Trade Bill

Lord Duncan of Springbank Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is exciting to be on the speakers’ list twice—once physically and once virtually—but I will trouble noble Lords with my thoughts only once. I start by giving a warm welcome to the right reverend Prelate the Bishop of Blackburn. I was glad to hear him mention the contrasting miracles of graphene and “Strictly Come Dancing”. He will be a great addition to our House.

This Bill is not very different from the Bill introduced in this House in 2018 on which I spoke at some length. It provides for the continuity of EU trade agreements where possible on a bilateral basis and sets up the UK-only arrangements for procurement and an independent trade remedies authority. Not much has changed, although some of the Lords amendments have been stripped out.

However, the context is very different. Boris Johnson has become Prime Minister—a welcome change—and won a decisive election victory. We have left the EU and the nature of any FTA with the EU makes our international trading arrangements even more important. Continuity arrangements have been agreed and scrutinised effectively by the EU Committee of this House. We have produced 22 reports on 50 different Brexit-related agreements, and I thank our brilliant clerks.

Trade negotiations with Japan, Australia, New Zealand and the US are very active and the Department for International Trade has been strengthened enormously, most recently with the addition of former Australian Prime Minister Tony Abbott, whom I had the pleasure of meeting on an earlier visit to the UK. I am now chairman of the UK-ASEAN Business Council—one of my interests in the register—and can assure noble Lords that in the ASEAN region, which is dynamic and growing, he is well regarded for the important trade agreements he concluded in Asia.

We have also welcomed my noble friend the Minister, with his global business experience, to his role, and at last today we heard his maiden speech. He has an amazing record and network, but for me the most important qualities he highlighted were clear thinking and decisiveness. These should be much valued in our Government today.

I welcome the return of this Bill and the Minister’s clear introduction and look forward to supporting its rapid passage through our House. I have a particular interest in data and intellectual property and thank the Alliance for IP for its usual briefing. I know that these areas are important to the noble Lords, Lord Stevenson and Lord Clement-Jones, and I look forward to working with them on the usual cross-party basis.

I sympathise with many of the points made about parliamentary scrutiny and hope to bring to our debates my experience on trade issues within the EU in the European Parliament and on the European Union Committee. I also endorse everything my noble friend Lord Naseby said, his practical ideas on export promotion and the intriguing ideas of the noble Lord, Lord Berkeley, on rail rolling stock. Like the noble Baroness, Lady Burt of Solihull, I care a lot about the role of small business in trade.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

The next speaker is the noble Lord, Lord Freyberg. I am sorry but we cannot hear him at all. We may have to move on to the next speaker and return to the noble Lord, Lord Freyberg, afterwards. I call the next speaker, the noble Baroness, Lady Chakrabarti.

--- Later in debate ---

[Baroness Sheehan (LD) [V]]

My Lords, I start by welcoming the maiden speeches of the Minister and the right reverend Prelate the Bishop of Blackburn, whose focus on inequality is very welcome. The Secretary of State for the Foreign, Commonwealth and Development Office has stated:

“With democracy and human rights as the central principle of the FCDO mission, we can bring together the UK’s values, its global mission, and its responsibilities as a world-beating international development institution.”


Those are fine words indeed, but they would have greater force if underpinned by the opportunity presented by the Bill, but that has not happened. Not only that, but Parliament’s role to set objectives, scrutinise deals and evaluate the impact on fundamentals, such as public well-being, climate requirements, human rights and international development, has been diminished. The second time around for the Trade Bill means that some of the essential safeguards won last time may be lost, given the Government’s majority. However, this House has a responsibility to uphold parliamentary sovereignty, and I will support amendments that seek to do so. To date, we have had nothing but promises from Boris Johnson to protect us from the vagaries of countries such as the US or Brazil while they are led by men whose principles and values we do not share.

I move on to the dual challenges of climate chaos and Covid-19. Some 50% of the UK’s carbon footprint appears elsewhere in the world. The Bill is an opportunity to do more to invest in green trade and use Aid for Trade support to help developing countries transition into renewables. The upcoming leadership of COP 26 gives us a real opportunity to lead on fossil fuel subsidy reform, starting with the UKEF. In 2019, the Environmental Audit Committee stated that UK Export Finance supported fossil fuel projects to the tune of £2.6 billion over the previous five years, the vast bulk of it going to low and middle-income countries, compared with just £104 million for renewable energy. It is not enough to stop subsidies for coal production. The parlous state of planetary ecosystems dictates that subsidies for oil and gas should also be consigned to history.

I end by speaking about equitable access to treatments and vaccines for Covid-19 for the developing world. Jeremy Farrar, the director of Wellcome, has said:

“For as long as COVID-19 is present somewhere, it is a threat everywhere … Governments, industry and philanthropy must pool resources to pay for the risk, the research, manufacturing and distribution.”


A recent YouGov poll commissioned by Wellcome found that most people think that Covid-19 treatments and vaccines should first be made available to those who need them the most, wherever in the world that need is greatest. Does the Minister agree, and does he agree that trade arrangements have their part to play to deliver this?

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

We will attempt to return to the noble Lord, Lord Freyberg.

Corporate Insolvency and Governance Bill

Lord Duncan of Springbank Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 17th June 2020 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I thank the Minister for rearranging his diary to enable us to complete Committee stage so quickly, the Whips Office for similarly reorganising things so that we can get on with it and, last but not least, the staff of the House for the work they have undertaken, particularly since we kept them here rather later than should have been the case yesterday evening. I am very grateful to them all, particularly my noble friend the Minister, who sat patiently and courteously through a very long and quite testing time yesterday.

I ask my noble friend the Minister’s help in just one thing, which concerns my blood pressure: could he possibly ask his Bill team, when they prepare his speaking notes, not to say, “The Bill is needed because of the pandemic”? The Bill is not needed because of the pandemic. Half the Bill is needed because of the pandemic, and if we were dealing only with that half, we would have been done and dusted and home in time for tea yesterday. As we unpicked and unpacked the Bill yesterday afternoon, we saw how much consideration still needed to be given to the bit of the Bill that has nothing to do with the pandemic. If he could just make that change to his speaking notes, it would do wonders for my blood pressure and, I suspect, for that of many other Members of your Lordships’ House.

Amendment 57 is designed to remedy a gap in the oversight and regulation of pre-packs. I am extremely grateful to the noble Baroness, Lady Bowles, for her support on this amendment. I know that my noble friend Lady Neville-Rolfe, whom we will hear from later, probed in a similar way with Amendment 60, which we touched on yesterday afternoon.

During that debate, my noble friend the Minister said that pre-packs were a valuable tool in the insolvency toolkit. He is right that they are valuable but they are open to abuse, which is why I pressed for the House to have a chance to debate pre-packs in a separate group of amendments. First, the treatment and regulation of pre-packs is a loose end in insolvency law and practice. It has been so for 20 years; indeed, it has been a very loose end for the past six years. Secondly, at the margin, if pre-packs continue to grow unregulated, it will undermine the use of moratoriums, which are a much more carefully controlled and regulated way of dealing with company insolvency. Why go through all that if you can go to a pre-pack and therefore, in that sense, undermine the purposes of this Bill?

For those who have come late to the party, I have a few sentences on how pre-packs work, using an example of how the position can be abused. Directors decide that a company is no longer able to trade solvently and will shortly become insolvent. The probable reason is because the company has taken on a lot of debt from previous bad decisions. There are too many creditors and the bank is owed a great deal of money. However, within the company, there is an operational piece that the directors think can be salvaged, so they decide that they will make an offer for that operational piece, without the debts. They approach an administrator and say, “This is what we’d like to do.” They make a nominal offer—maybe only £1 or a similarly trivial sum.

The administrator then takes it on. He or she must decide that this is a fair offer, so it is usually advertised in the paper—usually on a Monday in the Financial Times. If noble Lords look at the Financial Times on a Monday, they will see businesses for sale; those are mostly pre-pack transactions. If no competing offer has been made by the Thursday, the administrator has tested the market and this is therefore the best available offer. The pre-pack can then be completed and the business rises like a phoenix from the ashes of the old, often being run by the same people who got it into trouble in the first place—but, of course, without all the creditors, who have been sloughed off along the way.

As a concept, pre-packs have considerable political appeal. Governments, local Members of Parliament and councillors can trumpet the fact that their actions have saved, say, 200 jobs. However, no one counts the jobs lost or the financial damage done to suppliers, to other firms locally or, indeed, to the Pension Protection Fund, whose position and role was carefully debated yesterday afternoon in relation to moratoriums. Indeed, the Minister kindly sent us an email this morning indicating that the Pension Protection Fund will have a particular place in moratoriums. So what we have is a superficially attractive mechanism but one that, in many cases, because of counterfactual information that you cannot gather, causes more harm than good.

For a number of years, other Members of your Lordships’ House and I pressed Governments of all political persuasions not to be seduced by the attractions of unregulated pre-packs. To their credit, the coalition Government under Vince Cable recognised the problems and set up a review, which was carried out by Teresa Graham and backed by research from the University of Wolverhampton. Six years ago, her 2014 report was accepted by the Government.

Among the report’s recommendations was the establishment of what is known as Pre-Pack Pool Ltd, a company with access to a pool of experienced businessmen who could give a view on whether a proposed pre-pack was fair. They could reach one of only three conclusions: that a proposed transaction was reasonable; that it would be reasonable if changes were made; or that it was unreasonable. The pre-pack pool was established and remains self-funded through charging £800 for each opinion it gives. However—this is the critical weakness in the edifice—reference to it was optional. The results have therefore been entirely predictable. Who wants to pay £800 if they do not have to? The more ruthless and one-sided your proposed pre-pack is, the less likely it is that you will want to refer it to the pool. This device therefore rewards the good guys and does not catch the bad ones.

Now the pre-pack pool is on the edge of collapse. It had only 10 referrals this year, according to an article in the Times. If it collapses, the last vestiges of independent third-party regulation of pre-packs will disappear. Amendment 57 seeks to remedy this problem by making it compulsory to obtain an opinion from the pre-pack pool that a proposed pre-pack is not unreasonable. As my noble friend Lady Neville-Rolfe pointed out in her remarks yesterday, the Government had the power to make referrals mandatory under the Small Business, Enterprise and Employment Act 2015 but that power has now lapsed. I imagine that she will wish to use her Amendment 60 to review that decision and see what else can be done to reinstate that power.

Finally, I referred in my opening remarks to the possible damage to the flagship change in this Bill: the moratorium. No one—but no one—will prefer to undertake a highly regulated mortarium if they can get away with a virtually unregulated pre-pack.

The potential abuses of pre-packs have long been identified. They were reported on by an inquiry set up by the Government and solutions from that inquiry were accepted by the Government six years ago, yet still nothing has been done. By contrast, we are now rushing through a series of entirely new, untested and potentially controversial changes to our insolvency laws while leaving this loophole unblocked. My amendment closes the loophole and provides for proper regulation in this area.

My noble friend the Minister has an open goal. I hope that he will put the ball in the back of the net. If not—somehow I suspect that he will not—will he tell the House whether the Government are prepared to see the pre-pack pool collapse? No ifs, no buts; if the Government are to bring forward legislation at some point in the future, as is the hallowed phrase, what will we do about the pool in the meantime? I urge him to give a yes or no answer so that we can have some confidence in the way this matter is being tackled through the department’s policies. I beg to move.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

My Lords, we are aware of a technical problem meaning that those Members who are joining us remotely can hear us but not see us. We are working vigorously to bring about a resolution.

Weights and Measures Act 1985 (Definitions of “Metre” and “Kilogram”) (Amendment) Order 2020

Lord Duncan of Springbank Excerpts

Wednesday 20th May 2020 Lords Chamber

[Lord Liddle]

Of course I will. I suggest that he writes to them and explains that the great brouhaha about EU bullying was so much nonsense.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, it may be worth remembering that the time recommended for each contribution is three minutes. On that basis, I now call the noble Lord, Lord Wei.