Foreign Affairs Council (Trade): 22 May 2018
Greg Hands Excerpts(6 years, 5 months ago)
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The Minister for Trade Policy (Greg Hands)
The EU Foreign Affairs Informal Council (Trade) took place in Brussels on 22 May 2018. I represented the UK at the meeting. A summary of the discussions follows:
Commissioner Malmström provided an update on her latest contact with Wilbur Ross on US tariffs on steel imports. A further temporary exemption was not expected. I supported the outcome of the leaders’ discussion the previous week and emphasised active UK engagement with the US in support of the EU position.
Ministers adopted the conclusions on the negotiation and conclusion of EU trade agreements. These follow the CJEU decision on competence boundaries in May 2017. They note the Commission’s proposal to pursue EU-only trade agreements, with the option of separate mixed investment protection agreements, and assert the role of the Council in deciding on a case-by-case basis whether to open negotiations in this manner (or to split existing agreements which are yet to be signed). The conclusions make clear that investment protection agreements and association agreements containing provisions of shared competence will remain mixed agreements and will continue to require ratification at the national level. Among other things, the Council conclusions also state that member state Parliaments, civil society and other interested stakeholders should be kept duly informed from the beginning of the trade agreement negotiation process, and that member states should continue to involve their Parliaments in line with their respective national procedures.
Ministers thanked the Commission for its work on the EU-Japan economic partnership agreement along with the EU-Singapore free trade agreement and the EU-Singapore investment protection agreement (IPA). Commissioner Malmström confirmed the IPA would not be provisionally applied, coming into force only when all member states had ratified.
Ministers adopted mandates for negotiations with Australia and New Zealand, which would be launched during Commissioner Malmström’s visit to the region in June.
Commissioner Malmström debriefed Ministers on her recent engagement in the World Trade Organisation (WTO). Ministers agreed that the EU should continue engaging with the US and discussed the extent to which significant WTO reforms should be considered. I cautioned against portraying the WTO as being in “crisis” and urged maximising the opportunities including the “joint statement initiative” on e-commerce and encouraged further consideration of WTO reform.
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Oral Answers to Questions
Greg Hands Excerpts(6 years, 6 months ago)
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Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Minister for Trade Policy (Greg Hands)
The UK is committed to promoting equality and women’s rights in trade in the UK and around the world. We have taken decisive steps to recognise the role of trade in promoting gender equality by signing the WTO’s joint declaration on women’s economic empowerment. We also launched at the Commonwealth Heads of Government meeting last month the SheTrades Commonwealth programme, which will boost participation of women-owned businesses in trade.
Stuart C. McDonald
I very much welcome that answer because a well-designed trade policy can positively transform women’s social and economic rights in developing countries. If that is not the case, that can destroy livelihoods, undercut wages and damage vital public services. Will the Minister commit to publishing an assessment of the impact on women of every trade deal that he signs with developing countries?
Greg Hands
I agree with the thrust of the hon. Gentleman’s question. I commend the work of some key non-governmental organisations in this space, particularly ActionAid UK. The matter of impact assessments is one for future trade policy and future trade agreements. However, we are not waiting on that to make a difference on ensuring that women can participate fully in trade. I point him to a recent study by McKinsey that showed that, if women participated in the economy on an equal basis to men, there would be an increase of 26% in world GDP—the equivalent of an economy the size of the US and China put together.
Sir Desmond Swayne (New Forest West) (Con)
We drove this agenda in the EU. Is not the danger rather that, bereft of our influence, the EU will backslide?
Greg Hands
My right hon. Friend is quite right: the UK has been a key driver of that agenda. He is also right that the EU27 may well take a different approach. However, the UK approach remains strongly and resolutely in favour of promoting gender equality in trade and making sure that trade works particularly for women entrepreneurs, who make up a disproportionate part of the online entrepreneurial community.
Hannah Bardell (Livingston) (SNP)
This will be my last outing as the Scottish National party trade spokesman; I will be moving to pastures new in Digital, Culture, Media and Sport. I want to put on the record my thanks to the Secretary of State and his team. While we do not always agree—in fact, rarely—our discussions and exchanges are always respectful and lively.
The 2013 Rana Plaza disaster is a prime example of how growth in export industries can have devastating results, particularly for women and girls. Jobs were created that were unsafe and had exploitative conditions for the largely female factory workers. Can the Minister assure the House and indeed everyone across the UK that any trade deals he does will not result in the exploitation of anyone, in particular women and girls?
Mr Speaker
May I say to the hon. Lady that I hope in her new role the sky will be just as blue?
Greg Hands
May I first commend the hon. Lady for the constructive role she has taken? She and I have worked together particularly to try to benefit certain businesses in Livingston, her constituency, and in terms of her wider brief.
Yes, of course, we are absolutely committed that future trade agreements will pay heed to the importance of gender rights and a whole series of other rights in those agreements. What we can do, however, in the meantime is make sure that the trade agenda fully recognises gender equality, particularly, as I have mentioned, in relation to the Commonwealth and the WTO. We were one of the 120 WTO members at Buenos Aires in December that adopted the joint declaration on trade and women’s economic empowerment.
Judith Cummins (Bradford South) (Lab)
The Minister often remarks that trade has pulled millions of women out of poverty, but in the Trade Bill Committee the Government voted against ensuring that future trade deals fully comply with the convention on the elimination of all forms of discrimination against women. Has he changed his mind on this and, if so, will he ensure that future trade deals contain effective mechanisms that protect women in the global supply chain from exploitation, poverty wages and the suppression of trade union rights?
Greg Hands
I gently remind the hon. Lady that she of course voted against the Trade Bill in its entirety on Second Reading, which I think is always worth remembering. Secondly, I would say that we will take no lessons from Labour in this space because the UK has been a leader, over the last eight years, in making sure that this agenda is taken up at the WTO, at the European Union and at CHOGM. When it comes to future trade agreements and future trade policies around those trade agreements, that will be a matter for future proposals, as she well knows.
Stephen Hammond (Wimbledon) (Con)
The Minister for Trade Policy (Greg Hands)
Leaving the EU means, for the first time in over 40 years, we will from next March be able to sign and ratify new trade deals. We are currently party to about 40 international trade agreements and are committed to securing continuity of those agreements. We have also established 14 trade working groups in major markets to explore the best ways of developing new trade and investment relationships post Brexit.
Stephen Hammond
I thank my right hon. Friend for that answer. He will know, as I do, that international regulatory standards are what fuel international trade. For the continuation of those deals and opportunities, does he agree that regulatory alignment will be necessary to secure the best British deals post Brexit?
Greg Hands
As my hon. Friend will know, we have some good news for him about the implementation period. The UK will be party to those deals up to the end of December 2020. He is also right that there is a very important read-across between what is agreed with the EU on standards, rules of origin and so on. Our commitment remains absolute to have high standards and to encourage the use of broad international global standards of the highest quality.
Kate Green (Stretford and Urmston) (Lab)
Greg Hands
As I say, up to the end of 2020, the UK will remain party to those agreements as they stand. We are also putting in significant efforts to make sure that the substance of those agreements rolls over beyond that. That is why we have signed memorandums of understanding with, for example, the South African Development Community—the South African customs area—CARIFORUM and the eastern and southern African economic partnership agreement group. That is work that is making good progress.
Alex Cunningham (Stockton North) (Lab)
The Minister for Trade Policy (Greg Hands)
The Government are committed to securing continuity of existing EU trade agreements and other preferential arrangements as we leave the EU. The draft withdrawal agreement confirms EU international agreements continue to apply to the UK during the implementation period. We are working to ensure continuity of those arrangements after that.
Alex Cunningham
The REACH—registration, evaluation, authorisation and restriction of chemicals—regulations that govern production and other standards are critical to countless chemical companies in my Stockton North constituency and beyond for trade across the world. Will the Minister update the House on the progress to retain them when we leave the EU?
Greg Hands
I met the chemicals industry earlier this week—in line with other industries—in a very useful roundtable at the Department for Business, Energy and Industrial Strategy. That work to make sure that the UK benefits from the best possible rules as we go forward is ongoing.
Steve Double (St Austell and Newquay) (Con)
Does the Minister agree that one of the big opportunities from leaving the EU is that we can negotiate trade deals that best suit the UK, rather than being tied into the other 27 member states?
Greg Hands
My hon. Friend makes a very important point. That is why we have these 14 trade working groups with major markets around the world. We are in active discussions with those counterparts and we have the benefit, from March next year, of the ability to negotiate, sign and ratify trade agreements with them.
Barry Gardiner (Brent North) (Lab)
First, the Government said that they were simply rolling over these agreements on precisely the same terms. Then they admitted that they would have to amend the agreements with Norway, Turkey and Switzerland to avoid rolling over such things as the customs union or the four freedoms that they would rather avoid, but the Minister has still not explained what process this sovereign Parliament will undertake to ensure that these important new agreements are subjected to proper democratic scrutiny. When will he?
Greg Hands
We had significant exchanges on this during the Trade Bill Committee and the scrutiny arrangements are enshrined in that Bill, which I note again that the hon. Gentleman voted against. He will also know that these agreements have already been scrutinised in this House under existing EU scrutiny procedures, and there are precise arrangements set out in the Bill for how we go forward from here.
Mr Bob Seely (Isle of Wight) (Con)
The Minister for Trade Policy (Greg Hands)
Since the draft withdrawal agreement confirms that international agreements continue to apply to the UK during the implementation period, common rules of origin will remain until the end of 2020. We are keen, of course, to avoid disruption to supply chains, so we are working to secure continuity after this.
Kerry McCarthy
I am sure the Minister has met motor manufacturers who have warned that they will simply not be able to meet the 60% local content requirement under rules of origin if EU components cannot be included. At present, the UK content is between about 40% and 44%. How will the Minister address that?
Greg Hands
I think the hon. Lady is referring to the EU’s current set of more than 40 agreements with more than 70 counterparts. That is a matter for active discussions. We are obviously trying to secure the best possible deal for UK motor manufacturers, not only those involved with the finished product but those who provide the components, as part of our talks with third parties.
Alex Cunningham (Stockton North) (Lab)
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Minister for Trade Policy (Greg Hands)
It was my pleasure to address the hon. Gentleman’s all-party group on India only last week, and we have a huge success story. My right hon. Friend the Secretary of State has talked about the trade audit—the trade review—that we have done with India. I can also report that bilateral trade has increased by 15% over the last year, and we remain the largest G20 investor in India, with British companies currently employing around 788,000 people in India.
Ross Thomson (Aberdeen South) (Con)
It was a pleasure to welcome the Secretary of State to my constituency last week where he could see that, from food and drink to oil and gas, Aberdeen is best placed to take on the opportunities of Brexit. I thank my right hon. Friend’s Department for promoting Aberdeen’s £150 million Queen’s Square project this afternoon. Will my right hon. Friend update the House on the benefits to Scotland of extending the high potential opportunity scheme, and does it not show that Scotland is better off in the United Kingdom?
Foreign Affairs Council (Trade)
Greg Hands Excerpts(6 years, 6 months ago)
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The Minister for Trade Policy (Greg Hands)
The EU Foreign Affairs Council (Trade) will take place in Brussels on 22 May 2018. I will be representing the UK.
The substantive items on 22 May will be: adoption of the negotiating mandates for free trade agreements with Australia and New Zealand, adoption of conclusions on the negotiation and conclusion of EU trade arrangements, and follow-up to the 11 World Trade Organisation ministerial conference (MC11). There will also be an exchange of views on the EU-Japan economic partnership agreement, the EU-Singapore free trade agreement and the EU-Singapore investment protection agreement.
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Leaving the EU: Future Trade Remedies
Greg Hands Excerpts(6 years, 7 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister for Trade Policy (Greg Hands)
I congratulate my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on securing the debate. As you will know, Mr Hollobone, it is relatively rare, so far, for the Department for International Trade to be in Westminster Hall, so I welcome this opportunity to set out some of our proposals on trade remedies. I thank my hon. Friend for his kind words about recent UK trading success, the record levels of investment and the UK’s role in supporting the global rules-based system of trade, which is extremely important at the moment—it is important that we get that on the record right away.
I know well that my hon. Friend is passionate about his constituency and about defending manufacturing in Stoke. He was the first MP from the region to approach me, very soon after his election in June 2017, to talk about the importance of trade remedies to his constituents. He also introduced me to the British Ceramic Confederation, whose representatives I have now met three times in connection with trade remedies, as well as the Manufacturing Trade Remedies Alliance.
I also thank the other Members who have contributed to the debate. I will get through as many of the points that were made as I can. I thank them all for their contributions in a short debate—perhaps it could usefully have been longer. I will try to reply to the hon. Member for Scunthorpe (Nic Dakin), even though he is no longer here, but first let me say a few things about the actual contributions.
My hon. Friend the Member for Gordon (Colin Clark) made a number of important points. He of course is passionate about oil and gas in Scotland—as are we in the Department for International Trade—and about the capabilities and the future of fisheries exports from his constituency. We are working very closely with the Department for Environment, Food and Rural Affairs to pursue that. I heard his call for a DIT office in Aberdeen. I can tell him that the majority of DIT’s oil and gas team is based in Glasgow and spends significant time in Aberdeen. I agree with my hon. Friend that there are significant opportunities in the future. Only yesterday I was speaking to Wood Group, which, as my hon. Friend will know, is headquartered in Aberdeen, about the significant opportunities that the Commonwealth markets offer them, which he also referred to.
My hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) is an active member of the International Trade Committee. I gave evidence to her Committee—it must have been in early March—on the Trade Remedies Authority. It is a little bit early to say exactly how big this new organisation will be. We have yet to appoint the chair, let alone any members of it. However, I think an early indication of the sort of budget we are looking at is in the region of £15 million to £20 million a year. I referred at the Committee hearings to the size of the EU’s operation, which is about 100 people working on trade remedies within DG Trade. That will give some early indication of the sort of size we are thinking about for that body.
I thank the hon. Member for Livingston (Hannah Bardell) for her kind words. We have worked together on two or three issues with companies in her constituency. I have worked for their interests abroad, particularly on recent cases. She and I have a constructive relationship. I will answer a few points she made upfront. We talked about representation across the UK during the Bill Committee. She will know that the important thing is for the up to nine members of the board to think about how trade remedies work right across the UK and not to be beholden to any particular nation, region, interest group or company anywhere in the UK, but to have an expert view on how trade remedies might work throughout the UK.
Hannah Bardell
I take on board the point that the right hon. Gentleman makes, but I fail to understand why somebody from Scotland, Wales or Northern Ireland would be any less able to understand the distinct nature of the economies of their country as opposed to taking a wider view. The two need not be mutually exclusive. In the spirit of co-operation, and doing the right thing and what is best for the UK as a whole, why not have representatives and offices across the UK?
Greg Hands
I very much agree with the hon. Lady. It is perfectly possible and quite likely that of those nine members, one or more will originate from the devolved nations. The point is, however, that they should be appointed for their expertise in assessing some of these quite technical aspects, such as the determination of dumping, the calculation of injury and so on. The point is not to appoint them to represent a nation, region or particular stakeholder of the UK, but to have an interest across the board. She mentioned the possibility of satellite offices. I gave an indication of the likely size of the body.
Bill Esterson
I am puzzled by the Minister’s answer, as I was when he said the same thing in the Bill Committee. I do not understand why he does not see the benefit of having a mixture of independent members, who quite rightly have the expertise that he sets out, and a number drawn from different interest groups. There could be a balance of the two to reflect the needs of the different parts of the economy and the United Kingdom.
Greg Hands
I feel that I have already answered this. We want a set of people who have expertise in the subject matter, rather than who come from a particular perspective, body, nation or region. That is the most important thing. Returning to the question of location, I think satellite officers would add cost, but I stress to the hon. Member for Livingston that we have yet to make a decision on where the location of the body should be. Again, that will be driven by where we can access the expertise that would be needed for this Trade Remedies Authority. I mentioned earlier that the Department for International Trade has placed a significant part of its operation in Scotland, for example through the oil and gas team in Glasgow, so as a Department we are not averse to placing something in one of the devolved nations of the UK.
I do not want to labour the point, but the hon. Member for Sefton Central (Bill Esterson) goes on about his reasoned amendments. Mr Hollobone, given your long years in the House, you know perhaps better than anybody that when you put down a reasoned amendment, it normally means that you wish to vote for the reasoned amendment, because you wish to propose some way in which to improve the legislation, but you would not normally vote for a reasoned amendment and then vote against the Second Reading of the Bill. My point is that by voting against the Second Reading of the Bill, the hon. Gentleman showed that he disagreed with the central core of the Bill, part of which, of course, is to set up the Trade Remedies Authority.
This Government firmly believe in the benefits of free trade—I will come back to some of the other points raised in a moment—for consumers, earnings and jobs. My hon. Friend the Member for Stoke-on-Trent South spoke powerfully about the importance of the ceramics industry for his constituency, which is a huge UK success story as an industry. Other hon. Members have spoken about their own local industries as well. Our manufacturers benefit from trade. Manufacturing makes up 8% of our economy, but most of our exports. I think we all agree that free trade does not mean trade without rules, whether product safety or IP protection; some of the most important rules will be our system of trade remedies.
WTO members are permitted to take action where their domestic industry is suffering harm as a result of unfair trade practices such as dumping, where foreign companies sell their products in the UK for less than they are sold at home, or subsidies, which let foreign companies sell goods in the UK at a lower price than they would otherwise be able to. Members can also act in response to harm caused by unexpected surges in imports. In such cases, members can introduce safeguard measures to give industry time to adjust against unexpected surges in imports. Well-functioning trade remedies can level the playing field for domestic industry, by counteracting any unfair subsidies, dumping or unexpected import surges. They can also deter dumping and unfair subsidies from happening in the first place. It is important to have these first and foremost as a basic matter of fairness. Our industries should not lose contracts and our workers should not lose jobs because a foreign company has gained an unfair advantage. It would also be unfair if jobs were lost that could have been saved if only industry had been given time to adjust. That is why we are introducing a rigorous and robust system of remedies, which provides for the full suite of powers offered under WTO rules.
My hon. Friend the Member for Stoke-on-Trent South raised points about existing EU trade remedies. He should bear it in mind that we have just finished a call for evidence on the existing EU trade remedies. That call for evidence closed on 30 March. The response was good. We will be looking at our response to that in due course. We have been clear that when we operate our own trade remedies system, we will transition those measures in the EU system that matter to UK business. We received over 70 responses from producers and other interested parties in that consultation. Most importantly, I can assure hon. Members there will not be one day when a UK industry that needs protection from unfairly traded imports will be left alone.
I will quickly answer the point made by the hon. Member for Scunthorpe about a transparent approach. The Government will use secondary legislation to set out the details of the TRA’s framework. That is very important. Mr Hollobone, you will know from your years in the House that secondary legislation is not on the face of it particularly welcomed by legislators, but it is important in this case to be able to have a dynamic body of law that particularly reflects recent WTO case law, rather than write all of these details on to the face of the two Bills that are currently passing through the House of Commons. In particular this secondary legislation will include the different dumping methodologies and the level of remedy required to address injury to UK industry. We are meeting trade bodies in the coming days to talk about some of those details. In the future, the TRA will set out the way in which it has carried out its calculations in any investigation as part of a commitment to transparency.
My hon. Friend the Member for Stoke-on-Trent South asked about the de minimis threshold. At what level would an investigation simply not be taken on, because the amount of product produced in the UK was below a particular amount? If UK producers have a negligible share of the total UK market, the TRA would not initiate an investigation, as it would be unlikely to result in measures. For example, a company could be the only producer of widgets in the UK and therefore meet the WTO requirements to bring a case, but if that company produced a negligible proportion of the widgets actually bought in the UK—in other words, the total market that is there—putting duties in place would have a disproportionate effect on the rest of the market, much of which would not necessarily be consumers, but could be other businesses and industries purchasing that product. That is why we will have a de minimis threshold.
In special cases, the TRA could choose to waive the threshold, which, by the way, we have not yet set. That would help to avoid a scenario in which an industry’s market share is negligible precisely because of the impact of dumped imports, or in cases involving an emerging UK industry struggling to establish itself in the face of dumped or subsidised imports. I assure my hon. Friend that it will reflect a de minimis level, but there will be exceptions. The TRA will be able to overrule.
My hon. Friend asked whether EU measures will be transitioned for the full five years. We have agreed that EU trade remedy rules and regulations will continue to apply during the implementation period. We will assess which EU measures matter to UK industry, which the call for evidence that closed last month did, and maintain those measures at their current level until the TRA reviews them.
My hon. Friend the Member for Gordon mentioned agricultural imports. Our trade remedies framework will enable the TRA to investigate unfairly subsidised imports where they are injuring UK agricultural producers and to take action where appropriate. The Secretary of State for Environment, Food and Rural Affairs is working on a safeguards regime for agricultural products to address the issues that my hon. Friend identified.
My hon. Friend the Member for Hornchurch and Upminster asked whether the TRA should consist of two bodies. There are, of course, always different views. There is not an exact parallel. We have looked at systems across the world, as she knows from the evidence I gave to the Committee. However, I believe that we are setting up the TRA with the right level of independence to allow it to reach informed and objective conclusions, which includes clear projections for the TRA’s independence, impartiality and expertise. Other countries that use a single-body trade remedy system include Australia and New Zealand.
It is standard practice for the chair and the non-execs to be ministerial appointments. The other members would typically be appointed by the chair. That is the practice we have followed in relation to the Trade Remedies Authority.
Greg Hands
No, I am going to finish. I have perhaps not been able to answer every single point. Obviously, this is a matter for legislation that is still continuing its passage through the House. I hope that I have outlined some of the strengths of the trade remedies regime. We look forward to further engagement during the passage of the Bills.
Oral Answers to Questions
Greg Hands Excerpts(6 years, 8 months ago)
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Thangam Debbonaire (Bristol West) (Lab)
The Minister for Trade Policy (Greg Hands)
Yesterday the Government announced the creative industries sector deal. With a strategy and new money committed to boost our creative industries, trade and investment is a key part of that deal. Exports are booming in the sector, with £9.6 billion in services and £2.7 billion in goods in 2015, making this country a global leader.
Thangam Debbonaire
I refer the House to my entry in the Register of Members’ Financial Interests.
I thank the Minister for his answer, but the clock is ticking. Representatives of the live performance part of the creative industries tell me of their worries, based on current experience of touring theatre, dance and music outside the EU. Will he, like the DCMS Minister, the hon. Member for Stourbridge (Margot James), agree to meet representatives of the creative industries to discuss those significant challenges so that this massive growth sector of our economy can continue post-Brexit?
Greg Hands
My colleagues and I are always happy to meet representatives of the sector. The sector’s export growth, and its activity both in the European Union and beyond, is actually growing. Only 34% of the sector’s total global exports are to the EU. A huge amount is already being done outside the EU and, when it comes to things like music, DIT has committed to make about £3 million of grant support available to help music small and medium-sized enterprises to be able to export up to 2020.
Bob Blackman (Harrow East) (Con)
One of the biggest growth markets is in the film and creative industries: one of the biggest areas now, apart from Hollywood, is Bollywood in India. What relations has my right hon. Friend established to build that market up so that we can exploit opportunities with our good friends from India?
Greg Hands
My hon. Friend, who has impeccable trade connections with India, makes a strong point. Film, TV and broadcasting as a sector in the UK grew by 6.6% last year, and a large part of that is in co-operation with India. Total spend in the UK on film production reached a 20-year high, and global UK-qualifying films enjoyed 21% of global box office success, including a lot of success in India.
Judith Cummins (Bradford South) (Lab)
British audiovisual exports are worth £7.4 billion a year, with more than £3 billion of that coming from trade with the EU. The industry has raised major concerns that its ability to export into the European market will be undermined, unless there is frictionless access for broadcasters and creative industries. Will the Minister reassure the sector and the House that this will be the case—or is this yet another area where the Government are failing to listen to British businesses?
Greg Hands
I will take no lectures from the hon. Lady on listening to British businesses, on which this Government have an impeccable record. We are seeking frictionless trade—as frictionless as possible—with the EU. We are seeking a free trade agreement of much greater scope than any before, and it will cover services—including creative industries, which are such a key part of our export offer.
Mark Pawsey (Rugby) (Con)
Christine Jardine (Edinburgh West) (LD)
The Minister for Trade Policy (Greg Hands)
The Government believe strongly that Parliament has a vital role to play in the scrutiny of future free trade agreements, as it always has in the past. The Government are currently in the process of designing our future trade agreement policy. No decisions have yet been taken, as stakeholder consultations are ongoing.
Christine Jardine
When there is a new EU trade treaty, the European Scrutiny Committee can review it and the European Parliament can veto it; when there is a new UK treaty, all this House can do is delay its ratification by 21 days. Far from taking back control, does the Minister agree with the Commons Library that post-Brexit Britain
“may be seen as diminishing democratic accountability in relation to trade treaties”?
Will he fix that by supporting the inclusion of new clause 3 in the Trade Bill?
Greg Hands
I will take no lessons from the Liberal Democrats in this regard. The hon. Lady voted against the Second Reading of the Trade Bill, which will allow this country to transition its 40 or more existing EU trade agreements into UK law. Those agreements have already been scrutinised in Parliament. As I say, future trade agreements will be a matter for future proposals.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Is it not the case that, under current plans, the British Government will be able to sign off UK-wide trade deals without the consent of the devolved Parliaments, meaning that the Belgian region of Wallonia will have more power over EU trade deals than Wales, Scotland and Northern Ireland will have over UK trade deals?
Greg Hands
I think the hon. Gentleman is confused. Existing trade deals have been scrutinised in this Parliament, with input from the Welsh Government in the usual way—more than 40 EU trade deals have already been scrutinised in this Parliament. He has confused those with future trade deals. We will, of course, work closely with Parliament and the devolved Administrations to make sure that their voice is heard on those future trade deals.
Patrick Grady (Glasgow North) (SNP)
It is important that the Minister tries to clarify this issue. Brexit is supposed to be about regaining sovereignty and taking back control, so what is actually going to happen? Are this House and the devolved Assemblies simply going to be consulted, or are they going to have to consent to new trade deals?
Greg Hands
Again, I think the hon. Gentleman is confusing existing trade deals, which are what the Trade Bill is all about, with the prospects for future trade deals. We have been absolutely clear on future trade deals. Trade policy is of course a reserved matter, but Ministers have engaged with the Scottish and Welsh Governments frequently, including at official level, and we recently did a deep dive with the devolved Administrations on what future trade policy might look like.
Alberto Costa (South Leicestershire) (Con)
Rachel Maclean (Redditch) (Con)
The Minister for Trade Policy (Greg Hands)
As part of its preparations for future trade negotiations, the Department for International Trade has established 14 trade working groups and high-level dialogues with key trade partners beyond the EU to explore the best ways of progressing our trade and investment relationships.
Martin Vickers
Many businesses in my constituency, particularly in the seafood sector, are reliant on the free flow of supplies. Does the Minister share my confidence that new arrangements can be made to ensure that, particularly in the seafood sector, supplies are maintained without any undue delay?
Greg Hands
My hon. Friend is a passionate advocate for the fish and seafood sector in his constituency. Those sectors already contribute £1.3 billion to the UK economy. I am concerned about reports of problems at Five Star Fish in Grimsby, next door to his constituency, but I can tell him that leaving the common fisheries policy presents the opportunities to boost exports, expertise and fish-related services.
Rachel Maclean
Last week I visited the innovative company, Mission Resources, in Abbots Morton. It has invented the home energy resources unit, which generates energy from household waste to reduce fuel consumption, furthering climate change reduction and the Government’s clean growth strategy. Given that the company is looking to expand to powerhouses such as China and India, what assurances can the Secretary of State give to my constituent about the opportunities for trade with non-EU countries?
Greg Hands
Over the last seven years, this Government have made significant resource investments into clean energy and renewable technologies. We have put in a huge amount of effort to ensure that those capabilities are now exportable. The UK has the world’s largest offshore wind sector and quite a significant sector in resources such as solar. We need to take advantage of export opportunities, and that is where the Department for International Trade plays its role.
Bill Esterson (Sefton Central) (Lab)
GKN has total sales of £10.4 billion, £9 billion of which are outside the UK. Profits from its operations in 30 countries around the world are repatriated to the UK. It will not be much of a global Britain if the Secretary of State’s approach is to stand idly by while a business like GKN that is so vital to our international trade is allowed to be subject to a hostile takeover that can lead only to its break-up and sale. Why has he stayed so silent on such a crucial issue for our trading prospects?
The Minister for Trade Policy (Greg Hands)
The allegation that anybody has stood idly by is utter rot. On Monday—perhaps the hon. Gentleman has not been following the news—my right hon. Friend the Business Secretary issued an open letter to Melrose, the company that is doing the bidding, to request certain safeguards for employees, and so on, if the bid was successful. Melrose has responded, agreeing to give those very assurances. We took action on this days ago. He needs to keep up with the news.
Mary Glindon (North Tyneside) (Lab)
Greg Hands
As my right hon. Friend the Secretary of State just said, we are working for all parts of the United Kingdom, by working with DExEU on our future trading relationships with the European Union and, as importantly, making sure that we open up trading possibilities beyond the EU. I mentioned earlier that we have 14 trade working groups working with major markets, and exports from the north-east will be right at the centre of that work.
Mr Peter Bone (Wellingborough) (Con)
Can the Secretary of State tell the House what he will be doing in 365 days’ time?
Informal Trade Foreign Affairs Council
Greg Hands Excerpts(6 years, 8 months ago)
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The Minister for Trade Policy (Greg Hands)
The EU Foreign Affairs Informal Council (Trade) took place in Sofia on 27 February 2018. I represented the UK at the meeting. A summary of the discussions follows:
On follow up to the 11th WTO ministerial conference held in December 2017, Ministers discussed the lack of negotiated outcomes at the multilateral level. Nonetheless, there was a broad welcome for the new joint initiative statements at MC11. The objective was for a critical mass of interested WTO members to make progress in the areas addressed by the joint statements. These discussions should be open to everybody to join. Developments around the WTO appellate body were also discussed.
Commissioner Malmström updated the Council on the state of play of the EU’s free trade agreements, stating that Japan and Singapore would be presented to Council imminently, and that negotiations with Indonesia and Chile were ongoing. Negotiations with Malaysia were set to resume in the near future.
Discussion revolved around Mexico and Mercosur, which were both reported to be in the end game but with a number of issues remaining to be resolved. I called on the Commission to show ambition on data flows in the Mexico agreement.
Under AOB, and after I had had to leave, the Commission gave an update on EU-US relations, and assessed that the US’s likely imposition of import tariffs or quotas on steel and aluminium on national security grounds was unjustified. The Commission and member states agreed to continue to engage the US Government and Congress in order to argue against any measures, highlighting the knock on impact of safeguards on global markets. Since the President’s announcement on 1 March that he intends to impose tariffs, discussions with the EU have continued and the UK will stay closely engaged on this live issue.
[HCWS551]
European Affairs
Greg Hands Excerpts(6 years, 8 months ago)
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The Minister for Trade Policy (Greg Hands)
I beg to move,
That this House has considered European Affairs.
I welcome the fact that we are having this debate, which is perhaps a return to the tradition of a pre-European Council debate in the House of Commons. I used to take part in those twice-yearly debates. When I checked my last contribution, which was in June 2008, I was reminded that I, like so many other Conservative Members, called for a new approach in Europe in the immediate aftermath of the Irish rejection of the Lisbon treaty. The purpose of today’s debate, however, is not to dwell on missed opportunities in the past, or to reflect on what might have been had the EU reformed itself; we are here to look to the future, and the Department for International Trade is at the very centre of that bright future.
Before I turn to the future of our trade with Europe and the negotiations under way, it is important to take stock of what we have achieved so far. The joint report issued in December sets out a financial settlement that honours commitments we undertook as EU members, just as we said we would. It agrees to avoid a hard border in Ireland, while respecting the UK’s integrity, which was and is one of the Government’s priorities for these negotiations. Very importantly, it safeguards the rights of EU citizens living in the UK and of UK nationals living abroad, which the Prime Minister has always said was her first priority. Some 17% of my constituents in Chelsea and Fulham are nationals of other EU countries; indeed, my wife is an EU national. I have put in a lot of time and effort in outreach to them, and I can report to the House that the December agreement landed very well among EU nationals there. Ireland, the budget and citizens’ rights—these are strong foundations for the ongoing negotiations, and we should all welcome the progress that has been made on them.
Emma Reynolds (Wolverhampton North East) (Lab)
I have listened very carefully to what the Minister has said. Will he acknowledge that there are still very serious concerns about what needs to happen to preserve an invisible border on the island of Ireland—one that does not have any physical infrastructure—and that there is seemingly a misunderstanding in some parts about what is actually meant by the fall-back option of full alignment?
Greg Hands
We have been absolutely clear that we will of course abide by the December agreement in full. Let me remind the hon. Lady that the three priorities we laid out include a strong commitment to avoid a hard border, but also to preserve the integrity of the UK market—I remind her that having access to the UK market is very important for the people of Northern Ireland. No UK Prime Minister could accept a new border down the Irish sea.
We are also making strong progress on our trading relationships outside the EU, which is my primary responsibility as Minister for Trade Policy.
Mr Kenneth Clarke (Rushcliffe) (Con)
To follow on from that point, my right hon. Friend has repeated two points from December, and at Prime Minister’s questions the Prime Minister repeated her full commitment to the December agreement on Ireland. When he says there will be no hard border, I assume that means there will be no physical infrastructure. I of course recognise that we will not have a border down the Irish sea, but does he accept that, if there is no other way of achieving it, we are going to have the full regulatory convergence to which the Government signed up in the December agreement?
Greg Hands
I reiterate that what the Prime Minister said at Mansion House and at Prime Minister’s questions this week still stands. I refer my right hon. and learned Friend to the papers published last summer by the Department for Exiting the European Union on how a proper border between the two parts of Ireland can be effectuated through the two possible types of customs agreements between the UK and the European Union.
Karin Smyth (Bristol South) (Lab)
I asked the Prime Minister during her statement, and I have written to her, about paragraph 47 of the December agreement, which mentions the mapping exercise on north-south co-operation. Will the Government commit to publishing that mapping exercise?
Greg Hands
The Government are undertaking analyses of so many different factors involved in this particular arrangement and question. We have always made clear our commitment to ensuring that the House is properly apprised of all the relevant facts when it comes to examine the actual withdrawal agreement in due course.
As we prepare the ground at the Department for International Trade, its Ministers have made more than 100 overseas visits in the past year and a half. We have set up 14 trade working groups, covering 21 countries with a substantial market size. None of that would have been possible without the excellent work of our Department for International Trade staff, both at home and in post in 108 countries around the world. I put on the record my thanks for their hard work, professionalism and invaluable expertise.
Chuka Umunna (Streatham) (Lab)
The Minister is right to pay tribute to his Department’s staff. First, has he noted the comments of the Department’s recent former permanent secretary to the effect that, if we are to leave the European Union, non-EU trade will not make up for the loss of trade that we currently enjoy with the EU? Secondly, the Secretary of State was part of a campaign that promised that we would start negotiating new trade agreements with other non-EU countries as soon as we voted to leave. How many of those new trade agreements are being negotiated right now?
Greg Hands
The hon. Gentleman knows full well that this is not an either/or situation: it is not a choice between having trade with the European Union or with the rest of the world. The Government’s objectives are clear, namely, to secure a deep and comprehensive partnership with the European Union while still being able—crucially, outside the customs union—to pursue an independent trade policy and to secure those agreements with the rest of the world.
On what was said during the campaign, the Department for International Trade has the capability in place and we have built up the Department. I have mentioned the 14 trade working groups. We are clearly not able to carry out a trade negotiation while we are still members of the European Union, but the hon. Gentleman seems to be demanding that we have those negotiations while at the same time saying that we should stay in the EU, which would prevent us from having the negotiations in the first place.
Vicky Ford (Chelmsford) (Con)
Does my right hon. Friend agree that, given the incredible depth and complexity of the UK’s trade with Europe, there is no off-the-shelf solution available from any other trade relationship? Does he also agree that, if we are to have as frictionless trade as possible, there clearly needs to be some form of agreement for what will happen at our customs, such as a partnership or another type of agreement?
Greg Hands
My hon. Friend is right on both counts. There is no off-the-shelf agreement that would be suitable in this case. We are clear that we are seeking a bespoke arrangement between the United Kingdom and the European Union. Neither something like the comprehensive economic and trade agreement nor something like the European economic area would be suitable. On co-operation, we are clear that we seek a good agreement with the European Union that creates as frictionless trade as possible across all our borders, not just the internal border on the island of Ireland.
Sir Desmond Swayne (New Forest West) (Con)
May I take the Minister back to the former permanent secretary? When Mr Donnelly was interviewed on the “Today” programme that morning, so keen were the presenters to get his soundbite about the packet of crisps that they gave no analysis whatsoever of his figures, which were about 10% awry from those issued by the national statistics office. Has the Department done any digging into where his figures came from?
Greg Hands
My right hon. Friend tempts me down a path which I think I ought to resist. I am not exactly sure what figures the former permanent secretary used, but the figures are clear: European Union trade is extremely important to this country, but it is none the less a declining part of our overall trade, down from 56% in 2006 to just 43% today.
Greg Hands
I am going to make a bit of progress.
We are not working purely on non-EU trade. A common misconception is that the DIT is a purely Brexit Department. Our ongoing work of encouraging investment and exports is equally important, and that applies just as much to trade with Europe as it does to trade outside it. DIT has over 300 staff across continental Europe. I myself have made 16 European visits to 10 countries while in this position, as have all our ministerial team, including the Secretary of State. We have brilliant teams in commercial centres right the way across Europe.
Anna Soubry
I am very grateful to my right hon. Friend for giving way. It is very good, kind and generous of him. May we just return to the comments made by Sir Martin Donnelly, because I do not think the record will be accurate? We have heard mention of a bag of crisps. What he said was that, based on his experience of 15 years and beyond in the specific area of trade, our country was in effect embarking on a course that was the equivalent of swapping a three-course meal for a bag of crisps. Has my right hon. Friend seen the Government’s own analysis of the various options available to us that show that, even if we get a trade deal with every single country with which we do not have one by virtue of our membership of the European Union, which is about 50, we will still not be as prosperous as we are now by virtue of our membership of the European Union?
Greg Hands
I thank my right hon. Friend for her lengthy intervention. What I would say is that there is no such analysis of the kind she describes. What I am clear on is that it is our objective to maintain frictionless trade with the European Union as we go forward. It is our objective to conduct an independent trade policy and to seek, when the time is right, trade agreements with those partners. It is also our objective to seek the continuity in existing EU trade agreements for the UK, which I note the Labour party voted against on Second Reading of the Trade Bill. Labour is actually opposed to us seeking the continuity of existing trade agreements.
Antoinette Sandbach (Eddisbury) (Con)
Going back to the analysis published by the Government and the risk presented by non-tariff barriers, it was clear in that analysis that, even if we had an EEA-style agreement, there would still be damage to the UK economy. Is the Minister saying that he wants EEA-plus?
Greg Hands
I think I understand my hon. Friend’s intervention, but the Government have been clear for more than a year, since the Lancaster House speech, that our objective is not to seek an EEA-style agreement. Nor is it our objective to seek a CETA-style agreement. It is our objective to seek a deep and comprehensive agreement with the European Union, the like of which, I remind my hon. Friend, who I know studies these matters very carefully, was not modelled in those analyses. That is the most important point.
Greg Hands
I am going to make a bit of progress.
I am going to give a few examples of our work around Europe. I promoted the UK’s defence industry in Sweden, visiting Saab, whose new generation Gripen fighter jet could be worth £1.1 billion to UK industry. I and my colleagues engaged with the Polish Government directly on behalf of UK companies to discuss high-value retail opportunities in the Czech Republic—in Czech, I might add, Madam Deputy Speaker. I and my colleagues from DIT and the Department for Exiting the European Union have addressed chambers of commerce right the way across the European Union—in Austria, Hungary and Bulgaria, among many others. I enjoyed making use of my language skills when I gave speeches in German to senior business leaders in Munich, Düsseldorf, Osnabrück, Tegernsee and so on.
DIT’s relationship with Europe does not just extend to export and investment promotion. The vote to leave the EU was not a vote to undermine the EU. It is very important to understand that it is in this country’s interest to have a strong and effective EU. We continue to engage constructively in ongoing EU trade policy, as we currently are a full and equal member of the EU. As the House heard on Monday, we are working closely with our European partners as well as bilaterally to respond to President Trump’s decision to impose tariffs on imported steel and aluminium.
Greg Hands
I will make a bit more progress. We are committed to ratifying the CETA agreement with Canada, which provisionally came into effect in September. I was delighted that we were joined by 86 Labour MPs—many of whom are in the Chamber at the moment—who, in defiance of their Front-Bench team, supported the EU’s trade agenda in making sure that CETA was passed. In defiance of the party Whip, they voted for that important agreement with Justin Trudeau’s Canada.
We are supportive of the EU’s work to sign third-country trade agreements in future, and I have attended four Trade Ministers’ Foreign Affairs Councils, which included discussion of these. The Commission has been particularly focusing on agreements with South America’s Mercosur union and with Mexico. We continue to support the ongoing negotiations for both free trade agreements. On Mexico, we would like to see progress made wherever possible in the negotiations, although we recognise the complexity of North American Free Trade Agreement renegotiations running in parallel. We will continue our support for EU-Mercosur trade negotiations and would like to emphasise the urgent need to progress the trade components. It is essential to keep momentum and to achieve a swift political agreement.
Another high-profile agreement is the EU-Japan economic partnership agreement, which the Commission is strongly pushing to fast-track, so that it can be signed during Japan’s Prime Minister Abe’s visit to Brussels in July 2018. As a champion of free trade, the UK has been one of the strongest advocates—actually, I believe the strongest advocate—of this EPA, and we warmly welcome the work of both sides to reach this agreement, which will support global prosperity. We continue to engage constructively on EU business and with our European partners, and we continue to push UK trade and investment to businesses on the European continent. It is important that our trade engagement includes Europe, because our trade with Europe—our nearest and largest neighbour—will always be of great importance.
I often hear the criticism that trade deals outside the EU cannot make up for a loss in EU trade—that has already been referred to in a couple of interventions—but, as I say, this is not an either/or choice. I can assure the House that the Government fully understand the importance of European trade. The EU is our largest trading partner, accounting for 43% of our exports and 54% of our imports. Complex and integrated supply chains across the UK and EU show the importance of making cross-border trade as free and frictionless as possible, and that is why it is important that we get our relationship with Europe right.
Phil Wilson (Sedgefield) (Lab)
On frictionless trade, will the future be better than what we have now or worse?
Greg Hands
As I said, we are seeking a good, comprehensive, deep and wide trade partnership with the EU that is as frictionless as possible. That is why the right relationship is this deep, comprehensive and unique free trade agreement with Europe, based on the principles the Prime Minister set out throughout 2017 and in her speech a fortnight ago. We should oppose Labour’s latest Brexit policy of apparently keeping the UK in the, a, or perhaps any customs union with the EU. We want the greatest possible tariff and barrier-free trade with our European neighbours, as well as to negotiate our own trade agreements around the world.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
In the pursuit of this future relationship, will the Minister update the House on what progress has been made on the continuity of trading terms for our food and drink producers, especially in relation to the protected designation of origin and protected geographical indication schemes? Last week, the Secretary of State for Scotland guaranteed that there would be absolutely no change, but yesterday the Minister for Agriculture, Fisheries and Food said that absolutely nothing could be guaranteed. Who is correct?
Greg Hands
It is a bit rich for the right hon. Gentleman to vote against the European Union (Withdrawal) Bill and then to call for something that would be a consequence of that Bill: creating a new geographical indication scheme—by the way, we will be doing that in consultation with the devolved Administrations—to make sure that we continue to protect the UK’s 84 registered GIs within the UK. That is the Government’s objective, which I would hope he would support.
Greg Hands
No, I will make a little more progress.
We have heard questions about why we would want a bespoke trade agreement rather than taking one off the shelf, which, the argument goes, would involve easier negotiation. I remind the House of the Government’s reasons for choosing this approach over existing models, such as the EEA or CETA, and why whatever model we choose must involve leaving the customs union. A Norway-style deal might seem superficially attractive, but we would be subject to any new rules that the Commission chose to enact, automatically and in their entirety, with no endpoint. Most importantly, we would have little influence over those rules and no vote, which would be too much of a loss of democratic control, and also no guarantee—far from it—that whatever the EU27 did would also be in the interests of UK businesses and consumers.
Nor should we look to a Canadian-style agreement for the answer. Even if it were easier to achieve a CETA-style deal, we start from a unique position of regulatory alignment with the EU. Unlike other countries, we start from the position that our systems are already the same. It is precisely because the Government recognise how important EU trade is that we must look to an ambitious deal, rather than starting our relationship from scratch with something like CETA.
As important as trade with the EU is, however, we must also look outside Europe. The IMF—this statistic is also on the Commission’s website—estimates that over the next decade or so, 90% of global growth will come from beyond the EU. China adds an economy the size of Switzerland every year. There will be over 1 billion middle-class African consumers in 2060, and Commonwealth GDP is predicted to hit $13 trillion in two years. These represent unprecedented opportunities, yet they are harder to reach from behind the EU’s customs wall. Only once we can sign our own independent trade deals can we take full advantage of them.
Signing those deals means being outside the customs union. We need look only to Turkey to see that being in the customs union, in whole or in part, can sometimes be the worst of all worlds.
Several hon. Members rose—
Greg Hands
I want to make progress—it is very important that Members understand the point that I am making.
The EU is currently negotiating a deal with Japan. If it finalises that deal, of which, as I say, we are strongly supportive, Turkey will need to reduce tariffs on Japanese imports, but it will not get reciprocal access to the Japanese market. It will have to negotiate its own access, but those negotiations will be more difficult because Turkey will already have reduced its own tariffs and therefore will not have as much to give in return. As the Prime Minister has set out repeatedly, we are looking for a bespoke agreement. For goods, this will be based on a comprehensive system of mutual recognition, so that products need be approved only once. On services, we have an opportunity to establish a broader agreement than ever before.
Anna Soubry
My right hon. Friend is being very kind and generous in giving way, especially as I am really not helping him. With the greatest respect, he knows, as everyone else does, that we will and can achieve all these deals with countries such as China as a member of the EU. By way of example, I have met the Australian ambassador, and while he would of course want to do a trade deal with our great country, Australia will look first to do a trade deal with the EU, with its 500 million customers. Is it not important that we make all these things very clear to the British people? We do trade deals at the moment by virtue of our membership of the EU, and the only reason why we are leaving the customs union is to chase unicorn deals, but we can get deals with the EU.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It was quite in order for the Minister to give way to the right hon. Lady, but she knows that her intervention was too long, because she said so the last time—I heard her.
Greg Hands
It was a long intervention, Madam Deputy Speaker.
With all due respect to my right hon. Friend—she and I served alongside each other in government—the British people have made the decision to leave the European Union. That was the crucial decision made in June 2016. The Government’s purpose is now to ensure that we have the best possible frictionless trade deal with the European Union, while still being able to take advantage of trade opportunities beyond the EU. As I have stated repeatedly during this debate, that is the Government’s objective.
Greg Hands
No. I have already used up 25 minutes, and I am going to make a little more progress.
On services, we have the opportunity to establish a broader agreement than ever before. Of course we recognise that we cannot have the rights of single market membership, such as passporting for financial services, just as we understand that we cannot have all the benefits of single market membership without the obligations, but that does not mean that we should be shackled by existing precedent.
I know that some Members will ask how we can be sure that the EU will agree to our approach. The main point to bear in mind is that it is strongly in EU countries’ interests—economic and otherwise—to sign and agree such a deal. On the day we leave, the United Kingdom will overnight become the EU’s second largest trading partner—larger than China, Japan or India. The Commission estimates trade between the UK and the EU27 to be worth €812 billion. That is only 8% behind the EU27’s main trading partner, the United States, but it is 60% more than with China, which comes third.
Given the effort that the EU has put into deals with the likes of Mexico, Vietnam and Singapore—all of which, crucially, we support, but each of which is significantly less important to the EU than ours—it would be odd indeed for it to reject proposals from us. Furthermore, both the EU and the UK need to send a loud and clear message that we are strong believers in free trade. What message would be sent if we could not reach a free trade agreement?
However, even that underestimates our importance to the EU, because it is the type of trade that matters, not just the volume. Our strongest comparative advantages are in the business, professional and financial services that other businesses need to grow, and in the pharmaceutical goods that no one wants to exclude. For an advanced economy, good financial infrastructure is just as important as physical infrastructure, even if it is not as obvious. Restricting Europe’s access to the City’s financial infrastructure would be the act of a latter-day Beeching—although this time the main line would be closed, not the branch. Yes, the rest of the network could try and pick up the slack—the Frankfurts or Parises—but as I know, because I have worked in the sector, that network has less capacity and is less efficient, and EU businesses and manufacturers could not connect with the capital market that they need. The EU talks about a capital markets union, but how tenable is that without access to Europe’s main capital market?
Our relationship goes beyond mutual economic interest, however. Our membership of the EU is only one part of our relationship with Europe. We can still be neighbours when we leave: we are 30 km from the coast of France. We have cultural ties from before the EU was founded. We will still be in the same core organisations that the EU or its members are part of, from the European Court of Human Rights to the UN to NATO, and from the International Monetary Fund to the World Trade Organisation—the economic, security and humanitarian firmament that holds the international system together.
Greg Hands
No. I am about to finish.
Nevertheless, the Department for International Trade is preparing this country for life outside the EU. We are proceeding with trade and customs Bills that will give us a functioning customs regime on day one. As one would expect, they have been designed to prepare us for every eventuality, although they will be needed regardless of the outcome of our negotiations with the EU. They will give us a strong trade remedies regime. Free trade does not mean trade without rules, but Labour opposed these new powers when they were considered on Second Reading. Our independent trade remedies regime will allow us to protect UK industry from unfair dumping or subsidy, while balancing its interests against the interests of UK consumers and other UK businesses. It will be delivered through an independent trade remedies authority, so that businesses have the confidence they need that it will be impartial and will not act against the interests of wider industry. I want to make sure that this new regime works as well for business as it should from the start. We are consulting on which existing EU trade remedies we should carry over, and I encourage any business with an interest to respond before the consultation closes at the end of this month, and any Members with producer or consumer interests to help to publicise this.
The Taxation (Cross-border Trade) Bill will also allow us to create a UK unilateral trade preferences regime for developing countries. Shockingly, this was also opposed by Labour, the Scottish National party and the Liberal Democrats on Second Reading. The UK is a proud advocate of supporting developing countries to reduce poverty through trade, and I hope that Labour will reconsider its stance. This Bill will let us continue the UK’s existing system of preferential access for developing countries, which reduces or removes import tariffs from a number of countries, while also allowing us to explore improvements on the EU’s current system.
Leaving the European Union will allow us to negotiate trade deals across the world, but at the same time, this Government understand the importance of EU trade. That is why we seek a deep and special partnership with the EU. This is the only appropriate option. Members of all parties should be optimistic that that can be achieved.
Several hon. Members rose—
Point of Order
Greg Hands Excerpts(6 years, 8 months ago)
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Madam Deputy Speaker (Dame Rosie Winterton)
I thank the hon. Gentleman for giving me notice that he wished to raise this matter. It is obviously unsatisfactory that he has had to wait for such a long time to receive a response, but I am sure his concern has been heard on the Treasury Bench and will be conveyed to the Home Office.
Madam Deputy Speaker
Thank you.
Meanwhile, the hon. Member for Edinburgh East (Tommy Sheppard) has obviously made his dissatisfaction clear, and it is now on the record.
Oral Answers to Questions
Greg Hands Excerpts(6 years, 9 months ago)
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Catherine West (Hornsey and Wood Green) (Lab)
The Minister for Trade Policy (Greg Hands)
The Government are committed to seeking continuity in our trading arrangements to minimise disruption to businesses, consumers and our trading partners. We will ensure that the institutional provisions of existing agreements are met as the UK begins to operate its independent trade policy.
Catherine West
What parliamentary shared goals do the Government have in mind for the new arrangements that will come into place?
Greg Hands
To be absolutely clear, if the hon. Lady is referring to the Trade Bill, what we are looking at is the transitioning of existing trading arrangements with the EU. All those agreements have already been through parliamentary scrutiny. If she is referring to future trade agreements, we will bring that subject back to this House in due course.
Julia Lopez (Hornchurch and Upminster) (Con)
One of the new institutions we shall need to set up as we leave the EU is a trade remedies authority. I recently travelled to Canada and the US with the International Trade Committee. They are two countries that have robust trade remedies authorities whose impartiality can be critical in reaching economically sound judgments. What assurances can the Minister offer the House that the UK Government are similarly committed to an independent TRA that will be free from undue political interference?
Greg Hands
I congratulate my hon. Friend and the other members of the Committee on their recent visit to the United States and Canada. Those are two of the countries whose trade remedy systems we have studied, along with Australia and, in fact, the European Union system itself. As my hon. Friend says, it is common, although not universal, for the investigation process to be independent of the Government, but there is still a political decision at the end of the process by a Minister who is accountable to Parliament. It is worth pointing out, by the way, that all the Opposition parties voted against the creation of the trade remedies authority in the first place.
Patrick Grady (Glasgow North) (SNP)
I do not know whether a bridge counts as an institution, but I wonder whether the policy of the Department for International Trade, like that of the Foreign Office, is that a new fixed link between Britain and France is required to continue to improve trade after Brexit.
Greg Hands
We have been absolutely clear throughout this process about the importance of maintaining our trading relations with the European Union. That is why we are seeking to ensure that trade is as frictionless as possible, and why we are seeking a comprehensive free trade agreement with the EU.
Mr Philip Hollobone (Kettering) (Con)
The EU does not have comprehensive free trade agreements with some of the world’s major economies. Does the Minister believe that the United Kingdom is likely to strike such deals more quickly than the European Union?
Greg Hands
We remain supportive of the European Union’s negotiations with some of those trade partners while we are still a member of the EU, because we are strong believers in free trade. We have also set up 14 trade working groups with many of the leading economies, including China, India and the United States, and we look forward to making further progress with those arrangements in due course.
Judith Cummins (Bradford South) (Lab)
Our current trading relationships with many partners ranging from Switzerland to Mexico are overseen by joint committees of the EU and those other states. Will the Minister tell us how many of the committees will be replaced by UK equivalents after Brexit, and what progress his Department has made in establishing those institutions? Will he also tell us where the staff and expertise will be sourced from, and at what cost to the taxpayer?
Greg Hands
Let me say first that the UK played a leading role in establishing the European Union arrangements with countries such as Mexico and Switzerland in the first place. As for the question of where we go from here, our priority is to maintain continuity in our trading relations, ensuring that all the 40-plus trading agreements we have with 70-plus countries become UK arrangements as we leave the European Union. The precise format of the further discussions that we will have with those partners will be a matter for future arrangements.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Colin Clark (Gordon) (Con)
The Minister for Trade Policy (Greg Hands)
We have the opportunity to enhance our global trading relationships, including those with the countries with which we share bonds of history and friendship. My right hon. Friend the Secretary of State travelled to Australia and New Zealand in November to promote free trade and deepen those trading relationships. The April Commonwealth summit here in London will provide an opportunity for us to continue that work with all member states.
Colin Clark
Has my right hon. Friend considered how UK agriculture will compete with our Commonwealth cousins when we agree a free trade deal after leaving the customs union?
Greg Hands
I praise my hon. Friend for his distinguished business career in the sector before coming to this House; it means he brings real expertise to the House. He will know that we have established trade working groups with both Australia and New Zealand to explore possibilities in trade and investment. They will include agriculture, but it is too early to be sure how it will be covered in those and other future trading arrangements. The New Zealanders are very interested in this—the New Zealand High Commission recently wrote to the International Trade Committee saying:
“Given the complementarity of our two economies and our deep bilateral ties,”
they want to do something with us, and we very much agree.
Chris Elmore (Ogmore) (Lab)
On negotiations with New Zealand, the Minister will be aware that Wales has a large lamb industry—it is one of the great prides of the United Kingdom—so can he give an absolute assurance that in his negotiations with New Zealand he will not put any Welsh farms and the Welsh lamb industry at risk?
Greg Hands
I am keenly aware, as are my right hon. Friend the Secretaries of State for International Trade and for Environment, Food and Rural Affairs, of the importance of British agriculture in all parts of the United Kingdom and of making sure we have the necessary protections in place on animal welfare standards and so on, and also of promoting the opportunity to export our excellent British goods. Food and drink is one of our fastest-growing export sectors, and we want people to take advantage of opportunities across the UK.
Mr Gregory Campbell (East Londonderry) (DUP)
What importance does the Minister attach to deepening and broadening our trade relationships with countries such as India, which has a widening middle class among its population of 1.25 billion?
Greg Hands
The Prime Minister’s first bilateral trade visit in November 2016 was to India, accompanied by the Secretary of State and myself. We have recently completed a trade audit with India that looks at all the barriers. India is at times a difficult market for British exporters to crack. We have a lot of advantages in doing business there, and the trade audit and the joint economic trade committee talks led by the Secretary of State last month are taking us in the right direction.
Joanna Cherry (Edinburgh South West) (SNP)
Mr John Hayes (South Holland and The Deepings) (Con)
The Minister for Trade Policy (Greg Hands)
In 2016, the UK had a trade deficit with the EU of £70.97 billion, and a trade surplus of £39 billion with non-EU countries, up from £33.6 billion in 2015. The latest trade figures show that in 2017, the UK’s trade deficit in goods and services narrowed by £7 billion to £33.7 billion.
Mr Hayes
Balance of trade figures were once regarded as pivotal. They were even thought to win or lose elections. Given that we are now going to escape from the constraining clutches of the European Union, will my right hon. Friend invest again in old friends and rejuvenate our relationships in the realm with allies such as Australia and New Zealand? What steps has he taken to ensure preferential arrangements with such old allies?
Greg Hands
My right hon. Friend asks a very good question. First, I should like to put on record my thanks to him for leading various Government trade delegations in recent years, including one to Colombia. I know that he takes a strong interest in this subject. As I said earlier, we have set up trade working groups with Canada, the United States, Australia and New Zealand, and, unlike Opposition Front Benchers, we also voted for the comprehensive economic and trade agreement, the EU’s free trade agreement with Canada. The Secretary of State has been in all four of those markets in the past year, leading efforts to break down trade barriers and to seek new trade agreements.
Mr Speaker
I am sure that the right hon. Member for South Holland and The Deepings (Mr Hayes) enjoyed going to Colombia. Quite what Colombia made of the right hon. Gentleman is not recorded.
Thangam Debbonaire (Bristol West) (Lab)
The creative sector in Bristol West—particularly the music industry—is important, and trade in that sector is a service industry. What steps are the Government taking to ensure that the creative industries, particularly the music industry, are supported as we leave the EU?
Greg Hands
The hon. Lady is quite right to point out the importance of services to our trade. Overall, services represent 80% of our economy and 79% of jobs. My right hon. Friend the Secretary of State and the whole team are working closely with the Department for Digital, Culture, Media and Sport to ensure that we continue to grow exports from our creative sector and that investment from abroad continues to come into the sector. We often visit places such as Tech City UK and techUK, and we are working closely with them to ensure that we have a flourishing future for our creative industries.
Martin Vickers (Cleethorpes) (Con)
Last week, as co-chair of the all-party parliamentary group on Kosovo, I visited a British company in Pristina that has a £20 million investment there. What opportunities does the Minister foresee for widening our trade in goods and services with Kosovo and the neighbouring western Balkan countries?
Greg Hands
This is a very good opportunity. That is a part of the world that I know well, and I think that the company to which my hon. Friend refers is called Fox Marble—a highly appropriate name for this particular Question Time. It finds top-quality marble in Kosovo for export, and it should be congratulated. In regard to the wider region, we work closely with the Foreign and Commonwealth Office to promote trading opportunities throughout the region.
Rehman Chishti (Gillingham and Rainham) (Con)
Edward Argar (Charnwood) (Con)
The Minister for Trade Policy (Greg Hands)
Yes, my hon. Friend is right. I mentioned the India trade audit that has just been published. The Secretary of State met his Indian counterpart, Minister Prabhu, during our Joint Economic and Trade Committee meetings in January, and they agreed that bilateral work will now explore addressing barriers in four recommended sectors: food and drink, life sciences, information technology and services.
Mohammad Yasin (Bedford) (Lab)
The UK remains a major transit hub for illegal wildlife trafficking, and we rely on Border Force to prevent that trade. Will the Minister tell his colleagues in the Home Office to ditch their dangerous plan to replace Border Force staff with volunteers?
Greg Hands
Actually, this Government have made enormous efforts to stop wildlife trafficking. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs made it a major part of his visit to south-east Asia last week, and he made particular reference to the pangolin, which at the moment is the world’s most trafficked animal. This Government are leading global efforts in combating this horrendous trade.
Chris Philp (Croydon South) (Con)
Eddie Hughes (Walsall North) (Con)
Greg Hands
My hon. Friend is a fine and upstanding voice for the Black country. He will know that manufacturing experienced a 2.8% growth rate over the past year. Leaving the customs union provides an opportunity to enhance that growth, particularly as manufacturing exports outside the EU are growing so fast.
Trade Bill (Eighth sitting)
Greg Hands ExcerptsThursday 1st February 2018
(6 years, 9 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 1 February 2018 - (1 Feb 2018)
Bill Esterson
Absolutely. I know that many of my hon. Friend’s constituents in Warrington are affected by those closures. We clearly cannot on the one hand see cutbacks, and on the other hand expect an expansion of HMRC’s work commitments.
The Public Accounts Committee recently published its report, following an inquiry into our Brexit readiness, in respect of the border planning group. It raised concerns that
“HM Treasury’s usual business model is inadequate for allocating Brexit funding to departments who are forced to operate together, at pace, to a hard deadline.”
That seems pretty clear to me. When giving evidence to that Committee, representatives of the relevant bodies on the border planning group explained that funding was released on a case-by-case basis, and demonstrated that much of the funding had yet to be drawn down.
HMRC is still wrangling with HM Treasury over a £7.3 million drawdown to cover upgrades to the CHIEF customs system—I think that is what the hon. Member for Kilmarnock and Loudoun was referring to—in order to level up functionality. HMRC also told the Committee that it was not expecting any shift in the risk profile of goods coming into the UK from the EU, and that it had “no evidence to suggest” that there would be increased trade flows with non-EU countries after Brexit. Will the Minister confirm whether his Department’s assessment matches that of HMRC, and that our standards and regulations will match entirely those of the EU, such that the risk profile of goods in or out remains the same?
HMRC has planned operating resources for no change after we leave the EU, per the evidence it gave to the PAC. Will the Minister confirm that it is Government policy for there to be no change in the regulations? Will he also confirm whether HMRC was right to say that there is “no evidence to suggest” that there will be increased trade flows with non-EU countries after Brexit? He is looking at me with a puzzled look, as he often does.
Bill Esterson
I was not taking it personally. I have seen him with that puzzled look on many occasions, not just when I am speaking—often it is in response to comments from those his own side.
If the Department for International Trade has any purpose, it is surely to absolutely change the volume of trade after Brexit. That, in turn, suggests that HMRC was not right to say that there would be no changes in trade flows. It also suggests that HMRC is significantly under-resourced, which is more to the point, if it is operating on a no-change assumption. HMRC’s new customs declarations service is geared up for a fivefold increase in customs processing once we leave the EU. Surely the Minister accepts that that is likely to put severe strain on HMRC’s capacity and significant strain on its resourcing.
What the Government and HMRC have said appears to be at odds when it comes to standards and regulations, and whether they will match—especially the comment about there being “no evidence” of increased trade flows. [Interruption.] I thought that the hon. Member for Livingston was trying to intervene, but she is not.
Greg Hands
Welcome back to the Chair, Mr Davies; it is a pleasure to serve under you, as ever.
Clause 7, as we know because we debated it at length on Tuesday, sets out the powers that are needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services. Clause 8, in turn, sets out the powers that are needed for HMRC to share data with the Department for International Trade and other Departments and organisations in order for those bodies to carry out their public functions in relation to trade. Any trade information collected or shared by the Government under clauses 7 and 8 will come at minimal cost to business and the taxpayer—I will go into a bit more detail in a moment—and will be below the threshold needed for an impact assessment and review.
To deal with some of the points raised in the debate, the hon. Member for Kilmarnock and Loudoun asked about the impact on HMRC. I can confirm that HMRC will not require additional staff or resources for this function as a result of the data provision in the Trade Bill. From what the hon. Members for Sefton Central and for Brent North said, it sounded as if they are going to vote for the new clause. The different Opposition parties seem to be attacking the issue from different angles. Although the hon. Member for Kilmarnock and Loudoun said that too much resource is going to some places—I think that he called it the “Brexit gravy train”—the hon. Member for Sefton Central seemed to say that resources were too limited. However, I think that they are both coalescing around voting for the new clause.
Alan Brown
To clarify, I was talking about the Brexit process as a whole. It is certainly a gravy train for consultants, because the Government do not have the expertise in house.
Greg Hands
Well, I guess we will leave it at that. I accept the hon. Gentleman’s intervention to clarify precisely what he meant by the “Brexit gravy train”, but let us look at the truth.
The truth is that collecting the data will involve minimal cost to Government and business. The cost will certainly be below the level at which an impact assessment must be published, which is £1 million. I do not know what the cost of the hon. Gentleman’s assessment might be, by contrast, but the cost of the provision in the Bill will be less than £1 million. The Regulatory Policy Committee confirmed to my Department during the course of our analysis that no impact assessment was therefore needed, due to the low costs associated with the provision.
Matt Western (Warwick and Leamington) (Lab)
Does the Minister accept the interpretation that businesses will need additional support and that that is what is being proposed? HMRC will need additional capacity to help small businesses. Given that the Government and the Secretary of State are determined that businesses will look for new markets to diversify, those businesses will have a lot to do, so we need to give them as much assistance as possible.
Greg Hands
I agree, which is why we have made additional resources available for HMRC. We recognise that it will require additional staff, and that is being discussed. However, that does not relate to this Bill and this power. That is the most important thing to realise. The hon. Gentleman’s points about the generic nature of HMRC are well made, but my point is that this power will be introduced at minimal cost and will not affect the overall equation. The point that he raised about additional resources being needed for HMRC overall is not in dispute.
Matt Western
The Minister is being most generous. My point was that the report that we are requesting would help us to better understand the implications for HMRC.
Greg Hands
I do not think that that is necessary. The work that has been done shows that the cost would be less than £1 million. The new clause is all about trying to work out the cost of this particular measure, not about the wider implications for HMRC.
The hon. Member for Sefton Central asked whether this is a futile exercise. I say to him that we will be able to target support directly and ensure that UK business is at the forefront of post-Brexit opportunities, thanks to the data that this provision may well realise.
Finally, I remind the Committee that the Government currently do not collect any export data at all from about 4 million UK businesses. Our analysis elsewhere suggests that about 300,000 businesses in the UK could and should export but do not. We need this limited data collection and sharing power to be able to find and help them. I therefore urge the hon. Member for Kilmarnock and Loudoun to withdraw the new clause.
Alan Brown
I listened to what the Minister said. Clearly, if we stick to the existing trade agreements, nothing will change and everything will be much the same. Although there may be a logic to that, I will press the new clause to a vote because it would allow the Government to print an impact assessment that shows that nothing will change, that everything will be okay and that there will be no impact on HMRC. I would have thought that the Government would be happy to do that, and that it would not take too long.
Question put, That the clause be read a Second time.
Anna McMorrin (Cardiff North) (Lab)
The Trade Bill fails to set out a suitable framework for future trade agreements. The arrangements included in the Bill are insufficient and leave a lot to be desired on several important issues that I and many MPs raised in the debates on the European Union (Withdrawal) Bill. Just like that Bill, the Trade Bill puts restrictions on the Executive capacity of the Scottish and Welsh Governments, while placing no restrictions on the capacity of the UK Government. Essentially, under the Bill, Ministers of the UK Government will be able to legislate in devolved areas.
Wales is an outward-facing, globally trading nation and remains open for business.
Greg Hands
Could the hon. Lady outline to the Committee why she did not vote last week for the Welsh Government’s sponsored amendment in this area?
Alan Brown
Far be it from me to suggest that the hon. Gentleman may be a tad naive, but he is certainly optimistic if he thinks the Government have seen the light on this. I have made this point several times, but the devolved Administrations have said that they will withhold legislative consent motions if the Bill is not amended, so realistically, the Government will need to consider further amendments.
Greg Hands
The Government have made it clear that we seek to maintain the effects of the UK’s existing trade agreements. We make that commitment in relation to all parts of the United Kingdom, which means that we do not intend Scotland, Wales, Northern Ireland or, indeed, England to be disproportionately impacted by the transitioning of those agreements. Given that we have committed to seeking continuity in the effects of existing agreements, the impact of the transition should be neutral on all parts of the UK.
Hannah Bardell
While I take what the right hon. Gentleman says with the greatest of respect—I want to believe him—can he not see that, from the perspective of those of us from the devolved nations, the written and oral evidence given to the Committee paints a very different picture from that which he paints here today? Our concerns are legitimate, yet we have nothing. The Government have supported none of our amendments, despite promises made on the Floor of the House.
Greg Hands
I will come on to outline the engagement that we have had with the devolved Administrations and to talk about what that engagement might look like in the future. I stress to the hon. Lady that the Bill is about transitioning agreements that, in most cases, are already in place.
Matt Western
Gordon MacIntyre-Kemp, the chief executive of Business for Scotland, put it very simply. He said that the Bill
“puts the power to act almost unilaterally in the hands of a single Minister… At worst, it looks like a deliberate attempt to delay the transfer of EU-held powers…until after the UK Government has had free rein to agree deals that you could say run roughshod over the devolution agreements”.––[Official Report, Trade Public Bill Committee, 25 January 2018; c. 99, Q184.]
Greg Hands
Again, if I recall correctly, the evidence was almost all about future trade agreements that the UK may wish to enter into. To reiterate, the Bill talks about our existing trading arrangements.
Matt Western
Does the Minister not accept that they will technically be new agreements?
Greg Hands
As I have laid out frequently, the substance of the agreements will be the same. That is what we are looking to transition; that is the continuity factor of these agreements. There will of course be the opportunity in the future to come to new trade agreements with the same countries, but we are talking about the continuity of our existing trading arrangements—the 40-plus agreements with 70-plus nations.
On consultation with the devolved Administrations, the Department for International Trade ensures that its Ministers, as well as its directors and other senior officials, visit the devolved Administrations regularly and continually looks for further opportunities to engage with a range of stakeholders across the UK. Indeed, the hon. Member for Livingston knows that, because on a previous visit to Edinburgh I actually went to her constituency. The Secretary of State has engaged with the Scottish and Welsh Governments and with the Northern Ireland Executive.
Hannah Bardell
We were very glad to welcome the Minister to Livingston and I have been glad to engage with him on issues in my constituency. However, does he not recognise that engagement and consultation are very different from consent? The importance of consent and the devolution settlement being rowed back on are very different issues.
Greg Hands
I do not mean for us to keep throwing questions at each other, but I again stress that the Bill is about the existing trading arrangements of the United Kingdom as a whole. We will engage extensively with the devolved Administrations about what the future arrangements might be. We are being clear that we will continue to engage with the devolved Administrations as we transition these agreements as well. The devolved Administrations will, of course, have a role in implementing transitioned trade agreements in devolved areas, including, where appropriate, by amending retained EU law.
We have committed to consulting the devolved Administrations on the most appropriate way to implement the transitioned trade agreements and the agreement on government procurement in areas of retained direct EU law that have effect in otherwise devolved areas. We will welcome their input on the best way to do that so that the agreements are implemented effectively for the whole of the UK. We will also work closely with the devolved Administrations on the role they will play in shaping the UK’s future trade negotiations. It is right that we should have the opportunity to take these discussions forward and to engage the devolved Administrations to understand their views.
Alan Brown
I welcome the fact that the Minister is outlining the engagement he has had with the devolved Administrations, but can he confirm what the views of the devolved Administrations are on the provisions of the Bill?
Greg Hands
I do not think the hon. Gentleman needs me to confirm that. He has said himself what the position of the devolved Administrations is, including on the legislative consent motion. We have listened to them and will continue to listen to them very closely. He has put his point of view on the record as to the perspective of the Scottish Government.
I will come back to some of the points raised in the debate. The hon. Member for Brent North wanted to put devolved Administration engagement on the face of the Bill. I stress again that these agreements are about continuity, not future trade agreements. We have been clear in the White Paper that we will engage. We therefore do not require statutory engagement structures in the Bill.
Barry Gardiner
One of the trade agreements that we have repeatedly come back to, which makes it quite clear that this is not the simple roll-over of the existing trading arrangements that the Minister is talking about, is the treaty we currently have with Norway. Fisheries are an important part of Norway’s economy. It is almost inconceivable that in the roll-over of that agreement, there will not need to be some provision in that regard. Surely the Minister must address those points, because they are pertinent to the Bill and to the Government’s capacity to do what they seek to do, which in large measure the Opposition believe to be right and proper: to try to make the transition as seamless as possible. However, there will be areas where it is not, and Norway is one of them. We must address that and not simply gloss over it by saying, “Well, we’ll have to deal with that once we know what we’re doing with the EU final deal.”
Greg Hands
Of course we value our trade relations with Norway very strongly and closely. By geography alone, let alone the amount of oil and gas coming from Norway, we have incredibly strong trade relations. For the record, I met the Norwegian Trade Minister last autumn. I am perhaps going to sound like déjà vu all over again, but I repeat that the future trading relations with Norway will be very dependent on the future UK negotiations with the European Union. That is not a matter for this Bill; it is a matter that is being scrutinised on frequent occasions in this House and elsewhere.
The hon. Member for Brent North said that we need an engagement structure for future trade agreements. The Government agree that we need to engage the devolved Administrations in our future trade agreements for the benefit of the whole of the UK, as was made clear in the White Paper. We are talking to the devolved Administrations about what that will look like. The new clause would pre-decide that discussion.
The hon. Gentleman talked about international examples for consultation models with the devolved Administrations and gave us a quite interesting exposition of the position in Australia and other parts of the world. It was fascinating stuff, but our constitutional arrangement is very different from any of the international examples raised. As was made clear in our White Paper, we therefore need to design our own engagement structures, in consultation, that work for the benefit of the whole of the UK.
The hon. Members for Warwick and Leamington and for Cardiff North claimed that we were putting a constraint on the devolved legislatures. To be clear, the Bill will allow the devolved Administrations to make regulations that they consider appropriate for the purpose of implementing trade agreements in devolved areas, including in areas of retained EU law.
The hon. Member for Cardiff North said that devolution is being undermined. That is not at all the case. The Bill introduces new powers for the devolved Administrations to work collaboratively with the UK Government to secure continuity in our current trading relationships. Under the Bill, the devolved Administrations will be able to make every decision after exit that they can make before exit. We therefore do not need to commit to such a review or role for the Joint Ministerial Committee in legislation.
The official Opposition’s tabling at a late stage of this emergency extra new clause, which emerged earlier this week, seems to be more about Labour members of the Committee messing it up last week by controversially not supporting the Welsh Labour Government’s amendments, when everyone expected them to do so. When the hon. Member for Warrington South talked about a “political hell”, he might have been referring to the political hell we see all day, every day in the official Opposition in this House and elsewhere. On that basis, I urge the hon. Member for Brent North not to press the new clause.
Barry Gardiner
Had I been disposed not to press the new clause, the Minister’s final remarks would have made me all the more determined to do so. However, I was not so disposed, and we will press the new clause to a vote.
Question put, That the clause be read a Second time.
Barry Gardiner
I beg to move, That the clause be read a Second time.
This is the last new clause we will deal with in Committee, and it is our last attempt in Committee to introduce a high-level principle into the Bill. We have tried to establish the legal framework for an ethical trading policy that respects human rights, labour standards, environmental integrity and the needs of countries and communities poorer than our own. The Government turned down every single amendment and new clause that tried to enshrine those principles in law. None the less, we will have one final push. We are trying to establish the principle of animal welfare and sentience at the heart of our trade policy. Perhaps the Government will agree to stand up for those species that share our planet with us, but that have no representatives of their own to speak for them.
My hon. Friend the Member for Bradford South spoke persuasively—though not persuasively enough to get Government Members to agree—about the importance of maintaining high food standards in all our trade agreements. She referred to the connection between high food standards and the call for animal welfare, whether in respect of the general requirement for food hygiene or the specific target set by the Veterinary Medicines Directorate for a reduction of antibiotic use in agriculture. We also argued for animal welfare to be included in any impact assessment of the UK’s trade agreements, whether it is carried out ex ante or ex post. That call stands, and we will continue to press the point until we are satisfied.
I am pleased that the Minister saw fit to agree with us about the importance of this issue. I quote from the Hansard report of our sitting a couple of days ago:
“The Government have always been clear that we will maintain our very high standards on food and animal welfare, and for protection in that space. There will be no race to the bottom. Nothing in free trade agreements precludes a Government from regulating in the domestic environment. I hope that that is enough reassurance for the hon. Gentleman.”––[Official Report, Trade Public Bill Committee, 30 January 2018; c. 196.]
Greg Hands
The hon. Gentleman was a Minister in the Department for Environment, Food and Rural Affairs under Tony Blair. Can he point to specific occasions when he raised concerns about animal sentience with respect to trade agreements that were going through at that time?
Barry Gardiner
That is one on which I will probably write to the right hon. Gentleman. I am convinced that there were a number of occasions when I did exactly that. I will try to dig them out from my records and send them to him. I am delighted that he did not stand up to repudiate the remarks recorded in Hansard, as he did the other day. Given that, I take it that he stands by them.
Sadly, the Minister’s reassurance on this matter is not enough. The right of parties to regulate in favour of animal life and animal health is regularly mentioned in the text of international trade agreements, yet that same right is typically circumscribed by requirements that any measures to protect animal health must be undertaken while facilitating trade. Governments may take any measure they like to protect animal health so long as it does not create an “unjustified barrier to trade”. It is left to a tribunal of trade lawyers, who examine the justification of the measure in relation to international trade law, to decide whether it is justified or unjustified.
There is sometimes a clause in the general exceptions chapter of a free trade agreement that affirms that a state may introduce whatever measures are necessary to protect animal life or health, but the meaning of “necessary” is left up to another tribunal of trade lawyers to decide. They may rule that an alternative measure is available that would be less burdensome on trade and therefore conclude, even if the alternative would be less effective, that the measure that was taken does not qualify as necessary after all.
This is familiar territory to anyone who has looked into the history of international trade disputes, both before and since the founding of the World Trade Organisation. There is an entire sub-discipline of trade lawyers and academics who have written about what they call the “necessity test” that is employed to ascertain whether a measure is necessary and thus allowed under international trade law, or unnecessary and thus prohibited.
Let me take as a specific example a free trade agreement that was mentioned in written evidence by the RSPCA, because it contains a fleeting reference to animal welfare. The Government are keen to replace the EU-Korea free trade agreement with a new UK-Korea agreement, which would be implemented using the powers afforded to the Government by the Bill. The chapter of the EU-Korea agreement devoted to sanitary and phytosanitary measures includes specific clauses about enhanced co-operation between EU and Korean authorities on animal welfare issues—anyone who wishes to look them up will find them in article 5.9—yet those fine sentiments are thoroughly undermined by the clause at the outset of the chapter, which states that the objective of the chapter as a whole is
“to minimise the…effects of sanitary and phytosanitary measures on trade”.
The health and welfare of animals—and of humans, for that matter—is already subordinated to commercial interests. That is precisely the problem.
Matt Western
I rise to speak to new clause 12, and I thank my hon. Friend the Member for Brent North for proposing it. It would ensure that we provide important safeguards for not just livestock but our farming communities and our consumers by specifying animal welfare and sentience in the legislation.
In November, as we have heard, the Secretary of State for Environment, Food and Rural Affairs promised to make “any necessary changes” to UK law to ensure that it recognises that animals can feel pain. That came after proposals to accept that they are sentient beings were voted down. Now the Government are apparently looking at making UK law that specifically recognises animal sentience. I remind the Committee that the first sentence of the Bill says that it will
“Make provision about the implementation of international trade agreements”.
That is why—when we have spoken at previous sittings about ensuring that it is a comprehensive Trade Bill—we have said that this issue should be included.
According to the written evidence from the RSPCA, the EU has 19 farm animal welfare laws that the UK has implemented, giving a high degree of consistency on standards and a level playing field for trade in farm products. That will not be the case when the UK starts to negotiate FTAs with other countries. Thankfully, the UK has some of the highest farm animal welfare standards in the world, although it is well documented that Canadian and American farm welfare standards tend to be based on corporate standards rather than federal law, as we heard in the International Trade Committee yesterday.
Likewise, an FTA may include sectoral chapters on cosmetics, pharmaceuticals, chemicals and pesticides. The UK needs to be careful that it does not compromise any existing UK laws, such as cosmetics regulation, or risk that those laws are as sensitive to change as the farm animal ones that I have mentioned.
Greg Hands
The hon. Gentleman is making a good speech. One of the points he raises surely gets to the nub of the matter. When he says that we should not do anything contrary to domestic law in trade agreements, he rather makes the point for me that the Government and the country will have a right to regulate most of these matters domestically, which is the important thing. We can introduce protections domestically in our laws that would not be subject to the trade agreement.
Matt Western
I thank the Minister for his intervention. There is the law that goes through this place, and there is the role and power of the Minister, and very much at the nub of this debate over the Bill is the control the Minister has, as opposed to the controls we and other bodies will have, in influencing any trade agreements.
Anna McMorrin
It is imperative that animal welfare rights are protected after we leave the EU and that animals keep their status as sentient beings under UK law, which is why this new clause is absolutely vital.
I wrote to the Secretary of State for Environment, Food and Rural Affairs after the defeat in the House of Commons on this very issue. That letter was signed by over 100 MPs. It is disappointing that the Trade Bill neglected to make it clear that the UK will not enter any trade deals in the future that will require us to water down animal welfare standards. It is clear from the reaction of the public, and from the campaigns and letters that I am sure all MPs have received from constituents and organisations, that people have no interest in seeing chlorinated chicken in our supermarkets, are not happy to see live animal exports and are not willing to compromise in any way on animal rights to please the likes of the current US President or any other leader of a country that does not share the same concerns and views as us on animal welfare and animal sentience. Any trade negotiation or deal will impact on UK animal welfare standards.
Under article 13 of the Lisbon treaty, the UK recognises animals as sentient beings—that they are not just goods but have the capacity to feel pain, hunger, heat and cold—and that the Government must pay full regard to their welfare requirements. Recognising animals as sentient beings is accepted across animal welfare science and means that we acknowledge that animals are capable of feelings such as pain and are deserving of our respect. It is appalling that this Government could not vote in favour of maintaining—let alone progressing—existing animal welfare standards during the European Union (Withdrawal) Bill.
Greg Hands
I am not accusing the hon. Lady of spreading misinformation, of course, but a lot of the reactions to that vote spread a lot of misinformation. Various otherwise reputable news outlets such as The Independent and Evening Standard had to retract and withdraw and to print clarifications and apologies for putting out misinformation about the Government’s view on animal sentience. The Government strongly believe in animal sentience, and the European Union (Withdrawal) Bill vote was not contrary to that.
Anna McMorrin
I thank the Minister for his intervention, but the fact remains that this Government did not vote for that amendment, so are we to keep that trust that this UK Government will introduce those welfare standards post-Brexit? I for one do not find that trust. I struggle to understand this decision by the Government, which is a massive blow for the welfare of wildlife, pets and livestock alike.
Anna McMorrin
I thank the hon. Lady for her intervention, but does she not realise that this Bill is about the rules and regulations during trade? That is why we need the new clause in the Bill.
Only domestic animals are covered by the Animal Welfare Act 2006; animals in the wild and laboratory animals are expressly exempt. As we seek new deals in our negotiations with countries that perhaps have much lower animal welfare standards, we are particularly concerned that there will be the temptation to lower our standards. The Bill needs strengthening to better protect UK animal welfare standards. I hope the Government will see some sense and support the new clause to ensure that we do not water down those standards.
Greg Hands
The Government have made clear that we intend not only to retain our existing standards of animal welfare once we have left the European Union but, indeed, to enhance them. We are proud to have some of the highest animal welfare standards anywhere in the world, and they will not be watered down when we leave the EU.
Our food is held in high repute thanks to our animal welfare standards. The withdrawal Bill will transfer on to the UK statute book all EU animal welfare standards— it is very important to understand that in the context of the withdrawal Bill, which was raised by the hon. Member for Cardiff North. Our current high standards, including import requirements, will apply when we leave the EU.
Similarly, the Government are committed to retaining the EU’s recognition of animal sentience. That is why, as has been referred to quite a few times in this helpful debate, at the end of last year the Government published the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill, which sets out how we can go even further and better enshrine in domestic law the recognition of animals as sentient beings. That point was capably made by my hon. Friend the Member for Saffron Walden and others.
Barry Gardiner
Does the Minister understand that the new clause’s intention is not to run counter to or prevent what we hope the Government will bring forward in that Bill? It seeks to establish the hierarchy of principles in international trade so that a necessity test or any other precursor in the clauses and paragraphs that deal with such issues cannot mean that animal welfare is of a lower order in that hierarchy.
Greg Hands
Let us try to separate out those two issues. We will deal with animal sentience in the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill. What we are talking about here is transitioning existing trade agreements. I will return to the intervention I made on the hon. Gentleman in relation to existing trade agreements, but let me first point out a few more things in the draft animal welfare Bill. It proposes a new obligation on Ministers of the Crown to have regard to the welfare needs of animals as sentient beings when formulating and implementing Government policy. A public consultation on the draft Bill has recently closed and DEFRA is considering all the responses received.
We are absolutely clear that all existing commitments relating to animal welfare will remain when these agreements are transitioned—I cannot be any more definitive than that. That is in line with our clearly articulated principle that it is our intent to transition solely the existing effects of the current agreements.
On current agreements, Mr Davies, you and I were elected in 2005, and in a couple of those early years we shared in Parliament I distinctly remember the hon. Gentleman being a DEFRA Minister. I was intrigued when he was seemingly unable to offer any single occasion when, as a Minister in DEFRA—the Department with primary responsibility in this area—he had raised any objection to EU trade agreements going through the House in relation to animal welfare or animal sentience.
I look forward to receiving the hon. Gentleman’s letter, in which he will explain in detail those occasions he was unable to remember today—he may have time to dig through his filing cabinet from 12 or 13 years ago to find them. I remember well that it was very rare for any Government Minister in Tony Blair’s regime to go against the word of Mr Blair, and very rare for any Government Minister to go against the word of the European Union, so I am interested to see if the hon. Member for Brent North managed to do both at the same time. I very much look forward to getting this letter. May I suggest that he shares it with the whole Committee, because I do not think that it is something I should abuse by keeping it private to myself? I look forward to that letter.
Barry Gardiner
May I just point out to the Minister that I voted for the ban on hunting mammals with dogs? I believe that most of the Conservative party voted to retain hunting mammals with dogs. I also voted to secure an end to cosmetic testing on animals, to ban fur farming and to introduce the Animal Welfare Act 2006. So there were a number of occasions on which my voting record on animal welfare and animal sentience stands up very strongly. I suspect that it would it be in marked contrast to many Members on the Government side of the House.
Greg Hands
I thank the hon. Gentleman for that intervention, because I now find it even more illuminating. He has now been able to remember all these other occasions when he stuck up for animal welfare, but he still cannot remember a single occasion when, in relation to EU trade agreements, which is what the Bill is all about—
Greg Hands
Perhaps the hon. Gentleman has now remembered the single occasion. I will give him another opportunity to tell us all about this disagreement he had with Tony Blair or the European Union.
Barry Gardiner
It is not about a disagreement with Tony Blair or the European Union, because actually we did vote to ban the export of animals on the hoof in that Government. That was precisely about trade—it was banning live exports. The Minister has to accept that I have a very clear record on animal welfare in terms of not only domestic legislation in this country but international trade.
Greg Hands
I am still looking forward to the letter. The hon. Gentleman has still not remembered a single occasion when he raised this in relation to a European Union trade agreement. He has an opportunity. I am sure he will take a little bit of time to prepare the letter, and I am sure that all members of the Committee will look forward to receiving it.
The hon. Gentleman did mention live animal exports, which is an interesting subject. He says that he was concerned about live animal exports, but you and I know, Mr Davies, that while we remain an EU member we are unable to ban live animal exports. I do not know whether, at that point, he was taking an early Eurosceptic turn. Perhaps he mentioned to Tony Blair that he had this fundamental problem with the European Union. It was just after Tony Blair had promised a vote on the EU constitution, which was not delivered, so it may have been an interesting time to have made these Eurosceptic points that he now says that he has.
Matt Western
Far be it from me to talk about what happened five or 10 years ago and under a different ministerial dispensation, but my recollection was that in the 2000s there was a huge issue about veal being transported in crates, and it was EU legislation that was introduced that actually put an end to that. I would like to think that the UK Government were in support of that, but I do not know—I will defer to either the Minister or my hon. Friend the Member for Brent North.
Greg Hands
If the hon. Gentleman is a strong believer in EU law, surely he should be voting, and have voted, for the European Union (Withdrawal) Bill, which seeks to take all of this retained EU law into the UK domestic environment.
To return to the issue, we have a manifesto commitment to take early steps to control live animal exports as we leave the European Union. The hon. Member for Brent North claimed that FTAs contain provisions stating that animal health measures must
“not be unjustifiable barriers to trade”.
Again, that returns to the point I made in my intervention on the hon. Member for Warwick and Leamington, that it importantly does not prevent states from imposing their own high animal welfare standards, which is what we currently do and will expect to enhance in the future.
My hon. Friend the Member for Saffron Walden made an excellent and succinct speech, outlining why the Bill is about existing trade agreements and why the Government have separate proposed legislation relating to animal sentience. I can tell her that the consultation closed yesterday and we will consider the 9,000 responses, as well as the report by the Environment, Food and Rural Affairs Committee, in due course.
The hon. Member for Kilmarnock and Loudoun raised a relevant point when he said that the issue of animal sentience is devolved. I can tell him that the Department for Environment, Food and Rural Affairs is speaking to the devolved Administrations regarding animal sentience. The clause in the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill refers only to UK Ministers and the role they play, but I would be interested to see what proposals the Scottish and Welsh Governments might bring forward in this space as well.
I hope that is sufficient reassurance to the hon. Member for Brent North. I very much look forward to his letter, but on that basis I ask him to withdraw the new clause.
Greg Hands
Mr Davies, I thank you and everybody concerned with this Bill. I am delighted that we have so thoroughly scrutinised this short yet important Bill over the last five Committee sessions. I thank Committee members for the constructive way in which they have engaged in the debate. I am pleased that we have completed proceedings within the allotted time. In fact, we have a little time to spare.
This has been an unusual Bill Committee. The Bill, in my view, is relatively uncontroversial and certainly quite short. Indeed, on Second Reading, I think a little unfairly, the hon. Member for Brent North called it a
“hollowed out little embarrassment of a Bill, which extends to just six pages and four schedules.”—[Official Report, 9 January 2018; Vol. 634, c. 223.]
I think he was calling it small and unimportant; I am interpreting the words “hollowed out little embarrassment” in that way. Therefore, I find it all the more remarkable that the Opposition have called some 37 votes on the Bill so far. I am not trying to make a wider political point—or maybe I am—but it was clear on Second Reading and now that they are against the UK having its own trade remedies, against the UK being able to benefit from the more than 40-plus EU trade agreements, and against UK companies participating in the £1.3 trillion global procurement market. I hope they will change their minds on Third Reading.
I also thank the Government Whip and the Opposition Whip, who have ensured that the Committee has run smoothly and effectively. We have had a helpful and constructive consideration of the Bill, and the debate has been superbly conducted by you, Mr Davies, and by Mrs Ryan and Mr Gray, in the Chair. I am very grateful for your and their guidance during our deliberations.
Further, I would like to pay tribute to the usual channels, who I know quite well from previous experiences in this House, for their help and guidance throughout. I also recognise in particular the hard work of Hansard in recording everything. I thank the Clerk for his advice, the Doorkeepers for keeping good order, and my excellent team of officials for their support. This is the Department for International Trade’s first ever piece of legislation, and the officials have done the Department very proud indeed.
Barry Gardiner
I, too, would like to express, on behalf of all my team, my thanks to you, Mr Davies, to Ms Ryan and Mr Gray, and to all the officials who so ably supported the Minister. We tried to throw as many difficult questions at him as possible, and they tried to field them and provide him with answers as quickly as possible. I have to say we were not always convinced by the answers he came up with, but we recognise the work that went into them and hope that we did not cause the officials too much trouble.
I pay particular tribute to Kenneth Fox, the Clerk of the Committee. He is an exemplary Clerk, and he aided us in ensuring that our amendments were substantive and all in good order. It was extremely helpful to us to be assisted by someone of his experience and wisdom—and calm. I say that because, as you know, Mr Davies, amendments are worked on until the last moment to ensure that they are tabled in good time, and Mr Fox did so with the greatest humour.
I am grateful to all my team: my hon. Friends the Members for Bradford South, for Sefton Central, for Cardiff North, for Warrington South, for Blaenau Gwent and for Warwick and Leamington. It has been an excellent team effort. I am delighted that they were all able to contribute to debate in a most positive way. I also thank the Government Members. I thank the Minister, who I think took every intervention he was offered, for his courtesy. I know that serving on such Committees is often a thankless task for Government Back Benchers, who are told by the Government Whip to sit quietly and not to take up too much of the proceedings, but when they did intervene, they did so with courtesy.
We have scrutinised the Bill in great detail. We have not come to an agreement—that much is clear. There are lacunae in the Bill that need to be remedied, and we will return to it on Report and subsequently. I thank everyone associated with the Committee and in particular you, Mr Davies, for conducting proceedings with absolute fairness and impeccable order.