Trade Bill

Debate between Lord Hendy and Lord Grimstone of Boscobel

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

[Lord Grimstone of Boscobel (Con)]

The noble Lord raises two good points. On the first point, I will, if I may, write to him setting out in more detail the disadvantages and advantages that I see of the negative as opposed to the affirmative process. On the court, I make it clear that we welcome changes in the ISDS mechanism and potentially the formation of an MIC if, once the details are worked out, it seems that nations will sign up to it and it will be workable and in the best interests of the UK. We do not have our head in the sand in these matters. Like the noble Lord, I recognise that, if improvements can be made to the ISDS process, it is incumbent on us to do that. The point that I was trying to get across was that these are still early days in the discussions at the UN on this and it did not seem right to put our weight firmly behind it until we see how the discussions move forward. But I assure the noble Lord that we are open-minded about this and we will see where it gets to.

[Lord Hendy (Lab)]

My Lords, I am very grateful to the Minister for his response and to my noble friends Lord Hain, Lady Blower and Lady Chakrabarti for supporting Amendment 17. I am also grateful to all noble Lords who made such elegant and persuasive contributions to this debate, which has been wide-ranging and has covered a lot of issues.

I will not presume on the time of the Committee by commenting on particular contributions, save for two. The noble Lord, Lord Lansley, mentioned the fact that the central issue in the Philip Morris case was litigated in the World Trade Organization dispute mechanism, where the case was lost. His knowledge of the WTO is certainly greater than mine, but my understanding is that the rules, and hence the basis of the claim in the WTO, were different from the basis of the claim under the ISDS, not least because the claim in the WTO—as I understand it; I could be wrong—was brought by nation states rather than investing corporations.

The Minister made many points in his summary that I would like to take up, but I must resist. I will make just three points. First, he said that there were great benefits to UK investors overseas. Of course I accept that that is the case, but there appear to me to be four points to bear in mind.

First, this country should not support a mechanism that provides an avenue of challenge to other democratic states, just as it should not support a mechanism that enables a challenge to our democratic state. A remedy under ISDS is not available to citizens of either state except for investing corporations, but many citizens are affected by the matters covered by these trade agreements—food standards, environmental standards and labour standards.

Secondly, the Minister overlooked the globalised economy that we now have. UK corporations can establish almost anywhere in the world, just as foreign corporations can. So UK corporations can take advantage of ISDS arrangements by establishing a subsidiary to bring a case against the United Kingdom. There are dangers there, too.

Thirdly, when overseas investors make their investments, they of course evaluate the risk that things could go wrong or that the state might change the law. That is a matter for them. I do not see why we should put at risk our democratic standards by inviting a mechanism to protect overseas commercial investors.

Fourthly, this country has an admired legal system, as do many other countries. It is wrong in principle to provide a mechanism of legal challenge that is outside the domestic laws of any country.