Trade Bill (Fifth sitting)

Hannah Bardell Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Judith Cummins]

It is the Trade Bill. These principles, including on human rights, should be held dear; if they are not held dear by Government Members, they are at least by Opposition Members. Environmental degradation has just been dismissed as collateral damage when it comes to international trade agreements. That is no basis on which to construct a new trade policy for a United Kingdom.

[Hannah Bardell (Livingston) (SNP)]

The hon. Lady makes an excellent speech. Does she agree that we all have deep concerns about fair trade? There is already a creep in supermarkets looking at fairly traded products, rather than Fairtrade products, and we will see significantly more of that if the Bill passes without amendment. Given that many of our constituencies are Fairtrade towns, that should be of significant concern to all of us.

[Judith Cummins]

I thank the hon. Lady for that intervention. Fair trade should absolutely be a key element of any Bill that deals with trade.

Trade Bill (Fourth sitting)

Hannah Bardell Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[The Chair]

We now begin line-by-line consideration of the Bill. The selection list for today’s sitting, which is available in the room, shows how the selected amendments have been grouped for debate. Grouped amendments generally deal with the same or similar issues. Please note that decisions on amendments take place not in the order they are debated, but in the order they appear on the amendment paper. The selection list shows the order of debate; decisions will be taken when we come to the clause an amendment affects.

I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on relevant amendments, but it will certainly help if right hon. and hon. Members, including Ministers and shadow Ministers, stand if they wish to speak on clause stand part.

Clause 1

Implementation of the Agreement on Government Procurement

[Hannah Bardell (Livingston) (SNP)]

I beg to move amendment 33, in clause 1, page 1, line 15, at end insert—

“(1A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Scottish Ministers consent.

(1B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), unless the Welsh Ministers consent.”

This amendment would ensure that the consent of the Scottish Ministers or Welsh Ministers is required for any regulations that deal with matters within the competence of devolved authorities in Scotland and Wales.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 34, in clause 2, page 2, line 40, at end insert—

“(7A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Scottish Ministers consent.

(7B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), unless the Welsh Ministers consent.”

This amendment would ensure that the consent of the Scottish Ministers or Welsh Ministers is required for any regulations that deal with matters within the competence of devolved authorities in Scotland and Wales.

Amendment 36, in schedule 1, page 7, line 24, at end insert—

“(4) This paragraph does not apply to regulations made under section 1(1) or 2(1) by the Scottish Ministers or the Welsh Ministers.”

This amendment would give the Scottish and Welsh Ministers power, by regulation, to amend direct EU legislation that forms part of domestic law on and after exit day in devolved areas.

Amendment 37, in schedule 1, page 8, line 5, at end insert—

“(4) This paragraph does not apply to regulations made under section 1(1) or 2(1) by the Scottish Ministers or the Welsh Ministers.

Requirement for consultation in certain circumstances

3A (1) No regulations may be made by the Scottish Ministers or the Welsh Ministers acting alone under section 1(1) or 2(1) so far as the regulations are to come into force before exit day unless the regulations are, to that extent, made after consulting with a Minister of the Crown.

(2) No regulations may be made by the Scottish Ministers or the Welsh Ministers acting alone under section 2(1) so far as the regulations make provision about any quota arrangements or are incompatible with any such arrangements unless the regulations are, to that extent, made after consulting with a Minister of the Crown.

(3) In sub-paragraph (2) ‘quota arrangements’ has the same meaning as in paragraph 3.”

This amendment would replace the requirement for the Scottish and Welsh Ministers to obtain the consent of the UK Government when acting alone under section 1(1) or 2(1) with the need to consult before making such regulations.

[Hannah Bardell]

It is a pleasure to kick off what I think we all agree is a hugely important debate. We are pleased that the amendments were selected.

It is important to say at the outset that our amendments to clauses 1 and 2 would ensure that the principles of devolution are safeguarded in the Bill as the UK leaves the EU. Just over 20 years have passed since devolution, and it is important to pause for thought. There has been a lot of discussion—on Second Reading and in the public discourse—about how the cross-party agreement that brought us devolution and the Parliaments and Assemblies of the devolved nations of the UK all those years ago is threatened. Much in the Bill drives a coach and horses through the cross-party agreements that brought huge changes to the devolved nations of the UK. I say to fervent defenders of the United Kingdom that by threatening devolution and devolved powers—the Scottish National party has set out 111 areas in which they are under threat—the Bill threatens to undermine the Union.

We agree with the provision in clause 1 that aims to ensure continued access to Government procurement markets after the UK leaves the EU, but we believe that UK Ministers should have to seek consent, not just to consult. During our debates on the European Union (Withdrawal) Bill, the Prime Minister promised that the devolved nations of the UK would be consulted. As we know, it has not been possible to seek proper consultation in Northern Ireland because of the situation there; we look forward to seeing what happens in Northern Ireland and what threat that poses. However, I think it is fair to say that the devolved nations do not really feel that consultation has happened. For us, consultation and consent are absolutely the bottom line.

Amendment 33 would ensure that the consent of the Scottish Ministers or the Welsh Ministers is required for any regulations made under clause 1 that deal with matters within the competence of devolved authorities in Scotland or Wales. The Library briefing for the Bill states:

“If responsibilities for much of procurement law move from the EU to the UK with Brexit, there are questions about who takes on these responsibilities. At present, responsibilities for procurement are generally either devolved or set at the EU level.”

The devolved legislatures in Scotland and Wales implement EU directives directly.

Let me draw on a specific example. Procurement is probably quite a dry and technical subject to many people, but it is very important. Back in 2008, we had a big challenge with superbugs and sickness in hospitals in Scotland, as did much of the UK. Through Government procurement measures, we were able to take contracts with private firms back under Government control. That was absolutely vital. If our amendments are not agreed to and we are unable to guarantee our procurement rights, there is a risk that they will be lost in the 111 areas I mentioned.

My Labour colleagues should think very carefully, given that it was their party that was instrumental in devolution. Labour should be congratulated on that. Labour Members must reflect on the impact of the Bill and the opportunity presented by the amendments, which have been laid with a degree of cross-party consensus and support. If we choose to push the amendment to a vote—obviously we will listen to the full debate—it would be excellent to have their support, and perhaps that of some Government Members. They might deem the promises made to Scotland in the past to lead not leave the UK, to be an equal partner—all those words and rhetoric—to be not rhetoric, but something that Members actually stand by.

On amendment 34, we agree with the provision in clause 2 that aims to provide continuity to existing trade deals that the UK is part of by virtue of its EU membership. There are about 40 trade deals, with more than 60 countries. We have heard a huge amount of evidence from a number of different organisations, including today from Devro, a company that makes sausage skins—we might argue that there will be no breakfast after Brexit if Devro is not able to produce the skins for sausages. We also heard from Hologic, a company I visited some time ago that operates in my Livingston constituency. Its representative spoke about the importance of consultation and consent and the involvement of the devolved nations.

We believe that UK Ministers ought to seek the consent of devolved Ministers when amending the law in devolved areas. The amendment would assure that the consent of Scottish or Welsh Ministers is required for any regulations made under the provisions of clause 2 that deal with matters within the competence of devolved authorities in Scotland and Wales.

I ask colleagues on both sides of the Committee to think about when trade deals are being negotiated. I know the Bill is about transferring current deals across, but it is also about what happens beyond that; it is about the framework that is put in place and ensuring that that framework is good and robust for everybody in the UK, wherever their business is and wherever they live. It is incredible to think that we would not get support, particularly from our Labour colleagues, on ensuring that the devolved Administration in Wales, whoever that may be, would have a say and would be able to give consent on the decisions that are made for those businesses.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

Let us say a major treaty was going forward that was in the interests of Scottish whisky, for example. Is it the hon. Lady’s position that Welsh Ministers should be able to veto that?

[Hannah Bardell]

Those are things that can be discussed. I am not going to draw on particular areas—if it were Welsh lamb, for example, should we have a veto?—and say that we should be interfering. I would like to think that if it came to that situation, the Welsh Government—whoever was in power in Wales—would take a sensible approach and realise it was the right thing that the Government in Scotland, whichever colour they may be, should be able to consent and be consulted on the products of their nation. We should have an even hand across the UK.

[Mr Prisk]

I note that the hon. Lady said no to that. In other words, as it stands, what she is saying about consent means that the treaty in question could not go forward. I put the question to her again: what if there was a major interest in Scotland that, under her amendment, was vetoed by Welsh Ministers? Is that what she intends?

[Hannah Bardell]

No, that absolutely is not the intention. We all live in a world at the moment where we can put scenarios forward and say this or that might happen.

[Mr Prisk]

That is the point of this Committee.

[Hannah Bardell]

And the point of the amendments is that in relation to goods coming from whichever part of the UK, we do not create a democratic deficit. That is what the Bill creates. The amendment rectifies that.

[Bill Esterson (Sefton Central) (Lab)]

I am proud of the Labour Government’s role in delivering devolution to Scotland and Wales, and I appreciate the hon. Lady mentioning that role. Can she set out when she sees there is a need for the consent of the devolved Administrations and when there is a need to consult them? Perhaps she could give some examples to demonstrate the difference.

[Hannah Bardell]

To be honest, the point is that we have the powers and we can have that discussion on an issue-by-issue basis. We have many examples of where we have worked well with the UK Government on trade and on rights, but we can consider other things—workers’ rights, for example. I know that when the Bill that became the Trade Union Act 2016 came to Parliament, many Members in the hon. Gentleman’s party and in other parties had huge problems with it, and it was hotly debated and discussed. Unfortunately, what we have seen is a rolling-back, despite the fact that there was opposition.

If we turn that on its head and say, “Could there be vetoes from other parts of the UK?” or, “Could we be in a position where one country is blocking a trade deal on a particular product over another within the United Kingdom?”, I would like to think that people will not use those powers in the way that the UK Government have often used their powers to impose legislation on devolved nations against their will. The whole point is that the rights, protections and opportunities, the access to and membership of the single market and the customs union are so vital to Wales, Scotland and the rest of the UK that we must not row back on those things and not give the devolved nations the opportunity to consent and be consulted. We could pick any particular issue and we could all have a discussion about whether there should be consent or consultation. The point is that we have the powers and they are powers for a purpose, and we should not have powers taken away.

Amendment 36 would amend schedule 1, which provides that Scottish and Welsh Ministers have

“No power to modify retained direct EU legislation etc.”,

such as EU regulations, or to make regulations that would create inconsistencies with any modifications to retained law that the UK Government have made, even in devolved areas. However, those restrictions are not being placed on UK Ministers. We believe that, as a matter of principle, devolved Ministers should have the same power in respect of matters falling within devolved competence as UK Ministers are being given. That is not is an unreasonable request. We are in a Union and we have devolved powers and devolved Governments; Ministers in each of those countries should have the same power as any UK Minister. Amendment 36 would remove the restrictions placed on the Scottish and Welsh Ministers’ ability to amend directly applicable EU law incorporated into UK law, bringing the powers into line with those being given to UK Ministers.

Amendment 37 would replace requirements imposed on Scottish and Welsh Ministers to seek UK Ministers’ consent when

“acting alone under section 1(1) or 2(1)”

with a requirement to consult UK Ministers before making those provisions. We have heard from stakeholders on this matter. I am sorry I was not here at the earlier evidence sessions; I was at the Council of Europe, but I have watched and read the contributions that were made. As we know, stakeholders were invited to give evidence and discuss their concerns. Chris Southworth from the International Chamber of Commerce UK said,

“Overall...I would be concerned if I were in the devolved Administrations. There is specifically no opportunity for the devolved Administrations—or the regions, I have to say—to feed into decisions on trade. I would be very concerned about that, particularly in the devolved Administrations, where there are vulnerabilities on a whole range of different industries.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 35, Q80.]

That is not SNP Members or Members of other parties just making political points; it is what we have heard in the Committee.

Today, we heard Elspeth Macdonald from Food Standards Scotland say that one of the reasons her organisation is supporting the Scottish Government on withholding a legislative consent motion is that it feels there could be a lowering of food and drink standards. Given that Scotland’s food and drink industry has grown at twice the rate of that of the rest of the UK and is a leading light of our exports, that is something.

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[Barry Gardiner (Brent North) (Lab)]

It is good to have you back in the Chair, Mr Davies. I look forward to the Committee making progress under your guidance.

The Labour party brought forward and delivered the devolution settlements when it was in government, so we absolutely support the rights and powers that are conferred on the devolved Administrations by their respective devolution settlements. Matters of devolved competence must not be subject to overreach by Ministers of the Crown who seek to amend or overrule the will of the people, as expressed through their devolved Governments. For Labour, that is absolutely the starting point of this debate. We believe that the powers of those devolved Governments must be enforced and, indeed, reinforced where appropriate.

That said, we have real concerns about some of the implications of this group of amendments in the context of implementing our legally binding obligations under international law. The amendments might, in effect, create a veto power, which in turn might result in the UK failing to deliver on its binding obligations under a treaty. We have a conundrum. Often in Committees like this we have what are, in effect, set-piece debates, but this is a real debate about a profoundly complex constitutional issue, which I do not think will be easily resolved. Let me try to set out what I think is at the heart of it.

I pay tribute to the hon. Member for Hertford and Stortford, whose question went to the heart of the matter. Interestingly, the spokesperson for the SNP, the hon. Member for Livingston, used the words consult and consent in the same sentence as if they were interchangeable. The difficulty is that, in law and in effect, they are not.

[Hannah Bardell]

Will the hon. Gentleman give way on that point?

[Barry Gardiner]

I will happily give way after I have made a little more progress. I do not seek a point-scoring debate, because we have to get to the heart of some extremely technical and complicated issues, but I will of course give way in due course if the hon. Lady wishes me to.

In respect of the devolution settlements, trade agreements and the negotiation thereof remain exclusively reserved to the UK Government. International treaties are also the exclusive reserve of the UK Government. I have no doubt that the devolved Governments recognise that and supported that approach when the relevant devolution Acts were passed. Our membership of the European Union has meant that the competence for trade has been exercised by the EU under the common commercial policy—in effect, it has been taken up a level from the UK Government to the EU. That relationship has meant that no devolved Government—nor, indeed, the national UK Government—has been able to legislate in any way that contravenes EU law. In respect of trade agreements, that has meant that we have amended our domestic legislation where required to align it with the terms of agreements concluded on our behalf by the European Union. No devolved Government therefore has any effective veto on the implementation of those agreements, nor have they ever had such a veto.

Of course, the Bill prepares us for life outside the European Union, when that common commercial policy will no longer apply and the competence for trade will be returned to the United Kingdom. Similarly, the obligation on the devolved authorities to ensure compliance with EU law may also no longer apply. That, in effect is the crux of the issue.

The amendments would, in some respects, extend upwards powers of devolved Governments that they might not currently have in respect of international trade agreements. It was telling to hear from the gentleman from Business for Scotland this morning—I am delighted that you managed to squeeze me in to ask my question at the last minute, Mr Davies. In his response to whether the Scottish Government or a devolved Assembly should, in effect, have the right to consent regarding the content of the trade agreement, with reference to his chlorine-washed chicken example, he said that, yes, he thought there should be a consent power at that level.

Whether the Bill is about an agreement with America is completely by the bye. That was a thought experiment to show the sort of situation that could arise. If we want to bring it slightly closer to home, we could talk specifically about one of the agreements the Minister proposes to have a corresponding agreement with through the good offices of the Bill: CETA. Of course, one of Canada’s main objectives when negotiating with the European Union was to be able to get chlorine-washed beef and chicken into the European market. It failed in that endeavour, because that was not agreed to by the European Union in the eventual treaty. However, it is not beyond the wit of any of us—we heard this on many occasions from our witnesses—to construct a situation in which Canada might do what other countries at such a juncture might do, which is seek to reopen the negotiations in a particular way to its advantage, to try specifically to achieve with the European Union that which previously it had not been able to.

That brings the example much closer to home, and to the Bill in particular. The key point is that, as was said by Business for Scotland’s witness, the Scottish Government’s view is that they should have the power of consent to the substantive measures of the international treaty. We recognise that there are clear implications for what might be set out in the international trade agreements on matters of devolved competence. Agricultural policy, food safety, fisheries, the environment and so on are all areas that are touched upon by modern trade agreements. They are all areas where trade agreements will of course have an impact.

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[Hannah Bardell]

I take on board the hon. Gentleman’s point. The notion of consent is an interesting one. Let me just expand a little on my take on it. The idea of consent—not just consultation—for us is that we cannot have certain aspects of our regulatory framework, or deals done, that go against the principle of devolution.

The memorandum of understanding concordat from devolution was binding

“in law, but promises cooperation on exchanging information, formulating UK foreign policy, negotiating treaties and implementing treaty obligations.”

In our view, the Bill goes across that.

For the sake of argument, say that Scotland or Wales could not give consent to a trade agreement. That would force the UK Government to go back and look at why consent could not be given, and hopefully bring something forward. If we only have the power of consultation—we could argue that consultation is not really a power—we are at the mercy of whatever the UK Government of the day do. It could be argued that the power of consent is absolutely vital in negotiating trade deals.

[Barry Gardiner]

It is not that I do not understand the force of the position the hon. Lady is taking and the way in which she is trying to express it, but of course those powers are powers that the devolved Administrations do not currently possess vis-à-vis the European Union. That is why, as I said, the levels at which we consider this, and the change in those levels, are absolutely material to the discussion we have today.

The hon. Lady is absolutely right to say that if the substance of a trade agreement or any of the corresponding agreements that the Minister is seeking to roll over from our existing EU trade agreement is substantively changed, it may well have an impact on areas that are devolved competences. But that is the substance of what is agreed at the international level. Trade is a reserved matter. Treaties are a reserved matter. Therefore, the question of the implementation comes in two ways. I do not want to depart from my notes too much, but I am seeking to respond to the hon. Lady’s intervention in the spirit in which she made it.

The difficulty is that our legislative language is poor. We talk about implementing an international agreement in UK law and we also talk about implementing the terms of the agreement within the devolved competence. It is very easy to have a confusion about which implementation we are talking about. I will progress the argument, because it seems to me that it is not cut and dried. There are serious issues here that we need to consider as a Committee.

I cannot say that I normally say this, but I very much look forward to listening to what the Minister says on this occasion, because I trust he has had the benefit not only of parliamentary counsel, but of constitutional legislators, who will have looked at the matter very carefully when they saw the amendments. I look to what the Minister is going to say in the Committee to guide us on these matters.

Picking up from where I left off talking about the substantive changes, new institutions may be required—institutions that might otherwise be within the devolved competence of the Scottish and Welsh Governments. That simply arises from the changes that will be made to the free trade agreements, because they might specify the European Food Safety Authority and that would need to be changed. New institutions may have to be established to fulfil the competences that the European Food Safety Authority or any other such agency had, and they would have to be designated in the roll-over Bill.

Of course, it may be that the Minister specifies the Food Standards Agency in England as the body that will now make the specifications. It might be better to use Food Standards Scotland, which we heard from earlier today. It is absolutely right that there is a process of consultation between the devolved Administrations and the Minister at that point to say, “You’re proposing to specify that body, but actually there are far more relevant skills in this other body.” Consultation is absolutely essential to try to ensure that they get this right.

[Hannah Bardell]

Will the hon. Gentleman give way?

[Barry Gardiner]

In one moment. I hope the hon. Lady will intervene in a moment, because this is the question I think she may wish to respond to. Imagine a situation where Wales said, “We believe our agency should be the certification body,” Scotland said, “No, it should be our agency,” and because both had the power of consent and not simply the right to consultation, the Minister and the UK were unable to fulfil our international obligations under an international treaty.

The hon. Lady may say, “Surely no devolved Ministers would be so pig-headed as to say, ‘It’s got to be ours.’” The Westminster Minister may well be the one who is being pig-headed—who knows? However, I cannot imagine that it is right for the Committee to pass an amendment that could give rise to a situation in which we were unable to fulfil our international treaty obligations.

[Hannah Bardell]

I guess the simple answer is that they would have to consult each other. I argue that what is proposed drives a coach and horses through many aspects of devolution, and others also have serious concerns. If the hon. Gentleman believes that there is an overreach in the amendments, what answers does he propose? Given the supposed “consultation” that was part of the European Union (Withdrawal) Bill process, does he really have faith in that aspect of today’s legislation? I know that I do not.

[Barry Gardiner]

I said at the beginning that I was not going to engage in point scoring, so I will not take up the hon. Lady’s invitation to beat the Minister over the head about the lack of consultation. The witnesses have amply displayed their dissatisfaction with the consultation process, but she has, in effect, made my point for me. She said, “Well, they would have to consult.” Of course they would; that is why I believe that it is vital that consultation with the devolved Administrations is statutorily required, in a way that is not transparent on the face of the Bill. Consent, however, which could bring about the sort of impasse I referred to, should not be built into the legislation.

It is one thing to imagine legislation working in a benign, perfect scenario where people have good will, are engaging with each other and want to come to an agreement. Sadly, that is not always the case, and we must make our legislation such that it survives not only when things go right, but when things go wrong and a way through an impasse is necessary. The danger in the amendments is the reaching upwards into what would currently be seen as the competence and the rights of the European Union to negotiate the substance of those trade agreements. That is why I am fearful of the route down which the amendments would take us.

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Let us imagine a different scenario.

[Hannah Bardell]

Will the hon. Gentleman give way on that scenario?

[Barry Gardiner]

I will give both scenarios, and then the hon. Lady can choose.

Our fictional country, Xanadu, has very relaxed laws about the rearing and sale of chicken for consumption. In Xanadu, chickens may be hormone-fed, genetically modified or chlorine-washed prior to slaughter for consumption. In the UK, one of the devolved Governments may have a particularly robust animal framework code, coupled with robust agriculture and food standards regulations, which would not allow for the production or consumption of such chickens. What happens if the UK agrees terms with this country that ultimately liberalise trade in chickens between our nations, such that hormone-fed, genetically modified, chlorine-washed chicken is allowed to be imported into the UK and sold on the shelves of our supermarkets for consumption by British citizens?

The devolved Government would argue, “These are matters of devolved competence, and we have right of consent regarding the implementation of the agreement, especially as it conflicts greatly with our standards.” They might also think, “There is no way we are allowing these products on to our shelves, and we will not give our consent.” In that example, I would probably be cheering and saying, “Good for them. We don’t want those chickens on our supermarket shelves.” However, the point is that if the agreement had been made, we would be bound by the obligations under it, whichever way they went—whichever example we use.

Failure to implement would result in remedial action being pursued by Xanadu. Indeed, many such countries might not even come to the negotiating table if they had significant concerns about potential consent reserve functions distorting their access to the market on terms that had been agreed at state-to-state level. When we heard from the witnesses this morning, the example of Canada was used. We have already seen that the provinces in Canada are brought in at the beginning of the process precisely to get round countries’ reluctance to engage in trade agreement negotiations without certainty that devolved Administrations cannot veto what is agreed.

The hon. Member for Livingston asked me whether I had spoken to my Welsh counterparts and I explained that I had, as well as to two of my Scottish counterparts. We have also spoken with the House of Commons constitutional law experts. They explained to us that they cannot answer the question. They do not know. They have recognised that this is a problem, and that neither the Bill nor the amendment address the issue in a way that would prevent our reaching the situation that I have tried to articulate.

We have spoken with House of Commons trade experts, and have similarly drawn a blank. They advised us that the matter has not been considered because it was not an issue before. They said they had just not come across it. What everyone has recognised is that there must absolutely be consultation in advance, to ensure that no trade agreements come unstuck if a veto is exercisable at a later stage. Also, how will the UK Government ensure that the provisions of a concluded trade agreement are implemented across the United Kingdom, as they are bound to by their obligations under international treaties?

The Bill fails to set out how the Government intend to resolve the issues. It does not define what implementation frameworks will be constructed to mitigate the extent of conflicts between the powers of the UK Government and the devolved competence of the devolved authorities. It does not differentiate between the incorporation of the terms of the agreement into UK law and how that might be considered to be separate from implementation at a devolved level. It does not set out what consultation processes will be instituted to address those issues early on, and to ensure that the interests and experience of the devolved Administrations are represented at the negotiation stage to avoid any conflict at implementation stage.

Of course the devolved Governments must have a say in the process. They must have the capacity to scrutinise it to ensure that it is compatible. The Government’s approach to consultation has not been what it should. Ad-hoc meetings between the Secretary of State and representatives of the devolved Governments cannot be considered a formal consultation process, even if the Secretary of State donned his President of the Board of Trade hat for them.

It is our view that a formal consultation role must be established for each of the devolved authorities and, indeed, for a much wider group of stakeholders with an interest in the outcomes of any trade agreement. Their views are essential in ensuring not only that any future implementation issues are addressed up front, but that their constituent interests, be they commercial or public, are properly considered before negotiations begin and as negotiations progress. It is our view that the Government must be obliged formally to consider and respond to representations made through that stakeholder engagement process, whatever those might look like.

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[Greg Hands]

As you know, Mr Davies, perhaps better than anyone, it certainly it is not for me to suggest what may or may not happen as part of the ongoing negotiations with the European Union. Clearly, aspects of the European economic area agreement will be dependent on those. It is our intention for there to be no substantive changes in those agreements as we go forward and transition. It is very important to understand that.

[Hannah Bardell]

Is that not at the heart of the issue? The Minister does not know what may happen in the future, or what may have to be traded off so that we can tread water and stay where we are. The power of consent is, in some ways, a negative power and a threat, but it means that a negotiation and an agreement have to be reached by all the devolved Administrations. Until now, consultation has not been a very positive experience for Scotland and the other devolved Administrations.

[Greg Hands]

We made a commitment in the trade White Paper to not normally use these powers in areas of devolved competence without consultation. I repeat that commitment to continuing that consultative process as we go forward. That commitment can be heard loud and clear.

[Hannah Bardell]

I try to speak on behalf of my constituents and others in Scotland. “Not normally” is, quite frankly, not good enough. The Minister might be as good as his word, but what about future Governments and future Ministers?

[Greg Hands]

I know that the hon. Lady takes up issues for her constituents—she and I have meetings about particular issues in her constituency. I repeat that we would not normally use these powers, and we would never do so without consultation. I will refer to some of the other reasons, which have been alluded to by my hon. Friend the Member for Hertford and Stortford, and by the hon. Member for Brent North, why we will not go down the road of requiring consent. We would not normally use the powers, but it is very important that we do not require consent to use them. That is a very serious commitment, which should offer the hon. Lady reassurance.

Amendment 36 seeks to remove the restriction on devolved Administrations amending direct retained EU law. Some EU law applies directly and uniformly across all EU member states without needing to be implemented in domestic legislation. On the day that we exit the EU, that type of EU law will be converted into what will be called retained direct EU law.

As the Government’s guiding principle is that no new barriers to living and doing business in our own Union should be created on exiting the EU, it is right that there should be only a co-ordinated set of changes made to that type of law, in order to maximise continuity and certainty for businesses and consumers. We are committed to consulting the devolved Administrations on the most appropriate way to legislate in areas of retained direct EU law that have effect in otherwise devolved areas.

Regarding amendment 37, we also consider it right that where measures affect the whole UK, such as quota arrangements or the use of powers in clauses 1 and 2, before we exit the EU, decisions are taken at UK level before the devolved Administration can take the measures.

Let me turn to some of the individual points raised. The hon. Member for Livingston asked whether a proper consultation could not be sought in Northern Ireland. It is important to recognise that, for reasons of arithmetic, there is not a Northern Irish Member on the Committee, but I will try to answer her point. We are working hard, as she will know—I think she will agree—to restore devolved Government in Northern Ireland as soon as possible. We are committed to working to ensure that Northern Ireland’s interests are represented in the meantime. The Department for International Trade engages with officials in Northern Ireland on a regular basis.

The hon. Lady also asked whether the GPA allows Governments to nationalise or privatise anything, whether for procurement or any other purposes. The UK Government will be bound to open up procurement markets only to the extent they have committed to do so in the new schedule to the government procurement agreement as lodged with the WTO. That will preserve the present position in relation to procurement in areas such as the NHS.

I think the hon. Lady asserted that procurement is devolved. This is a complicated area. The UK Government accept that some procurement is devolved, and the Scottish Government have made some regulations about procurement. However, the UK Government’s position is that procurement is an activity for devolution purposes rather than a subject matter. In other words, whether a procurement is devolved or reserved depends on the functions of the public body carrying it out. I think the saying is that if the public body answers to part of the Scottish Government, it might be devolved, but if it is a UK body of Her Majesty’s Government that operates in Scotland, it is likely not to be devolved.

The hon. Member for Kilmarnock and Loudoun referenced the power that Wallonia has. I am familiar with such arguments: I think the hon. Member for Brent North debated that at some length in relation to CETA in February last year. To be clear, I expect he knows that the UK and Belgium have very different constitutional arrangements. Foreign relations are the responsibility of the UK Government under each of the devolution settlements.

The hon. Member for Brent North made some interesting points. For the first third or so of his speech, I thought I was coming close to being in complete agreement with him—at least in his thrust that the proposal in the amendment to have in effect a veto power for the devolved Administrations would make the whole endeavour unworkable. He is right. He made reference, as I will, to the short, succinct intervention by my hon. Friend the Member for Hertford and Stortford about the potential for a Welsh Government veto over something that was felt to be particularly important in Scotland. That, or vice versa, is a very real example. Our approach is best: not normally to use the powers to amend legislation in devolved areas without consent, and never without consultation with the devolved Administration.

I was surprised by the approach taken by the hon. Member for Brent North. It was my impression that the amendments were drafted by the Scottish and Welsh Governments together. Therefore, much as I welcome him saying that he will not vote for the amendment, it surprised me a little that he seems to be at odds with the Welsh Government viewpoint. Anyway, I am glad that he may be joining us on this occasion.

In terms of the GPA and rolling over the existing schedule, yes, that is the intention, but—I repeat—the terms on which the UK enters the GPA in our own right will be subject to a separate vote in Parliament. The Constitutional Reform and Governance Act 2010 applies to the terms of the UK’s new membership of the GPA —in other words, it is possible to bring a vote in Parliament on the terms under which the UK will join the GPA.

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[Anna McMorrin (Cardiff North) (Lab)]

The UK Government must have meaningful engagement with devolved Administrations about the shape of the UK’s future customs and tariff regime post-Brexit. That has not been the case so far. Just like the EU (Withdrawal) 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, UK Ministers will be able to legislate in devolved areas without consent from Welsh or Scottish Ministers. That is an overt power grab and a rolling back of devolution. I am proud to have played a part in bringing devolution about in Wales 20 years ago. It is vital that we maintain what devolution was set up to deliver: a proud and confident nation.

It is also disappointing that there is no provision for the Trade Remedies Authority to have any input from devolved nations. It is important for it to be an independent and impartial body, separate from the Government, but it must also represent all parts of the UK, including Wales and Scotland.

It is important to remember that in the trade White Paper, the UK Government stated that the Bill would have provisions for UK Ministers to seek consent from Welsh and Scottish Ministers when making secondary legislation under the Bill, but that has now disappeared.

In 2016, First Minister Carwyn Jones told the Welsh Assembly’s External Affairs and Additional Legislation Committee that it was “hugely important” for devolved Administrations and legislatures to have a say in the negotiation of future agreements that would have an impact on Wales. He gave the specific example of a free trade agreement with New Zealand:

“The impact of that might be to remove the current controls that exist on the import of New Zealand lamb. If they were to go, that would clearly be a great difficulty for Welsh lamb producers. That issue might not be as apparent in Whitehall as it is in Wales, and that’s one example there of why it’s important that the views of the devolved Governments are understood and the interests of the devolved nations are respected.”

It is not new. We are not advocating new devolved powers. It is not even about extending devolution. It is about preserving devolution. It is important to remember that there are restrictions on competence. The devolved settlements of both Wales and Scotland ensure that both Welsh and Scottish Ministers cannot legislate in ways that interfere with UK international obligations. That comes under the Government of Wales Act 2006, specifically sections 82 and 114. It simply cannot legislate to interfere.

[Hannah Bardell]

The hon. Lady is making an excellent speech and highlighting the importance of the devolution journey we have travelled. Particularly on the devolution settlement, does she agree that there might be challenges if this amendment passes—it is about consent? As she says, it is written into the devolution settlements and that agreement would have to be reached to ensure that that legislation is passed. Does she agree that it would be absolutely in the interests of devolution, and in the interests of Scotland, Wales and Northern Ireland, that those amendments pass today?

[Anna McMorrin]

It is absolutely about consent, agreement and consultation. Essentially it is about not rolling back on the devolution settlement. Amending the Bill to explicitly ask for the consent of devolved Administrations for secondary legislation under the Bill would therefore not interfere with that, nor would it amount to a veto power.

As I already said, what was already drafted in the UK Government’s White Paper should be in the Bill. Consent and consultation are at the very heart of devolution. If there is secondary legislation being made within an area that is currently within devolved competence, the devolved Administrations and Welsh Ministers must give consent and ensure the democratically elected Welsh Assembly or Scottish Parliament is able to debate it. That is why I agree with the principle underlying the amendments, as agreed by both the Welsh and Scottish Governments.

Professor Jones, a Welsh political expert, told the Select Committee on Public Administration and Constitutional Affairs:

“We see the UK Government in effect reintroducing a kind of conferred powers model where it will decide which bits of the powers returning from Brussels will be conferred on the Welsh Government… That—in the context of this constant churn and change—looks one-sided and objectionable.”

The most disappointing aspect of this Bill’s disregard for devolution is that the UK Government know it is completely unacceptable.

[Anna McMorrin]

As I said, I absolutely support this principle, which has been agreed jointly with the Welsh Government and the Scottish Government.

Ministers, Conservative MPs and civil servants privately acknowledge how extremely ill-advised it is to remove the power of devolved Governments over devolved areas. Clearly the issue is one of trust: trust to exercise devolved powers responsibly; trust to carry out measures that represent the people of Wales and Scotland; and trust to provide meaningful scrutiny of legislation. As it stands, under this Bill, and after Brexit, the devolved Governments will be at the mercy of Whitehall, which will have complete control of all areas, including those which are currently devolved. That is called rolling back devolution. As set out in the Government’s White Paper, devolved Governments must have the right to give consent to secondary legislation in areas of devolved competence.

[Hannah Bardell]

I have listened carefully to hon. Members. I am not saying that there are not areas of concern, and I understand that we are in unchartered territory. I am sure when we look back, when the history books are written, how we have handled this matter will probably not reflect well on politicians, but we have had a good and detailed discussion.

I pay tribute to the hon. Member for Cardiff North. She has been extremely brave in standing up to say what she has said. She has stood up for her country and for the devolution settlement and the devolved nations. I commend her for that, and for her point about conferred powers and the evidence given in the Brexit Committee. That is really about protecting and preserving devolution.

I understand that the UK Government might have concerns about losing their grip on power, but they have to understand that for generations the people of Scotland, Wales and Northern Ireland have had power wielded over them at times by the UK Government, and devolution sought to move forward from that to create a more consensual approach across the UK. That has been absolutely vital in the development of our society and of how we see ourselves as nations and as the UK. As a result, internationally, we have been looked on as a world-leading model for how different nations in a union can share power.

I believe in Scottish independence and that we could sort all this out if Scotland had all the powers of a fully devolved nation. I appreciate that that is not necessarily going to happen straightaway. However, if the UK Government and the Conservatives continue on this road by stopping and encroaching on the devolved powers of Scotland and the other nations, Scottish independence is increasingly likely. They should bear in mind as we leave the EU the creation of a situation in which consent is required.

I understand the point made by the Labour spokes- person, the hon. Member for Brent North, about Xanadu, chickens and so on. I would make a point in return that UK Ministers will have power that Scottish Ministers and those from other devolved Administrations do not. Why should they be allowed to wield those powers and encroach on the powers of devolution? If we have the power of consent and there is a concern that something may not be agreed to, surely instead of being concerned about not adhering to our international obligations, it would not be beyond the wit of those Ministers and that Government to go back to the devolved nations to ask, “What will it take for you to give your consent and reach an agreement?” I am sure that that is entirely plausible.

I appreciate that we are in uncharted territory, but unfortunately those in government have got too used to having power over the other nations. If they are not willing to listen to and concede the points being made not just by us politicians but by people outside—organisations, trade bodies, law societies—who say that that is encroaching on the powers of devolution, that will be at their peril. That is absolutely something that will befall them. I will not withdraw my amendment and will press it to a vote.

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[Barry Gardiner]

Yes, I absolutely concur with my hon. Friend. That is precisely what those of our constituents who wrote to us earlier today were getting at. The gentleman from the CBI who gave evidence only two days ago posed a very pertinent question to the Minister on two occasions—at the beginning and the very end of his remarks. He pointed out that the Minister and the Government have said repeatedly that they will bring forward legislation in the future to put in place what we now think should be here. They give no assurances of that though. What the CBI, supported by the International Chambers of Commerce, said was: if not now, then when?

The Minister is keen to suggest the importance of passing this Bill is that we are pressed for time, and we are. But if we are pressed for time on the need to have trade agreements that correspond to existing agreements in place by the time we leave the European Union, surely we are also pressed for time if we are to have, as the Government have suggested they could have on day one, new trade agreements in place ready to go. Where is the legislation to facilitate that? This should be that legislation and it is not.

By choosing to focus solely on providing continuity with pre-existing EU trade agreements, the Bill has gone back on the promise that the Government made in the Queen’s Speech, and in other places on other occasions. The opening words of the Bill identify its scope perfectly clearly:

“A Bill to make provision about the implementation of international trade agreements”.

My hon. Friend the Member for Sefton Central tried to elicit comment on that point from the witnesses this morning. The Bill bears no qualification to suggest that we should be focusing only on a subset of the broader whole. The issue before us is explicitly the implementation of the UK’s future international trade agreements, which is why we consider the two amendments to be essential to restoring the Bill to its correct proportions right from the outset.

It was highly revealing that several witnesses from the business community voiced their concern at the failure of the Bill to address so many essential aspects of our future trade policy, which are precisely the aspects on which their members desperately want clarity, so that they can start making the necessary investments and operational decisions on how to take on board the new realities. Was it not depressing to hear business leader after business leader in our witness sessions saying that, because there is not that clarity, businesses are now having to execute their plan B? They are being precipitated into taking decisions to make investments abroad in order to safeguard their trading future. That is not good for this country, yet in this Bill we could set out clearly how we will achieve that.

I was concerned and taken aback to hear how angry some businesses are about the Government’s mishandling of the whole process of informing them what the Bill is about and the Government’s abject failure to take on board any of the business community’s input into the official consultation. It came up time and again. It is hardly surprising when we consider that the Bill was already printed before the consultation on the White Paper informing it had run its course. The consultation closed on 6 November, and when we went into the Table Office on the morning of 7 November, copies of the Bill were available.

[Hannah Bardell]

I absolutely agree with what the hon. Gentleman is saying. Does he share my concern that when it comes to involving businesses, trade bodies and organisations in trade agreements, the Government have huge lessons to learn from the mishandling of the process and the anger? The British Retail Consortium was absolutely infuriated by how the process had been done. Businesses, individuals and trade bodies had been asked to spend staff time, effort and money feeding into a consultation, but there was no space. As he said, the Bill was printed before the consultation had even finished. That is an appalling way to treat businesses and trade bodies, and an appalling way to govern.

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[Greg Hands]

All that will be considered in due course. We will bring forward proposals in the coming months on how Parliament will interact with future trade agreements.

[Hannah Bardell]

Will the Minister give a definition of “due course” and say what his vision is? Many external organisations and hon. Members have expressed about the structures in this place and Delegated Legislation Committees. I have sat on those Committees and I know they are not sufficient to allow proper scrutiny of the thousands of statutory instruments and regulations that will have to be dealt with, or to allow Parliament and its Members to have a say on them and be confident that they will be able to scrutinise what has been decided.

[Greg Hands]

We want a clear and significant role for Parliament in the scrutiny of future trade agreements. Returning to my intervention on the hon. Member for Brent North, the amendments and new clauses would pre-empt those arrangements before we have been able to consider properly what we are doing and to consult on that.

On 5 January, the Government published a response to the trade White Paper, which covered a number of things—of course, not everything that was in the White Paper is in the Bill. We will consider the views expressed in that consultation as we develop proposals regarding the role of Parliament in respect of future trade negotiations.

[Hannah Bardell]

A number of deficiencies have been highlighted. Does the Minister think that some of the deficiencies in the Bill, and the fact that he is having to tell us that some things will come later—I appreciate that he has great integrity and the best intentions—relate to the fact that the Bill was published before the consultation period ended? Is that the reason why some aspects of the Bill are so deficient?

[Greg Hands]

As I have stressed, consultation on future trade policy is ongoing. It is not dependent solely on the trade White Paper. We are consulting by speaking with partners, businesses, the devolved Administrations and other stakeholders constantly as we seek to bring forward proposals on our future trade policy. However, as I have explained, we consciously decided to make this Bill about our current trading arrangements and ensuring that they can be transitioned properly into UK law.

Therefore, these amendments pre-empt the full consideration of the 7,429 responses received during that consultation and of the views expressed inside and outside the House. It is right that we take the appropriate amount of time to develop a range of proposals that ensures that Parliament, the devolved Administrations, devolved legislatures and a wide range of stakeholders, including business and civil society, are engaged throughout the negotiating process.

The hon. Member for Brent North made a fascinating speech on what the UK’s future trade policy might look like, but that is not what we are deciding today. He said that Government can smuggle new trade agreements through Parliament without a vote. No. The implementation powers in clause 2 are exercisable by negative procedure statutory instruments. These are subject to a vote in either House of Parliament, if the regulations are objected to by parliamentarians. Parliament has the right to vote on the implementation of transitionally adopted trade agreements, if it so desires.

Oral Answers to Questions

Hannah Bardell Excerpts

Thursday 11th January 2018 Commons Chamber

[Dr Fox]

Alignment is about pursuing the same objectives; it is not the same as requiring regulatory harmonisation. We hope that our agreement with the Republic of Ireland is covered by a full and comprehensive agreement with the rest of the European Union.

[Hannah Bardell (Livingston) (SNP)]

The Irish Government have been clear that a deal that maintains regulatory alignment means free movement of people, goods and services across the border to Northern Ireland. Given that the United Kingdom Government have shown that they are willing to give a nation of the UK a differential deal, will they now bring to Brussels the Scottish Government’s proposals to keep Scotland in the single market and customs union, and if not, why not?

[Dr Fox]

Why not? Because when we leave the European Union we leave the single market and the customs union—it is not that complicated.

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[Amber Rudd]

Women throughout the UK went to the ballot boxes for the first time in 1918, and all four nations contributed to that landmark change. The Scottish Government are like the Welsh Government and the Northern Ireland Executive—they are all responsible for how they choose to mark the centenary in their respective nations. I understand that the Scottish Government will announce their plans shortly, but I cannot see why they would not want to mark such a great celebration in an important way.

[Hannah Bardell (Livingston) (SNP)]

Does the right hon. Lady agree that, as part of the celebrations, a fitting tribute to the great Winnie Ewing, who was elected 50 years ago last year, would be a portrait in the House of Commons?

[Amber Rudd]

Well, Mr Speaker, I am sure that you listened carefully to that question, as I understand that that is a matter for the Speaker’s Advisory Committee on Works of Art.

Trade Bill

Hannah Bardell Excerpts

Tuesday 9th January 2018 Commons Chamber

[Dr Fox]

As my hon. Friend knows, detail on the implementation of the Trade Remedies Authority will be in secondary legislation subsequent to the passing of the Taxation (Cross-border Trade) Bill, which we debated in this House last night. The Trade Bill merely creates the framework for creating the Trade Remedies Authority, which will be an arm’s length authority. These issues are often commercially sensitive and market sensitive, so it is important that we are seen not to have overt political intervention. Likewise, if we want to be WTO compliant, we have to be as transparent as possible. We will want to consult further, but we want to set out the details as soon as possible.

Closely related to that is the Bill’s fourth aim. We want to enable HMRC to collect and share essential data on the United Kingdom’s trade flows, which will enable DIT and bodies such as the Trade Remedies Authority to perform essential trade functions such as providing evidence to WTO panels that rule on trade disputes. It will also provide a vital insight into our export performance during our development of trade policy.

[Hannah Bardell (Livingston) (SNP)]

Can the Secretary of State give us an idea of how much more resource HMRC will get so it can do that job of collecting data? Will the Government expand the number of HMRC offices, rather than reducing the number of offices, as he and his Government are currently doing?

[Dr Fox]

My understanding is that HMRC was given extra resource in advance, before we reached this point. It seems strange that we do not already collect this data. If we want better-informed policy, we need better datasets. It is merely a sensible option for any Government to collect this data as widely as possible, so that we operate on the basis of better information.

Before I further explain the process, this is a good juncture to correct some of the misunderstandings that seem to have grown, deliberately or otherwise, around the Trade Bill. As I have explained, the Bill contains two powers that allow the Government to amend primary legislation: the power in clause 2 to implement the trade agreements that the UK adopts; and the power in clause 7 to allow HMRC to collect the export information that the hon. Lady has just mentioned. Both these powers are limited in scope and restricted in their use. Contrary to the belief of some in this House and beyond, seemingly including the shadow Secretary of State for International Trade, this Bill does not legislate for powers that could be used when implementing new free trade agreements with countries with which the EU does not have a free trade agreement before exit day. An article in The Guardian—I do not avidly read it, but this was brought to my attention—written by him incorrectly asserted that the Government would only be obliged to present the text of new trade agreements under the convention of the Ponsonby rule. As I mentioned earlier, the scrutiny of new agreements requiring ratification is ensured by the Constitutional Reform and Governance Act 2010.

--- Later in debate ---

[Hannah Bardell (Livingston) (SNP)]

It is a pleasure to speak on behalf of the Scottish National party. I will do my best not to take up too much of your or the House’s time, Madam Deputy Speaker.

The UK Government have an opportunity in the Bill to show leadership, to engage widely and to consult with devolved nations, business and other stakeholders about what should be contained within it, but it seems like a paper-thin effort—and not a very great effort at that. Given the magnitude of Brexit and its potentially damaging ramifications, this pretty paper-thin Bill is an affront to democracy and lacking in any real detail—not a great start as we enter this new territory.

A hard Tory Brexit would be disastrous for the economy and completely undermine the Scottish Government’s efforts to boost Scotland’s trading position. We found out just a few moments ago that the UK Government have dropped their promise to amend devolution aspects of the European Union (Withdrawal) Bill and that they plan to do it in the House of Lords. That is shameful, because the Secretary of State for Scotland made a promise on the Floor of the House to the people of Scotland and Scottish MPs.

We have significant concerns about trust in the Government and about whether they can stick to their word. Regarding withdrawal, the Scottish Parliament should not have its powers in any way diminished. As we know, the Government cannot be trusted. The Law Society of Scotland, for instance, says:

“We are concerned by the extensive scope of delegated ministerial powers under the Act, mirroring concerns previously identified in relation to the use of Henry VIII powers in the context of the European Union (Withdrawal) Bill. It is not clear why the Government considers such wide powers to be necessary.”

It would be interesting to hear from the Secretary of State what his take on that is. In its excellent briefing, the Law Society of Scotland refers to “Clarity of drafting”, which it says is

“central to good law-making.”

It says:

“Under clause 2(2) an international trade agreement means a ‘free trade agreement’, however ‘free trade agreement’ is not itself defined.”

That is a very important point. In all these discussions about free trade agreements, the actual definition is not given. The briefing points out that clause 2(2) also

“refers to ‘an international agreement that mainly relates to trade, other than a free trade agreement’. However, ‘mainly’ does not grant sufficient certainty in terms of interpretation.”

I am no legal eagle, but I am sure that my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) will give us her take on matters later.

[Lady Hermon]

There is a very significant omission from the definition section in clause 4, which relates to Northern Ireland. When I asked the Secretary of State about that in an intervention, he repeated the Government’s mantra that there is hope of restoring the Northern Ireland Executive. If there were indeed that hope, one would expect to see some reference to the devolved authority meaning the First Minister and Deputy First Minister, hopefully acting jointly, but there is zero mention of those Ministers. The clause defines a devolved authority as “a Northern Ireland department”. The Government, I suggest, are clearly preparing for direct rule, and I am deeply concerned about that.

[Hannah Bardell]

I share the hon. Lady’s concern. It seems very much as though the Government are making policy on a wing and a prayer.

It is just over 20 years since the people of Scotland voted for devolution, for progress, to move forward and have power over some, but not all, of their own affairs. In 1997, voters in Scotland backed the creation of a Scottish Parliament by 74% to 26% and voted by 63% to 37% for it to have tax-raising powers—powers that we are very proud to be using.

The Scottish Parliament’s pillars of establishment include accountability: it is answerable to the people of Scotland. It should be open and encourage participation. It should be accessible, and should involve the people of Scotland in its decisions as much as possible. I remind the House of that not to give a history lesson, but to highlight what the people of Scotland voted for and what was delivered in devolution, on a cross-party basis. This Bill, and more generally Brexit, are not what Scotland, or indeed the rest of the UK, voted for. The Bill threatens devolution in Scotland, and it threatens the vote that took place 20 years ago.

[Joanna Cherry]

My hon. Friend quoted the Law Society of Scotland. Does she agree that it is important for the Tory Government to understand that it is not just members of the SNP who are concerned about the Bill, but that a wide section of Scottish civic society is completely behind the devolved settlement for which it voted so overwhelmingly in 1997? The Law Society’s trenchant comments should give the Government pause for thought about what they are doing. They should bear in mind that it is not just a political party that says they are undermining the devolved settlement, but an apolitical, professional association with great expertise behind it.

[Hannah Bardell]

I absolutely, and not surprisingly, agree with my hon. and learned Friend. It is true that Scotland voted by 62% to remain in the EU. My colleagues and I are here today to stand up for Scotland and what it voted for in that referendum and to defend and protect the powers of our Parliament in Scotland and the rights, protections and equalities that we enjoy by virtue of our membership of the EU. I for one am not going to let this chaotic and reckless Tory Government diminish or damage the powers of the Parliament, country and economy of Scotland without a very real and determined fight.

We should not have to fight for our voice to be heard here or in trade negotiations and any trade deals that are done. Scotland and the devolved nations should be treated as equal partners, and if we are not, we reserve the right to make a decision about our constitutional future.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

Just today we learned that the Scottish Parliament’s Finance and Constitution Committee unanimously endorsed the view that it could not recommend legislative consent to the Scottish Parliament for the withdrawal Bill, and the Committee includes no less than Adam Tomkins, spokesperson on the constitution for the Conservative party in the Scottish Parliament.

[Hannah Bardell]

I thank my hon. Friend for that intervention. I am not given to agreeing with Professor Tomkins, but on this matter I do.

The SNP had a manifesto commitment to call for greater transparency in any proposed international trade deals following Brexit, with the UK and Scottish Parliaments being given a say. As I am sure the Secretary of State will know, there are 111 powers returning from the EU that intersect with the devolution settlement in Scotland and that must come back to Scotland and not be seized by Westminster.

The Law Society of Scotland has been much quoted, but I shall quote it again because, interestingly, it has highlighted the importance of extending a whole of governance approach to trade negotiations, and we very much endorse that. The Secretary of State will also know that we held a roundtable this morning with my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford). The Leader of the Opposition was sorely missed; we would have loved to have seen him there. The Law Society of Scotland has said:

“We would urge further consideration of how trade negotiations will be handled where they intersect with the powers of the Scottish Parliament and other devolved legislative authorities where any proposed trade agreement will affect an area of devolved competence.”

Devolved Governments inevitably have different priorities. Indeed, as the hon. Member for North Down (Lady Hermon) has said, there is a country in the UK that does not have a Parliament, and we need this Government not to be making deals or imposing direct rule by the back door; they need to be up-front about what they are doing and how they are going to ensure that the devolved nations of the UK have their say in this process.

They have different priorities, and therefore trade negotiations must be carried out with their involvement. For example, the Scottish food and drink sector has had record growth year on year and has outstripped the rest of the UK. Under the protected geographical indication—PGI—scheme, the EU guarantees no trademark interference with the name of an area, specific place or, in exceptional cases, a country.

[Mr Nigel Evans]

The hon. Lady will have heard from the Secretary of State that our exports have increased dramatically since the decision of the British people to leave the EU. What aspects of the rolling over of the trade deals that already exist between the EU and other countries does she object to in this Bill?

[Hannah Bardell]

I am not sure that I have referred to that at all; what I am referring to—[Interruption.] The point I am making is that the powers that will be given to this Government and the deals in place and the powers that intersect with the devolved nations will not be protected, so any future trade deals might well be imposed or impinged on, and our powers will be diminished.

[Joanna Cherry]

The point my hon. Friend is forcefully making—[Interruption.] Conservative Members laugh, but this is very important for the Scottish and British economy, because the biggest export from Scotland and indeed of the whole UK is Scotch whisky; that is what is keeping the economy afloat. It is very important to Scotland that trade deals such as that with South Korea are perpetuated on the same terms and that Scotch whisky’s geographical indication is protected. These are not just my concerns. I am holding an email from the Scottish Whisky Association, with which I am in regular contact. It wants these matters to be raised; it is used to hearing assurances from the Government, as am I, but we do not hear much else. Does my hon. Friend agree that the point is this: she is talking about the importance of—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. First, the hon. and learned Lady, whose eloquence is far above average in this House—that is meant to be a compliment—knows that she should not make such a long intervention. Secondly, she cannot have a private conversation with her colleague the hon. Member for Livingston (Hannah Bardell) and be looking away from the Chamber towards her; she must look this way. I call Hannah Bardell.

[Hannah Bardell]

Thank you very much, Madam Deputy Speaker. I absolutely agree with my hon. and learned Friend. The point is that we do not want to leave the EU; we did not vote to leave the EU. The legislation as it stands is insufficient, not only by our standards but by those of others.

As I was saying, some of our most globally renowned brands, such as Scotch beef, Scotch lamb and Scottish farmed salmon are among the 14 protected food names in Scotland, along with the Arbroath smokie, Dunlop cheese and Stornoway black pudding. Those are among the localities to have been given PGI status. In any trade deal after Brexit, we must be able to protect those Scottish brands. Scotch whisky is an important example. It is the UK’s biggest export and, quite frankly, we are getting a bit fed up with that trade propping up the UK Government and their economy.

Last month, the SNP Government published a legislative consent memorandum outlining why they do not intend to lodge a legislative consent motion in relation to the Bill. We firmly believe that policy responsibility and expertise for matters within devolved competence lie with the Scottish Government, who are accountable to the Scottish Parliament and to the Scottish people. We take democracy seriously in Scotland, and we do it pretty well. When we had a referendum in Scotland on independence, we had the widest possible participation. We included the future of our nation in it—the 16 and 17-year-olds who were sadly left out of the EU referendum but who will reap what is being sown by Brexit. We also had a proper timescale for the debate. We asked people what kind of nation they wanted to live in and be part of, rather than trying to exclude some people from society, to “other” them, and to blame them for the failures of the UK Government’s austerity plans.

This trade Bill is lacking in detail. It takes some serious and worrying paths, and it is just the starter for 10. We are told that there is going to be a further Bill later, but why not get it right now? Why not be bold and stand by that old adage that Scotland is leading the UK, not leaving the UK? The Government could have put forward proposals for the devolved nations to have Trade Remedies Authority offices and their own permanent commissioners. A truly collaborative approach could have been possible.

[Stewart Malcolm McDonald]

My hon. Friend asks why the Bill is before us now. Is it not simply to cover for the fact that the Secretary of State—nice man though he is—does not really have a job?

[Hannah Bardell]

I thank my hon. Friend for that intervention, but I do not want to be uncharitable to the Secretary of State.

The trade White Paper was issued on 16 October, with a deadline of 6 November. That is not exactly a long period for the consultation and it did not give anyone much time to respond. When the Trade Bill was published the very next day, there was concern at the speed with which the process was concluded. The Manufacturing Trade Remedies Alliance, which I met recently, voiced anger on behalf of its members, saying that officials would have no time to analyse reaction to the trade White Paper or to brief Ministers on the industry’s concerns. This goes back to the point about conducting a proper process in a timeous manner.

[Angus Brendan MacNeil]

It is an excellent suggestion that the Trade Remedies Authority should have an office and a commissioner in Scotland. The balance that feeds into the equation of what remedies are taken cannot be properly achieved by an authority based only in London that has a London-centric point of view.

[Hannah Bardell]

Absolutely. This was an opportunity to move away from that London-centric psychology.

In Scotland, Dave Tudor, the chairman of the Life Sciences Scotland Industry Leadership Group, published an open letter to the UK’s Brexit negotiators warning of the damage that uncertainty is already inflicting on the industry. These are his grim words, of which we should all take note:

“Widespread concern over regulation, movement of goods, access to talent and research and development and the negative impact this uncertainty is causing is set to intensify.”

I genuinely wonder when it will dawn on the UK Government and others across this House that our universities cannot staff their courses and are having to close departments, that they are dropping down the world rankings because they cannot attract talent and European funding and that we are becoming a union of diminished importance and influence. I for one have no intention of letting that happen to Scotland or, if I can help it, to the rest of the UK. As our First Minister, Nicola Sturgeon, said recently,

“no Brexit is preferable to no deal.”

We accept that the UK Government should make preparations for the UK’s withdrawal from the EU, particularly with regard to maintaining the important continuity of current trading arrangements. This is of vital importance to businesses across the UK and the EU. However, we are concerned about the direction of travel in the Bill.

Since 2007, Scottish exports to the EU have grown by more than 25%, which is a clear demonstration that the single market is Scotland’s real growth market. Being part of the EU means that our businesses are operating within the world’s largest trading area. With 500 million potential customers, it is eight times bigger than the UK alone and contains eight of our top 12 export destinations. The financial services sector alone employs 40,000 people in Edinburgh, and over £500 billion-worth of assets are under management in the city. We have already seen banks move from London due to fears of a hard Brexit when we lose our membership of the single market. Just a month ago, the European Banking Authority announced it will move from London to Paris.

[Patrick Grady (Glasgow North) (SNP)]

My hon. Friend is making a serious point that is in stark contrast to what the Government were originally coming out with, which was that Brexit would somehow lead to empire 2.0 and that the floodgates would open in terms of opportunities for the United Kingdom. In fact, the floodgates are opening in the opposite direction and people are fleeing the UK at the prospect of what is happening with Brexit.

[Hannah Bardell]

I do not want to be a “doomsday-scenarioist” but the reality is that these things are happening now. The European Medicines Agency is off to the Netherlands, which is a significant loss to the UK and diminishes its role in regulating medicines, taking away 900 great jobs and a serious amount of influence.

As for my constituency of Livingston, which is at the heart of West Lothian, around 4,500 to 5,000 jobs are sustained by exports to the EU. Members from across the Chamber will have been contacted with the numbers that their constituencies could lose. Owing to its relatively strong manufacturing base, the proportion of West Lothian’s international trade with its EU partners is estimated to be higher than the Scottish average, so I have real and grave concerns as a constituency MP. Many of the business people I have spoken to have expressed deep worries about the lack of experience in the Brexit and International Trade Departments. I pay tribute to the staff in those Departments, but those are real concerns that have been raised with me none the less. The Secretary of State for International Trade admitted in an interview last year that

“Britain has turned down countries wishing to strike free-trade deals after Brexit because the government does not have the capacity to negotiate them”.

That somewhat contradicts his previous comment that securing a post-Brexit trade deal with the European Union should be the “easiest in human history”, but it is not so easy if the Departments do not have any staff.

The potential impacts are significant, ranging from planes being grounded the day after Brexit to fresh Scottish produce rotting in a protracted customs process, to prohibitive tariffs and diminished access to labour. Let us look airlines for example. As the London Market Group explained to me, a broad range of EU-based businesses, often undertaking activities critical to the EU economy, require specialist cover from the London insurance market, including airlines. Currently, the UK insurance market is the only location with the specialist aviation insurance knowledge and financial capacity to provide the full coverage for all risks faced by an airline. If airlines cannot get that insurance when we leave the EU, there is a risk that planes could be grounded at the end of March 2019.

I raised that on the Floor of the House on 11 September, and I was laughed at from across the Chamber, but lo and behold that very risk was raised almost a month later when the Chancellor became the first Cabinet Minister to admit that no deal could ground all flights. It took so long because, as we know, the Government had not done a proper assessment of the economic consequences. Without contractual certainty, which is the fear following Brexit, there could be market disruption and dislocation in a range of sectors.

[Iain Stewart (Milton Keynes South) (Con)]

The hon. Lady has repeated the scare that flights will somehow be grounded on the day the UK leaves the EU. May I suggest that she look at the transcript of the Transport Committee evidence session when the heads of major airlines and airports said that such a fear was completely groundless?

[Hannah Bardell]

I thank the hon. Gentleman for his intervention, but not all of them have said that. I am quoting directly from someone who has brought that information to me, but I appreciate that there are different views and different takes.

[Angus Brendan MacNeil]

Some in the airline industry think that they can go back to the agreements that existed from 1945 to 1955, but those bilateral aviation agreements stipulate London airports, so maybe Heathrow is okay, but the rest of us will be left in hock.

[Hannah Bardell]

I thank my hon. Friend for his intervention, and I remind the hon. Member for Milton Keynes South (Iain Stewart) that it was the Chancellor who said that flights being grounded is a concern.

Financial services of all kinds, from insurance to loans to derivatives, could be disrupted because UK firms are not able to continue servicing EU customers, or vice versa. EU banks that have derivatives cleared through UK central counterparty clearing houses might be in breach of regulations, as those central counterparties may not be authorised. I appreciate this is a technical point, but it is important. Contracts may have to be unwound, or may become unenforceable. According to reports from the Association for Financial Markets in Europe, €1.3 billion of bank assets, including loans, securities and derivatives, may need to be moved from the UK to the EU. I am sure the Secretary of State is familiar with those issues, but I wonder what he and his colleagues will do about it.

This Bill also gives the Government power to implement agreements with partner countries corresponding to the EU’s free trade agreements. We have serious concerns about that, and we hear that the UK Government are off negotiating deals in the US—top-secret deals that the Secretary of State has said should remain classified for four years after a deal is struck, which beggars belief.

This Trade Bill also provides measures for HMRC to collect data on behalf of the Government—the hon. Member for Ribble Valley (Mr Evans) asked whether I did not agree that should happen, and I have no problem with it. It is important that it happens, but it is about how it happens. It is vital that data is collected in an appropriate fashion, and the Law Society of Scotland has expressed concerns:

“We are concerned that clause 7(1) grants a very wide discretion to HMRC to require information. The scope of this provision should be more clearly defined to give greater certainty as to the extent of information and the anticipated frequency and method of data collection.”

The focus of the Scottish Government, and of the Scottish National party in power in Scotland, has always been to preserve our place in Europe for the benefit of business, the economy and families everywhere. The only way a hard Tory Brexit can be avoided is if Labour joins the SNP in supporting our continued membership of the single market and the customs union in these Brexit negotiations. I know these Benches are not very comfy, but some of the bums opposite must be pretty sore from sitting on the fence. We really need to get together on this issue.

Liberty has expressed deep concerns:

“The plans are the latest attempt by ministers to undermine democracy and bypass parliamentary scrutiny of the Brexit process, after the EU (Withdrawal) Bill and Data Protection Bill contained similar ‘Henry VIII’ powers.”

The EU (Withdrawal) Bill defines “retained EU law” as including primary legislation that gives effect to EU mandates, such as the Equality Act 2010 and the Modern Slavery Act 2015.

The concerns continue to be wide ranging not just on the Opposition Benches but across society.

I close by sharing a little lyric I wrote that sums up the current situation:

“B-R-E-X-I-T

Fed up with Brexit, me three,

Trading relations headed down the ‘swanee’

If it doesn’t fit on the side of a bus,

Then let’s not say it, don’t make a fuss

Phase one was a floundering mess

The Prime Minister said she did her best

The Irish border was the sticking point, and the DUP

Cross-border trade we’re told it’s possible, it’s about wording, you see

A fudge not a dodge

Or has the right hon. Lady for Maidenhead, really lost the thread?

The Brexit spool unravels

Our economy headed south and what about travel?

Blue passports we’re told

Ah, perfect, imported they’ll be, that’s me, I’m sold

Choose Brexit, choose a new queue,

At the airport, we’ll be going through

It’s for the next generation of children I fear

Erasmus, international trade, travel will be lost, I shed a tear.

LGBT rights, workers’ rights, equal pay,

All important things, the EU has paved the way,

On the night of the referendum, and then the next day

Promises made were dead straightaway

How will history judge, our politicians of today

All of us here, not well, I’d say

Not all of us want to be facing this mess,

In Scotland we voted to stay in, we think it’s for the best

So let’s get together and stop this guddle,

For the sake of our future, we need out of this Brexit muddle.”

[Several hon. Members rose—]

--- Later in debate ---

[Angus Brendan MacNeil]

My colleague is again absolutely correct.

In here, there are Members representing many constituencies—today they are on the Government Benches—who think that they will be okay. Governments change over time. Who makes the decisions and according to what criteria? Will decisions be made such as the bilateral aid agreements run from 1945 to 1985, in which the UK Government had a deliberate policy to support only London airports, for example? When Iceland wanted flights to Scotland, the UK Government tried to get them to fly first to London and then north to Scotland. It was Iceland that broke that. That was a deliberate policy of the UK Government. London is not the place it is today because of anything magical about London; it is the result of UK Government policy over many years. Other areas of the UK could be sacrificed in future, just as they have been sacrificed in the past, for the benefit of London or elsewhere. If there is no parliamentary scrutiny, on what basis will that be done? Will it be on the basis of the Secretary of State having a meeting in an airport departure lounge? It is not at all clear.

[Hannah Bardell]

rose—

[Angus Brendan MacNeil]

I am running out of time and cannot give way.

Surely the devolved Administrations must be involved. My hon. Friend the Member for Livingston (Hannah Bardell) mentioned the 111 powers coming back from Brussels. I am tempted to say that we must free the 111 powers from the grasp of the Westminster super-state, because that is what is happening at the moment. Those 111 powers should be going to Scotland.

Polls show that the EU has 68% support in Scotland and that the UK has 51% support. If Members were wise, they would not treat Scotland in the highhanded way the UK super-state is trying to do, because that will lead—I want it to—to an independent Scotland. If they were sensible, they would be more measured in what they are doing. The new Trade Remedies Authority should exactly mirror that point. [Interruption.] The Minister chunters from a sedentary position, “What does this have to do with the Bill?” It has everything to do with the Bill, because if you continue with your London- centric point of view, you will regret it in future—

--- Later in debate ---

[Hywel Williams (Arfon) (PC)]

I shall not repeat the points that have already been made by other Members, including the hon. Member for Livingston (Hannah Bardell), who made an excellent speech.

I shall begin my own brief speech by explaining why I think that turning our back on the economic institutions of Europe is an error. I shall then explain why I support the current stance of the two sitting devolved Administrations in denying the Bill a legislative consent motion. Finally, I shall refer to changes that should be made to the Bill to ensure that any future trade deals are based on the principles of fairness, clarity and reasonable representation. I hope to speak about those matters in more detail during the Bill’s later stages.

The free trade agreements that we have with countries as a beneficial consequence of our membership of the European customs union account for nearly £140 billion of UK trade. Wales is a trading and exporting economy, which has recently been in surplus, and that is extremely important to us. The Minister said earlier that he believed that the Bill would simply translate these highly effective deals into domestic legislation. That was a bit like the characterisation by the Secretary of State for International Trade of a post-Brexit trade deal with the EU which he said could be the “easiest in human history”. However, we just do not know. We have no guarantee, and common sense suggests that it might be otherwise. Getting equal or better terms for our trade outside the EU after Brexit is a bit of a punt, to say the least.

Furthermore, while we remain members of the EU, and possibly throughout the transition phase, our Government will be precluded from finalising any negotiations with third countries. If we are to grandfather agreements and continue with the status quo ante Brexit, we will be reliant on the co-operation and good will of the 50-plus nations with which we have existing deals. This is a £140 billion gamble to try to secure trade terms that we already have.

My second point concerns the power grab. The Government’s default position on Brexit legislation now seems to include clauses seeking to claw back the powers of the devolved Parliaments. We have seen that in, for instance, this afternoon’s U-turn. Clauses 1 to 4 and schedule 1 to the Bill do just that by giving Westminster the power to change devolved legislation without consultation and without the consent of the devolved Parliaments. As I have said in previous Brexit speeches, this is no longer the 1980s or the early 1990s, and it is certainly not the 1950s. The UK is not a two-party, one-Parliament state, latterly globally dominant. Things have changed, but the Government seem to be in denial—and up with this we will not put. That is why I support the decision of the two sitting devolved Administrations to reject the legislative consent motion.

However, I will not leave it at that. Plaid Cymru is a pragmatic, positive party. We are determined to secure the best deal that we can for our country, even in these dark times. The Bill would set us on a deeply concerning path. Ministers might barter away the advantages of our high-quality agricultural industry and aspects of the NHS, perhaps to secure a “genius” trade deal with Mr Trump. Our amendment would ensure that trade deals were at least based on those principles of clarity, fairness and representation.

For clarity, we would require proper impact assessments, geographically focused and published at the beginning and the end of any trade negotiations. They would outline the impact of any potential trade deal on Wales and the other countries of the UK, and they would empower the public and elected politicians by giving them the information that is necessary for the making of democratic, ground-level decisions.

[Hannah Bardell]

Will the hon. Gentleman give way?

[Hywel Williams]

I am afraid that I have agreed not to take interventions.

For fairness, we propose parity of voting power. Any trade deal would require a ratification vote in all the UK’s Parliaments. That would be a genuine partnership. It is an unremarkable approach, which is common to European states and others throughout the world. For representation, as a first baby step, there must be Welsh, Scottish and Irish representation on the board of the new Trade Remedies Authority.

Let me end by saying this. I have been to a horse race only once in my life. Tempted to place a modest bet, I asked an experienced friend how I should judge the assembled nags for winning form. He drew me closer and says confidentially, “Count the legs. If there are four, you are in with a chance.” As far as I can see, the Bill has only three, and is stumbling away from the finishing line in any event. We in Plaid Cymru will not support it tonight.

--- Later in debate ---

[Greg Hands]

Tonight, Mr Speaker, it seems that Labour Members will go even further and vote against the creation of the Trade Remedies Authority in the first place. They will vote against the ability of UK companies, including SMEs, to bid on government procurement contracts elsewhere in the world and against UK exporters continuing to benefit from the provisions of more than 40 EU trade agreements. All that bears witness to the staggering confusion that exists among official Opposition Members.

Before I respond to the individual points that have been made in the debate, I want to be very clear, because there is still a great deal of confusion on the Opposition Benches, about what is not in the Bill. It does not include a power to implement future free trade agreements negotiated with new countries. It is very much about providing continuity and stability by enabling the UK to implement the effects of the trading arrangements that already exist between the European Union and other countries at the point when the UK leaves the EU.

We heard excellent speeches from my hon. Friends the Members for Hertford and Stortford (Mr Prisk) and for Fylde (Mark Menzies)—two of our excellent trade envoys—and from my hon. Friends the Members for Milton Keynes South (Iain Stewart), for Hornchurch and Upminster (Julia Lopez), for Walsall North (Eddie Hughes), for Saffron Walden (Mrs Badenoch), for Chelmsford (Vicky Ford) and for Clacton (Giles Watling). Let me draw out four particular strands from those speeches. First, all the Members were very strong in pointing out what was in the Bill and what was not, particularly my hon. Friends the Members for Milton Keynes South, for Hornchurch and Upminster and for Clacton. We also heard some home truths about Brexit, particularly from my hon. Friend for Walsall North. My hon. Friend the Member for Hertford and Stortford agreed with calls for the UK to be a strong advocate of free trade and a supporter of the rules-based international system, which was very much what my right hon. Friend the Secretary of State and I did last month in Buenos Aires. We also heard some very important points about the definition of fair trade from my hon. Friend the Member for Newton Abbot (Anne Marie Morris).

Let me deal briefly with some of the points raised by Opposition Front Benchers. First, there was an allegation of an exchange of letters with the US trade representative, suggesting that the Department for International Trade had given some kind of assurance of secrecy. The opposite is true: the letters to which the hon. Member for Brent North (Barry Gardiner) referred do nothing more than set out a proposal for the proper handling of confidential information and are not an attempt to avoid scrutiny. In fact, the letters reaffirm our commitment to a transparent and inclusive process with specific reference to Parliament.

The hon. Gentleman also talked, as did the hon. Member for Glasgow East (David Linden), about the trade White Paper with reference to when the Bill was published. The White Paper was just one way of getting the shape of our future UK trade policy correct. Since then, we have also issued a call for evidence on specific EU trade remedies, which is still open. My door is open, and the Secretary of State and I have meetings coming up with the ceramics and steel industries and other important industry groups.

The hon. Member for Brent North asserted that transitioning deals would not be subject to any parliamentary scrutiny, as did many of his colleagues. We have every intention of ratifying all the EU free trade agreements currently in force before we leave the EU, including the EU-Canada CETA agreement, the South Korea agreement that was mentioned by the hon. Member for Edinburgh South (Ian Murray) and others, and the economic partnership with the South African Development Community. Those have already been subject to parliamentary scrutiny here, and there is of course a process for them to have further scrutiny as well.

The hon. Member for Brent North also raised the question whether Parliament can vote on the terms of UK membership of the GPA. The Bill creates the power to have stand-alone UK membership of the GPA, but the approval for ratifying the UK independent membership will be sought separately from Parliament.

The hon. Member for Livingston (Hannah Bardell) made various points in a thoughtful contribution. She said the Bill does not define what a free trade agreement is, but it does define that in clause 2(7) as

“an agreement that is or was notifiable under”

particular provisions

“of GATT, or…GATS.”

The hon. Member for Edinburgh South made some points about Scotch whisky. There have already been two meetings of the trade working group with South Korea and there is absolutely no evidence that the South Koreans want to do anything at all against Scotch whisky. It would be against their interests and ours to do so. I, the Secretary of State and the whole International Trade team work tirelessly to promote Scotch whisky. I did that personally in Peru when lobbying about particular metal rules, and it has happened during discussions about rules in Taiwan.

[Hannah Bardell]

Will the Minister give way?

[Greg Hands]

I am sorry, but I do not have time.

The hon. Member for City of Durham (Dr Blackman-Woods) raised interesting points that have been under-scrutinised both yesterday and today with regard to Britain’s trading relationship with developing countries. That is incredibly important and a strong priority of this Department, but I must point out to her that the official Opposition voted last night against powers to transition existing schemes of trade preferences and for the UK to have trade preferences for the developing world. That was not consistent with what she said today.

In conclusion, trade is a key driver for growth and prosperity, and an important part of both the UK and the world economy. The UK’s trade with the world is equivalent to over half the UK’s GDP. A recent IMF project to which my right hon. Friend the Secretary of State referred concluded that about 90% of world growth is likely to come from outside the EU. International trade is linked to many jobs and contributes to a growing economy by stimulating greater business efficiency and higher productivity and sharing knowledge and innovation across the globe.

The Bill is a responsible first step. It is about continuity and stability. It is designed to provide continuity by ensuring that we have in place the right tools to ensure a smooth transition as the UK exits the European Union. That is in all our interests, so I urge colleagues to vote against the amendment. I commend the Bill to the House.

Question put, That the amendment be made.

Oral Answers to Questions

Hannah Bardell Excerpts

Thursday 12th October 2017 Commons Chamber

[Dr Fox]

The Government will bring forward legislation that sets out our plans for a trade remedies authority to ensure that the protections that UK business currently has—and that the UK workforce currently enjoy—are continued when we leave the European Union.

[Hannah Bardell (Livingston) (SNP)]

White Papers are all good and well, but yesterday the Scottish Government published a report showing what is at stake for business as the UK edges closer to the Brexit cliff edge. We know that the Secretary of State has consulted the business community to find out how it will be affected, but will he commit today to publishing the findings, as called for by a range of MPs across the House, even if they show that business wants to stay in the single market and customs union? At what point will this Government stop governing in secret and publish the reality of the impact of Brexit?

[Dr Fox]

The Government are of course extremely concerned about any perceptions of instability. We will consult widely, particularly when it comes to new free trade agreements, but of course the greatest threat to stability, particularly in Scotland, is the insistence of the Scottish Government on threatening a second referendum on independence.

Foreign Direct Investment 2016-17

Hannah Bardell Excerpts

Tuesday 12th September 2017 Westminster Hall

[Michael Tomlinson]

My hon. Friend is absolutely right. We are always hearing about business certainty. What do businesses want? They want to be able to anticipate what is going to happen, to know about the future, and the prospect of another referendum hanging over Scotland creates uncertainty. We have heard comments in exactly that vein from businesses across Scotland, so I am grateful for that intervention.

[Hannah Bardell (Livingston) (SNP)]

Picking up on the point about a second referendum, the hon. Member for Dumfries and Galloway (Mr Jack) will be aware of the comments made by First Minister Nicola Sturgeon with regard to that, but he might also be aware that many businesses, including the London Insurance Group, to which I spoke recently, were looking favourably upon Scotland and the opportunity it offered because of Brexit and the threat it posed. He might also be aware that Mark Harvey, a senior EY partner in Scotland, said that according to recent research,

“the EU Referendum vote and its aftermath may be having an influence on global perceptions of…the UK”.

So Brexit, not a Scottish independence referendum, is the greatest threat to the UK’s competitiveness.

[Michael Tomlinson]

I beg to differ. In my speech I have shown that, even after the referendum, FDI and investment more generally are still coming into this country. What I heard in the intervention by my hon. Friend the Member for Dumfries and Galloway is that businesses in Scotland want the certainty of remaining part of the biggest single market which, as far as they are concerned, is the United Kingdom and not the European Union.

Before changing portfolios, the hon. Member for Livingston (Hannah Bardell) served briefly on the all-party parliamentary group on youth employment. Each month we track the job figures, and month by month in recent years they have looked very good. The youth unemployment figure is now 12.2%, which is within touching distance of record lows, and the global employment rate is at its highest since comparable records began.

[Hannah Bardell]

I welcome those figures, which are great news for youth employment across the UK. Does the hon. Gentleman know and welcome the fact that Scotland’s youth unemployment figures are also at a record low? In my constituency, there is only 8% youth unemployment. Is that not something to celebrate?

[Michael Tomlinson]

I completely agree, and I very much welcome the hon. Lady’s intervention. The figures are a sign of strength in the United Kingdom, not in the separatist agenda that she and her party would pursue. I of course welcome all record levels of youth employment, whether in Scotland, London or my own region. I appreciate the short time that the hon. Lady spent on the all-party group on youth employment. I invite the Minister to consider how we can pull out all the stops to ensure that the figures keep going in the right direction. That is the challenge as we near full employment, or as full as we might be able to reach.

One of the most popular measures for boosting FDI are enterprise zones, in which companies receive preferential tax, planning and other financial incentives. That measure is most popular among non-UK companies, which have constantly advocated the creation of such zones. I am delighted that the Dorset Green Technology Park, just outside my constituency, was recently announced as an enterprise zone. Such zones promise the creation of engineering excellence, and this one will generate 2,000 new jobs and 20 new employment units as the result of a massive £2.5 billion investment. Although the park is just outside my constituency, I firmly believe that it will benefit the whole of Dorset, bringing an extra opportunity for attracting FDI into the region.

Northern Ireland was mentioned, and I want to hear from the Minister about his Department’s “Invest in Great Britain and Northern Ireland” campaign. As we look forward to the challenges and opportunities this country faces, the whole of the United Kingdom must go forward together. I invite particular attention to be paid to regions such as the south-west—and of course other regions represented by Members here today—where there is a risk of their being left behind or slipping behind.

I end on this point: to foreign investors, the United Kingdom is an attractive place in which to invest and with which to do business, but I strike a warning note for the Labour Front-Bench team. Foreign investors, just like domestic businesses, like our low rate of corporation tax. They like our country for a number of reasons, but one of them is the corporation tax rate, which at 19% is the lowest in the G7. That has not resulted, as some argued it would, in our having to compromise on the tax take, which is so important. In fact, the tax take in 2016 was £6.6 billion higher than in 2010. So we must also keep an eye on that and ensure that businesses keep investing in this country.

Much of the Brexit debate is about how we divide up the national cake. This discussion about foreign direct investment is about ensuring that our cake is even bigger in the first place. I firmly believe in the importance of FDI and the opportunities that Brexit can present to us, and I look forward to hearing from other hon. Members and the Minister in due course.

--- Later in debate ---

[Hannah Bardell (Livingston) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gray. I welcome the debate secured by the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) and the opportunity to discuss foreign direct investment from a Scottish perspective. It has been a record-breaking year, as it has for the UK. I hear much positivity about post-Brexit, but we must remember that nothing has actually happened yet and things are very much in a state of flux.

The hon. Member for Richmond (Yorks) (Rishi Sunak) mentioned universities. I do not know whether he is aware that last week Scotland was ranked as having five of the top 200 universities in the world, which is a huge achievement.

[Rishi Sunak]

I welcome that fact, but does the hon. Lady agree that the Scottish Government could do more to improve access to those universities? She will be aware that students from poor and disadvantaged families are twice as likely to go to university in England as they are in Scotland, and that is something the Scottish Government should focus on fixing.

[Hannah Bardell]

I thank the hon. Gentleman very much for that intervention. He knows that the scrapping of tuition fees in Scotland has meant access not only to university but to employment and to college. That has been welcomed across the board. A university place is not always the full picture. Youth employment in Scotland is lower than anywhere else in the UK because of the SNP Government’s investment in a youth employment Minister—the first in these islands—and making sure that students do not leave university with tens if not hundreds of thousands of pounds’- worth of debt.

[Mr Jack]

Will the hon. Lady give way?

[Hannah Bardell]

If the hon. Gentleman does not mind, I want to make some progress.

Scotland has performed well in terms of FDI, so I will indulge in talk about some of Scotland’s unique opportunities. The combination of natural resources, a highly skilled labour force and a long-standing reputation for innovation make Scotland a prime destination for foreign direct investment. The SNP Scottish Government have taken action to grow our economy and ensure that Scotland remains an attractive destination for business, boosting investment to record levels. As a result, 2016 was a record-breaking year, and, outside of London, Scotland is the best place in the UK for FDI. Places such as Aberdeen, Glasgow and Edinburgh are in the UK’s top 10 cities for attracting FDI. Our attractiveness to international investors is recognised through investments in recent years from the US, with 43 projects; France with 14 projects; and Germany with seven.

The latest annual survey on the attractiveness of locations to international business by Ernst and Young shows that Scotland now takes more than one in 50 of all investment projects based in Europe. That is a clear indication that Scotland in Europe is vital, and that Scotland is firmly established as a location of choice for global investors.

[Jim Shannon]

Does the hon. Lady accept that the strategy directed by central Government at Westminster has to take some of the credit for what is happening across all the regions? It is important to acknowledge that.

[Hannah Bardell]

I think we have to acknowledge that the Government are taking Scotland out of Europe against its will, which will be a wrecking ball not only to Scotland’s economy, but to the rest of the UK’s economy. When we have these debates and discussions in one or two years’ time, I will be interested to see where we are. It is important that Governments work together on things such as foreign direct investment. That is not to say that there has not been support from the UK Government—of course there has—but we also have to recognise the flipside of the coin. The hon. Gentleman spoke about his own constituency in Northern Ireland. He must surely recognise the challenges and issues that will come down the line for Northern Ireland as we go through the Brexit process, especially as Northern Ireland relies so heavily on foreign direct investment. Recent research suggests that people will look less favourably on the UK because of the message it has sent as a result of Brexit. That is surely a concern for him.

[Mr Jack]

The wrecking ball was not the Brexit referendum; in Scotland, where the hon. Lady and I live, the wrecking ball was the independence referendum. Law firms went out of business, conveyancing stopped, the housing market slowed dramatically and businesses stopped moving to and investing in Scotland. I know people who were planning to come to open branches of their business who stopped immediately. People do not like the uncertainty and they see our being part of the United Kingdom as a strength, not a weakness.

[Hannah Bardell]

I thank the hon. Gentleman for that intervention, but he will not be surprised that I completely disagree. The Scottish independence referendum in 2014 was one of the most open and engaging democratic processes that Scotland has ever gone through, in complete contrast, unfortunately—I know we digress, Mr Gray— to the Brexit referendum process, which was squashed into a short time period, with no proper engagement and no proper information. I am now talking to businesses across my constituency and across Scotland that are increasingly turning to the notion of Scotland as an independent country within Europe, because of the mess that this Government are making of the Brexit process, and the absolute devastation that it will cause to the Scottish and UK economy.

Global professional services firm Genpact plans to create more than 300 jobs in Glasgow over the next five years, following a decision to expand its European operations in Scotland. Those roles will encompass digital solutions, risk management, insurance claims, business process transformation and customer services. I recently met members of the insurance sector who were extremely concerned that, if they cannot remain in the single market and customs union and retain the ability to passport their services, services such as aviation and even household insurance will be under threat. Unless we have clear detail from the Government about their plans for a transitional arrangement, there is a real threat to the insurance sector, which will have a significant knock-on impact on businesses and sectors across the UK.

Welcome news on FDI comes with the caveat that many of those decisions were taken up to three years before last summer’s vote to leave the EU. A senior EY partner in Scotland has voiced caution over the longer- term outlook, saying:

“The research suggests that the EU Referendum vote and its aftermath may be having an influence on global perceptions of the UK’s medium to long-term attractiveness. Western European investors are twice as negative as Asian and North American investors.”

That should be of concern to us all. He continued:

“Decisions on the majority of investments made in 2016 would have been made up to three years ago, which helps to explain the UK’s solid performance last year, but signs of a slowdown are on the horizon.”

The Scottish Government released their programme for government recently. It is important to recognise the work that they are doing. The SNP Scottish Government have established a board of trade and are setting up innovation and investment hubs in Dublin, London, Brussels, Berlin and Paris. They are investing in Scotland’s future by setting up a multi-billion pound infrastructure plan and a £500-million Scottish growth scheme targeting growth, innovation and export-focused SMEs, and start-ups by young people.

Much has been made of youth unemployment. The low rate of youth unemployment in Scotland—only 8.2%; one of the lowest rates in Europe—is absolutely fantastic. It is good to see the rest of the UK following suit, but we have to ask ourselves what that will look like in one, two or three years’ time, as we go through the Brexit process.

The programme for government presented by the First Minister last week included bold initiatives to boost the Scottish economy, such as the creation of a Scottish national investment bank and the doubling of business enterprise expenditure in research and development, from £871 million in 2015 to £1.7 billion in 2025. The Scottish Government and Nicola Sturgeon are taking real, decisive action, but they are doing it with one hand tied behind their back. Foreign direct investment will continue to be hugely important to Scotland and the rest of the UK, but we need real answers on what this Government will do to support not only Scotland, but the rest of the UK as we leave the EU.

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[Bill Esterson]

The hon. Gentleman is absolutely right to raise that point. Japanese firms have already invested here, as have other foreign firms. They need to do everything they can to maximise their existing investments and to be in a position where it makes sense for them to build on those investments. That comes back to what the Minister has to say and what the Department has to do to enhance our position so that those investments continue to deliver and attract additional investment.

[Hannah Bardell]

The hon. Gentleman is making a detailed and informed speech. To counter the point made by the hon. Member for Strangford (Jim Shannon), Mitsubishi, which is a major employer in my constituency, has significant concerns about its ability to continue to invest and grow in Livingston and across the country, due to issues such as market access and the continued employment of EU nationals. Does the hon. Gentleman share my concern that companies such as Mitsubishi should be able to continue trading in Scotland and across the UK?

[Bill Esterson]

Yes. I am grateful to the hon. Lady for showing that there is a balance between two viewpoints: our foreign investors’ desire to continue their investments, make the most of them and build on them is set against their very real concerns. I am glad that she touched on the challenges with respect to skilled workers’ ability to come here and stay here, given that we have such serious skills shortages.

Nissan’s car plant in Sunderland employs 6,100 staff and an estimated 24,000 additional jobs are linked to it through the domestic supply chain. That fact and the hon. Lady’s point about Mitsubishi demonstrate just how important Japanese investment is for our car industry. The previous Labour Government helped to establish the Automotive Council UK, which turned around the struggling UK car sector and has contributed so much to making it a success story. Labour intervened to boost that vital industry—the 2009 car scrappage scheme played a key part in increasing demand for new cars. In contrast, the Government’s current inaction is a serious threat to the industry’s ability to compete.

The threat to UK car industry jobs is very real, and is compounded by the recent sale of Vauxhall to PSA Group, with the possibility of job losses as a consequence of any restructuring of UK operations. The Prime Minister is alleged to have told PSA that her Government are committed to the UK car industry, but the investment figures show a very worrying picture and serious concern on the part of investors. Figures from the Society of Motor Manufacturers and Traders quoted in the Financial Times suggest that investment in the UK car industry fell to just £322 million in the first half of 2017, compared with last year’s £1.66 billion.

The Secretary of State has repeatedly referenced the UK’s service sector in his various speeches and appearances before the House, but the Government have been largely silent on how they intend to ensure the future strength of this sector, which is vital to our economic success. The passporting regime is critical to the ongoing ability of UK-based banks to engage with EU-based customers, and it has been essential to decisions by US and Swiss banks to use London as a centre of operations, but uncertainty about its future continues; as a result, decisions are being taken to relocate to the continent.

The Government have finally decided to produce a trade White Paper in advance of the upcoming trade Bill. The fact that they have taken more than a year to do so may well have had a significant impact on investment appetite—often, decisions are made years in advance of committing capital to investment projects—and the trade White Paper must address the critical issues faced by domestic and foreign investors alike. Investors need to know what the Government will do to encourage investment across the United Kingdom, including the devolved Administrations and regions; whether the Government intend to prioritise support for certain industry sectors in preference to others; to what extent those industries will be able to continue to operate within global and, in particular, intra-EU supply chains, and what impact the rules of origin regulations will have on their capacity to continue to participate therein. Furthermore, what trade defence mechanisms do the Government intend to introduce and how will they use trade remedies to address any unfair practices undertaken by foreign competitors? What efforts will the Government make to ensure that standards are maintained in order to prevent unfair market distortion as a result of imports from markets with less stringent regulations and standards? What efforts will the Government make to maintain regulatory equivalence with key markets? What investment dispute settlement mechanisms does the UK intend to pursue in future trade agreements?

Labour has been clear about what our trade priorities will be and how we will seek to ensure that all of Britain benefits. We have addressed that in our manifesto. We recognise that the UK’s ability to continue to be a premier destination for FDI is essential to our future prosperity and to creating the jobs and economic growth we need. Now the Government need to minimise uncertainty and set out how they will reassure and support investors and deliver an attractive strategy that encourages foreign investors to continue to come here and to invest more.

Many investors come here precisely because of our access to the EU. The Government need to set out how they will maintain that access in financial and professional services, in manufacturing and across the economy. Time is fast running out. Investors are worried—remember those SMMT figures for the car industry and the actions of Japanese banks. Those are not isolated examples. Businesses want to know how their investments will be supported and enhanced; they need to know that trade policy is linked to an industrial strategy. Piecemeal deals for one business at a time are not an industrial strategy, however much they are welcome to the businesses, workers and communities in which such businesses are located. The future of FDI is vital to our national interest. The Government must intervene now.

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[Mark Garnier]

Absolutely. I met the chief executive of JLR and he shared those concerns with me. We have concerns—actually “concerns” is the wrong word. We are striving to have a Brexit that feels, in every commercial sense, exactly the way things are at the moment.

It is worth bearing in mind that the history of trade negotiations has been one where we have started with a bad position and tried to work out how to go forwards. People go into a negotiating room and say to the two people across the table, “This is how we trade”—let us say it is under WTO terms—“How are we going to improve this?” What is fascinating about the proposed free trade arrangement with the European Union is that, for the first time ever, people are suggesting that we will have negotiators going into a room, saying, “We have the best outcome that we could want in terms of free trade. How are we going to make this worse?”

It is in everyone’s interests to maintain the trading relationship we have, whether we be in the UK or the European Union. It is a different dynamic, but from the conversations we have with people and businesses in the European Union—bear in mind that we also talk to them about what they want from Brexit—it is crystal clear that no one wants to run into a position where WTO tariffs are being charged. We are doing everything we can to ensure that we get to a tariff-free and customs-free outcome of Brexit.

[Hannah Bardell]

On tariffs, does the Minister share my concerns and those of others, including business, about the comments made by the EU negotiators that no progress has been made because issues such as the border in Ireland and the position of EU nationals have not been sorted out, and trade agreements cannot be struck until that point? Similarly, his boss has said that the UK Government do not have the capacity to strike trade deals. Surely that is of significant concern to him and to others.

[Mark Garnier]

The hon. Lady is mixing up a couple of things. The Department for International Trade is doing trade deals, but not the one with the European Union; that is being done by the Department for Exiting the European Union, which does have the capacity to strike that trade deal.

On the wider piece, we are currently having conversations with 15 countries where we are looking potentially to strike trade deals. It is worth bearing in mind that America finds running three trade negotiations at a time slightly taxing and would not want to do more than that. We are trying to do 15, and we are getting on with it. We have 350 trade negotiators and have taken on Crawford Falconer, who has an extraordinary amount of experience. We have therefore upskilled to do that.

To return to the automotive industry, the shadow Minister is right. Since Brexit, we have seen Nissan commit. We have also seen Toyota commit, and we have seen BMW commit to build electric motors in Cowley. That is significant. On the question, “Is Brexit holding this up?”, it is not.

It is widely agreed that FDI has a positive effect on the host country, especially when the supportive business environment is strong. That increases productivity. The Department for International Trade will lead the way in convening the whole of Government to ensure that the UK remains an attractive destination for FDI in Europe and one of the most attractive in the world. A global Britain will always welcome foreign investment for the innovation it spurs and the skills it brings.

As a vital part of the Government’s industrial strategy, inward investment will fuel science and innovation, upgrade our infrastructure and cultivate the world-leading sectors that will allow our businesses to thrive on the global stage. The debate has demonstrated the important role that foreign investment plays in building a stronger and more sustainable economy that works for all. While we have one or two differences of opinion, it seems that the House is united behind the idea of a global Britain.

Export Licensing: High Court Judgment

Hannah Bardell Excerpts

Monday 10th July 2017 Commons Chamber

[Dr Fox]

As my right hon. Friend knows from his experience, there are a number of criteria for refusals and revocations; if he has not seen the list, I will ensure that he is sent it. If we believed that we were not able to convince ourselves that we were operating entirely within the consolidated criteria, we could suspend extant licences and refuse new ones. As I made very clear, if we believed that we were not fully in line with the criteria, we would do so.

[Hannah Bardell (Livingston) (SNP)]

I thank the Secretary of State for advance notice of the statement. I apologise for my hoarse voice—I think I shouted a bit too much in excitement at London Pride on Saturday.

Amnesty International, Human Rights Watch and other human rights campaign groups believe that UK and US weapons have been used against Yemeni civilians. As things stand, 10,000 civilians have been killed, 50,000 wounded and 3 million displaced. Today’s judgment raises a number of questions. We pay tribute to Campaign Against Arms Trade, which has taken the Government to court and forced them to explain themselves. We acknowledge CAAT’s plan to appeal this decision and wish it well, but the UK Government should be coming to this house with the facts at all times, not having to be dragged through the courts for the public to get a full explanation.

Does the Secretary of State accept that it cannot be beneficial if the public lose confidence in the Government over their relationship with a supposed ally—one that is in flagrant breach of international humanitarian law in Yemen? Let us not forget that Saudi Arabia, the UK’s largest weapons client, has bought more than £3 billion-worth of British arms in the past two years. UK and EU arms sales rules state that export licences cannot be granted if there is a “clear risk” that the equipment could be used to break international humanitarian law.

The Secretary of State says that he takes this very seriously. He will know that our former colleagues Angus Robertson and Tasmina Ahmed-Sheikh were strong advocates for the re-establishment of the Committees on Arms Export Controls, which the UK Government promised before the election would be reconvened. When will that happen, and when will the first meeting take place? Can he give us categorical assurances that the election does not mean that such an important Committee will be kicked into the long grass?

[Dr Fox]

I thank the hon. Lady for her comments. As the judgment set out, the case focused on the airstrikes conducted by a coalition led by Saudi Arabia in support of the legitimate Government of Yemen against the Houthi rebellion. We need to put on record that that is the origin of the conflict. Of course the humanitarian issues in Yemen are deeply troubling to all of us; we have all seen the pictures. The United Kingdom, through our various agencies and Government Departments, has been fulfilling as much of our diplomatic and humanitarian actions as we can in the circumstances. This will only be brought to an end by a political settlement, not by a military settlement.

The hon. Lady talks about the “clear risk” test. The judgment could not have been clearer that the Government met the “clear risk” test of criterion 2c in the way they carried this out.

On the hon. Lady’s point about the Committees on Arms Export Controls, I have absolutely no objection to such a Committee being set up. In fact, I think it is beneficial to us to ensure at all times the highest reputation of our probity in these matters. I would have absolutely no objection whatsoever to such a Committee being in place.

Oral Answers to Questions

Hannah Bardell Excerpts

Thursday 6th July 2017 Commons Chamber

[Mark Garnier]

The hon. Gentleman raises a number of issues. The hon. Member for York Central (Rachael Maskell) has been working hard on behalf of her constituents to try to help with the redundancies at Nestlé, as indeed has the Department for Work and Pensions, which is standing ready to put in place its rapid response service. We are happy to meet representatives of Nestlé, and I would be very happy to meet them again. [Interruption.] Fantastic. Thank you.

[Hannah Bardell (Livingston) (SNP)]

Scottish food and drink exports have doubled since the Scottish National party Government came to power in 2007. This has been key to the development of the Scottish economy. What does the Minister think about Michel Barnier’s comment that frictionless trade in goods is “not possible” outside the single market and the customs union? Given the concerns of the Scottish Food and Drink Federation and the Scotch Whisky Association, and the huge reliance of the Scottish economy on this sector, will the Minister consider a transitional arrangement?

[Mark Garnier]

The total value of Scottish exports is some £62 billion a year, of which £50 billion is exported to the rest of the United Kingdom. That is as good a statement as any as to why Scotland should remain in the Union of the United Kingdom, rather than in the European Union.

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[Mr Speaker]

Order. As we come to the first of the two urgent questions that I have granted today, can I please remind colleagues of the importance of sticking to the time limits that have been declared and communicated repeatedly to colleagues? Obviously this is particularly relevant to the Front Benchers—the person who secured the UQ and who has the allocated two minutes, and the Minister answering it, who has the allocated three minutes. We really do need to stick to the limits, because otherwise it is very unfair on Back Benchers.

[Hannah Bardell (Livingston) (SNP)]

On a point of order, Mr Speaker.

[Mr Speaker]

No, no—I am not taking points of order now. Points of order come after UQs and statements, but we will look forward to hearing the hon. Lady; we are saving her up for later on in the day.

Exiting the European Union and Global Trade

Hannah Bardell Excerpts

Thursday 6th July 2017 Commons Chamber

[Hannah Bardell (Livingston) (SNP)]

The right hon. Gentleman speaks about the customs union and the Lancaster House speech, but does he not share my concern, and the concern of the Scotch whisky industry, that the customs processes as they stand are creaking under pressure? I should declare an interest as the chair of the all-party group on Scotch whisky, which met for the first time last night. Those processes are being transformed into a new digital process, but there is little confidence that it will be able to cope with the process of Brexit. What guarantees can he give that industry that those issues will be solved?

[Dr Fox]

The hon. Lady raises a fair point about global trade facilitation. We have just signed the trade facilitation agreement, which aims to reduce border friction across the world. It is estimated that that is worth about £70 billion in the global economy. One of the biggest barriers facing Scotch whisky, however, is tariff barriers. The Department has been trying to talk to Governments such as India’s who have very high tariffs against Scotch whisky, which is not good for their own consumers because it encourages an illicit trade. I encourage all those Governments to indulge liberally in the pleasures of single malt—as I do myself.

By 2010, G7 and G20 countries were estimated to be operating some 300 non-tariff barriers to trade. By 2015, that number had mushroomed to more than 1,200. There are those who, having accrued great wealth, would pull up the drawbridge behind them. We cannot let that happen. This country’s own commitment to free trade was perhaps most clearly illustrated by the repeal of the Corn Laws in 1846. The Conservative Prime Minister Sir Robert Peel rightly saw protectionism as an attempt to preserve the wealth of a privileged few at the expense of the many. Import tariffs were all but abolished and Britain’s free trade principles were created to put bread into the mouths of the hungry majority. Now, as then, it is free trade and competition that will do most to address inequality and safeguard the interests of working people. More than ever, it is up to nations that possess the economic and diplomatic means to reassert the rationale of free trade to do so.

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[Hannah Bardell (Livingston) (SNP)]

I associate myself and other SNP Members with the Secretary of State’s comments about PC Keith Palmer—this debate was due to take place on the day of the attack on Parliament—and our thoughts continue to be with him, his family and his friends.

I welcome you to the Chair, Madam Deputy Speaker. It is nice to see that we have gender balance among the Speaker and Deputy Speakers.

I rise to speak for the first time in a substantive debate since my re-election as the MP for Livingston—I am grateful to the people of Livingston for re-electing me—and since my appointment as SNP spokesperson on international trade and investment.

I pay tribute to my former colleague and Member for Ochil and South Perthshire, Tasmina Ahmed-Sheikh, our previous spokesperson on international trade and investment. She was one of the hardest working MPs this Parliament has ever seen, and she was a doughty champion for the people of Ochil and South Perthshire. She pursued many matters—from international trade to the plight of the people of war-torn Syria and the UK Government’s involvement in the Yemen conflict—and her dogged work ensured that, time and again, UK Ministers were dragged to the Dispatch Box to answer the questions of SNP Members. We will continue to pursue such issues with vigour and passion.

My former colleague was a far cry from some of the Conservative Members who, sadly, have replaced her and other SNP colleagues. I do not mean to be entirely unkind—they are not in their places today—but they have been here for only a few weeks, and they have already rolled over on a distasteful deal with the DUP, failing to stand up for Scotland and their constituents. This Tory Government have found £1.5 billion to do a deal so that they can vote down pay increases for emergency service workers and public servants. In recent weeks and months, we have come to rely very heavily on those emergency workers and public servants, and the Scottish Conservatives should hang their heads in shame.

The Scottish Conservatives now have a choice: they can choose to do what is in the best interests of Scotland and of the constituents who voted them in, or they can fall into line with the rest of their party in support of a hard Brexit. I challenge them to use the opportunities that lie ahead to make sure that the Prime Minister reconsiders her position and joins us, and other Members in other parties, in defending Scotland’s place in the single market and the customs union.

The trade and customs Bills will seek to put in place a legislative framework to allow the UK to operate its own trade policy and provide new domestic legislation to replace EU customs legislation. The problem is that, despite all the bluff and bluster from the Tories, the UK had to cave in on the first day of Brexit talks and agree that the divorce deal will have to be established before any trade deals are agreed, leaving business, the economy and workers across our country in limbo. Michel Barnier said earlier today that frictionless trade in goods and services “is not possible” outside the single market and the customs union. We need to know from the Secretary of State and colleagues whether there will be transitional arrangements for our economy in relation to goods and services.

We know the track record of this Government on scrutiny and process: they avoid it at all costs. They had to be dragged through the courts even to give Parliament a say on the triggering of article 50, so what hope can we have that we will get to scrutinise properly the many laws and regulations that will be coming back from the EU? The Government’s plans for the great repeal Bill include so-called Henry VIII powers to avoid any scrutiny, as well as antiquated and back-door measures through the use of delegated legislation. What guarantees are the Government offering to ensure they will not abuse such powers? What guarantees are they offering to ensure they will not use antiquated and back-door measures to avoid scrutiny by and the need to obtain the consent of the devolved Administrations?

The public rejected the Prime Minister’s call at the last election to strengthen her hand in the Brexit negotiations, and she cannot carry on as if the election result has not happened. It would serve her and this Government’s flailing credibility better to build a much more consensual approach, because leaving the single market would be an unprecedented act of self-harm.

[Joanna Cherry (Edinburgh South West) (SNP)]

Does my hon. Friend agree that that would in particular be an act of self-harm for Scotland? At present, EU trade deals with the likes of South Korea mean that the tariff on our major export of Scotch whisky has been reduced to nil, whereas a 20% tariff has to be paid on other whisky entering South Korea. Are we not much more likely to get such favourable deals for Scotch whisky if we have the whole weight of the EU behind us, rather than if we are negotiating just as the UK?

[Hannah Bardell]

I absolutely agree with everything my hon. and learned Friend says.

The Secretary of State alluded in his opening comments to trade deals with countries such as India, particularly on whisky. Are he and his colleagues not concerned that when the Foreign Secretary visited India recently he was advised that:

“Mobility issues are of importance to us; we cannot separate free movement of people from the free flow of goods, services and investments”

Trade agreements are about give and take. The Government, the Ministers on the Front Bench and others who have spoken do not seem to understand that concept.

The plans for a hard Tory Brexit have already immersed the UK economy in uncertainty, with inflation escalating and companies preparing to move their operations outside the UK. [Interruption.] Conservative Members chunter from a sedentary position, but they only need to open the papers every day to see examples of that. Figures from the National Institute of Economic and Social Research suggest that Scotland’s exports could be cut by more than £5 billion if we fail to retain full membership of the single market. The research also shows that trade in goods could decline by 35% to 44%. If exports of Scottish goods were to fall by a similar amount, the additional cost would be about £3 billion. According to the UK Government’s own analysis, leaving the single market could reduce Scotland’s GDP by more than £10 billion.

At the end of this process, when we have clarity on whether there is a deal or no deal, if the Government have not taken on board Scotland’s position, which I will come on to later, we must have an insurance policy. We must have a say over our own future and be able to decide whether we want to be an independent nation within Europe. That is why Scotland’s main business organisations issued a joint statement on 8 July last year, confirming that Scotland’s businesses need continued access to the single market and free movement of labour.

Since then, those organisations have all repeatedly raised concerns about the impact of Brexit on business, including on access to labour, both skilled and non-skilled. For example, the loss of EU nationals will seriously harm our rural economy. About 8,000 EU nationals come to live in Scotland and work in the food and drink industry, and 15,000 seasonal migrant workers harvest our world-class fruit and vegetables. We cannot put their futures or the future of our vital sectors at risk. EU nationals also make a huge contribution to our NHS. One in 20 NHS doctors in Scotland comes from the EU. More than 1,000 companies owned in the EU employ over 127,000 people in Scotland and about 181,000 EU citizens live in Scotland, bringing vital skills and expertise. We heard only last week that the rate of applicants for nursing posts from the EU has dropped by 96%. That will be devastating across the UK.

Scotland is an open and modern economy. Our exports of goods and services account for about 50% of our GDP. That is why our membership of the single market is so crucial to our economy. Through the EU, Scotland trades with the world. The EU has signed free trade agreements with nearly 90 non-EU countries. Free trade agreements are already in place with 62 countries and the agreements with 28 countries are still to be applied. The Secretary of State said in his comments that he hoped they would be ratified soon. Those agreements are driving growth in Scotland’s trade with the rest of the world, which increased by 55% between 2007 and 2015.

If we are not able to continue with those trade agreements—we know how long many of them may take—then cumulatively it could be decades before we even reach the position we now have with full access to the single market. Scotland’s businesses are well placed to take advantage of the opportunities to sell their products across Europe and the world. If we leave the single market, we gamble with a market of 500 million people and free trade deals with 90 countries around the world.

The Tory manifesto contained a pledge to leave the single market and the customs union. Given that the Tories failed to gain a clear majority, they must think again, put those options back on the table and make them central to their negotiating position. It just went to show the contempt the UK Government have for Scotland when we heard the Brexit Secretary admitting to the Exiting the European Union Committee and, indeed, the rest of the UK in March 2017 that no economic analysis—none—had been done to address the impact of Brexit on the UK economy. How can we have been in a position whereby not only was an impact study not done before we went into the referendum, but in all of the time between then and coming to that Committee no work had been done? This was compounded by comments on “The Andrew Marr Show” recently, where the right hon. Gentleman, who is opening negotiations for the UK, was unable to confirm that the UK would get a free trade agreement with the EU; it was very much a case of, “Mebbe’s aye, mebbe’s no.” The Secretary of State’s comments show just how disorganised he and the Tory party are on Brexit and our future trading relationship with the EU.

Just this week, the Financial Times reported that the City of London was sending a delegation to Brussels to present a secret blueprint for a post-Brexit free trade deal on financial services. The City is left to do the work of the Government for itself.

Concern mounts over the damage facing employers if they are forced to move operations to the continent. Not every sector is able to do that, or should do that. We should have a Government who are listening to the devolved nations and all those sectors. This is just the latest indication that businesses do not trust the Tory Government.

The SNP Scottish Government put forward a very sensible compromise agreement on Scotland’s place in Europe, respecting the results in 2014 and of the EU referendum. It laid out a sensible and pragmatic approach to the situation we now find ourselves in: that Scotland could retain its membership of the single market and remain within the UK.

In Scotland, we are working hard to support SMEs and corporates with initiatives like the Borders enterprise agency, which was just launched, with a focus on meeting the region’s distinctive economic needs. We have also launched the Scottish-European Growth Co-investment Programme, the first part of the Scottish growth scheme, with £50 million from Scottish Enterprise and £50 million from the European Investment Fund, which will leverage at least £100 million from private sector fund managers. Evidence of the fruits of the Scottish Government’s labours were borne out by yesterday’s GDP data, which showed the Scottish economy defying recession concerns and growing at 0.8%, compared with the UK average of 0.2%.

But this is set against a backdrop of Brexit uncertainty giving businesses much pause for thought in investment decisions. The Chancellor has conceded that a “large amount” of UK business investment is being postponed, and urged early agreement with the EU on transitional arrangements. Our growth is under threat, and we need to hear more than warm words from the Government Benches. The Governor of the Bank of England, Mark Carney, spoke of “anaemic wage growth” and said he would like in coming months to see

“whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.”

Scotland’s voice is being ignored. That is not democratic, and it is not acceptable. Scotland is the top destination in Europe for exports from the rest of the UK, so it is in everybody’s interests to have a close trading relationship, because the European single market is Scotland’s real growth market, and is eight times bigger than the UK market alone.

The Secretary of State for Exiting the European Union said on a recent visit to Ireland:

“Ireland will not have to choose between having a strong commitment to the EU or to the UK—it can and should have both.”

Why, then, can that not apply to Scotland?

In a press conference in Dublin on 30 January 2017, the Prime Minister said that the UK would maintain

“the common travel area and excellent economic links with Ireland.”

Again, I ask why that cannot apply to Scotland?

There must be a meeting of the UK and devolved Governments to decide objectives before the next cycle of negotiations with the EU this month, and there must be a commitment to take seriously, and act upon, the interests of Scottish businesses, universities and a range of other groups becoming increasingly alarmed at the way Brexit is being handled.

Scotland’s voice must be heard during the Brexit negotiations. Only recently we heard from a surprise supporter of that long-held SNP view. The Labour party leader, the right hon. Member for Islington North (Jeremy Corbyn), took time out from partying at Glastonbury to write for the Sunday Herald saying that Scotland needs a clear input into the Brexit negotiating process. He said:

“The Scottish Government must have regular and systematic access to the British negotiating team so that the Scottish perspective, especially in those areas for which the Scottish Parliament is responsible, is fully taken into account.”

That is very welcome; it is just a shame that his party cannot be united on access to the single market and the customs union. Will this Government finally acknowledge the overwhelming support for a Scottish seat at the Brexit table and extend the hand of friendship to all the devolved nations to enable them to take part in these negotiations, which will affect their people, their economies and their future?

This Conservative Government are cowed and reduced; they failed resolutely to start negotiating a trade deal with the EU at the same time as the exit deal. We in the SNP believe that it is important to maintain our international development goals and ensure an ethical trade policy. To ensure that our international development goals are maintained, the Scottish Parliament must have a real say on any trade deal that is negotiated. ActionAid has ranked the UK joint worst in the world for having the largest number of treaties with developing countries that most restrict the rights of poor countries to tax UK companies operating there. That is not acceptable and it does the UK’s reputation no good on the world stage. The SNP will continue to defend Scotland’s interests and prioritise maintaining Scotland’s membership of the single market and the customs union in the Brexit negotiations.

[Patrick Grady (Glasgow North) (SNP)]

My hon. Friend mentions our relationships with developing countries. Resolving the tax treaty with Malawi was a priority for many Members in the last Parliament. Malawi is neither too small nor too poor to be independent, despite its many challenges. Today is its independence day, and I am sure that we all wish it a happy independence day.

[Hannah Bardell]

I share my hon. Friend’s sentiment in wishing Malawi a happy independence day. I note the work that many Members across many different parties have done on Malawi, not least the former Labour First Minister, Jack McConnell, who I know continues to champion that work in the other place.

It is vital that the Brexit negotiations are carried out alongside a firm commitment to developing an ethical trade policy. I say to the Prime Minister and her Government that they will not get any kind of unity or agreement by ignoring the issues that they find in front of them. It is time to take their heads out of the sand, face the music and work with the devolved Administrations and other Members across the House so that we can get the best possible deal.

--- Later in debate ---

[Mr Vaizey]

And Russian. So everything is now in place for progress to be made.

I have to say that I am sceptical about the future. May I quickly add that I do not work for the BBC? However, I want to use this opportunity to say that I am a huge supporter of the BBC and of BBC news, which is respected all around the world. Those people who question the BBC’s patriotism or declare that it is somehow biased in this debate are absurd. You can see me on YouTube, when I defended George Osborne’s Brexit emergency Budget debate, being torn apart by Andrew Neil. He cut me no slack as a remainer coming on his programme. The BBC is not biased or partial, and people who claim that it is have simply lost the argument.

Let me get back to the main point of the debate, which is trade. I confess that I find this country in a confusing position. We are leaving the European Union free trade area that gives us access to 500 million consumers in order to trade with them on the basis of the World Trade Organisation rules. That seems to be the only position that we are taking. At the same time, we will negotiate a free trade deal with the United States because we do not like trading with that country on a WTO basis, so I am completely unclear as to what our position is on free trade and why we are walking away from 500 million consumers. I also find it odd that we want to have no deal rather than a bad deal.

It is quite clear from Michel Barnier’s speech this morning that we cannot pick and choose which sectors might benefit from access to the single market. It is also clear that having access to the single market and being a member of the European Union enables us to have free trade. The European Union has negotiated 60 free trade deals. The House approved a free trade deal with Canada this week, and another has seen exports to Korea rise by 54%. The EU has just started negotiations with Japan, and it is through no fault of the EU that we do not have a trade deal with the United States.

Trade deals are not necessarily nirvana. Ministers and others say that we will be able to have free trade deals from the day we leave the European Union, but I caution them as to the nature of those free trade deals. My hon. Friend the Member for Stone (Sir William Cash) talked about the virtues of free trade, with which I agree, and the opportunity to reduce import tariffs, but he has to be aware of the reaction of the British public and different sectors of the British economy if we simply reduce tariffs against their competitors. Not every free trade deal will be plain sailing, which is why it has taken seven years to negotiate the free trade deal with Canada.

[Hannah Bardell]

Is the right hon. Gentleman aware of the research by the University of California, Berkeley showing that the average time taken to negotiate a free trade agreement is 28 months? That means it would take the UK 91 years of cumulative negotiation to get to where we are. Does he think that will be a problem?

[Mr Vaizey]

That is the point. The idea that we can take free trade deals off the shelf and not face lobbying from different sectors of our economy on the possible threats to their position from a free trade deal—the idea that all sectors of our economy are crying out for free trade deals—is a misconception. These are extremely complicated arrangements. [Interruption.] My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) says that we do not have a free trade deal with the EU, but at least we have access to the market without quotas, tariffs or non-tariff barriers.

Remember that free trade deals are constructed by human beings. This week I met a former US trade negotiator who is well plugged into the entire scene and who told me that the US trade representative organisation is already at full stretch and is demoralised by President Trump canning the Trans-Pacific Partnership. It has to renegotiate the North American Free Trade Agreement, and the Transatlantic Trade and Investment Partnership has been put back on the agenda. When President Obama said that we were at the back of the queue, the language may have been unfortunate but we should be realistic about where we are in the line with the US and realistic about the capacity of the US Administration to negotiate with us.

I have a few asks of the Minister, who is free to reply in German or Russian, as he sees fit, to show his capacity, for which I have nothing but admiration. Which countries are we targeting, and why have we chosen them? I know that we have 10 trade groups. I would like to hear his thoughts on a timetable for free trade deals with those countries. Is there any economic analysis of what the growth of GDP will be once those free trade deals have been negotiated?

I am a great supporter of the work of the Secretary of State for International Trade, who mentioned the welcome inward investment we have seen in the past year or so. As a former Minister with responsibility for the digital industries, I particularly welcome the investment by companies such as Facebook and Google. There are many, many issues, but we welcome their inward investment. Does the Minister agree that that inward investment is predicated on their ability to recruit people with specialist abilities?