Trade Bill

Debate between Lord Grimstone of Boscobel and Baroness Kramer

Committee stage
Thursday 15th October 2020 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I drafted Amendment 109 essentially in reaction to Amendment 106 proposed by the noble Lord, Lord Stevenson, which would require the group of non-executive directors of the TRA to include stakeholders. I have no problem with people with those backgrounds and expertise being on that board, but I fear that it could raise false expectations. You could say that this was a particular bête noire of mine: non-execs on a board must act in the interests of the organisation on whose board they sit. Membership is in many ways a gagging order, if they have other interests and represent other relevant parties. The noble Baroness, Lady Noakes, pointed out, as did my noble friend Lady Bowles, that their work is very largely procedural and concerns governance: whether rules have been followed, whether risks have been assessed and what remuneration is right for senior executives. However, I believe that stakeholders, especially given the economic importance and potential impact of the TRA, should be able to speak and persuade freely in the interests of the organisations or different nations of the UK, the businesses they belong to or the consumers they represent. That applies just as much to other relevant groups.

Our proposal in Amendment 106 is to create an advisory committee. In my mind at least—and this is not necessarily underscored in the amendment’s language —it would be like the two-tiered corporate governance systems that we see in many continental European countries. Of course the TRA can set up committees. However, I am concerned that, as they are written in the Bill, they will have a tendency to be ad hoc and lack status, whereas a board that contains representatives with a specific role and status established in legislation has much more impact and is exceedingly important as a flow of information and advice to the TRA. I pick up a comment which I think the noble Lord, Lord Lansley, made, which is that it is really important that advice is balanced, and this would be one of the mechanisms that would help to ensure it.

I join the noble Lord, Lord Stevenson, and others in their call in Amendment 81 for pre-appointment hearings by the Select Committee on International Trade. These would be for appointments to the Board of Trade—and, as the noble Baroness, Lady Noakes, said, TAGs would probably be thrown into that as well. I spoke on this extensively on Tuesday, and I shall not repeat the comments, as the case has been very well made. The same amendment calls for appointments to be made following the governance code for public appointments. We are in a pretty pass when this House has to put such a requirement in a Bill in regard to such key and important appointments. Clearly, it has to do so because No. 10 has been so clear in its intentions to skirt those requirements wherever possible.

The noble Baroness, Lady Noakes—and I saw the noble Lord, Lord Lansley, nodding confirmation—pointed out that the appointments would essentially be limited to members of the Privy Council. I am really shocked at the thought that the Privy Council mechanism is being used to get around what everyone would expect to be a process that came under the governance code for public appointments. The noble Lord, Lord Grimstone, has a long history with that code, and I hope that he will be sufficiently shocked that he goes back to the Government and discusses that issue. All these appointments need to have the absolute smack of integrity, and there must be an absolute absence of cronyism.

Amendment 83 raises the issue of non-disclosure agreements. I was very pleased to see this language in there. I think that the drafting probably needs some work but, again, we are in Committee. Non-disclosure agreements are being widely abused, instead of being kept to their original and narrow purpose of preventing commercial harm essentially by a competitor company, or disclosure of intellectual property, pricing and so on. I have worked with so many whistleblowers who have experienced the impact of these gagging orders, which tend to work very much against the public interest. We need a proper drafting into the Bill of the kind of language that would limit the scope and purpose of non-disclosure agreements to the most restricted kind of necessity that they originally covered, not the expansive use that has become habitual as a way to protect privacy and avoid challenge.

Amendment 110, in my name and that of my noble friend Lady Bowles, again raises the issue of properly funding the TRA, including providing for its inherited liabilities, to protect its independence. I spoke to this on Tuesday, so I shall not repeat myself, but there is a common sense among many of your Lordships that funding the TRA is an issue that has to be challenged. It must not find itself in a position of being short of resource and, therefore, curtailing or basically shaping what it does because of a lack of funding.

Amendments 111 and 112 in my name and that of my noble friend and Amendment 113 in the name of the noble Lord, Lord Lansley, which I think is a very significant amendment, strengthen the reporting requirements of the TRA and finally provide some substance to the report. I spoke on an earlier group of the criticism of this Bill from the Constitution Committee—essentially, of its thinness and skeleton nature. Providing this kind of substance is genuinely critical if the significance of Parliament is to be recognised. As drafted, the Bill, as we have heard on two groups of amendments today, raises issues of transparency and independence. Therefore, like my noble friend Lady Bowles, I find it frustrating and inappropriate that the report of the TRA comes to Parliament only via the Secretary of State. That strikes me as a mark of undesirable dependency. We have been arguing all the way through that the TRA must be visibly, clearly and openly independent. Its ability to report directly to Parliament is surely a litmus test of that.

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

My Lords, we have had a most interesting debate on this group of amendments, particularly touching on many aspects of corporate governance. To put my cards on the table, I am a fervent believer that good corporate governance leads to good decisions. Noble Lords were absolutely right to make their comments about the importance of governance.

I thank the noble Lords, Lord Bassam of Brighton and Lord Rooker, and the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 81, and the noble Lord, Lord Stevenson of Balmacara, for moving it. Noble Lords may be interested to hear that, technically, the only member of the Board of Trade is its president, the Trade Secretary, as it is a requirement that, to be a member, you must be a privy counsellor. The Board of Trade is one of our most historic boards, which is why, as noble Lords can imagine, it was set up that way. My noble friend Lady Noakes was quite right about this, as was my noble friend Lord Trenchard, who added his normal wisdom to our debate.

The Board of Trade advisers are just that: advisers. They are not board members. We brought together experts from business, academia and government, who we hope will use their expertise and influence to help Britain make a stronger case for free trade on the international stage and to encourage more businesses across the UK regions and nations to boost their international trade. They are not policymakers, as such; the board and its advisers take a collaborative approach, focused on promoting the UK regions as destinations to trade and do business with.

The selection process for all advisers is the same: they are first shortlisted by the president of the board; departmental officials then conduct due diligence, in accordance with guidance from the propriety and ethics team at the Cabinet Office. Throughout this, principles are followed that are consistent with those underpinning the Governance Code on Public Appointments, to provide advice on the suitability of appointments. As they are direct appointments, the Secretary of State considers the advice provided and, following No. 10 approval, has the final decision on whether or not to appoint. The board’s sole function is to provide expert and apolitical advice to the department. As such, the role of adviser to the board does not carry with it the responsibility to make decisions, hold senior staff to account or have any role in striking trade deals while representing the UK overseas.

I listened carefully to the comments made by the noble Baroness, Lady Bennett, and the noble Lord, Lord Wigley, about Mr Tony Abbott. As the PM has made clear, the Government do not agree with all of Tony Abbott’s views; nor do his views reflect the views of the Government. As with all advisers, he has been appointed because of his expertise in trade matters.

I thank again the noble Baroness, Lady Kramer, for her kind words about my small role in public appointments and for explaining the need for all public appointments to be made with integrity. Cronyism must have no place in our public appointment system.

Amendment 83, tabled by the noble Lord, Lord Stevenson, relates to the trade advisory groups established by my department. The trade advisory groups will engage with businesses across the whole of the UK to access the strategic and technical expertise necessary to progress our trade negotiations with new partners across the globe. They have a very wide membership, embracing exactly the types of organisations referred to by my noble friend Lady McIntosh. The names of all members and their affiliations can be found on GOV.UK.

Trade advisory groups are just one part of the Government’s external engagement on international trade. We of course recognise the very important position that civil society organisations, such as trade unions, occupy in our society, particularly the unique insight that they can offer on important issues. I confirm that we are deepening our engagement with trade unions in relation to trade matters and we will announce more details of that in due course.

I have heard the concerns over confidentiality, and I reassure the House that we intend to share sensitive information only where it is relevant to current negotiations and where the trade advisory groups are best positioned to provide advice and expertise. This is information which must of course be protected, because if such information were to be released it may compromise our negotiations with key partners.

Trade Bill

Debate between Lord Grimstone of Boscobel and Baroness Kramer

Committee stage
Tuesday 13th October 2020 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord, Lord Lansley, for that question. I have some skin in this game, because I was the author of the public appointments code in which these requirements appear. I shall certainly consider the point that he has raised and write to him about it, but, frankly, with no great confidence that I will agree with him when I do so.

[Baroness Kramer (LD) [V]]

When the noble Lord, Lord Grimstone, drew up that framework for public appointments, there was no way in which he could have anticipated this role, so I hope that he will look closely at the role of the TRA chair and listen closely to the noble Lord, Lord Lansley.

I was delighted to hear from the Minister that the Secretary of State cannot vary duties recommended by the TRA and cannot, without the TRA’s say-so, impose those duties. I appreciate that clarification.

I smiled at the thought that there might be “excessive steps” to protect the independence and impartiality of the TRA. It is hard to think of anything that would be excessive if it were to support those principles of independence and impartiality, so fundamental are they to the role.

Given the lateness of the hour, I beg leave to withdraw my amendment.