Trade (Disclosure of Information) Bill

Lord Grimstone of Boscobel Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Thursday 17th December 2020 Lords Chamber

Moved by

[Lord Grimstone of Boscobel]

That the Bill be now read a second time.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, on 31 December, the UK will regain full control of its borders at the end of the transition period. Irrespective of the ongoing negotiations with the European Union regarding a free trade agreement, the Government have been clear that there will be additional requirements for people and goods traveling to the EU. I am sure that your Lordships will appreciate that since the Trade Bill will not pass until next year, it is vital that we ensure there is no gap in the Government’s ability to share the information that they already collect and hold in order to mitigate and manage any temporary friction from the end of the transition period. That is exactly what this Bill achieves, substantially replicating amendments made to the Trade Bill—namely, Clauses 8 through 10.

I know that my noble friend Lord Lansley and the noble Lord, Lord Stevenson, have asked what the differences in clauses are between this Bill and the Trade Bill. As I have already mentioned, the clauses are substantially the same but there are minor differences. Most notably, Clause 4 of this Bill provides for the expiry of Clauses 1 to 3 if, in the same Session in which this Act is passed, an Act resulting from the Trade Bill is passed which in the opinion of the Secretary of State contains provisions that have the same or similar effect to Clauses 1 to 3. This sunsetting is necessary to ensure the statute book is kept in good order. This clause will therefore provide that Clauses 8 to10 of the Trade Bill form the permanent basis for data-sharing. This Bill also includes an explicit reference to the DAs on the face of the Bill, alongside references to investigatory powers legislation and sentencing, which were absent from the clauses in the Trade Bill. However, these changes will be made to the Trade Bill clauses in due course, and amendments are already tabled and appear in my name on the Marshalled List.

This Bill will allow the effective use of government data to ensure the smooth flow of goods and services after the end of the transition period. The Cabinet Office’s Border and Protocol Delivery Group is leading work to ensure that our borders are robust and efficient, establishing a border operation centre to monitor and manage flow through the border and support the mitigation of any disruption. This Bill ensures that the Government make best use of the data they already collect and hold and in so doing reduces inefficiencies and bureaucracy for business. It will support better services by permitting data on the flow of international trade to be shared and analysed, helping to identify and resolve the root cause of any disruption. It will also allow the Government to use data more effectively to plan new controls at the border, ensuring that security is maintained, new requirements are introduced seamlessly and any temporary friction is properly mitigated.

The Government recognise that this Bill is being proposed on an expedited schedule and that many noble Lords attach great importance, rightly and properly, to data security, as demonstrated by a number of thoughtful previous contributions on this subject. I reassure the House that this Bill contains measures to ensure that the permitted use of data that it facilitates is both discretionary and specific. I stress that the Bill does not create any additional powers to collect data; it applies only to the public bodies specified and only when those public bodies are satisfied that data use would support a Minister’s functions relating to trade. It creates an offence of unlawfully disclosing information and ensures that data-sharing remains subject to GDPR and DPA protections.

With regards to the expedited schedule of the Bill, I emphasise that all these measures have already been subject to substantive scrutiny in this House and the other place during the passage of the Trade Bill, through the relevant clauses, without further amendment. The Bill contains a sunset clause that will ensure consistency with the powers being delivered through the Trade Bill. Clause 2(9) provides the power for a Minister of the Crown to add public authorities to the data-sharing gateway and therefore has the potential in a narrow sense to alter the executive competence of the devolved Administrations. I therefore make the same two commitments to the devolved Administrations on data-sharing as I made in Committee on the Trade Bill.

First, the data shared under Clause 2 will be used by the border operation centre being established by the Cabinet Office to develop strategic insights into the flow of trade and functioning of the border. The Cabinet Office is committed to sharing strategic analysis related to flow of trade where it will support the more effective management of flow through the border. The Cabinet Office will continue to work closely with the devolved Administrations to ensure that relevant analysis and information can be shared to support devolved functions relating to trade and management of the border. Secondly, the UK Government commit to consulting the devolved Administrations before any devolved authorities are added to the list of specified authorities that can share data under Clause 2.

In breaking news, I am pleased to say that the Senedd and Scottish Parliament have both granted legislative consent, and I am grateful to my colleagues in the Welsh and Scottish Governments, who have worked at pace to consider this Bill and schedule the necessary votes. However, due to the accelerated timetable of this Bill, the Northern Ireland Executive have not brought forward a legislative consent memorandum, and the Assembly has not voted on legislative consent. I reassure noble Lords that the Government will continue to engage with the Northern Ireland Executive on this matter.

In conclusion, this Bill is necessary to ensure that the Government can use their information properly to minimise disruption at the border following the transition period. It is limited in scope and contains specific safeguards to prevent inappropriate or excessive sharing of data. This will, in turn, underpin the delivery of a world-class border fit for the UK’s future as an independent trading nation, protecting our country, strengthening our economy and growing our international trade. I beg to move.

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[Lord Grimstone of Boscobel (Con)]

My Lords, I thank noble Lords for what turned out to be a very spirited debate on the Bill. I will try to respond in as detailed a way as I can, although, as my noble friend Lord Lansley recognised, some of the points that have been raised are very detailed, and for those points I will write to the noble Lords concerned. Of course, as he said, we will be debating this again in the first week of January, which will give us the chance to come back to some of those detailed points.

I can confirm to the noble Lord, Lord Purvis, that these powers are absolutely necessary. Of course, when the Trade Bill started its long, meandering process through your Lordships’ House, we had hoped to complete that process. We thought that it would have had Royal Assent by now, in which case this Bill would not have been necessary. This Bill has had to be brought forward because of the time that, in their wisdom, noble Lords wished to devote to debating the Trade Bill.

I can confirm that the Bill will cover Northern Ireland and Scottish ports and roads, et cetera. The ability to add extra authorities to the list already in the Bill is there so that those devolved authorities can be added, obviously following consultations with the DAs.

The noble Lord, Lord Stevenson, asked about Clause 7 of the Trade Bill and the collection of data. This is a very specific power, which is to help the statistical data that we need to manage trade and exports going forward. I remind noble Lords that it involves a simple tick box on a company’s tax return. It is entirely voluntary but you can, if you wish, tick that box to say that you are an exporter. That information in itself is not relevant to the management of the border. All the data that this Bill needs to fulfil the management of the border is already available through powers that exist in relation to the authorities concerned with the border. They might be powers for the port authorities, the highways authorities or the police.

As I said in my opening comments, the intention of the Bill is to allow those bits and pieces of data that have already been collected to be merged together. For example, if a truck is headed to a border and contains cows, which need a veterinary inspection when they get there, the border will know that those cows are coming and can have the vet ready on standby to see to them. That might seem a small example but it is those specific practical points that the Bill is designed to deal with.

In relation to the point that the noble Lord, Lord Stevenson, and others raised about the exact reconciliation between the clauses in this Bill and the Trade Bill clauses as amended on the Marshalled List, I will have that looked at. I can absolutely see the advantage of everything reconciling, and I will take it away and look at it before Report. As my noble friend Lord Lansley recognised, parliamentary counsel, in their wisdom, like to improve on the drafting of their predecessors, and there might have been a little bit of that going on here.

I can answer the noble Lord, Lord Stevenson, specifically on his point about the sunset clause: there is nothing funny going on here. As a matter of principle, we absolutely expect that this Bill will be sunsetted by the Trade Bill, as night follows day.

So I think I have dealt with most, at least, of the points that have been raised, and, as I said, if I have missed any out, I will happily write to the noble Lords concerned. Again, I thank noble Lords again for the constructive way they have dealt with this and for helping us speed the passage of this important Bill.

The Bill’s purpose is simple: it allows the Government to use data they already hold to ensure the smooth flow of goods after the end of the transition period. This will reduce inefficiencies and bureaucracy for business, which I am sure Members across the House will support. The Bill will support better services by permitting data on the flow of international trade to be shared and analysed, helping identify and resolve the root cause of disruption. I stress to noble Lords, as I have done earlier, that the Bill does not create any additional powers to collect data, and the Government have also ensured that its provisions apply only to the public bodies specified and only where those bodies are satisfied that data use would support a Minister’s functions relating to trade.

On that basis, we have had a good debate, carried out in an excellent, spirited style, demonstrating of course the very great attention that noble Lords rightly and properly give to the detail of the legislation when it is before our House. I thank noble Lords for their contributions, and I also thank the Government and Opposition Whips, who have ensured that this process has run smoothly.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

Trade Bill

Lord Grimstone of Boscobel Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Tuesday 15th December 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been a good debate on an important issue. We have heard some very expert contributions from all sides of the House set out the scene clearly. In responding to the debate, I will also speak to Amendment 19 in my name, which I am pleased has some support from the noble Lords who spoke before me.

The issue that distinguishes my amendment from those in the names of the noble Baronesses, Lady Kramer and Lady Boycott, and the noble Lord, Lord Purvis, is—if I can use an inelegant term—the fact that I was trying to provide in the amendment a little wiggle room for the Government on ISDS. I mean that in the sense of offering the Minister and the Secretary of State, when a proposal for an ISDS mechanism comes forward within a trade agreement, the chance to argue the case in Parliament and get support for it, should that be necessary in his or her judgment in relation to the particular case concerned. However, today’s debate has polarised the views of those who are concerned about ISDS. Probably the right thing to do is to signal at this stage that I support the amendment moved by the noble Baroness, Lady Kramer, and we would be prepared to follow her into the Lobbies if she wished to test the opinion of the House.

The reasons for that are easily summed up; we can look to the cases drawn up by my noble friend Lord Hendy, the points made by the noble Earl, Lord Caithness, and the concerns expressed by the noble Lord, Lord Lansley. For a moment, I thought that he was going to turn into a serial rebel with his victory earlier on in our debates this afternoon; I also thought that he might wish also to move against his own Government on this issue, but he was able to draw a line and point out both the transgressions that were being perpetrated within the Government and the opportunity for a rethink, in his terms, in the light of the schemes before us.

As the noble Lord, Lord Purvis, concluded, we probably need to draw a line in the sand and explain why we do not believe that ISDS is the model that the Government should be thinking about going forward. It may well be that the multilateral tribune approach is not yet right. There may also be a better case to be made for the use of our own courts; after all, we have an experienced and expert judiciary and a lot of court experience in these matters. If we are doing trade deals with countries that also have mature legal systems, it is hard to see why an ISDS scheme needs to be there unless, as my noble friend Lord Hendy said, this is part of some overall scheme of preferential treatment for those who have investment to spare but find the risks too great and need the assurances of an ISDS system to back up their support.

We live in different times. I do not know whether the old arguments will work, but I do know that what we see before us with ISDS is not right. It is no longer fit for purpose— it must change. We should start that progress by supporting the amendment moved by the noble Baroness, Lady Kramer.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I turn to Amendment 15, in the names of the noble Baroness, Lady Kramer, and the noble Lord, Lord Purvis, and Amendment 19, in the name of the noble Lord, Lord Stevenson. These proposed new clauses concern the approach taken to investment protection and the settlement of investment disputes where these provisions are included in free trade agreements. I will try to restrict my comments to points germane to these amendments.

The UK has included these provisions in more than 90 bilateral investment treaties, which have been crucial for our overseas investors. The UK is one of the most open countries for investments. That is because one of the great attractions for foreign investment is the fair and independent legal system underpinning domestic and foreign investment. We look to use investment provisions in trade agreements to guarantee equivalent levels of legal certainty for our businesses expanding overseas. These businesses make sizeable investments and incur significant risks. It is therefore vital that they can operate in a free and fair environment with a means of independent redress where treaty commitments have been breached.

In response to points made by the noble Lord, Lord Hendy, and the noble Baroness, Lady Jones of Moulsecoomb—not that I expect I will cause noble Lords to change their minds, sadly—many major British companies tell me that the existence of ISDS in certain overseas countries is absolutely germane to their decision to invest in that country. I recognise that noble Lords are concerned that these interests are correctly balanced in our free trade agreements with the Government’s right to regulate in the public interest. That is an objective I share. I was grateful to my noble friend Lord Lansley for answering the noble Baroness, Lady Kramer, on Canada in such depth and with such erudition—in words I could not hope to better.

Amendment 15 would permit the UK to sign a trade agreement only if it commits all parties to pursue the establishment of a multilateral investment tribunal system and an appellate mechanism for the settlement of investment disputes. It would also require all such disputes against the UK to be heard by UK domestic courts until such a system is in place. Your Lordships will no doubt be aware that not all trade agreements include investment protection and dispute settlement. It would not be appropriate to require all trade agreements to include a commitment to pursue a multilateral investment tribunal system or for disputes to be heard in UK domestic courts. In the absence of such a system, including this requirement would only hinder the progress of UK trade policy.

The UK is fully engaged in negotiations at the UN Commission on International Trade Law on the options to reform investor-state dispute settlement and the possibility of establishing a multilateral investment court —MIC. I confirm to the noble Lord, Lord Purvis, that the process of triangulation continues, and we have not yet come to a conclusion on the most appropriate way forward. Binding the hands of both the UK and our treaty partners before negotiations are concluded may not be in either their or the UK’s best interests, especially, as my noble friend Lord Lansley noted, some of our major trading partners are against the concept of the MIC. My noble friend Lord Caithness asked about ISDS and China. I confirm, perhaps surprisingly, that we have had a bilateral investment treaty with China since 1986. However, perhaps to the relief of noble Lords, there has never been a case brought against the UK under that treaty—nor do I expect there to be.

As for the requirement for UK courts to hear investment disputes, depending on the circumstances foreign investors in the UK will already have a means to legal redress against the Government without resorting to ISDS. It is likely that if we impose a requirement for disputes to be handled only by national courts, this will need to be agreed on a reciprocal basis with treaty partners. This would then require disputes brought by UK investors against a host state to be heard in their national courts, undermining the access to independent ad hoc arbitration for UK investors which has successfully supported UK investors worldwide for the past 40 years. I have no doubt that our major investing companies would oppose this.

ISDS in its current form is valuable for UK businesses investing overseas. This in turn benefits UK citizens as their shareholders. Conversely, the UK has never been a respondent in an investment dispute before a tribunal that has gone against it. The UK’s existing stock of bilateral investment treaties all contain ad hoc arbitration as the form of dispute settlement. Arbitration is a widely used means of resolving disputes between parties, including under international and domestic law.

Amendment 19 would similarly require the UK to pursue the establishment of a multilateral investment tribunal system and appellate mechanism. It would also result in the UK being unable to implement trade agreements containing ISDS unless the subject matter of a claim is something under which UK domestic law offers redress to UK persons. It would require the Government to approve a mandate for a free trade agreement containing ISDS provisions through regulations of both Houses of Parliament.

I will start with the redress available to investors under domestic law. The amendment overlooks the fact that, depending on circumstances, foreign investors in the UK already have the means to seek legal redress against the UK Government through domestic law, without resorting to ISDS. I humbly suggest that is one reason cases have never been brought against the UK under ISDS. As I mentioned, UK courts are regarded internationally as reliable and independent. It is worth reiterating that this is one reason the UK has never been a respondent in an ISDS case.

The amendment requires that the Government approve the inclusion of ISDS provisions through both Houses of Parliament. The Government have already committed to publishing their negotiating objectives, along with an initial impact assessment and a response to any public consultations, before entering negotiations. I humbly suggest that noble Lords know well that, as required under the CRaG procedure, the Government will lay the final treaty text alongside an explanatory memorandum before both Houses for 21 sitting days. This House has the power to prevent ratification should the ISDS provisions in the proposed treaty not be to the satisfaction of noble Lords. The House of Commons can do so indefinitely.

On the point raised by my noble friend Lady McIntosh about dispute resolution in any EU agreement, I am afraid that, like me, noble Lords will have to wait and see. I hope this reassures noble Lords and, on that basis, I ask for the amendment to be withdrawn.

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[Lord Grimstone of Boscobel (Con)]

My Lords, I thank the noble Lord, Lord Purvis, for raising the important issues of trade and international development. I am well aware of his deep commitment to this topic, and I admire the integrity with which he pursues it. I am pleased to say that the Government share his commitment to supporting international trade, prosperity and poverty reduction, and I am happy to explain the Government’s policy on this topic.

The Government have a proud history of providing official development assistance in such a way as to achieve maximum impact on reducing poverty in developing countries, including through helping to build their capability to trade. The International Development Act 2002 requires that overseas development assistance is provided only for the purposes of furthering sustainable development of a country outside the UK or for improving the welfare of the population of such a country. I unequivocally assure all noble Lords who have raised the point that the Government are committed to providing international aid untied to commercial conditions. That ensures that international aid spending is procured through open competition to achieve best value for money. The UK’s approach in this area is published in the 2015 UK aid strategy and further set out in the UK Official Development Assistance: Value for Money Guidance. The Foreign Secretary reaffirmed this commitment in the other place on 26 November. Through these provisions, the Government’s approach to international aid is wholly consistent with both sets of OECD guidelines on official development assistance to which this amendment refers. I am happy to give the noble Lord, Lord Purvis, and other noble Lords a categoric reassurance that we have no plans or intent to change that.

I turn to Amendment 25. The Government, of course, share the desire of the noble Lord, Lord Purvis, to support trade with developing countries. We have engaged wholeheartedly with our developing country partners to secure economic partnership agreements that provide continuity of their market access. As has already been noted by noble Lords, I am pleased to inform the House that Kenya and the Ivory Coast have recently agreed economic partnership agreements with the UK, which will provide long-term certainty of their duty-free market access and provide a framework to develop our trade relationships in future.

We began discussing an economic partnership agreement with Ghana no less than three years ago, and we encourage Ghana to conclude those discussions to maintain our existing trade arrangements, including its duty-free access. I ask noble Lords to join me in that encouragement: we want to conclude an agreement with Ghana, and I give it that message loudly and clearly. On Cameroon, we are committed to securing an EPA. Further discussions continued as recently as last week and, again, I encourage that country to reach an agreement with us as soon as possible.

Further, I clarify that the Government’s long-stated policy is to replicate the effects of the EU’s generalised scheme of preferences, or GSP, and then in due course to go beyond it. This arrangement supports trade with around 70 developing countries; it increases global prosperity and reduces poverty while providing access to cheaper products for UK consumers. The most appropriate way in which to ensure continuity of this vital trade arrangement is to replicate the existing trade preference scheme, which is already known to be compatible with WTO rules, and regulations to create the GSP will be laid in Parliament shortly.

I absolutely took the point made by my noble friend Lord Lansley about the optimum arrangements for the future, and I will ensure that his comments are passed on. Transitioning the existing EPAs is absolutely not the limit of the Government’s ambition in the area, and in the future we will look at how we can improve on these structures. Regarding proposed new subsection (2) in Amendment 25, introducing any changes to the eligibility criteria of the UK GSP at this point creates risk and uncertainty for the remaining 70 countries of the UK GSP, which I am sure noble Lords wish to avoid.

Regarding proposed new subsection (3), which proposes removing the tariffs on bananas for countries in the UK GSP’s enhanced framework, I urge caution. Although this could provide a way to maintain Ghana’s duty-free access to bananas, it would also extend this preferential access to the other countries in the enhanced framework. Some of them are already competitive banana producers and could increase their exports of bananas to the UK at the expense of existing banana producers, many of which are Commonwealth partners in the Caribbean. Such a proposal cannot be rushed. It must be based on careful analysis. For that reason, it cannot be accepted now.

I hope that your Lordships agree that there is a balance to be struck. While of course I share the concerns of the noble Lord, Lord Purvis, about the impact of a potential loss of duty-free access for Ghana if the worst comes to the worst, this amendment to the UK’s generalised scheme of preferences could have negative consequence on other countries’ trade relationships with the UK. I reassure noble Lords that if Ghana does not agree an EPA—I sincerely hope that it will—it will still receive tariff reductions on two-thirds of its product lines through the general framework of the UK GSP. Ghana can also apply for the enhanced framework of the UK GSP, which provides further trade preferences.

I am genuinely grateful to the noble Lord, Lord Purvis, for raising these important issues. I hope that I have clarified for him and other noble Lords who have spoken the wider consequences of the amendment. I also hope that I have reassured him and other noble Lords on the Government’s policy to not tie overseas development assistance to procurement or trade from the UK, in line with international guidelines. I hope therefore that noble Lords agree that this amendment is unnecessary, and that the noble Lord agrees to withdraw it and not bring it forward on the later occasion.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to noble Lords who have participated in this short debate, which has focused on longer-term issues rather than more immediate ones. I am very grateful for the Minister’s response, his kind remarks, and the courtesy with which he carries out his work. My noble friend Lord Bruce and the noble Earl, Lord Sandwich, addressed very clearly the point made by the noble Lord, Lord Lansley, and to some extent, that of the noble Baroness, Lady Noakes. I took the 2015 Act through this House on behalf of my then right honourable friend Michael Moore in the House of Commons. I refer to the subsequent Conservative Party manifesto, its 2017 and 2019 manifestos, and what has been said by every Conservative Minister from the passing of that commitment until three weeks ago. The noble Lord, Lord Lansley, asked whether the amendment was going to prevent the Government doing something that he said they were not going to do. Well, every statement from Ministers and three manifesto commitments has been breached.

Therefore, I hope that noble colleagues will forgive me for laying down a marker to indicate that the connection between trade and development is real. It may be that if, as the noble Baroness, Lady Noakes, has indicated, the Government bring forward repeal or significant amendments to the 2015 Act or, indeed, the 2002 Act, we will consider it then. I hope, of course, that they do not.

The noble Lord, Lord Lansley, made the point about blurring the lines, perhaps, between development priorities and trade priorities. He asked specifically about the drafting of the amendment. It is a fair question. I tried to blend the categories in the list at Part 3 of Schedule 3 to the Taxation (Cross-border Trade) Act 2018, which defines the countries that we will have, with what a trade agreement amendment would be—because as we know, the tied aid goes beyond trade agreements—but, of course, there are elements to be debated going forward. I hope we will not need to debate these. I think that the noble Baroness, Lady Noakes, is right. I hope that what the Government say about having no plans for change will be right. I believe that the Minister has a very high degree of integrity and I am very grateful for the explicit and categorical assurances, and therefore I shall not press Amendment 16.

On the most immediate point, I am grateful for the Minister’s response. I was hoping that he might be in a position to confirm the movement that I understand has been made, because while I freely admit that my amendment is only one option—the noble Baroness, Lady McIntosh, indicated other options and the Minister has indicated certain other areas; we might need to approach this in a different way—the principle is the same. Agreements have not been made. I hope that they will be, but if they are not within a week’s time, assurances need to be made for goods that are in port now, ready to come to the UK from some of the least developed countries in the world. I am glad that the Minister has given reassurance, and I hope very much that we will not need to come back to this after January, because this is now a real, live test that needs to be resolved so that the people paying the price for the end of the transition period are not the people working in some of the least developed countries in the world. However, I beg leave to withdraw the amendment.

Regional Comprehensive Economic Partnership

Lord Grimstone of Boscobel Excerpts

Tuesday 15th December 2020 Lords Chamber

[Lord Howell of Guildford]

To ask Her Majesty’s Government what assessment they have made of the Regional Comprehensive Economic Partnership free trade agreement.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, as a supporter of free trade the UK takes a close interest in RCEP, which should help standardise rules and facilitate trade between partners in the region. The Government are committed to enhancing our trade with RCEP members, having concluded the CEPA with Japan and negotiated with Australia and New Zealand, along with our intention to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—plus, of course, our bilateral trade engagement with partner countries.

[Lord Howell of Guildford (Con) [V]]

My Lords, I thank the Minister for that reply and congratulate him on the work that he and his colleagues have done in this whole area. But this new regional comprehensive liberalisation partnership, although it is much shallower than other market liberalisation such as the EU single market, for instance, is actually much bigger than any other. It covers 2.3 billion people and a third of the world’s trade; and it is in the region where most of the world’s growth will be over the next 10 years. Does my noble friend agree that we need to engage very closely indeed with this development? Now that we are aiming to join the revised Trans-Pacific Partnership, and are involved in the Japan agreement that he mentioned, does he agree that this should all be seen as part of what his right honourable friend Elizabeth Truss, the International Trade Secretary, calls the “Pacific mindset” in our overseas commercial strategy? That is thoroughly welcome and to my mind, as some would say, overdue.

[Lord Grimstone of Boscobel (Con)]

I agree with my noble friend that RCEP is a very interesting trade agreement, and it is a notable achievement that it has been concluded. However, we feel that the Trans-Pacific Partnership is a significantly deeper agreement that will set standards globally in a large number of areas; that is our priority.

[Viscount Trenchard (Con)]

My Lords, RCEP is a much shallower and less significant partnership than the CPTPP, as my noble friend just stated. Does he agree that it is hard to see how China could be accepted as a member of the CPTPP, given its provisions on transparency, anti-corruption, state-owned enterprises and labour and environmental protection? Does he also agree that it is very important that UK accession to the CPTPP should be fully agreed during Japan’s presidency, which necessitates a formal request for accession early in the new year?

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[Lord Grimstone of Boscobel (Con)]

My noble friend is right: we intend to move forward as quickly as we can with the Trans-Pacific Partnership, and we hope to be able to make an application for accession early in the new year.

[Viscount Waverley (CB) [V]]

I fully take the point about the Trans-Pacific Partnership Agreement—regional integration and multilateralism, serving other nations’ prosperity, is in the UK’s interest, so fully endorsing the importance of our linking to major trade blocs is a priority. However, as the noble Viscount, Lord Trenchard, has just drawn attention to, the China relationship is fraught, as it is for others, for multiple reasons. Does China’s inclusion hamper our ability to deepen trade relations with the RCEP community, or is RCEP viewed as a practical bridge-building mechanism?

[Lord Grimstone of Boscobel (Con)]

We are watching RCEP closely, but at least six ASEAN and three non- ASEAN signatories need to ratify the agreement before it enters into force, and there is then a gap of 18 months before any other country can enter—so it would be many years before it would even be possible for us to consider entry into RCEP.

[The Lord Speaker (Lord Fowler)]

I call the noble Lord, Lord Haskel. Lord Haskel? No? We will move on.

[Lord Purvis of Tweed (LD)]

My Lords, before looking to very long-term ambitions for joining regional economic partnerships, is it not better for the Government to focus absolutely on the trade agreements that we already have and are struggling to roll over? The update from the Government yesterday says that, for the first time that we know of, we will, from 1 January, be trading on WTO terms with countries that we had a trade agreement with before—a real failure of this Government. One of the RCEP countries is Vietnam; when will we see the details for the rollover agreement for Vietnam so that we can debate it in this Parliament and judge whether the Government are performing as they should be?

[Lord Grimstone of Boscobel (Con)]

My Lords, we have now concluded 27 agreements with 59 countries. There is a very small number of countries that we will not have completed agreements with before the end of this year, but I am pleased to say that the agreement in principle with Vietnam was concluded last week, during the Trade Secretary’s visit, and full details will be made available to the House in the normal way in due course.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, when he answered the noble Viscount, Lord Waverley, a few minutes ago, the Minister was equivocal about whether the UK was considering joining RCEP. Could he give a clear yes-or-no answer as to whether, if China were a member by that stage—and it has applied to join—we would apply?

[Lord Grimstone of Boscobel (Con)]

I am happy to give a clear answer to the noble Lord: at the present time, we have no intention of concluding a free trade agreement with China or of applying to join RCEP.

[Baroness Altmann (Con)]

My Lords, I am delighted to hear that the Government have no intention of signing a free trade agreement with China, and I welcome RCEP because it could well have positive implications for companies in the EU and the UK. Does my noble friend agree that this arrangement will allow companies to ship products across the region more easily, without the rule-of-origin problems and with lower costs for those companies and their supply chains across the region? Does he agree that the UK would benefit from that if, rather than leaving the EU on WTO terms, we could retain our agreements with the EU?

[Lord Grimstone of Boscobel (Con)]

My Lords, I have learnt that it is not easy to give answers that are completely up to date in relation to the EU negotiations. Noble Lords realise that these negotiations are proceeding, and a Statement will no doubt be made as to their conclusion in due course.

[Lord Bilimoria (CB) [V]]

My Lords, UK trade with CPTPP members is £110 billion—more than our trade with China. Does the Minister agree that UK accession to the CPTPP would be a clear display of intent that the UK would continue to back the international rules-based trading order after leaving the EU? Does he also agree that it would display that it intends to remain an open economy—and, therefore, securing an EU deal is all the more important to press on to seize these opportunities? Will he confirm that, with India not being a member of either the CPTPP or RCEP, the Government will make the most of the Prime Minister’s forthcoming visit to India to fast-track an FTA with India?

[Lord Grimstone of Boscobel (Con)]

My Lords, I completely agree with the noble Lord’s comments in relation to India and am very pleased to be able to say that the UK and India have agreed to pursue an enhanced trade partnership, which is, of course, the first step to a wider road map to deepen trade ties. This is an ambitious approach, and I look forward to it moving to a conclusion in due course.

[Baroness Bennett of Manor Castle (GP)]

My Lords, what assessment have the Government made of the climate impacts of RCEP, particularly its impacts on disciplining the fossil fuel subsidies around the world, which are currently $500 billion? Is this being considered in all our trade negotiations, along the lines that New Zealand and others are aiming for with the Agreement on Climate Change, Trade and Sustainability?

[Lord Grimstone of Boscobel (Con)]

My Lords, because we have no intention of joining RCEP at present, we have made no assessment of its effect on climate change.

[Lord Wallace of Saltaire (LD) [V]]

My Lords, is it compatible with Britain’s sovereignty to join the Trans-Pacific Partnership? We have just re-established our sovereignty by sloughing off the multilateral agreements we have made, which clearly share sovereignty with the European Union, so why on earth are this Government considering going into other multilateral agreements in which we will have to share some of our sovereignty with others, whichever countries they are? I am very glad that they do not include China.

[Lord Grimstone of Boscobel (Con)]

My Lords, UK accession to the Trans-Pacific Partnership Agreement would secure increased trade and investment opportunities and help us diversify our trading links, and we believe that that would be to the benefit of the United Kingdom.

[Baroness McIntosh of Pickering (Con)]

My noble friend said that we had signed 27 out of 59 free trade agreements; are those 59 agreements all those that we were party to through our EU membership? When might those negotiations on the remaining EPAs be concluded?

[Lord Grimstone of Boscobel (Con)]

My Lords, only a small handful of agreements have not yet been concluded. We are anxious and keen to conclude those but, of course, it takes two to make a trade agreement, and we are in the hands of our partners for the timing of some of those.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked, and we now move to the next Question.

Export Control (Amendment) (EU Exit) Regulations 2020

Lord Grimstone of Boscobel Excerpts

Monday 7th December 2020 Lords Chamber

Moved by

[Lord Grimstone of Boscobel]

That the draft Regulations laid before the House on 15 October be approved.

Relevant document: 32nd Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument). Considered in Grand Committee on 2 December.

Motion agreed.

Trade Bill

Lord Grimstone of Boscobel Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, on the substance of this amendment, I have very little to add to the excellent speeches that we have already heard from my noble friend Lord Berkeley and the noble Baroness, Lady Neville-Rolfe, with additional support from the noble Baroness, Lady Kramer. As my noble friend Lord Berkeley said, we have watched his progress from Bill to Bill, from department to department and from Minister to Minister almost with affection as he wends his way around, receiving much the same answer from everybody: they all agree that this is a terrifically important thing to do, but, of course, supporting it is not their job or that of their Bill or department. I do not think that he should divide the House on this issue because it is not something that we can progress by amendment or Division but, at the very least, when the Minister comes to respond, he should commit to come back to my noble friend with a clear plan of what he needs do to get this protocol agreed. Clearly there is willingness and there are lawyers and opportunities; we just need a plan.

[Lord Grimstone of Boscobel (Con)]

My Lords, I turn to Amendments 1, 4 and 5, tabled by the noble Lord, Lord Berkeley. I acknowledge without reservation how much this topic means to him; no one could have worked more assiduously than he has on it.

The amendments before us would expand the scope of the Clause 2 power, creating a power to make regulations implementing private international law conventions as well as agreements that facilitate trade or trade financing. I thank the noble Lord, Lord Berkeley, for his engagement on this matter with DIT, the Department for Transport and the Ministry of Justice in relation to the private international law Bill.

In Committee, the noble Lord outlined that this amendment would allow the UK to implement the provisions of the Luxembourg Rail Protocol; for those who were not present, this protocol relates to the financing of railway rolling stock. Noble Lords will be pleased to know that the Government recognise the competitive advantages of ratifying the Luxembourg Rail Protocol. We have identified the benefits that this could bring to both the UK rail sector and UK financial services. Thus the Government support the ratification of this protocol; the challenge has always been finding an appropriate parliamentary time and a suitable vehicle to implement it, given the very significant pressures on parliamentary time—as your Lordships will be all too aware.

Turning to the appropriateness of this amendment, as we argued in Committee, we believe that the scope of the Trade Bill

“should not expand beyond essential readiness”—[Official Report, 29/9/20; col. GC 40.]

for trading as an independent country outside the European Union. I am afraid that the Trade Bill is not a suitable vehicle to provide powers for the implementation of this agreement. As previously explained, the powers granted by this Bill are limited but vital for the delivery of the UK’s independent trade policy.

In Committee, we argued that technical matters relating to finance and transport should be considered outside the Trade Bill in a way that is suitable to matters related explicitly to finance and transport. I was pleased to see Peers support amendments to the private international law Bill that will help to support the implementation of the Luxembourg Rail Protocol, but it is obviously disappointing that this is not a final solution. I assure your Lordships that the Department for Transport will continue to explore all available options and vehicles to implement the protocol fully.

As I have made clear, the Government fully support the implementation of the Luxembourg Rail Protocol. However, I repeat: we do not believe that this Bill is the appropriate place to achieve this. We will therefore oppose this amendment on this occasion, but I would be happy to work with colleagues across government and facilitate further conversations between the noble Lord, Lord Berkeley, and the Department for Transport to discuss our policy in this sector at greater length and see whether a plan can be put together.

Again, to be clear, we do not believe that this is the appropriate legislation for this amendment and we will not bring forward an amendment to the Trade Bill on this topic at Third Reading. I therefore ask the noble Lord to withdraw his amendment.

[Lord Berkeley (Lab) [V]]

My Lords, I am very grateful to all noble Lords who spoke and to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and my noble friend Lord Stevenson for their support. I am grateful to the Minister for his response, courtesy and offer of further support.

We have not moved very far from where we were in Committee and the Minister did not really answer the question about why it is inappropriate for a Trade Bill that is designed to encourage trading when we become a completely independent country at the end of the year to include a text that allows a trade in railway equipment to be ratified. As I said in my earlier remarks, if this had been the motor or printing trades, I am sure that the Department for International Trade would have been only too keen to do it.

The Minister is pushing me in the direction of the Department for Transport. The most useful way of achieving this would be to have an early meeting with Ministers there and the noble Lord, Lord Grimstone—I hope that he would be happy to join us—to see what we can do. It would be good, and it is important, to have this done before the end of the year for the same reason that so much other legislation is needed. I am doubtful about whether the Department for Transport will have a slot in its parliamentary programme, but we will have to see.

As my noble friend Lord Stevenson said, there is no point in dividing the House on this because it will not help to achieve the objective that I think we all want; on that basis, I look forward to further meetings but, in the meantime, I beg leave to withdraw the amendment.

--- Later in debate ---

We are not trying to be too radical; we are trying to be fair and reasonable. As the right reverend Prelate the Bishop of St Albans said, we do not want to lag behind everyone else on transparency. There is a consensus for change. If we support Amendment 6 and vote through Amendment 12, we will get a long way down that track.

[Lord Grimstone of Boscobel (Con)]

I would like to thank noble Lords for the courteous way in which this debate has been conducted. I will begin with Amendment 6, in the name of the noble Lords, Lord Purvis of Tweed, Lord Stevenson of Balmacara, and Lord Curry of Kirkharle, and the right reverend Prelate the Bishop of St Albans. During the passage of this legislation, I believe there has been a general acceptance on all sides of the importance of Parliament’s being able to effectively scrutinise trade policy, including our new FTAs with the likes of the US, Australia and New Zealand. We have consistently ensured that there is sufficient scope for Parliament to do this.

The Government have taken a number of important steps, and it is pleasing that noble Lords recognise this and have supported us. For example, we have shared extensive and comprehensive information with Parliament ahead of negotiations with the US, Australia, New Zealand and Japan. On 12 October, I made a Written Ministerial Statement setting out the transparency and scrutiny arrangements for specific international trade deals, starting with Japan. Today, I have made a further comprehensive statement setting out arrangements for trade agreements with the United States, Australia and New Zealand and the UK’s proposed accession to the CPTPP. I believe this statement adds further weight to the enhanced procedures we have already outlined. I was pleased that the nobel Baroness, Lady Hayman, picked up on and welcomed the reference to environmental impacts, and grateful for the pragmatic comments about the statement from the noble Earl, Lord Sandwich. I was also grateful for the comments made about the statement by the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Stevenson.

I believe that our approach to transparency, and openness to scrutiny by Parliament and stakeholders, is at least as strong as any other Westminster-style democracy, such as Canada, Australia and New Zealand. I can assure the noble Lord, Lord Purvis, that nothing should be read into the omission of South Africa from this list.

Your Lordships have drawn comparisons between our approach and those taken by the EU and US. They are more similar to each other with their federalised arrangements, than they are to the UK. The European Commission negotiates on behalf of the interests of the 27 member states and its scrutiny arrangements reflect the specific and unique structure of the EU. The same applies to the US. The role the US Congress plays in scrutinising international trade agreements is a product of the constitutional make-up of the United States. I suggest it would be wholly inappropriate for the UK, with our own unique constitutional framework, to import the regime of another country, particularly one where the constitutional circumstances differ so markedly.

We have frequently repeated our commitment to ensuring a transparent trade policy and we have delivered on this time and time again. We have made significant progress in this space. We have listened to concerns from parliamentarians and have taken actions to address them, including putting the Trade and Agriculture Commission tack on to a statutory footing, which will be discussed in the next group of amendments.

We have kept Parliament regularly updated on the negotiations as they have progressed. We have done this via Written Ministerial Statements to update Parliament on key milestones and we have held regular, open briefing sessions for all parliamentarians throughout the negotiations on our FTAs. We have engaged closely with the International Trade Committee and the International Agreements Sub-Committee, including writing to the chairs of both committees at every key stage and facilitating private briefings for them with Ministers and our chief negotiators. My noble friend Lord Lansley, as a member of the IASC, has seen us in action on this and has complimented us on it. We will continue to share confidential treaty text on the FTAs that are currently under negotiation, and on the CPTPP when it comes down the track, with the ITC and the IAS. We will ensure that they both have time to produce a report on any such concluded agreement before it is laid before Parliament under the CRaG procedure.

I hope noble Lords will also realise and accept that we have demonstrated this with the Japan agreement. I accept absolutely the importance of this, as described so cogently by the noble and learned Lord, Lord Goldsmith. Both of the committees’ reports on Japan have now been published, with, if I may say, both committees praising the engagement that they have had with my department. The IASC report notes that

“DIT has been a constructive partner in helping to determine the right processes by which parliamentary scrutiny of the Government’s new function of negotiating trade deals can be facilitated.”

In addition, the ITC and IASC reports congratulate the Government on their achievement in securing the Japan agreement, noting the warm welcome that it has had from witnesses in their inquiries.

I turn to the devolved Administrations. The Government have always been clear that we want to engage meaningfully with them on our trade policy. As Counsel General for Wales, Jeremy Miles MS, recently confirmed in his evidence on 19 November to the Welsh Affairs Committee, the DIT has listened to the devolved Administrations. We have established a new ministerial forum on trade and we have used it to consult the DAs on all of our trade agreements. The forum has met three times already this year and will meet for a fourth time later this week. I can assure the noble Baronesses, Lady Finlay of Llandaff and Lady Ritchie of Downpatrick, and the noble Lord, Lord Wigley, that our desire to engage with the devolved Administrations is both deep and sincere, and we will continue to do so. I believe that putting these arrangements into statute would upset this balance. While in practice, the Government engage with the devolved Administrations on international trade policy, it is important to remember that this has legal status as a reserved matter. We have to take care to preserve this status.

I turn to impact assessments. The Government are committed to an inclusive and transparent trade policy. Scoping assessments are published to assess analytically the impacts of new FTAs in advance of negotiations, and following the conclusion of negotiations currently in train, a full impact assessment will be published prior to implementation. This will be presented to Parliament, alongside the final treaty text, together with an explanatory memorandum to aid parliamentarians in their scrutiny role. Of course, this is in addition to the CRaG procedure. We will also ensure that the impact assessments are independently scrutinised by the Regulatory Policy Committee.

In drafting the amendment, I welcome the fact that the noble Lord has tried to address our point at previous stages of the Bill; namely, that the negotiation and making of treaties, including international trade agreements, is a function of the Executive held under the royal prerogative. However, despite the drafting of subsection (1), that

“Nothing in this section restricts the power conferred by Her Majesty’s prerogative to commence, conduct negotiations towards and then conclude a trade agreement”,


I am afraid that the amendment does exactly that because it places restrictions on the ability of the Government to enter into treaty negotiations and to ratify treaties. With all due respect to the drafters of the amendment, it starts by saying one thing and then it goes on to say another. I am grateful to my noble friends Lord Lansley and Lady Noakes for also spotting that and pointing it out to your Lordships.

Giving Parliament a veto over our negotiating objectives would curtail the royal prerogative, whatever the preamble to the proposed new clause says, and would limit our flexibility to negotiate in the best interests of the UK. I know that noble Lords are aware that the Constitution Committee of this House recommended in its 2019 report on the scrutiny of treaties that mandates for treaties should not be subject to parliamentary approval.

Ultimately, if Parliament is not content with a trade agreement that we have negotiated, it can—like for the majority of all other treaties—raise concerns by resolving against ratification under the statutory CRaG procedure. Under that, as noble Lords will know well, Parliament can delay ratification indefinitely, giving it, in effect, the power to block ratification. The Government are committed to a transparent trade policy with comprehensive engagement with Parliament. We have already demonstrated this and we will continue to do so. The Government have moved a long way in developing comprehensive scrutiny arrangements that are appropriate to our constitutional make-up.

I turn now to Amendment 12 in the name of my noble friend Lord Lansley. I thank him for the amendment. He and I have already had constructive discussions on the topic, and I think it is fair to say that we are in mutual agreement on the importance of strong parliamentary scrutiny and the transparency of our trade deals.

On implementing our trade deals, noble Lords will be aware that it has long been UK practice not to ratify international agreements until any necessary implementing legislation has been passed domestically. This is a well-established process that the FCDO has followed historically for treaties for centuries in order to ensure that the UK will not be in breach of the treaty when it enters into force. The Government have no intention of deviating from this process in relation to our new trade agreements. However, we believe that putting this on to a statutory footing would be inappropriate and would deprive and restrict the Government’s flexibility in the conclusion of our international trade agreements, as well as curtailing the treaty-making prerogative.

I know that my noble friend has expressed concerns about the level of detail in the explanatory memorandums that are laid alongside treaties. I agree with him that Parliament should know clearly how the Government intend to implement any commitments made in an FTA and what legislation Parliament will need to pass in order to implement it domestically. I would argue that, in part, we already do this. For example, in paragraph 5 of the Explanatory Memorandum to the recent Japan agreement, we outline how the agreement will be implemented in domestic legislation. It includes details on how commitments in specific policy areas, such as tariffs, procurement and technical barriers to trade, will be implemented, and where legislation will need to change. I can say without reservation that I would be more than happy to explore with my noble friend how we might make this clearer and more useful to parliamentarians. However, I do not believe that this is an issue which is best resolved in legislation.

In respect of facilitating debates on FTAs as part of CRaG, we have been clear that the Government will facilitate requests for debate on the agreement—including, of course, those from the relevant Select Committees—with the only caveat being that it is subject to available parliamentary time. As many noble Lords know far better than I, it would not be appropriate for the Government to guarantee debating time in the way suggested in this amendment. As I am sure my noble friend with his ministerial experience can appreciate, any Minister would like to be able to guarantee debating time. However, the pandemic and other matters have shown us the need to remain flexible in how we manage precious parliamentary time.

I assure noble Lords—I said this in Committee and willingly repeat it now—that it is not the Government’s intention to shy away from scrutiny. I believe that scrutiny gives us better free trade agreements; the Government want these agreements to be examined by parliamentarians and effectively scrutinised. I hope that noble Lords do not mind my saying that the Government’s practical record on this has been good. Requests for debates have been met, most recently on our FTA with Japan, which was debated in your Lordships’ House on 26 November. I am very pleased that 31 speakers participated in that debate, which followed on from the six earlier debates on our continuity agreements that we facilitated. I hope that these will be the first of many debates on our forthcoming agreements that the Government will facilitate, where—I repeat—parliamentary time allows.

This debate has allowed me to outline the extensive steps that the Government have taken to ensure that Parliament has an effective scrutiny role in the constitutional context of the UK. This includes our long-standing commitments to provide comprehensive information to Parliament in advance of starting negotiations—beyond what many other partner countries undertake—along with conducting thorough engagement throughout negotiations. In addition, we have further enhanced arrangements at the end of negotiations. On this point, I thank noble Lords for helping us to shape these arrangements; I am sure that we will continue to shape and improve them as we go forward. Noble Lords have helped to improve the process of FTA scrutiny and, frankly, persuaded the Government to bring forward their amendments on the Trade and Agriculture Commission. The EU International Agreements Sub-Committee of your Lordships’ House persuaded the Government to ensure that it is given time ahead of the start of the CRaG period to produce a report on the agreement. This will ensure that your Lordships are better informed and able to scrutinise our new agreements more effectively.

As many noble Lords have expressed over the course of this Bill, this is the first time in nearly 50 years that the UK has undertaken trade negotiations; I hope that noble Lords recognise that my officials are not doing a bad job of it. I believe that we should utilise the flexibilities afforded to us under our constitutional arrangements to ensure a robust scrutiny process. I repeat the Government’s commitment to continue to ensure that these arrangements remain fit for purpose, working in close collaboration with the relevant committees.

I hope that I have been able to address your Lordships’ concerns adequately. I therefore ask my noble friend Lord Lansley not to move his amendment and the noble Lord, Lord Purvis, to withdraw his amendment.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for a very thorough response; he will find out how persuasive I have found him in a moment after I draw out two or three points from the debate. I am grateful to all those who have taken part and, indeed, for the support that I have received, including from the noble Lord, Lord Stevenson of Balmacara.

I have been a Member of this House for seven years. While the noble Lord was making his remarks, I reflected on the fact that if the noble Earl, Lord Caithness, supports a liberal amendment and the noble Lord, Lord Lansley, persuades a Green Peer, it is pretty evident that there is some cross-party backing. We can rely on the noble Baroness, Lady Noakes, to be consistent in her position. I am grateful to her. She always makes me think in these debates, even though she does not often persuade me. I have a copy of the Written Ministerial Statement, which I can share with her if she likes; I am afraid that it is rather heavily annotated, which will not surprise her. I think the point that she made was ably addressed by the noble Earl. Yes, these are our first trade negotiations in 50 years, but almost by definition, as the noble Earl and the noble Baroness indicated, these agreements are very different in nature from those of 50 years ago. They are primarily concerned with non-tariff measures rather than tariff measures.

I agree with the Minister that our approach must suit our own unique constitutional arrangements. With regard to that, the Minister should reflect that the prerogative power is not a static thing as part of those constitutional arrangements. It has been demonstrated that there have been changes in the use of that prerogative power over many years. It used to be a prerogative power that Parliament had no say in the deployment of troops, for example; this is now recognised to be rather different. I assure the Minister as the drafter of this amendment that amendments do not get tabled in this House without the beady eye of the Public Bill Office ensuring that one clause does not contradict another. So I believe in the robustness of this amendment, but I am grateful for his advice.

If I were arguing that, if Parliament is not content with the Trade Bill, it can raise any concerns it may have over a trade deal by resolving against ratification and delaying any implementing legislation indefinitely, I think that the noble Baroness would be frustrated with me for proposing such an argument. What would it say if a sovereign entity—the sovereign Government—signed an agreement then Parliament used a mechanism to delay the implementing legislation indefinitely? That would massively undermine the sovereignty of the Government that had signed an international agreement—yet that is the Government’s position in the Written Ministerial Statement; I quoted from it. It is not a fit-for-purpose mechanism; it is not an appropriate way of considering how we approve trade agreements.

Secondly, I refer to the point made by the noble Lord, Lord Lansley. These procedures are not very good; I would love him to have a right of reply to the Minister too. I will not endeavour to speak for him, nor would he want me to, but the noble Lord’s question—with regard to the amendment—about the ability of Parliament to make a decision before the signature is deliberate. In trade agreements, we know that there is a finalisation process and then, often, an initialling process. The initialled text will then usually go to the Parliament before there is full signature by the sovereign country. It is no accident that, at that stage, in Japan, which went through the process on 24 November, the law then authorised the Japanese Government to put their formal signature on the agreement. If there are problems, the time to highlight them is not as we have it—after the event, where a treaty has basically been made—after which we have the power only to delay the implementation. The right time is at the time of signing. This allows a judgment to be made to avoid problems down the line if there is still a great deal of unease with the agreement that has been signed.

This brings me to my last point. I am glad that the Minister referenced the next group. One of the points that he was at pains to make—indeed the noble Lord, Lord Lansley, made a slight reference to this—concerned whether we are now putting a great deal of restriction on this power. As I mentioned before, the prerogative power has not been set in stone over the years, nor have the restrictions on any British Government over how they conduct or conclude negotiations. No British Government would go into any negotiations that would breach human rights agreements—the ECHR, for example. There are international obligations that we are bound to accept. We are a sovereign Parliament and the prerogative power, as the Minister would suggest, should be completely unfettered. Well, there is quite a high level of fettering about that.

--- Later in debate ---

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Lord. It is clear that the government amendments the Minister is bringing forward today have had a long gestation period—over many years—and the noble Lord, Lord Curry, played a significant role in developing the higher standards which we now take for granted in many respects but which we cannot take for granted in our trading relationships. We still need the existing level of protection.

I commend noble Lords who have shown great endurance and persistence and, ultimately, a degree of success in their work. Among them, I include very much my noble friend Lady Bakewell. Like her, I feel that, having sat for many hours on the trade Bills and the Agriculture Bill, it is nice to see, finally, the Government accepting and then acting on a case that has been made powerfully. In that regard, I welcome the way in which the Minister brought forward the amendments and his openness in discussing them.

He will be aware of the response that I and my noble friend gave, which is reflected in our amendment. My noble friend outlined that in clear terms, and I will simply refer to it before I close. However, before doing so, I want to say that I agree with the point made by the noble Lord, Lord Grantchester, about the motives behind the Government putting this advisory body, but not others, on a statutory footing. We know that that is probably because of the strong campaigning that took place, and that is to the credit of the campaigners, who pressed hard for it. However, the Government have been slightly coy about saying why the agriculture advisory group will be put on a statutory footing but not the trade advisory groups that cover key sectors of the British economy: agri-food; automotive, aerospace and marine; British manufactured and consumer goods, telecoms and technology; chemicals; life sciences; the creative industries; investment; transport services; professional advisory services; and financial services. All those areas are covered by trade advisory groups. What interaction will there be when the trade agreement is being prepared but before it is laid before Parliament under the CRaG process? Why, uniquely, does a report on the elements in Section 42 of the Agriculture Act 2020 have to be received from the Trade and Agriculture Commission but not from the other trade advisory groups?

If the intention behind this is, as the Minister will surely say, to enhance scrutiny, how will we know the views of the trade advisory groups for those other sectors of the economy at exactly the same time as the report from the Trade and Agriculture Commission is presented to Parliament? Perhaps the Minister could make that clear. The situation could be resolved quite straightforwardly: he could state at the Dispatch Box that the Government intend to make sure that the other trade advisory groups are able to submit, and we are able to look at, their views on the impact assessments of an agreement.

I hope that the amendment eloquently outlined by my noble friend does not fall foul of the castigatory remarks from the Minister that my amendment received on the last occasion. In this amendment, I have simply used the Government’s wording. I quite liked the wording of their amendment to the internal market Bill—consulting the devolved authorities on appointments to the office of the internal market. In fact, I liked it so much that I thought it should be used in this Bill too. If the Government appoint members of an advisory body for internal United Kingdom trade and consult the devolved authorities, they should also consult the devolved Administrations when appointing members of an external trade advisory body. That would be quite straightforward, and for the Minister to accept that quickly when he winds up at the Dispatch Box would not create any great problems.

My wider question on the period of three years for the life of the Trade and Agriculture Commission is a good one to ask, as that period slightly jars with the five-year period in this Bill for the regulation-making powers. We have the slightly odd situation whereby, under the regulation-making powers in this legislation, the Government have five years but the Trade and Agriculture Commission has only three. Why there is that disjoint, I simply do not know. It would make sense if, at the very least, the lifetime of the regulation-making powers was the same as that of the Trade and Agriculture Commission.

The amendments on consultation should be straightforward. I am not being facetious but I hope the Minister can provide reassurance on the Government’s intention to consult before the appointments are made. I am not sure whether the amendment in my name and that of my noble friend will allow the noble Earl to have two or two and a half cheers. I think that they enhance this. I am grateful to him for allowing me to explain to my noble friend Lord Fox what peely-wally means. I hope that, with these amendments, the government amendments will be less peely-wally and that maybe there will be an improvement.

[Lord Grimstone of Boscobel (Con)]

My Lords, this group consists of government amendments, together with amendments from my noble friend Lady McIntosh of Pickering and the noble Lords, Lord Stevenson of Balmacara and Lord Purvis of Tweed. I will try to set a good example by keeping my comments tight and to the point, and I will of course write to noble Lords whose comments I do not do justice to in my response. I am convinced that one thing I have learned in taking this Bill through your Lordships’ House is that it is not possible to please all the people all the time in relation to the contents of the Bill.

I turn, first, to the amendments in the name of my noble friend Lady McIntosh. Although their purpose and intent are similar to those underpinning the government amendments before your Lordships—to ensure that high standards of imports into the UK are maintained—my noble friend’s amendments go further. They would create a body responsible for setting criteria for assessing whether provisions in trade agreements on UK imports meet or exceed domestic standards on a very wide range of issues. This would, as a result, set restrictions on what goods could be imported under trade agreements.

It is not appropriate for the UK to impose our standards on other countries and prohibit imports of goods that do not meet our standards where there is no basis to do so. Not only could doing so put us in breach of our WTO obligations but, as we spoke about in Committee on a similar amendment, such action has the potential to harm the economies of developing countries and some of the poorest people in society, and to increase protectionism.

The amendment is unnecessary as the standards that it seeks to protect are already enshrined in domestic statute and the Government will uphold them. Any changes to existing standards would, of course, require new legislation to be scrutinised by Parliament. I believe that the Government have taken decisive action to uphold our commitments to high standards. Extending the remit of the TAC to areas such as human rights would run the risk of duplicating the functions of trusted bodies such as the Equality and Human Rights Commission. I am sure that that is not something my noble friend would wish.

Similarly, my noble friend’s amendments apply to all trade agreements, including continuity agreements. Instead, the TAC should focus on only new free trade agreements and agreements signed with continuity partners from 2023 onwards. The UK’s continuity FTAs, as I have said previously, roll over existing EU arrangements that we now wish to hold on a bilateral basis. Those agreements were scrutinised under EU scrutiny procedures and simply replicate existing EU trade agreements, with necessary adjustments to reflect the UK context.

The Government have listened carefully to the concerns of the House with regard to independent scrutiny of FTAs. I am very pleased to bring forward Amendments 31, 34, 35, 36, 49 and 50, which will put the Trade and Agriculture Commission on a statutory footing. This step is integral to boost scrutiny of our new free trade agreements as we move on from continuity.

The current TAC had a different function. It was established as an independent advisory board in July 2020 to advise and inform the Government on their future trade policy. It aims to ensure that animal welfare and environmental standards in food production are not undermined, that consumer and developing country interests are represented and that new export opportunities are secured for producers in all parts of the UK. The amendments today will not impact the role of the current TAC, which will still produce a report by February 2021. I put on record that the Government are thankful for the commitment, time, investment and hard work that current TAC members and representatives of its working groups have put in, and we commend the success it has had to date. We believe that the action we are now taking to put the TAC on to a statutory footing will be an important development in boosting the scrutiny of the Government’s trade policy.

Amendment 34 places the Secretary of State under a duty to seek advice from the TAC on matters set out in Section 42 of the Agriculture Act 2020, excluding human life and health—I know that this point is of concern to a number of noble Lords; I will come back to it in a moment—in preparing a report to Parliament to accompany relevant free trade agreements laid under the Constitutional Reform and Governance Act procedures. I particularly reassure the noble Lord, Lord Grantchester, that the omission of human health from the remit of the TAC does not in any way diminish the importance that we will attach to it. It is just that, when we looked at the composition of the TAC and its range of duties, it seemed that expert advice relevant to human life and health would best be sourced separately from other, more expert bodies in that field. The report under the Agriculture Act will include both advice that comes from the TAC and advice that comes from other relevant bodies in relation to human life and health. The duty will be exercised, but not through the TAC.

Section 42 of the Agriculture Act places a duty on the Secretary of State to report on whether the measures in certain future FTAs applicable to trade in agricultural products are consistent with maintaining UK domestic statutory protections for human, animal or plant life or health, animal welfare and the environment. The TAC advice will inform that report. It will be laid separately before Parliament as an independent report, but it will not be the totality of the report under the Act.

The role of the statutory TAC will therefore represent an evolution of the current TAC. The statutory TAC’s purpose—to provide advice under Section 42 of the Agriculture Act—is set out in Amendment 31, and the TAC advice will ensure independent expert scrutiny of new free trade agreements. The request for advice by the Secretary of State and any guidelines will be published, and advice supplied by the TAC will be laid before Parliament. That is the role of the TAC. It is not a standing body producing advisory reports, as one might have deduced from the existing TAC; it is an independent expert body scrutinising new free trade agreements as and when they come along.

Amendment 31 creates a power for the Secretary of State to appoint members and, of course, a duty to have regard to the desirability of appointing members with expertise specific to the role of the TAC. The Government will work to ascertain the range of skills and knowledge required for the commission, noting that additional skills and expertise might be required and that the list in the amendment is not, of course, exclusive. The TAC must have those skills but the Secretary of State is free to decide that it might need additional skills other than those on the list.

I can absolutely affirm to your Lordships that the Secretary of State will make appointments in line with all the usual public law principles applicable to all ministerial decision-making and within the confines of the new statutory provisions. These will be direct appointments and will follow established protocols, demonstrating the department’s commitment to a robust process and eliminating any conflicts of interest. The steps required as part of this process will be reflected in the TAC’s terms of reference.

As a non-incorporated expert committee—I might just dwell on those words for a moment—the commission will provide the Government with independent external advice to deliver additional scrutiny of free trade agreements. It will comprise technical experts who can analyse complex treaty text and provide robust and balanced advice to Parliaments. Members of the TAC will be chosen to have knowledge of standards across the whole of the UK. To my noble friend Lady McIntosh, I say that what we are establishing is not a body with a CEO that produces annual reports; it is a group of experts who have a specified task to do, which is put in front of them every time a new FTA comes down the tracks.

Amendment 34 will require the TAC to be reviewed every three years. Of course, I can see from this debate that there is perhaps a misunderstanding among noble Lords about what exactly that means. In my experience, it is good practice for these bodies to be reviewed after a period of time, and three years is not an uncommon period. However, it in no way means that the body will be wound up after that time, because the TAC must stay in place unless the Government bring forward secondary legislation via the affirmative procedure to repeal the TAC’s provisions. There is a review every three years, but only if that review comes forward with recommendations that both Houses of Parliament accept can the TAC be discontinued.

I want completely to reassure noble Lords about the consequences of Amendment 36, which, I fear, has been misunderstood by Members. Amendment 36 is entirely dependent on Amendment 34. Only if the Amendment 34 process every three years resulted in a decision by Parliament that the TAC should be wound up would the provisions of Amendment 36 come into effect to pass the necessary statutory instruments to repeal the TAC. Amendment 36 does not stand alone so it could not be used for the Secretary of State to wind up the TAC on a whim; that would be a ludicrous proposition. I apologise if noble Lords have found the drafting of the amendment confusing in that respect, but I can give them complete reassurance on that matter.

I believe that the role of the statutory TAC complements other measures that the Government have taken to further enhance scrutiny of new FTAs and ensure that the views of the agricultural sector are taken into account during the negotiations process. Indeed, this will not be the only independent scrutiny that our new free trade agreement will receive: the International Trade Committee in the other place and our own IAC will also, of course, provide critical scrutiny and advice on our negotiated deals, just as this took place with the Japan agreement. I reassure noble Lords that the Government remain committed to listening to and engaging with consumers, farmers and industry in negotiating our free trade agreements, and we value the input that they provide in this process.

It is important to remember that our expert trade and advisory groups, representing businesses, consumers and civil society, already provide advice during free trade agreement negotiations—this is an essential difference from the TAC—and we will not seek to duplicate that important work. In particular, there is a dedicated agri-food trade advisory group, in which the agri-foods sector is represented; it does an excellent job of representing that sector.

I believe that these amendments will help the UK safeguard our current standards of agricultural products, put British farming at the heart of our trade policy and ensure that our agricultural sector is among the most competitive and innovative in the world. I hope that noble Lords will be able to support the amendments brought forward by the Government.

On the amendment tabled by the noble Lord, Lord Purvis of Tweed, as I have already mentioned, the TAC will be an expert committee; members will be independent experts, appointed as individuals, not as representatives of academia, business or other organisations for which many of them may work. As I said before, the Secretary of State will make appointments in line with established protocols, following the usual public law principles applicable to all ministerial decision-making. The statutory TAC will represent an evolution of the current TAC to reflect its purpose as set out in Amendment 33. Of course, the membership will be considered accordingly. We are committed to ensuring that only expertise will drive the appointment of new members. It is critical for the success of the TAC that the advice is independent and underpinned by the expertise listed in the amendment.

As I have said before, the central purpose of the TAC is to improve scrutiny of FTAs prior to their ratification. Therefore, as I said earlier, it is related to a reserved matter: the ratification of free trade agreements. As such, the TAC amendment does not engage the legislative consent process under the Sewel convention. While we acknowledge, of course, that the work of the TAC will touch on the devolved matter of agriculture, this does not alter the fact that its function relates to a reserved matter.

However, the UK Government recognise that, as agriculture is a devolved matter, the devolved Administrations, of course, have a legitimate interest in the TAC’s work. Therefore, the Minister of State for Trade Policy has written to them, seeking their views on the statutory TAC, and he will discuss it with them at the ministerial forum for trade later this week. I hope that noble Lords understand that the commitments that we have made, when pulled together, create a further commitment to produce a report on standards in FTAs in relation to specific concerns, as outlined in Section 42 of the Agriculture Act. Through our amendment, we are proposing to put the Trade and Agriculture Commission on a statutory footing—I sense that noble Lords welcome this—and to provide advice in relation to this. I therefore ask my noble friend to withdraw Amendment 7.

[The Deputy Speaker (Lord Alderdice) (LD)]

I have received a request to ask a short question from the noble Lord, Lord Grantchester, so I call the noble Lord to ask a short question of elucidation.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that question. Pragmatically, the most likely circumstance would be if a bigger and better idea came along. For a Trade Minister to come to this House or the other place and say they were winding up the TAC and nothing was being put in its place would lead to a difficult debate. This is, perhaps, part of the whole process. We are new to trade agreements, the way we are handling them is evolving, and matters may evolve with that.

I stress again that there is nothing Machiavellian about the three-year review point. It is certainly not Machiavellian to require both Houses to agree to any winding up of the TAC. Other noble Lords will be more expert than I am on this, but I would be surprised if either our House or the other place resolved to wind up the TAC unless something bigger and better was being put in its place.

--- Later in debate ---

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Lord. I remember very clearly the debate that he led in Committee. I think it was just the two of us and the Minister in the Chamber, shortly before midnight, when we debated a framework for human rights and trade. That is the point that he was trying to make, and I agree with him very strongly. That is why I commend the noble Lord, Lord Collins, for tabling this amendment to try to persuade the Government that there will be support if they bring forward a trade and human rights policy that we can engage in and work on with them. That is an appeal. I commend the noble Lord for bringing the amendment forward and I am delighted to have added my name to it.

With regard to a list of countries, we are yet to roll over an agreement with Algeria, which Freedom House has classified as “not free” or similarly with Cameroon, Egypt or Eswatini, which are also classified “not free”. We would not engage in this with Syria—although if we were rolling over all agreements, that could include an agreement that did exist but is not in place because the country is under sanction. We have arrangements with the Palestinian Authority, which Freedom House indicates is “not free”; Zimbabwe again is “not free”.

We have separate debates over Turkey and Vietnam. When it comes to Serbia and Bosnia-Herzegovina, we know that those two countries have had year-long disputes over the definition of genocide within the international tribunals. I agree to an extent that, as the noble Baroness, Lady Noakes, indicated, this is a grey area. That is not, however, a reason not to progress into a framework to continue to seek improvements.

I hope the Minister does not mind if I remind him that he has twice been referred to in this way as a private citizen and business leader. As chair of a British financial company he commended the authoritarianism of President Xi over protests in Hong Kong, stating that this ensured economic continuity in Hong Kong and was in the UK’s interest. He has now migrated from business leader to political leader. In many respects, that is illustrative of the challenges that we all face about choices that we make in the business community as well as the political community—it is illustrative of this wider debate.

I serve on the International Relations Committee, as does the noble Lord, Lord Alton. We said in our report on the Middle East that the British Government were on the wrong side of international human rights law in continuing to sell arms to Saudi Arabia as the Yemen tragedy ensued. We have high standards in this country and I believe we are a force for good around the world, but we should not delude ourselves about how others see us: inventor of concentration camps, holder of weapons of mass destruction and declarer of illegal wars. I love my country, but I am not totally rose-tinted about our history.

Still, we have had a proud record post war as the noble and learned Lord, Lord Hope, said. We have helped to shape international norms on human rights, in which we can take particular pride. One of the theatres where we have done so was in the European context when we were a member of the European Union. The noble Lord, Lord Collins, quite rightly said that a common approach on the use of political clauses was agreed in the European Union in 2009, to ensure that there would be systematic references of human rights clauses in all agreements going forward. I will come back to that.

I want to make it very clear what I am calling for, so that the Minister understands that there is no equivocation: a human rights and trade policy which has proper indicative measures and triggering mechanisms, so that we can replace what we had within the European context and have a distinct United Kingdom approach for all trade. The noble Lord, Lord Lansley, referred to proposed new subsection (6). I am pleased that the amendment outlined the breadth of the type of agreements that we have. I hope that the noble Lord, Lord Alton, does not mind me saying that Amendment 9 would have been strengthened if it had been more specific about the areas which we will be covering.

The noble Baroness, Lady Noakes, asked about what proposed new subsection (5)(d) means by some of those

“other … violations of human rights … including … the International Covenant on Civil and Political Rights.”

One example is that we hold strongly to the view that countries should not have the death sentence for people who have a mental illness, or for children. That is within the ICCPR and there should be no disagreement that it is a serious human rights violation. If such a violation is being practised, the question is what impact that should have on our trading relationships.

This is all about the trade relationships that we have through agreements, whether it is a full free trade policy or one of the other agreements outlined in proposed new subsection (6). Those all invariably involve preferential access for that third country to our economy: preferential either because there is less tax or because they have access to our markets or partnerships which we would deny to others except, in general, the WTO. As my noble friend Lady Smith asked: what value do we put on that preferential access? One part is economic; the second part is the value that we have for our wider rights.

I return to the common approach in the European Union and the use of political clauses. The agreements with third countries included human rights and they were all under what was termed “essential elements clauses”. Free trade agreements would be linked to the political framework agreements with that country, encapsulating all the agreements that we have. If they did not exist in the framework, this would be included specifically in a free trade agreement. I would be interested to know whether the Government believe that this is of merit too. Should we include our human rights element in our trading agreements, linked with the other partnership agreements that we have with that country? Labour rights have been included in specific trade and sustainable development chapters. I tried my hardest in Committee to get the Government to state their position on the inclusion and sustainable chapters in future agreements. They did not do so; I hope that the Minister can be clear about it today.

The fact that there has been a standard approach since 2009 meant that, during negotiations on agreements with countries, the EU was able to proactively assess the overall positive and negative impacts on trade agreements, including human rights, and the totality of the human rights record and domestic legal frameworks of that country. That informed the negotiations with those countries. It is not necessarily a case of seeking to impose a legislative framework on that country, but we assess what it is. At the very least, we determine how many international obligations, from labour rights to a whole set of legislative requirements on human rights, they have domesticated into their law. In the European context, it is interesting how many countries revised their domestic legislation during the process of negotiations with the EU, and domesticated international obligations—something they had not done up until then.

Up until that point, most of the agreements had the ability to either pause or suspend. It is only in the recent EU-Canada agreement that, for the first time, there is a specific mechanism where, if there is a gross violation of human rights, or non-proliferation, that could serve as grounds for termination of the entire agreement. We will get into this in the next group, but given that this is the first time, I would like to know from the Minister whether that element has been replicated in the UK-Canada agreement? If it has, it would be the first time that the UK has done this. If the Government have not replicated it, that is, in my mind, a very clear signal that they are departing from the approach that we had led up until now.

I hope that the Government will listen carefully to calls from across the Chambers. We need a UK Government impact assessment tool for the UK that is cross-departmental, including the Department of International Trade, the FCDO and BEIS, so that we can take a considered approach to human rights clauses in our trade agreements, sanctions regimes on human rights from our Foreign Office, and, potentially, remedial acts from the Department for Business. Without a proper impact assessment tool, it is very hard for us to consider this. We need mechanisms and we need frameworks. I hope noble Lords do not mind me saying so, but I believe that this is more important at this stage in this Bill than simply referring to individual examples of human rights abuses around the world that we know, to our shame, have existed.

I hope that the Government will respond positively to Amendment 8 and, before Third Reading, set out clear draft human rights clauses for future trade agreements, draft trade and sustainability chapters, and the mechanisms for escalating concerns around the implications of human rights, and the mechanisms that will then be triggered for us to judge not only whether we believe that the relationship should be questioned but what mechanisms can be put in place. At the end of the day, all of this is about the people and the victims. Unless we have a clear framework and a clear position from the Government, we are letting those people down in the countries with which we trade.

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank the noble Lord, Lord Collins of Highbury, for his Amendment 8. It touches on an important issue that, as noble Lords know, this Government take very seriously and to which I would like to assure the House I am personally committed.

Before I address the amendment specifically, I want to emphasise that the Government share the concerns underpinning the amendments before us today. The UK has long supported the promotion of our values globally and remains committed to our international obligations. We are clear that more trade does not have to come at the expense of human rights. I can confirm to the noble Lord, Lord Collins, that in rolling over continuity agreements we are seeking to deliver continuity of effect for agreements with all our partners. I can confirm that we are not seeking a continuity agreement with South Sudan.

In answer to the noble Earl, Lord Sandwich, I am sure he appreciates that I cannot comment on agreements presently still under negotiation. I have noted the point of my noble friend Lord Lansley on the ongoing human rights review, and I will make sure it is considered. I can assure the noble Lord, Lord Purvis, that we seek to ensure that human rights are recognised and protected in all our free trade agreements. This includes clauses in our trade agreements with many developing and emerging markets, suspensive powers in our trade preferences regime, and recourse to trade levers through our sanction policy.

Turning to the amendment in hand, tabled by the noble Lord, Lord Collins, I am sure the noble Lord will be pleased to hear that the Government are already delivering on some of the commitments that his amendment seeks. For instance, the amendment seeks publication of an annual report. My department has already committed to publish an annual report on our programme of trade activity, and we can certainly explore whether that report could be used for the purposes envisaged here.

However, there are a number of concerns and legal risks raised by the amendment from the noble Lord, Lord Collins, which means that we are unable to support it. It would constrain the royal prerogative powers to negotiate, ratify and withdraw from treaties. Of course, curtailing the royal prerogative is not something that the Government would do lightly.

Export Control (Amendment) (EU Exit) Regulations 2020

Lord Grimstone of Boscobel Excerpts

Wednesday 2nd December 2020 Grand Committee

Moved by

[Lord Grimstone of Boscobel]

That the Grand Committee do consider the Export Control (Amendment) (EU Exit) Regulations 2020.

Relevant document: 32nd Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument)

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I am pleased to be able to open this debate. These regulations, which were laid before the House on 15 October, are necessary to ensure a functioning export control regime at the end of the transition period on 31 December this year. Their aim is to complete the process of transposing the existing system, which is reliant on European Union law, into purely UK law. At the same time, they implement certain EU regulations in Northern Ireland to the extent required by the Northern Ireland protocol. They do not make any change in export control policy.

As noble Lords know, the European Union (Withdrawal) Act 2018 enables a functioning statute book at the end of the transition period by providing Ministers with the tools to deal with deficiencies in domestic law arising because of our exit from the European Union. Noble Lords with good memories will remember that this House has already debated and approved legislation to ensure the continued functioning of retained EU law in the UK in respect of export controls. The Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) Regulations 2019 were debated here on 26 March 2019 and the Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) (No. 2) Regulations 2019 were debated here on 8 May 2019.

These new regulations are necessary because under the Northern Ireland protocol, which forms part of the withdrawal agreement, the EU regulations and directives relating to export control of dual-use items, civilian firearms and goods usable for capital punishment or torture will continue to apply directly to and in Northern Ireland. The provisions of the EU directive on the intra-community transfer of defence-related products will also continue to apply to the movement of military goods between Northern Ireland and the EU. Therefore, these regulations amend provisions of retained EU law to accommodate the Northern Ireland protocol.

Let me explain in more detail how this will work. Beginning at 11 pm on 31 December 2020, the export control rules applying in Great Britain will be derived solely from domestic law, which will include retained EU law. In contrast, the export control rules applying in Northern Ireland will continue to be derived from EU law as required by the protocol on Ireland/Northern Ireland in the European Union withdrawal agreement. My department will continue to be the licensing authority for strategic exports from the whole of the United Kingdom, but items exported from Northern Ireland will do so technically under a licence issued under European Union regulations.

To make this work these regulations, the Export Control (Amendment) (EU Exit) Regulations 2020, amend existing legislation. First, they amend the Export Control Order 2008, which has been the centrepiece of domestic export control legislation since April 2009. Next, they amend two instruments, the Export Control (Amendment) (EU Exit) Regulations 2019 and the Trade etc. in Dual-Use items and Firearms etc. (Amendment) (EU Exit) Regulations 2019, which were made last year in preparation for EU exit. In addition, they amend the Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations 2020. These regulations were debated and approved by both Houses but have not yet been made. It is necessary to amend them to remove a dependency on the now non-existent Customs Tariff (Establishment) (EU Exit) Regulations 2019.

Let me be clear: these regulations do no more than is necessary to ensure the continued functioning of export control law, and therefore the continued effective operation of our export control system, in both Great Britain and Northern Ireland. Without them, our ability to control the export of these goods would be undermined. This legislation will enable the Secretary of State to continue to control exports from all parts of the United Kingdom of dual-use items, firearms and goods that could be used for capital punishment, torture or other cruel, inhumane or degrading treatment or punishment.

The Government believe that the procedures for assessing licence applications and our decision-making processes are robust, and will remain so following the end of the transition period. The eight criteria used to assess export licence applications, as set out in the consolidated criteria, will remain the same. The Foreign, Commonwealth and Development Office and the Ministry of Defence will continue to provide my department with advice and analysis of the relevant foreign, defence and international development policy aspects of each licence application. A licence would not be granted if to do so would be inconsistent with any of the criteria. My department will also continue to provide detailed advice and guidance about export controls and the end of the transition period in order to support legitimate exporters.

I take this opportunity to remind the Committee that these regulations are solely about preparing for the end of transition and ensuring that we have a functioning statute book after the end of the year. These amendments must happen, and Parliament needs to ensure that these controls remain in place. Negotiations about the future relationship between the United Kingdom and the European Union or the wider world are of course a separate matter, and I hope I may say to noble Lords that they play no part in this debate today. I hope that the House will work in the interests of the nation to ensure the passage of this legislation, which is essential to ensuring that we are prepared for the end of transition and continue to control the trade in strategic exports.

This legislation is necessary to ensure that we are prepared for the end of transition and continue to have a fully functioning export control regime on 31 December this year. I commend the Motion to the Committee and I beg to move.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank all noble Lords for their contributions. It is always a pleasure to respond to these debates when noble Lords speak with the expertise displayed today. I thank my noble friend Lady McIntosh of Pickering for drawing our attention particularly to the comments made by the Joint Committee on Statutory Instruments. I also thank the noble Lord, Lord Bassam, in this regard. I say without reservation that it was regrettable that a situation arose in which this will have to be corrected in due course.

As we have heard, at its meeting on 25 November, the JCSI scrutinised the instrument in accordance with Standing Orders, and it was, rightly and properly, agreed that the special attention of both Houses should be drawn to this instrument on two grounds. These are that the instrument in one respect is defectively drafted and makes unusual or unexpected use of the enabling powers in another. Of course, for the former point, I apologise unreservedly.

Let me go into more detail about the drafting error, its impact and what the Government intend to do about it. It is a drafting error in new Article 42N(2) of the Export Control Order 2008. The purpose of that new article is to re-enact in relation to transfers from Northern Ireland an existing exception that allows the transfer of software or technology for WMD purposes from the United Kingdom by non-electronic means if: the final destination of the software or technology is the customs territory of the European Union; or processing or working is to be performed on the software or technology in the customs territory of the European Union—in which case the law of the destination member state will be responsible for the control of any subsequent transfer.

The problem is that re-enactment is necessary because the existing exception, which applies in relation to the United Kingdom, is to be removed at the end of the transition period. The error was the insertion of the incorrect conjunction in new Article 42N(2)—an “and” was inserted instead of an “or” between sub-paragraphs (a) and (b). This makes the exception less permissive in relation to transfer from Northern Ireland after the transition period than the existing exception. Nothing is weakened by this error; indeed, the situation is strengthened for this particular category of software that might be used for weapons of mass destruction.

The department thought about this carefully—I have discussed it with officials—and does not consider the error to have sufficient impact to warrant the withdrawal, correction, and re-laying of the draft regulations. That is because it could not have been done in time for the regulations to be effective by the end of this year. I think all noble Lords want to avoid a gap between the existing and future systems. The department has assessed very carefully the consequences of that, and I reassure my noble friend that we believe there is a very low likelihood that a person would wish in early 2021 to transfer software or technology from Northern Ireland to the customs territory of the European Union by non-electronic means despite awareness that that software is, or may be intended, in entirety or in part, for WMD purposes.

I hope that if noble Lords take a step back from the regrettableness of the error, they will realise that the chances of that happening early in 2021 are very low. We undertake—I do so unreservedly—to correct this error in early 2021, when we will be making routine amendments to the Export Control Order 2008. The noble Lord, Lord Bassam, talked about urgency and the importance of there being no gap. I am sure that noble Lords will monitor this situation very carefully to make sure that we live up to our undertaking to correct it early in 2021. Again, I apologise to noble Lords and the House that the error arose. Regrettably, these things sometimes happen, and we took the view that the lesser of the two evils was to continue in this way with this very small error so as to avoid a gap, and to correct that very small error early in 2021.

The second point raised by my noble friend and drawn attention to by the noble Lord, Lord Purvis, was what was described by the JCSI as the

“unusual or unexpected use of enabling powers.”

Part 5 of the draft regulations contains amendments to an instrument that has not been made: the draft Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations. These regulations have been debated in the House; they were ready to be laid but they have not yet been laid, so they have been through the normal scrutiny processes.

Our intention is for the unmade instrument to be made the same day, so that instrument will be made before this instrument is made, which will mean it will come into effect before these regulations come into effect. The making of the instruments in this sequence will allow the draft regulations to correct the deficient commencement regulation in the Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations before it comes into force.

This was not an error; it was done deliberately, but it came about because those regulations were approved by Parliament in April 2019—noble Lords will know how long ago that seems in the history of negotiations with the European Union—before ratification of the agreement on the withdrawal of the United Kingdom from the European Union. I assure noble Lords that there are precedents for a draft instrument requiring affirmative approval to correct a deficient commencement clause in an earlier draft instrument that has been approved by Parliament but not made by making both instruments on the same day and in sequence.

I humbly submit that Part 5 of the draft regulations is appropriate considering the precedent and, more importantly, the additional parliamentary time that would be required if the Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations had to be relaid following, I stress, technical but not substantive amendment and debated again in their entirety by each House of Parliament. I am the first to admit that this is a messy situation. It would have been far better if it had not arisen, but we believe that the path we are taking is the best way to correct it.

The noble Lord, Lord Purvis of Tweed, raised the important question of dual use. I absolutely agree with him on this. He made the comment that the underlying importance of the regulations is to protect excesses of human rights abuse. I am sure that every noble Lord would agree with his sentiments on that matter.

We are right that, at the moment, on 1 January the same laws will apply in Northern Ireland and GB, but there is of course a theoretical risk that divergence will occur. I stress that this is how it will operate: there will have to be close co-operation between the European Union and the United Kingdom on this matter. It would be far preferable if there was no divergence, but because the matters to which these regulations obtain often come about due to wider considerations in the United Nations context, or others, the risk of divergence is low. However, we will do all we can to ensure that divergence does not occur between these two sets of regulations. The protocol is, of course, subject to the continued consent of the people of Northern Ireland, who must approve its continued application every four years.

I will quickly refer to the arguments that the noble Lord, Lord Bhatia, made. I assure him that promoting trade is an important feature of our new free trade agreements.

The noble Lord, Lord Bassam, asked about intercept and cybersurveillance equipment. All cyber, cryptographic and intercept exports are subject to the same thorough risk assessment against the consolidated criteria as other controlled exports.

I appreciate that I have not answered a couple of the detailed points raised by the noble Lords, Lord Bassam and Lord Purvis. I commit to answering those by letter as soon as I possibly can. On that basis, I hope that these matters find favour with the Committee.

Motion agreed.

Intellectual Property Rights: Affordable Drugs

Lord Grimstone of Boscobel Excerpts

Monday 30th November 2020 Lords Chamber

[Lord Alton of Liverpool]

To ask Her Majesty’s Government what plans they have to use the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights to guarantee access to affordable drugs in (1) the United Kingdom, and (2) developing countries.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

The Government have long supported affordable and equitable access to medicines, including in developing countries. We believe that a robust and fair intellectual property system is essential for an innovation framework. It allows economies to grow while enabling society to benefit from knowledge and ideas. The Government are therefore working within the TRIPS framework to collaborate with public and private partners, in the UK and internationally, to promote affordable access to medicines for all.

[Lord Alton of Liverpool (CB)]

My Lords, in the context of hundreds of millions of Covid vaccines being held in the United Kingdom and the significant sums of public money invested in developing new drugs and treatments, notwithstanding the need to generate funds to enable future research and development, when companies such as Gilead repurpose drugs such as remdesivir and charge $2,340 for a Covid treatment that Liverpool University estimates can be made for $9, should the Government not invoke their powers to use Crown licences to prevent patent monopolies impeding access to medicine, to ensure equitable access, to prevent exploitative profiteering, and to recognise that affordable drugs and their fair distribution are a public good that this country should be at the forefront in providing?

[Lord Grimstone of Boscobel (Con)]

My Lords, I think we all agree that the world urgently needs access for all to safe, effective, quality and affordable vaccines, diagnostic medicines and other health technologies to enable an effective response to the Covid-19 pandemic. Intellectual property rights provide incentives to create and commercialise new inventions such as life-changing vaccines. In short, they keep innovators innovating, creators creating and investors investing.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, as a former UK chairman of the charity Plan International for about 20 years, I visited many overseas centres, so I know how essential it is that developing countries have access to affordable and necessary drugs, and, even more importantly, advice on how they should be used. Too often, I found that they received the drugs, but they would remain on the shelf as they needed to be trained in how and when to use them. Will the Minister ensure that the Government take appropriate action to deal with this need?

[Lord Grimstone of Boscobel (Con)]

My noble friend makes an excellent point; without education, these drugs will not reach their full efficacy. We encourage active dialogue between industries and Governments to explore how best to work together and educate the citizens of countries to make the best use of these drugs.

[Lord Berkeley of Knighton (CB) [V]]

My Lords, there is a strong moral imperative in what my noble friend Lord Alton said. When one thinks of the effect drugs and chemicals have had in helping some of the poorest areas in the world with, for example, HIV and malaria, would the Minister not agree that it is important, with the reduction in overseas development aid, that we help these people get these drugs in the same way that we hope we will in this country?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for his point. There are existing mechanisms that facilitate the sharing of intellectual property—for example, the Medicines Patent Pool, which has been so successful with HIV. To follow up on this point, we are committed to identifying whether and how CTAP could add value to the existing infrastructure.

[Lord Reid of Cardowan (Lab)]

My Lords, I agree entirely with the noble Lords, Lord Alton and Lord Berkeley. This devastating pandemic is global in nature. Is the Minister aware that in giving evidence to the House of Lords International Relations and Defence Select Committee, the African Union’s special envoy Dr Ngozi Okonjo-Iweala had a simple message, which was

“to make sure that we have volume and quantity for everyone and that poor countries are not locked out”,

by which she meant locked out on the basis, mainly, of price? In the past, the Government have been prepared to threaten use of Crown licences legislation. Are they prepared to do that to ensure that those in the poorest countries in the world who most need these drugs have the same access as our own citizens will have?

[Lord Grimstone of Boscobel (Con)]

The noble Lord makes an excellent point. There are flexibilities in the Trade-Related Aspects of Intellectual Property Rights Agreement. WTO members can use these to ensure access. We actively encourage less-developed countries to look at this, because by taking advantage of these flexibilities they can bring real benefits to their citizens.

[Baroness Sheehan (LD)]

My Lords, history tells us that reliance on the good will of pharmaceutical companies is misplaced. For example, swathes of the world still lack access to HIV/AIDS medicines. Given that the development of Covid-19 vaccines is largely taxpayer-funded, will the Government back the WHO’s support for a temporary waiver to parts of the TRIPS Agreement?

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

As I said in answer to a previous question, there are flexibilities in the existing TRIPS Agreement. As I said, I encourage countries to take advantage of these flexibilities, because what could be more important than ensuring that supplies of the Covid-19 vaccine reach their citizens?

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, further to my noble friend Lord Reid’s question, we welcome the Government’s policy of affordable and accessible medicines for all, but how does that policy square with the parallel export ban of over 80 medicines earlier this year to help ensure that there is an uninterrupted supply of medicines for NHS hospitals treating coronavirus patients, which would effectively prevent UK companies sending even paracetamol to Covid-19 sufferers in other countries?

[Lord Grimstone of Boscobel (Con)]

As the noble Lord knows, nobody is a greater supporter of free trade than my department and me, but short-term considerations occasionally arise, particularly relating to public health emergencies, when those important general principles have to be put aside for very short periods of time to ensure that the NHS has access to the drugs it needs. I am sure most noble Lords would welcome this.

[Lord McColl of Dulwich (Con) [V]]

My Lords, how much of the overseas aid has been reserved to help to pay for accessible drugs for developing countries?

[Lord Grimstone of Boscobel (Con)]

My noble friend asks a good question. I do not have those detailed figures at my fingertips; I undertake to write to him.

[The Lord Bishop of Carlisle]

My Lords, for obvious reasons we have focused largely on equal access to vaccines but, given the broader significance and implications of this Oral Question on affordable drugs and the fact that Global Cancer Week took place earlier this month, are any negotiations currently taking place on access to affordable cancer treatments, especially in developing countries?

[Lord Grimstone of Boscobel (Con)]

The right reverend Prelate asks an excellent question. I am not aware of the details of any discussions of that sort; to ensure that I can give him a complete answer, I will write to him on that also.

[The Lord Speaker (Lord Fowler)]

I call the noble Baroness, Lady Clark of Kilwinning. No? I call the noble Baroness, Lady Altmann.

[Baroness Altmann (Con)]

My Lords, how are we assisting countries to take advantage of the flexibilities in the current rules on this TRIPS issue? Can we do more to help them access these drugs affordably?

[Lord Grimstone of Boscobel (Con)]

Our posts on the ground well know the importance of this. We try to bring these flexibilities home to these countries through all available channels; one would hope that they would use these flexibilities, as they would be so much to their advantage.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed.

Comprehensive Economic Partnership (EUC Report)

Lord Grimstone of Boscobel Excerpts

Thursday 26th November 2020 Grand Committee

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, this has been an extensive and compelling debate. The many thoughtful and measured contributions that we have heard this afternoon have reiterated this House’s ability to express its expertise clearly and authoritatively on the most important issues of the day. The 11 years spent by my noble friend Lord Trenchard in Japan perhaps deserves today’s gold star for knowledge.

On a personal level, I very much thank the noble Lords, Lord Purvis and Lord Stevenson, for their kind remarks about the underlying cause of my rather piratical appearance before noble Lords today.

The UK-Japan comprehensive economic partnership is a very important agreement, not least because it is the first in nearly 50 years that the United Kingdom has struck on its own account with another major economy. It strengthens Britain’s relationship with the third-largest economy in the world. It not only secures the benefits of the existing EU agreement—I ask noble Lords to remember that that was something that many said was impossible—but it goes further in a number of key areas, such as digital and data, the protection of geographical indications, and rules of origin.

At this point, perhaps I may welcome the noble Lord, Lord Darroch of Kew, to his place this afternoon and thank him on behalf of all of us present for electing to make this debate the occasion for his maiden speech. It was a particularly appropriate choice, given his deep experience of Japan. It is clear from his insightful remarks today, combined with his outstanding record of public service, that he will make a significant contribution to the quality of our proceedings.

I also take the opportunity to thank the staff and members of the EU International Agreements Sub-Committee, so capably chaired by the noble and learned Lord, Lord Goldsmith, for the timely production of their report on the UK-Japan CEPA. I fully recognise the enormous amount of effort and labour that it involved, and I am extremely grateful for their work. As the noble and learned Lord, Lord Goldsmith, said, at least we have ended up producing a respectable agreement. I also thank the many members of the committee for their very informed contributions today. I should also thank my noble friend Lady Bottomley for her kind remarks about my officials.

We will talk about scrutiny later, and we will certainly discuss it further at the Report stage of the Trade Bill, but, having examined the sub-committee’s findings and from listening to the many contributions from noble Lords today, it is clear that this thorough and considered report has enhanced the House’s understanding of the key issues in this agreement. To my mind, that is what scrutiny is all about. With those key issues in mind, I would like to address specifically as many of the points raised by noble Lords as I can in the time available.

I will talk, first, about agricultural market access. I believe that we have negotiated a deal that will secure the continuation of strong tariff reductions across a range of agricultural exports—most notably, higher-value pork, beef and salmon. Noble Lords will note that I used the word “continuation”. We will continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes.

It is perhaps worth noting that in 2019-20 total UK agri-food exports to Japan were worth around £402 million, of which £271 million related to beverages, spirits and vinegar, and £131 million to other agri-food products. I know that noble Lords have been concerned about tariff-rate quotas, but I remind them that only around £1 million of those exports was covered by TRQs. The deal that we have negotiated has, I think, provided a pragmatic solution, focusing on those quotas with the highest usage and of most value to the UK. The new arrangements cover 99% of the value of UK exports under EU TRQs in 2019-20.

We expect there will continue to be enough surplus volume in the EU TRQs until around 2024, by which time we hope and expect to have joined Trans-Pacific Partnership. The CEPA arrangements therefore—and I may come back to this later—form a pathway to further market access under CPTPP. That has, of course, been committed to by Japan as part of our agreement. The UK and Japan will monitor the implementation of the scheme for all products. Japan has provided a ministerial side letter committing to work closely with the UK to ensure the effective operation of the new scheme, such that the UK receives unfettered access to any under-utilised EU quota for the 10 TRQs covered by the scheme. I can assure the noble Baroness, Lady Bowles of Berkhamsted, that we will work hard to make sure that this process is as streamlined as possible. I will write to the noble Lord, Lord Loomba, if I may, on the points he raised about the TRQs.

Some noble Lords today have raised queries relating to geographical indications. Seven UK GIs are already covered in the agreement. The agreement sets out an improved process for the addition of new GIs. Under CEPA, it has been agreed that all eligible British products will be put through Japan’s GI approval process automatically. This arrangement is significantly better than the terms of the EU-Japan EPA, under which the EU was not able to put forward any new products for protection without explicit Japanese agreement. We have achieved agreement with the Japanese on this.

A number of noble Lords have raised queries concerning digital and data. The UK is committed to maintaining high standards of protection for personal data, including when it is transferred across borders. I can confirm to the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Foster, that the rights of UK users are not impacted by the deal with Japan and data protection standards will not be lowered as a result of the deal. UK data rules, which will continue to be enshrined in the Data Protection Act 2018 and the GDPR, will continue to apply. Moreover, CEPA does not interfere with the high level of protection afforded to personal data which is transferred out of the UK under the UK’s data protections laws. CEPA goes further than the existing EU-Japan agreement on many aspects of digital trade with a number of cutting-edge rules that reflect the status of the UK and Japan as digital leaders. This includes—and a number of noble Lords have referred to these points—a ban on unjustified data localisation. This prevents potential costs for companies that result from requirements to store data within national borders. It also includes an agreement to avoid unjustified restrictions on the free flow of data between the UK and Japan. This ensures that data will be able to be collected, processed and transferred between the two countries, without facing unnecessary red tape. Very importantly, we have a commitment to uphold world-leading standards of protection for individuals’ personal data when data is being transferred across borders. UK data protection laws, I say again, are not undermined or changed by the deal with Japan; any transfers of personal data to Japan must satisfy the UK’s high standards of data protection. The changes in the agreement directly benefit the UK’s digital economy, which in 2018 delivered £675 million in services exports to Japan.

The noble Lord, Lord Oates, and the noble Baroness, Lady Bowles of Berkhamsted, raised the question of algorithms. If I may, I will write to them about that.

On the matters relating to financial services, I was grateful to my noble friend Lord Lansley for emphasising the welcome that the FTA has received in the City and for the comments from my noble friend Lord Risby. I have to say that I am optimistic about the way forward in this area and the scope for further advances. This is important to us because financial services are of course our biggest export to Japan, accounting for around 25% of all UK exports to Japan in 2019. The CEPA provides improved market access for financial services firms, including greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan. There will be an annual dialogue between Her Majesty’s Treasury, UK financial regulators and the Japanese FSA that will explore ways to further reduce regulatory friction.

The noble Lord, Lord Foster, raised some important points about intellectual property, and if I may, I will write to him on that. The existing EU-Japan agreement contained a high standards IP chapter, but the CEPA contains a number of improvements to the EPA, covering designs, trademarks, copyrights and enforcements. I believe these improvements will bring benefit to both creative industries—for example, the music industry—and IP-intensive businesses.

A number of noble Lords raised issues relating to SMEs. The noble Baroness, Lady Liddell of Coatdyke, referred to the importance of this, and I can assure her that we consult widely with organisations that represent SMEs when we negotiate and carry forward agreements such as this. The CEPA will support SMEs through a dedicated SME chapter, which will ensure that SMEs are provided with the tools and resources necessary to seize the opportunities of exporting to Japan. This will include a commitment to making sure that information on doing business in Japan is available to UK SMEs in English.

I know that there is, rightly and properly, a strong interest across our House in the automotive industry, which was referred to in particular by the noble Lord, Lord Kerr of Kinlochard. The CEPA will continue to support jobs in the manufacturing sector—major investors such as Nissan and Hitachi, as well as our own manufacturers—through reduced tariffs on parts which already come from Japan, streamlined regulatory procedures and greater legal certainty for their operations. UK tariffs on two tariff lines covering electrical control units, often used in cars, will be put to zero as of 1 January 2021. By bringing in reductions on tariffs on car parts, UK-based auto manufacturers will benefit from lower costs of productions, which they could pass on to consumers.

As I mentioned earlier, on rules of origin, we have included a provision that seeks to recognise Japanese inputs that are contained in UK goods that are exported to the EU, and of course this is particularly important for the auto sector. While we have included this provision in CEPA, as the noble Lord, Lord Loomba, noted, this arrangement would also need to be agreed between the UK and the EU in order for it to come into effect. Of course, as a number of noble Lords have referenced, that most important negotiation is still ongoing. However, I ask the noble and learned Lord, Lord Goldsmith, and perhaps others, not yet to prejudge the outcome of those negotiations.

On the important question of food safety and animal welfare, I can reassure the noble Lord, Lord Trees, that we have locked in the benefits of the EU agreement on SPS and animal welfare, and nothing in the CEPA prevents the UK from continuing to uphold its high environmental, food safety and animal welfare standards now that the UK has left the European Union. I will write to the noble Lord, Lord Trees, and the noble Baroness, Lady Bennett of Manor Castle, with more details of the important animal welfare points that they raised.

I was pleased that my noble friend Lady McIntosh of Pickering rightly reminded us that when we debate matters such as this, we will have the benefit of expert advice from the Trade and Agriculture Commission, which I am pleased we are putting on to a statutory footing.

I know that climate change is an issue of great importance, and I recall the noble Lord, Lord Oates, speaking formidably on this topic after my maiden speech in September, as again he did today. I assure him and the noble Baroness, Lady Bennett, that the UK-Japan agreement locks in the benefits of the EU-Japan deal, including various provisions on climate change, such as those that reaffirm our respective commitments to the United Nations Framework Convention on Climate Change and the Paris Agreement.

On labour standards, I say to the noble Lord, Lord Stevenson, that the agreement includes provisions that commit the UK and Japan to reaffirm their obligations to internationally recognised principles on labour. In addition, the UK continues to meet its obligations under the International Labour Organization. I am pleased to acknowledge that we have now set up a trade union advisory group so that, as I am sure the noble Lord would support, we will be able to draw directly on the experience of trade unionists in future negotiations.

On standards, we have made it clear that the Government will never compromise the UK’s high environmental protection, product, animal welfare and food safety standards in this or any deal. I can confirm that nothing in the CEPA prevents the UK continuing to uphold these.

A number of noble Lords referred to the Trans-Pacific Partnership. It is clear that the CEPA also has wider significance in this context. We see the CEPA as part of our ambition to put the UK at the centre of a network of free trade agreements, making us even more of a focal hub for global businesses and investors.

Accession to the Trans-Pacific Partnership continues to be a priority for the Government and a key part of our trade negotiations programme. It complements bilateral agreements we have with TPP members, including this Japanese CEPA, deals we hope to strike with Australia and New Zealand, and existing EU agreements with Canada, Chile, Mexico, Peru, Singapore and Vietnam that we hope to transition into bilateral UK deals. We hope to be able to apply for formal accession in early 2021. I note the view of the noble Baroness, Lady Henig, that there should be wide consultation on this in due course. I was glad of the wise words of the noble Lord, Lord Darroch of Kew, and of the support from my noble friend Lord Risby and the noble Lord, Lord Bilimoria, in relation to potential accession. As recognised by my noble friend Lord Trenchard, Japan’s clearly stated support for this is extremely valuable and important to us.

I want to address directly noble Lords’ concerns that there may be greater benefits for Japan than for the UK in this agreement. It is true that the analysis shows that UK exports to Japan could increase by around 17% in the long run whereas UK imports from Japan could increase by around 80%, compared to no agreement. However, I say with all respect to noble Lords, including the noble Lords, Lord Liddle and Lord Stevenson, that cheaper imports lead to lower prices in British shops and make our businesses more efficient and competitive in global markets.

I acknowledge that our economic modelling does not compare the impact of the UK-Japan agreement with the impact of UK membership of the EU-Japan agreement. Our modelling compares the impact of CEPA against a situation where we do not have an agreement with Japan: that is, trade on MFN terms.

A number of noble Lords—I happily list some of them: the noble and learned Lord, Lord Morris, the noble Lords, Lord Purvis, Lord Stevenson, Lord Darroch, Lord Oates, Lord Hain, and Lord Foster, and the noble Baronesses, Lady Liddell, Lady Henig, and Lady Bennett of Manor Castle—expressed concern, which I acknowledge, about the way in which the agreement was publicised on media platforms and the claims that were made in relation to it. With a certain degree of trepidation, I will draw these comments to the attention of my colleague, the Trade Secretary.

I say to noble Lords that the right comparison for assessment is this deal versus no deal rather than the hypothetical continuation of our membership of the European Union. Going forward, I reassure the Committee that the UK and Japan will meet each year in a joint committee and, as part of the DIT’s transparent and inclusive approach to monitoring, I confirm that we will publish a monitoring report every two years.

I hope that my closing remarks have provided a broad assessment of the deal’s clear value and scope. The scrutiny the agreement has had has been extremely valuable. I apologise to noble Lords who have not had their questions answered directly, and I will write to noble Lords as varied as my noble friend Lord Howell of Guildford, the noble Baroness, Lady Liddell, my noble friend Lord Trenchard and other noble Lords, answering questions I was unable to answer today.

In conclusion, this agreement represents an historic milestone in the UK’s future as an independent trading nation. We will come back to the question of parliamentary scrutiny in our debate on the Trade Bill shortly. I hope that we will be able to take full advantage of the clear economic opportunities presented to us by this deal, and I am confident that this agreement will set a clear path and provide strong momentum to secure high-quality future trade agreements with friends and partners from around the world. I beg to move.

Continuity Trade Agreements: Parliamentary Scrutiny

Lord Grimstone of Boscobel Excerpts

Wednesday 18th November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, in the Commons, the Minister stated that parliamentary scrutiny was central to the ongoing continuity FTA rollovers. That was good to hear. He also said that nearly half these treaties will be agreed under the provisional agreement mechanism, which excludes parliamentary debate before the FTA is implemented. That is not so good. We have the opportunity to put things right when the Trade Bill returns to your Lordships’ House in early December. Will the noble Lord the Minister agree to continue our discussions to see if we can formalise a protocol for scrutiny, building on his good work in ensuring that the International Agreements Sub-Committee of this House has the papers and information it needs to carry out its valuable work?

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I welcome the constructive exchanges which the noble Lord and I have had on this matter. We have a mutual interest in ensuring that Parliament is able to carry out its scrutiny processes effectively. I look forward to continuing our debate on this important topic during Report on the Trade Bill.

[Lord Purvis of Tweed (LD)]

My Lords, the Government’s statement on the potential benefits of the Japan agreement indicated growth of £15 billion. Any reasonable observer would have assumed that that meant growth of £15 billion for the British economy. As the impact assessment has shown, only 17.2%—£2.6 billion of exports—is UK growth. A massive 79.9%—£13 billion—is growth in Japanese exports to the UK. Scrutiny of any trade agreement must be full and allow Parliament a proper vote at the outset and at the end. I welcome the ongoing cross-party discussions with the Minister. Will he consider the amendment I have tabled to the Trade Bill, arguing the case for Parliament to have a vote on the agreement, as the Japanese Diet has done?

[Lord Grimstone of Boscobel (Con)]

My Lords, I always consider carefully the points made by the noble Lord. Cheaper imports to the UK benefit the UK economy, so the FTA is not entirely one-sided. I agree that Parliament has to have the information available to allow its scrutiny processes to work effectively.

[Baroness Hayman (CB) [V]]

My Lords, I declare my interests as set out in the register. The scrutiny arrangements in the Trade Bill make no reference whatsoever to climate change or the environment, either in the economic impact assessments or in other reporting mechanisms. Yet the Government’s green recovery plan today shows how a green industrial revolution is essential and how much the future economic health of the UK will depend on success in these areas. Will the Minister look positively at how we can continue our discussions and amend the Trade Bill to include parliamentary scrutiny of these vital issues?

[Lord Grimstone of Boscobel (Con)]

The noble Baroness makes a good point. It is important that the impact assessments that we produce for each of these agreements cover these matters fully. If Parliament has this information, our debates can be more comprehensive and effective. As she says, these are extremely important matters.

[Lord Lansley (Con) [V]]

My Lords, I am a member of the International Agreements Sub-Committee. It is our job to report to this House on these continuity trade agreements. On 3 November, Ministers signed the agreement with Kenya which will come into force on 1 January. We have not yet seen the text of this agreement. If it is a copy and paste, why not share it immediately? If it involves new commitments, does not Parliament especially need to scrutinise them? When will we see it? How are we to conduct parliamentary scrutiny before it comes into force? If we do not, is this not unsatisfactory?

[Lord Grimstone of Boscobel (Con)]

I pay tribute to the work done by the IAC. It is a very effective mechanism. My noble friend referred specifically to the Kenya agreement. Agreement in principle has been reached but some loose ends are still being tied up with the Kenyan authorities. As soon as the agreement is signed, it will follow the normal processes and there will be full parliamentary scrutiny allowed.

[The Earl of Kinnoull (Non-Afl)]

My Lords, I thank the Minister for his and the Government’s courteous engagement with the International Agreements Sub-Committee over the UK-Japan free trade agreement. The report will be published very shortly, in the coming days. My question is on the same theme as those of others who have spoken. Do the Government reaffirm the commitments, statements and aspirations contained in the DIT Command Paper of February 2019 on free trade agreements?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Earl for his comments about the Japan free trade agreement. Like other Members of this House, I am looking forward to our debate on it in a couple of weeks’ time. We are following the spirit—if not the letter—of the Command Paper to which he refers.

[Lord Alton of Liverpool (CB)]

My Lords, in the House of Commons yesterday the Trade Minister, Greg Hands MP, said:

“We are negotiating better market access in markets such as ... China”.—[Official Report, Commons, 17/11/20; col. 196.]


Today Bob Rae, Canada’s ambassador to the United Nations, has called on the UN to investigate the horrors being perpetrated in Xinjiang. Some 180 human rights groups say that many of the world’s biggest fashion brands and retailers, along with suppliers of PPE to the United Kingdom, and companies such as Huawei and Volkswagen are complicit in the forced labour and human rights violations of millions of Uighur people in Xinjiang. Atrocities include torture, forced separation and the compulsory sterilisation of Uighur women. Is it a case of business as usual, or does the Minister believe that, where allegations of crimes against humanity or genocide are made, these should have consequences for trade with China? Will he therefore accept the amendment on genocide that I have tabled to the Trade Bill?

[Lord Grimstone of Boscobel (Con)]

The noble Lord always speaks on this topic with both expertise and passion. We understand the importance that noble Lords attach to these matters. The Government are studying them actively and carefully.

[Viscount Trenchard (Con)]

My Lords, it is good that the Government have confirmed that we have the bandwidth to conclude the agreement with Canada in short order. Can the Minister confirm that his department is at the same time discussing with Canada that country’s approach to our possible accession to CPTPP, and can he give a date by which the Government intend to notify CPTPP formally of our intention to accede? Can he confirm that there will be an opportunity to debate our accession before it is applied for?

[Lord Grimstone of Boscobel (Con)]

My noble friend recognises, as I do, the importance of reaching an agreement with Canada. Of course, the agreements that we will reach with Canada, those we hope to reach with Australia and New Zealand and the agreement we have reached with Japan are all vital precursors to fulfilling our ambition to accede to the Trans-Pacific Partnership. It is a complex matter; there are 11 countries in that partnership, and it will take time to bring all this to the point where the meal can be served, as opposed to just being cooked. Once we get to that point, Parliament will be fully involved.

[Lord Boateng (Lab) [V]]

Can the Minister assure the House that our continuity trade agreements with our African partners will support rather than undermine regional integration and the African free trade area?

[Lord Grimstone of Boscobel (Con)]

The noble Lord makes a good point. The free trade agreements are vitally important for the African countries; we are well seized of that. We have an active dialogue with them, and look forward to strengthening those agreements as we go forward.

[The Deputy Speaker (Lord Brougham and Vaux) (Con)]

I call the noble Baroness, Lady Kennedy of Cradley.

[Baroness Kennedy of The Shaws (Lab) [V]]

I am afraid it is in fact Lady Kennedy of The Shaws—there was a mistake in the listing. It is clear from many of our debates that the House does not want trade to be elevated above human rights. The noble Lord, Lord Alton, put his finger on the particular problems regarding China. The Government give the right rhetorical support on this, but it is difficult to have confidence when the Minister is on record as saying that

“everything in China gets associated with politics, but we have to look through politics to help get successful business with China”,

and that:

“The fact that Xi is prepared to give such strong authoritarian guidance within the context of a market economy is great for companies like mine


I am afraid that this does not give a lot of assurance to those of us who are concerned about the horrors taking place in China.

[Lord Grimstone of Boscobel (Con)]

My Lords, the noble Baroness refers to comments that I made in my previous life, when I was chairing a major business in China for the United Kingdom. It is important to realise the context within which those comments were made but, as I have said previously at this Dispatch Box, I have no patience with authoritarian regimes and I am completely in agreement with the Government’s policy in relation to China.

Canada-UK Trade Deal

Lord Grimstone of Boscobel Excerpts

Tuesday 17th November 2020 Lords Chamber

[Lord Wallace of Saltaire]

To ask Her Majesty’s Government what assessment they have made of the comments by the Prime Minister of Canada on 11 November about the United Kingdom’s prospects of a trade deal with Canada.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, both the UK and Canada remain committed to a seamless transition of our trading relationship at the end of the transition period, so that British and Canadian businesses and consumers can continue to benefit. Officials have been in regular contact to discuss this and the Government are hopeful of securing agreement by the end of this year.

[Lord Wallace of Saltaire (LD) [V]]

My Lords, in August 2018, the Canadian Prime Minister said that the Canadians would be ready to start negotiations on what he thought would be a very easy roll-on agreement the day that Britain left the European Union—which was last January. He also offered to second Canadian officials to help us if that would improve matters. Here we are, six weeks before the end of the transition, and the agreement has not yet been fixed. Can the Minister explain why?

[Lord Grimstone of Boscobel (Con)]

My Lords, I can explain exactly why. Agreement was almost reached with Canada in March 2019, but Canada did not like the temporary tariff reductions that we brought in and decided to walk away from the negotiating table, returning only in July this year.

[Baroness Noakes (Con)]

My Lords, the UK is Canada’s fifth-largest trading partner, but Canada ranks only 18th in terms of importance for the UK. Will the Minister agree that, while rolling over the Canada free trade agreement is highly desirable for both countries’ interests, the Government were absolutely right to prioritise the excellent agreement with Japan, which is much more important to us in trade terms?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Baroness for her comments on the Japan agreement, but I am pleased to be able to assure her that the Department of Trade has the capacity and bandwidth to do a number of these agreements simultaneously.

[Lord Bilimoria (CB) [V]]

Securing continuity of the CETA deal before 1 January is absolutely crucial; in fact, UK exports to Canada increased by 14% in the first year of implementation. Will the Minister agree that, assuming we secure this and roll it over, we can then have a brand new, bespoke, super-duper new trade deal to strengthen both economies, in their best interests and best of class, including issues such as climate change? Would he also agree that we can see the CPTPP as a future opportunity for the UK’s trading future and to broaden investment ties between the UK and Canada?

[Lord Grimstone of Boscobel (Con)]

The noble Lord is completely right. The focus of our present discussions with Canada has been on continuity of trade and I am very confident that an agreement will be continued. The next priority will be to use that as a launchpad from which we can then deepen and strengthen our very important relationship with Canada in the future.

[Lord Triesman (Lab) [V]]

My Lords, it is helpful that Prime Minister Trudeau is enthusiastic about starting and sharing a trade deal with us. However, it is deeply worrying that he doubts our capacity and expertise. It is hard to see why Liz Truss feels such grounds for optimism. Given the capacity issues, will the Minister set out the Government’s strategy in respect of the Regional Comprehensive Economic Partnership, concluded last weekend between China and 14 of its neighbours? This agreement covers 30% of global economic output. It makes no mention of the United Kingdom, despite the Government’s assertion that this region affords the greatest global opportunities for free trade deals and future growth.

[Lord Grimstone of Boscobel (Con)]

I encourage the noble Lord to distinguish between comments of substance and those that are made purely as a negotiating tactic. We have closely observed the recent agreement in Asia. Our priority is negotiating to join the Trans-Pacific Partnership next year, which is a much deeper and richer agreement.

[Lord Purvis of Tweed (LD)]

My Lords, it could be suggested that “walking away” from negotiations could be a government tactic, given that it was the no-deal temporary tariff published by the UK that prompted the Canadians to further consider our intentions. The UK has now published its permanent tariff regime. If we are hopeful of a deal, we may have to scrutinise this in short order. How many of these tariffs is Canada currently disputing?

[Lord Grimstone of Boscobel (Con)]

It would not be appropriate for me to go into the detail of ongoing negotiations. But I assure noble Lords that talks are at an advanced stage and I am confident that they will be concluded satisfactorily.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the Government promised that 40 rollover agreements would be in place by the end of the transition period. Only 20 have been considered so far under the CRaG procedure. We have fewer than 21 sitting days before 31 December, so it is not physically possible to ratify the remaining trade agreements under normal procedures. What advice can the Minister offer the country’s importers and exporters about what they should be doing if their trade engages with, for example, Canada, Singapore, Mexico or Vietnam?

[Lord Grimstone of Boscobel (Con)]

My Lords, first, I must correct the noble Lord: 23 agreements have now been signed. This is a moving target. I encourage British businesses to watch this space. I assure the House that all agreements will be put through the CRaG process. Some may need to be provisionally applied, but they will all be ratified by our standard agreements in due course.

[Lord McLoughlin (Con)]

My Lords, does my noble friend agree that the new trade agreement signed with Japan and the continuity agreements reached with a number of other countries show that the department is well aware of the pressures and the desire of industry for these agreements, and is working flat out to ensure that they are brought to a conclusion as quickly as possible?

[Lord Grimstone of Boscobel (Con)]

I thank my noble friend for his comments and for what he said about my department. My officials have worked extraordinarily hard in difficult circumstances during Covid. They are doing a marvellous job. I am sure we will see this progress continue.

[The Lord Bishop of Salisbury]

My Lords, early this morning, I had breakfast on Zoom, hosted by my colleague the Bishop of Sherborne, along with people from the Dorset churches and community. A farmer and local businessman said that his greatest fear for the future was uncertainty. How will this uncertainty be ended so that he will not be left just watching this space but will know what opportunities there are? How will the House assess these both in relation to the economy and to the environment?

[Lord Grimstone of Boscobel (Con)]

The right reverend Prelate makes a good point. I assure him that these matters are at the front of our mind. Uncertainty is being progressively eliminated. I am looking forward to the time when there is no uncertainty whatever.

[Lord McNicol of West Kilbride (Lab)]

Following my noble friend Lord Stevenson’s question, why, if the Minister says we have no bandwidth issues, will all future continuity agreements fall outside the full, proper CRaG procedure and be dealt with through a partial cover? This will eliminate a lot of the parliamentary scrutiny we talked about in the Trade Bill.

[Lord Grimstone of Boscobel (Con)]

My Lords, I can confirm that every single agreement will go through the comprehensive CRaG procedure. There may be issues of timing because these negotiations often go to the wire. But I assure the House that, even if they need to be provisionally implemented, every single agreement will be subject to appropriate parliamentary scrutiny.

[Baroness Ludford (LD) [V]]

My Lords, about an hour and a half ago, the International Trade Secretary, Liz Truss, tweeted that later today, at a conference of the trade body, TheCityUK, she would

“set out how the UK can become a global hub for services and tech trade … Services sits at the heart of my vision for values-driven and value-generating trade policy.”

We have heard hardly a squeak from the Brexit talks about services, which represent 80% of our economy, or about the quest for a data adequacy decision, which is essential to the tech trade. We are six weeks out from the end of the transition period. Can the Minister tell us where we are on services and data?

[Lord Grimstone of Boscobel (Con)]

I congratulate the noble Baroness on monitoring the International Trade Secretary’s Twitter feed so carefully. I agree about the importance of services. I hope the noble Baroness will understand that it would not be appropriate for me to comment on ongoing negotiations.

[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

My Lords, the time allowed for this Question has elapsed.