and therefore should not be approved, or whether, in fact, the benefits outweigh the downsides.

It is certainly the job of the Government to try to negotiate the best possible terms for a free trade agreement with another country, but surely it is for the people of this country to decide in the round, through their Members of Parliament, whether, on balance, it is the great deal that it has been set out to be. I ask the Committee why Ministers are apparently desperate to exclude the British people from having the final say, through their MPs, on whether a trade deal goes ahead.

Trade agreements can take a long time to negotiate and can seem like great prizes to have. I recognise the potential desperation of the Secretary of State to rock up to the signing ceremony for a new free trade agreement and bask in the positive glow from newspapers such as The Daily Telegraph and the Daily Mail, and maybe even the Daily Mirror and The Guardian, which will provide all sorts of photo opportunities for Members of Parliament. That desperation to get a deal, however, might sometimes take ministerial eyes off the downsides of a deal. It is surely the job of the House to look in the round at whether a trade agreement is genuinely in the interests of the country.

Surely Ministers having to work a bit harder to convince us that they have a genuinely good deal can be only a good thing in law. Giving the British people back control through a series of votes in this House and the other place on future free trade agreements will help to lock in high standards of deal making. Ministers seem to be taking the George Bush approach—the “Read my lips: taxes won’t rise” approach to trade. They are saying, “Trust us, we won’t reduce standards; we will protect the NHS and we will deliver the most amazing opportunities for British business.”

Let us pretend for a minute that I am willing to believe such a message from this particular Minister and this particular Secretary of State. The trouble is, Ministers change. Governments change. A commitment may not outlast the next Minister or Secretary of State who comes along. That is why it is essential to underpin in law a right for the British people, through the people they have chosen to represent them in the House of Commons, to agree to start negotiations and to vote on the final result of those negotiations.

Even over the last three years, ministerial attitudes to trade have shifted back and forth, as we shall discuss in debates on other amendments. One moment, the Government are opposing the idea that they should produce a report on a proposed free trade agreement, then they agree to do it voluntarily but oppose the idea of having that written into law; and then they agree, on Report on the 2017-2019 Trade Bill, to write it into the Bill. Today, we are back to a voluntary process—a commitment given by a Minister who is no longer Trade Minister. If the Executive’s line can change on such a simple point in so short a time, it is essential that the interests of the British people are protected by a lasting lock in law on a clear and sensible process to give the people through their representatives in the House of Commons a direct say on trade agreements that will have a lasting significance for their lives.

Ministers have a record of promising the earth on trade deals. Who can forget the last Secretary of State, who said in October 2017:

“I hear people saying, ‘Oh we won't have any free trade agreements before we leave’. Well believe me we’ll have up to 40 ready for one second after midnight in March 2019”?

Sadly, as the Minister knows only too well, the reality is very different. One of my favourite trade quotes has to be from the Chancellor of the Duchy of Lancaster, then the Secretary of State for Agriculture I think, who said:

“There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU. After we vote to leave we will remain in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would remain part of this free trade area—and Britain would be on the outside with just Belarus—is as credible as Jean-Claude Juncker joining UKIP.”

We all know what has happened since.

My final quote demonstrating what Ministers have said on free trade agreements is from the now Foreign Secretary, who said:

“I hadn’t quite understood the full extent of this, but…we are particularly reliant…on the Dover-Calais crossing”.

If Ministers do not understand the basics about the nature of British trade, it is even more essential that we lock into law a process for giving Parliament the right to scrutinise free trade agreements.

Governments make mistakes. Ministers make mistakes. Let us think about this Government: too late to the lockdown, a failure to protect care homes, a failure to stockpile personal protective equipment, the chaos over schools reopening and now the test-and-trace app fiasco. Ministers make mistakes. Scrutiny in the House of Commons helps to minimise the damage that those mistakes can have. Given the long-term significance of trade agreements, and to help to prevent mistakes being made, we need to lock in a tighter, stronger process of parliamentary scrutiny.

[Matt Western]

To amplify that point, irrespective of where we currently sit in the House—whether on the Front Bench or the Back Bench, or on the Government or Opposition Benches—it is important that we have some say. That is not simply about scrutiny and holding the Government to account; it is about asking the questions that ultimately lead to better governance. Surely that is what this place is all about.

[Gareth Thomas]

My hon. Friend is right. I recognise the temptation, having been a Minister for Trade, to fear scrutiny—to fear being asked detailed questions about rules of origin and things like that. However, that fear helps to make Ministers and officials get over the detail of those hugely important technical questions on trade agreements, which as a result helps to make government better, helping to make trade deals much better as a result.

As I indicated, Ministers had to be dragged kicking and screaming to publish the February 2019 Command Paper on future scrutiny of free trade agreements. A series of commitments were implicit in that Command Paper, but we have heard in recent times that some of those commitments may no longer enjoy ministerial support. Indeed, there seems to be some suggestion that Ministers will no longer publish reports at the end of negotiating rounds. Perhaps the Minister can clarify that point in his wind-up remarks.

Certainly, there has been zero progress on agreeing to give a Committee of this House access to confidential information and briefing from negotiators. If ministerial views on parliamentary scrutiny of new FTAs have changed since the publication of that Command Paper, surely the British people have a further justified claim for ensuring that a process for scrutinising all trade agreements be locked in to law. If Ministers are determined to row back on that commitment to work with a dedicated Committee in both Houses, providing confidential information and private briefings from the negotiating teams, there is even more need to lock into law new powers for Parliament to have more leverage over Ministers regarding those trade agreements.

The amendments would also widen the scrutiny requirements for continuity trade agreements that Ministers are negotiating with countries that already have a trade agreement with the European Union. Many agreements already notionally negotiated have small but significant differences from the original EU agreement on which they are based. At the moment, the British people do not have a say, through their representatives in the House, on whether those changes were appropriate.

It is slowly becoming clear, from the little we are able to glean from those negotiations on continuity trade agreements, that the agreements that have been signed, and indeed being negotiated, are slowly making the terms of trade for British businesses and our existing partners and allies worse. As Professor Winters made clear in his evidence last Tuesday, in conversations about how negotiations on the so-called roll-over agreement with Japan were going, Ministers and negotiators were being studiously vague about what was really going on.

The detail of concerns expressed about what has been negotiated only underlines the need for increased scrutiny—not only of all future FTAs but, crucially, of existing continuity deals. Nick Ashton-Hart of the Digital Trade Network noted that the UK-Swiss deal that has been negotiated has only three mutual recognition chapters, compared with the EU-Swiss deal, which has some 20. It will be interesting to know from Ministers why the UK-Swiss deal had just three mutual recognition chapters whereas its predecessor, the EU-Swiss deal, had 20. Apparently, there are similar problems with customs arrangements. In the case of Norway, only a goods arrangement was rolled over, so British companies have no idea at the moment what they will be able to access in terms of services markets in Norway from 1 January next year. There is a similar position with Switzerland—much has not been rolled over. Companies operating in services markets will have little idea at the moment what access to those markets in Switzerland they will have from 1 January.

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[Matt Western]

My hon. Friend is quite right to highlight the vulnerability of UK automotive manufacturing, particularly with Japanese plants, and the consequences of that throughout the entire sector. The Japanese clearly want to hold off on any negotiation with the UK until there is clarity on our future position with the EU. I recall attending a Japanese ambassador’s event two and a half years ago, at which the Japanese chamber of commerce said, “We will be watching you very closely to see what you decide to do, particularly in relation to your arrangements with the EU. If you get it wrong, watch this space.” The UK is incredibly vulnerable. That is why the Japanese are treading very carefully around any trade deal with us and why they will only come to high-line arrangements; they are going to hold off until they can see what happens with the EU.

[Gareth Thomas]

That is a very good point. Specific Japanese automotive manufacturers such as Nissan have been very public with their concerns about the way trade negotiations are going. In that sense, they amplify the case for proper parliamentary scrutiny of our future trade agreements.

A series of witnesses, as my hon. Friend the Member for Putney mentioned, made clear the lack of proper parliamentary scrutiny of trade agreements. Indeed, it would be fair to say that a majority of the witnesses who appeared before us in the three evidence sessions we had last week noted the lack of proper parliamentary scrutiny for free trade agreements and expressed serious concerns about it.

I remember that Sam Lowe from the Centre for European Reform suggested that our scrutiny of trade is very poor and not particularly democratic when compared with the US and the European Union, and he gave the UK parliamentary process for trade treaty scrutiny less than five out of 10. He made it clear that some agreements that Ministers have negotiated are purely continuity agreements and alluded to those with the Faroe Islands, Chile and Jordan. He thought there would be substantially different trade agreements with Turkey, Norway, Switzerland and Ukraine, and in effect fundamentally new agreements—surely they are not within the terms of the Bill, if it is limited merely to agreements we have through the EU with existing trade allies—with Japan, Canada and the stage 2 deal with South Korea, which will merit a different, more robust parliamentary process.

David Lawrence from Trade Justice Movement said he has heard “nothing new” billed by Ministers on scrutiny of trade agreements. He described the process as archaic, dating back to the first world war when it was used for secret defence treaties. It has not changed in about 100 years. Trade Justice Movement made clear that it has relied on reports from Washington and Brussels to find out what is going on in trade talks that the UK is a part of, which again underlines the point that surely the British people, through their representatives in the House of Commons, should have access to much more detail.

The principal justification that Ministers have deployed and hidden behind to resist giving the British people more control over such agreements is a decades-old convention first articulated, I believe, by Arthur Ponsonby in 1924. One can understand why Ministers look to Mr Ponsonby for inspiration as he was a Labour Member of Parliament, from whom Ministers get their best advice. Trade then was very much with the different parts of the empire; it looks completely different now, with the drastic changes we have seen to world trade and, of course, our exit from the European Union.

That convention was formalised in part 2 of the Constitutional Reform and Governance Act 2010, which no one conceived would still be in use should Britain exit from the European Union and need to negotiate all sorts of future free trade agreements on our own, without our EU allies. CRAG does not require Parliament’s approval for the Government to ratify treaties. Indeed, as a House of Commons Library briefing helps to make painfully clear,

“it gives any parliamentary objection to ratification (or similar processes like accession) a limited”—

limited is crucial—“statutory effect”. There is a theoretical power for the House of Commons to block ratification, but in practice that power does not amount to much. The briefing continues:

“Parliament does not have to debate or vote on the treaty, and indeed time to do so is hard to secure given the Government’s control over the timetable of the House of Commons.”

That the Conservative Government have a large majority underlines how it is entirely in No. 10’s gift whether a debate and a vote takes place on a UK-US deal, a UK-China deal, UK membership of the transatlantic partnership or on a deal with Australia or New Zealand. Why should not Members of Parliament have a vote on those free trade agreements?

It is worth underlining that Parliament cannot make amendments to a trade treaty under the CRAG process as the treaty will have already been signed. Parliament can only object to ratification of an entire treaty, and that is very much a theoretical power—it is fantasy. There is also the slightly less than theoretical option of Parliament refusing to put into domestic law the different elements of a new trade agreement. Again, with a Government with an 80-seat majority, it is difficult to see how that, in any way, could be anything other than a fantastical possibility.

Trade Bill (Fourth sitting)

Debate between Gareth Thomas and Matt Western

Committee stage & Committee Debate: 4th sitting: House of Commons
Thursday 18th June 2020 Public Bill Committees

[Gareth Thomas]

It is a pleasure to serve under your chairmanship, Mr Brady. I cannot do as much justice to these four amendments as my hon. Friend the Member for Sefton Central did from the Front Bench or my hon. Friend the Member for Putney did from the Back Benches, but I want to raise one or two slightly different points to try to underline some of the interventions I made. There is an understandable fear that at some future point the Government will roll back existing legislation that allows public authorities, the Government, devolved Administrations and local authorities to go beyond having to accept all the time the lowest price and instead to be able to think much more seriously about accepting quality concerns within contract offers. I am sure the Minister will have his most benevolent face on when he winds up and will say that the concerns that we have articulated, as have organisations such the TUC and good trade unions such as the GMB and Unison, are without any foundation. None the less, these concerns exist, because once we leave the protection of EU regulations, we will find that the provisions in the GPA are much more limited than those currently supplementing that under the EU procurement directive from 2014, which was transposed into UK domestic law under the Public Contracts Regulations 2015.

What these organisations understandably want to achieve is that little bit of extra protection against such an event happening, through the amendments that my hon. Friend the Member for Sefton Central has tabled. Indeed, they are seeking more ambition from the Government in terms of public procurement, and to move beyond the era in which big multinationals always win the big contracts. One thinks of the Sercos, the Carillions and the G4Ss, of which a little more anon.

I come back to the example that I gave in one of my earliest interventions on my hon. Friend: Hackney Community Transport, a local organisation that has managed to become much bigger in terms of the community transport offer that it makes. It depends on winning contracts from Transport for London to provide bus services, but has also been able to win contracts in many other local areas to provide transport services.

Hackney Community Transport provides a comparatively low offer because it has managed to get to a decent size where it can compete and, as my hon. Friend alluded to, it has a number of staff who are not just providing the service but thinking about how they win contracts. However, it has never lost its community roots. For the people of Hackney, it provides very cheap minibus hire and helps to train those from the local community who want to learn to drive a minibus. It employs ex-offenders and goes the extra mile, in a way that perhaps one of the corporate giants might not.

By comparison, Harrow Community Transport, which is a much smaller organisation but much valued by many of the most vulnerable people in my constituency—it uses its services to go to local day centres—struggles to survive. It has only one employee, and cannot imagine being able to win contracts from Transport for London given its present situation. There appears to be no sustained offer from central Government to change the situation for not only Harrow Community Transport but all those other community transport associations, or all those other local organisations, be they small and medium-sized businesses or small and medium-sized charities and co-operatives, that nevertheless provide commercial services that could be used effectively by public contracting organisations.

It is important that we build in that additional protection, so that procurement under the GPA does not inhibit local organisations that are determined to do something to provide good jobs with fair pay—not the kind of jobs that some individuals in my constituency have to do. Some of them have to work three jobs in order to make ends meet because the amount they are paid is so low. Businesses that want to help those who are disadvantaged in some way to get into employment must not be excluded as a result of our accession to the GPA. Amendments 24 to 27 help, very effectively, to give a little more protection against such exclusion.

I mentioned the Modern Slavery Act, which is a remarkable piece of legislation. The campaign for it was led by the Co-operative Group, to which I pay tribute for its work through its supply chain, and for the cross-party campaign that led to the Government passing that groundbreaking piece of legislation. Surely the last thing that we would want is not to build on it, and to inadvertently stop organisations that are committed to preventing modern slavery from getting into their supply chains winning the public contracts for which they bid.

My hon. Friend’s amendments seem to be about helping to prevent that from happening.

I served for a long time as chair of the Co-operative party. As a result, I have always wanted more co-ops growing and trading in the economy, and able to win government contracts, whether in local government, the NHS or central Government. I suspect that those of us of a certain generation remember Margaret Thatcher promising a world where owning shares would be as common as having a car. That grand promise of a share-owning democracy has long since disappeared, leaving economic power—according to some, certainly—concentrated in a few hands. That is why there are, I am pleased to say, organisations that champion the building of wealth in communities.

That brings me to the powerful demonstration that is taking place in Preston, where an inspirational council leader is seeking to use the public procurement tools that he and the local authority have available to them, working in partnership with other public bodies to try to contract locally. If we can reinforce those efforts that will surely help to tackle the anti-northern bias that we discussed earlier and allow imaginative council leaders to put extra support behind community organisations that want to do the right thing.

As to the failures of the Sercos, it is not only on test and trace that Serco’s performance has begun to be criticised. I remember it being accused and, so to speak, convicted, of false accounting and of breaching its responsibilities in handling radioactive waste. Carillion is another horror story, and the Public Administration and Constitutional Affairs Committee blamed the Government for outsourcing contracts based on the lowest price, and went on to say that that had caused public services to deteriorate. Surely, then, measures that would not stop us acceding to the GPA but would help us to get the best from our membership are sensible.

[Matt Western]

My hon. Friend makes some powerful points, but perhaps I may add some emphasis on public health and broaden that aspect of the argument. The emphasis on lowest price is mistaken. Perhaps we saw that with small and medium-sized enterprises—or more of a medium-sized to larger business in the case of De La Rue. However, on the public health side there has over the years been public anger, resentment and frustration at pressure for very low-cost meals to be provided in local authority schools, through companies such as Compass and others that source poor quality foods when they should think about the best value for public health and the health of children. That should be part of what we are talking about on this clause.

[Gareth Thomas]

My hon. Friend makes a good point. Part of the problem is that schools are not properly resourced. I am sure that he agrees about that. Other examples that we might point to are the difficulties that local authorities, whether Conservative or Labour-led, have had with refuse contracts. A number have had to bring contracts back in-house, or retender. Having gone for the lowest price, as my hon. Friend said, they have not got the value for money that local people rightly demand, and that councils expect from contracts.

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[Gareth Thomas]

There was once a Conservative Co-op movement, which in practice had only one member. Richard Balfe left our ranks, in a very misguided move, and set up the Conservative Co-op group. We appear to have three potential new members of such an organisation, which would be fantastic. Membership of the all-party parliamentary group for mutuals is definitely on offer to the three hon. Members who have intervened.

[Matt Western]

I tried to intervene a little earlier, and I thank my hon. Friend for giving way yet again. This serious, honest, and important point will probably be echoed across the room: the contract to provide food vouchers to schools over the Easter period and Whitsun was given to Edenred, which happens to be a French company, and an unproven business. I have had a huge number of issues with constituents who did not get vouchers on time, and those vouchers could have been provided by the Midcounties Co-operative, for example, which makes them—they are available. That could have been done locally, and I am sure it would have been done very cost-effectively.

[Gareth Thomas]

As ever, my hon. Friend makes a serious and important point about the contribution that co-operatives can make. If I may, I will return to the intervention from the hon. Member for Arundel and South Downs, who asked me to extol the benefits of trade. I will certainly do that, but I do not think our country should sell itself short, which is why we have tabled these amendments. In a former life, in happier times, I served as Minister for Trade Policy. As a result, I am an enthusiast for the benefits of trade, but there are caveats to that enthusiasm. If the hon. Gentleman stays awake and enthused, he will listen to examples of our enthusiasm for trade, as well as some of our concerns about the Bill.

I will conclude my remarks by noting the significant potential for co-ops to help deal with some of the issues arising from our ageing society. By 2030, the number of people who need help to wash, feed, or clothe themselves in this country will have doubled to some 2 million. That will place heavy burdens on local authorities and national Governments who seek to procure the support to help those vulnerable people. With a bit of imagination from procurement managers, co-operatives could help to meet those needs, and I suggest that they would also provide a good service. That will require imagination and proper Government support and thinking about procurement, so that co-operatives, and small and medium-sized businesses—they are mentioned in amendment 26 —can benefit from those procurement opportunities. That is another reason why the amendments tabled by my hon. Friend the Member for Sefton Central are spot on.

Trade Bill (First sitting)

Debate between Gareth Thomas and Matt Western

Tuesday 16th June 2020 Public Bill Committees

[Matt Western]

Q To pick up on a point about the competitiveness of the sector, you said, quite rightly, that London is a global leader, both in market research and advertising output. Are you happy with the protection through the TRA, whether it be for intellectual property or otherwise?

Konrad Shek: I do not have a particular view on the Trade Remedies Authority at the moment. As I say, a lot of these anti-dumping subsidies tends to fall on the exports of goods rather than services. It is very hard to understand what distortions might come into play. As services are delivered by people, they are generally affected more by migration and immigration policies than subsidies or specific duties. I cannot think of a particular example at the moment, but there is a possibility that a country may put a tax on digital trade.

[Gareth Thomas]

Q One of the areas of the Bill that we may discuss is future free trade agreements. Have you any particular offensive interests, in terms of future free trade agreements?

Konrad Shek: There is obviously a lot of interest in future free trade agreements. There seems to be a lot of discussion about moving away from the current structures of free trade agreements and looking for these lighter, more flexible types of free trade agreements, which can be negotiated in a shorter time. That is something we welcome, but there is obviously a trade-off; the lighter and more flexible type of agreements mean there is a lot better detail.

We would welcome having these agreements—[Inaudible.] Also, it has an important information aspect. If the UK signs a free trade agreement with a country, that disseminates the information that it is okay, or encouraged, to do business with that country. It sends a very good signal in terms of promoting trade investment links.

There probably needs to be some thought as well about the consultation process and the understanding of what companies require in terms of the wider economy and understanding the trade-offs. By opening or liberalising one particular sector, do we lose out in other sectors? There needs to be a balance, and a lot of political decisions need to be taken there.

There is scope for more consultation and perhaps a feedback process, hopefully for constructive criticism. One issue I have found with the DIT consultation is that it was good that we were able to feed in information, but there was perhaps less information being fed back to help in understanding about how issues lay or were being prioritised in the whole agreement.