Trade Bill

Debate between Lord Grimstone of Boscobel and Lord Bassam of Brighton

Committee stage
Tuesday 13th October 2020 Lords Chamber

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I am very grateful to the noble Lord, Lord Purvis, for putting forward this amendment. We should also be grateful to other colleagues in the Chamber for asking key questions on this.

Bad trade deals produce clear winners and losers. Surely our task is to make sure that British businesses, including those in Northern Ireland, do not lose out in trade agreements and face unnecessary costs. British businesses have faced an incredibly tough year; the pandemic in particular has seriously impacted on UK trade. We have seen big falls in exports and imports in the three months following April 2020; the ONS found that trade exports fell by £33.1 billion in those three months, while imports fell by £29.9 billion. These were the largest three-monthly falls since comparable records began in 1997. Trade will be vital for businesses in the post-Covid recovery period. The Government should make sure that businesses do not face unnecessary costs arising from trade agreements.

I am glad that the Minister has said previously that the Government have committed to publish their negotiating objectives alongside an initial impact assessment. Can he confirm that a full impact assessment for each agreement will be published by the Government at the end of negotiations? Will this full impact assessment be reviewed by an independent body? Will the Government act on any findings that come as a by-product of the review?

There are clearly major problems for Northern Ireland. Does the Minister expect different costs for businesses exporting or importing goods and services to or from Northern Ireland to result from an EU-UK FTA and any rollover agreement for the Japan agreement? Other businesses in the rest of the UK will clearly be affected by this.

The amendment’s explanatory note also refers to additional costs to businesses operating within the UK’s internal market. Labour firmly believes that there is a need for a strong internal market so that businesses can trade freely across the UK’s four nations, which will be vital for our economy and shared prosperity. This will be discussed at length in the Internal Market Bill, which has some important implications for this Bill.

I hope that the Minister is following these debates closely. I hope that we can be reassured that the impact assessments will be transparently conducted and published, and that the Government will take note of their findings. Rather like the noble Baroness, Lady Noakes, I accept that there are costs both ways, but we need transparency. That transparency will enable our businesses to trade better, more freely and more competitively.

[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 this amendment, put down by the noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Suttie. As I told the House on the first day of Committee, and as we have touched on since, our continuity agreements seek to replicate the effects of EU agreements, and the 21 agreements that we have already signed show that we are not diverging or introducing new obligations. These agreements are continuity by name and continuity by nature. We therefore do not think it proportionate to produce impact assessments for trade deals that only maintain the status quo. I emphasise that point because I will come to other free trade agreements later.

This is not to say that we intend to deny Parliament information on these agreements. That is why the parliamentary reports that we have committed to publish alongside signed agreements contain detailed information about the volume of trade, the composition of imports and exports, and the wider economic impact of those agreements. As I have said, we will continue to lay these parliamentary reports voluntarily, with Explanatory Memoranda, alongside each new continuity agreement. The recently signed new agreement with Ukraine will of course be treated in that way.

New FTAs are not included in the scope of the Bill—neither are the EU arrangements—but we have committed to publishing in advance of opening negotiations initial economic scoping assessments for the new FTAs setting out what impact we believe the agreements might have. At the end of negotiations, we will produce an impact assessment for the final treaty, alongside an Explanatory Memorandum, prior to it being laid before Parliament for scrutiny under CRaG. The Government believe that this strikes the right balance.

The noble Baroness, Lady McIntosh, and the noble Lord, Lord Bassam, asked what kind of independent assessment will be made of these assessments. I am pleased to say that those assessments will be made by the Regulatory Policy Committee. I can also let the House know that the International Agreements Sub-Committee has already received these assessments in relation to the Japan FTA, which we signed a few weeks ago. These agreements and reports have been made available to the IAC on a confidential basis. We committed that the committee would have these agreements to review in good time before the CRaG process started; I am pleased to say that I had a good meeting with the IAC yesterday where we talked through these processes. I look forward to receiving its report in due course.

The noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Suttie, asked various questions relating to trade with the EU, particularly on customs arrangements and other contingency arrangements, including Northern Ireland matters that will arise at the end of the transition period. If I may, I will write to the noble Lord and the noble Baroness on these matters.

Given these reassurances, I ask the noble Lord to withdraw the amendment.

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[Lord Bassam of Brighton (Lab) [V]]

My Lords, we should be grateful to the noble Lord, Lord Lansley, for his amendment on trade promotion and strategies. It has stimulated an interesting debate. It is interesting to me because it provides me with the an opportunity of agreeing, for once, with the noble Baroness, Lady Noakes, about the need to make any trade promotion strategy government-wide, which goes without saying. It is also interesting because the noble Baroness, Lady McIntosh, mentioned the trade in pigs, our influence on China and how we might learn from its ability to market pigs’ trotters. It is some years since I consumed a pig’s trotter, but the thought of it fills me with great joy.

As has been mentioned throughout these debates, trade offers many benefits to UK businesses and will play a vital role in our post-Covid recovery. The Government must make sure that when they sign trade deals those benefits are shared across SMEs and large companies, as well as different regional groupings.

The amendment usefully refers to trade and export strategies, and I shall pick up a few points on the Government’s approach, especially their export strategy. Their stated ambition is to increase exports from 30% to 35% of GDP, with the Department for International Trade and UK Export Finance playing a key part in achieving that goal. Their previous ambition of increasing exports to £1 trillion by 2020 was not achieved. The National Audit Office has criticised the evidence underlying the strategy to increase exports to 35% of GDP and has said that it is not clear how stretching such an ambition is and that the timetable in which the target is expected to be achieved is not clear. The Public Accounts Committee has also said that it is unclear how the DIT’s work is well-linked to the Government’s export strategy ambition.

I have questions for the Minister. How and when will the Government achieve their 35% target? How are the overseas networks of DIT and UKEF staff working closely together to avoid missing export opportunities? The Federation of Small Businesses supports the 35% target but would welcome a grant scheme to support smaller businesses in particular—which is where we look for growth—looking to invest in new export processes. Are the Government giving that active consideration? It goes without saying that we need a strategy that actively promotes trade internationally in these new times, as the noble Lord, Lord Purvis, called them, as we find our way in the new world free of the EU. We must have that strategy in place, and this debate has highlighted that. Colleagues have brought into it the valuable experience, knowledge and insight that they gained from the all-party parliamentary group.

The Minister in the other place has said that he is developing a new export strategy. What is it to be and when will it be published? Can we have more debate on it and can the House expect to have regular updates and reports based on it?

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank my noble friend Lord Lansley for his amendment and his wise words in his introduction, honed by his years of experience.

As discussed when I met my noble friend to speak about this amendment, international trade agreements are not worth the paper they are written on if businesses and consumers are not educated and enabled to take advantage of their contents. I also fully agree with the noble Lord, Lord Purvis, about the need to operationalise those agreements. He and I were in complete agreement when we discussed this. I therefore agree that it is right that the Government should regularly review the benefits realised through the measures adopted for the international trade agreements they negotiate and the trade and export promotion strategies that they deploy. The strategies are vital, and I and all my ministerial colleagues in the department are well-seized of this.

The new all-party parliamentary group for trade and export promotion is an important development, and I am pleased to thoroughly endorse it. The energy of the noble Viscount, Lord Waverley, as co-chair, and its eminent sponsors will surely lead to its success.

Coming to the substance of the amendment, I hope that my noble friend will be pleased to hear that my department already has plans to publish such a report every two years. I hope that noble Lords will appreciate that the two-year period is appropriate because to do so more regularly would be overly burdensome for the department to pull together and would provide insufficient time to monitor the benefits realised. I assure noble Lords that the fact that the period is two years rather than one year in no way means that we do not agree on the importance of this topic.

The noble Lord, Lord Purvis, referred to the trade access programme. I am well aware from my contacts with SMEs how valuable many of them find it, and I will write to give him an update on its present stature.

I can assure the noble Lord, Lord Bassam, that we are fully seized of the points he makes and that my domestic and international colleagues work closely together on this. If at any time a conversation with me or my ministerial colleagues would help him, we would be happy to have one.

I hope that my noble friend Lord Lansley is reassured that the Government share the objective behind his amendment and that our proposal for a biannual report meets it in a proportionate way. Consequently, I ask that the amendment be withdrawn.

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[Lord Bassam of Brighton (Lab) [V]]

My Lords, this is an important and valuable group of amendments and I congratulate my colleagues on bringing them forward and providing us with the opportunity to shine a bit more light on the Trade Remedies Authority. Labour believes that the creation of the TRA is necessary and welcome, in principle, once the UK has finally left the EU, so that we can protect domestic industries in our own right, investigate allegations of unfair practices by overseas competitors and seek their resolution via the WTO’s dispute settlement mechanisms.

However, we are also worried that the new Trade Remedies Authority lacks the stakeholder engagement, independence and parliamentary oversight and accountability to ensure that it will operate transparently and fairly when investigating and challenging practices that distort competition against UK producers, in breach of international trade rules. It is no secret that similar concerns were shared by your Lordships’ Constitution Committee, which said that

“it is not clear why … the functions and powers of the Trade Remedies Authority cannot be set out in more detail in this Bill”.

Schedule 4 states that the Secretary of State will appoint the chair of the Trade Remedies Authority, who will in turn appoint the chief executive and non-executive members. This process needs to ensure an independence of thought and action at the TRA. The Secretary of State should not appoint someone just in their own image, or necessarily with the same political leanings and economic opinion. We cannot have an unbalanced TRA that looks only at the approach favoured by the Government. The chair must balance interests in exactly the right way to do these things. Can the Minister therefore explain how independence at the TRA will be guaranteed? Can he explain what parliamentary involvement there will be to ensure that independence and that, whoever the chair is, they receive representations from across industry, employers, the unions, consumer groups, and the devolved nations? How will the TRA ensure a wide membership?

It is clear that we need a functioning TRA and a functioning trade remedies system, but that functioning will be undermined if there is no independence. This group of amendments enables us to focus on that important thing. I must say that I am very much drawn to the constitutional innovation of having confirmation hearings, so that at least questions can be asked by parliamentarians of the process and of those involved.

[Lord Grimstone of Boscobel (Con)]

My Lords, I recognise that the amendments tabled by noble Lords are intended to reinforce the independence and impartiality of the TRA, but I reassure them that this legislation has already been designed with this in mind. Both the Trade Bill and the Taxation (Cross-border Trade) Act have inbuilt protections of the TRA’s impartiality that already address many of these points. I reassure the Committee that we want the TRA to be independent and impartial, because it is the absolute requirement for a body of that sort.

Turning first to Amendment 78, in the name of the noble Baroness, Lady Kramer, it is of course important that the Secretary of State has regard to the operational independence and impartiality of the TRA. But imposing a positive duty may require the Secretary of State to take potentially excessive steps to protect the TRA’s independence, which might prevent her making any requests at all, thereby depriving her of the vital expertise that the TRA holds.

Trade Bill

Debate between Lord Grimstone of Boscobel and Lord Bassam of Brighton

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020 Grand Committee

[Lord Bassam of Brighton (Lab) [V]]

My Lords, Labour supports the amendments in this group. As we heard, Amendment 28 seeks to reinsert a government amendment made to the previous Trade Bill, which would reduce from five years to three years the period during which the EU FTAs can be rolled over and in which previously rolled-over FTAs can be reamended. Amendment 29 would reinsert another government amendment from last year. If the Government decide to extend the period in which to make regulations under Clause 2, any such period should not be more than three years.

In commentary, I must say that I am surprised that these sunset provisions are not already included. As the noble Lord, Lord Purvis, explained, the Government themselves made the changes last time round. Only last year, they committed to reducing from five years to three years the length of the period in which the implementation power can be used. My argument is simple. Let us put these amendments back in the Bill, so that the Minister can demonstrate the same faith in the department and in the Government as previous Ministers did to complete these rollover agreements in a timely fashion.

What has changed? Why do we face the prospect of not having these rollover periods? What is the problem with having the sunset clause as it is? If it was right last time, surely it must be right this time. I am drawn to sharing the suspicion of the noble Lord, Lord Purvis, that the advent of a larger majority has made the Government think that they do not need these provisions, but that cannot be right either. When this was discussed the last time round, the Government said that the period would be renewable by agreement in both Houses of Parliament and that they were committed to engaging the devolved Administrations in that decision-making process in advance. I hope that those points still stand and I look forward to the Minister confirming that they do, as that seems a sensible way forward, which I am sure would find agreement on all sides of the House.

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

My Lords, I will now address Amendments 28, 29, 30 and 32, in the names of the noble Lords, Lord Purvis of Tweed and Lord Bassam of Brighton, and the noble Baroness, Lady Kramer. The amendments would reduce the sunset period from five to three years and reduce the period by which it can be extended also from five to three years.

I am afraid that I have to say to the noble Lords, Lord Purvis and Lord Bassam, and to other noble Lords that, after careful consideration, we believe that the current sunset provisions in the Bill strike the right balance between allowing flexibility for negotiators, the ability to keep agreements operable and providing Parliament with appropriate constraints and scrutiny.

As I have said to noble Lords previously, the Government and I are very aware that at the time of the 2017-19 Trade Bill there was uncertainty and concern from Parliament as to the nature of the Government’s continuity programme. That is why the Government brought forward a number of amendments to the 2017-19 Bill. Noble Lords might be rather bored of hearing me repeat the fact that we have now signed 20 continuity agreements, so they will be pleased to know that, as the noble Lord, Lord Purvis, acknowledged, we have now signed 21. The United Kingdom and Ukraine have signed a political, free trade and strategic partnership agreement, which will help to further strengthen the partnership and serves as a foundation for a deeper strategic political and trading relationship between the UK and Ukraine. Trade between the UK and Ukraine was worth £1.5 billion in 2019 and we are committed to protecting and growing that trade. Signing this agreement will no doubt help us to do that.

We have now signed 21 continuity agreements and expect to make positive progress with remaining continuity agreements before the end of the transition period. Indeed, before this Bill completes its passage through your Lordships’ House, perhaps I will no longer have to say 21 but can come back with a higher number. I am pleased that these agreements have given Parliament more certainty as to the practical effects of the Government’s continuity programme.