Watchdogs (Industry and Regulators Committee Report)

Lord Kerr of Kinlochard Excerpts

Monday 9th September 2024 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I was lucky enough to serve on the economic committee when the noble Lord, Lord Hollick, was chairing it, so the quality of the report and the skill with which he introduced it tonight came as no surprise to me. I shall pick up what it says about transparency and accountability and draw on two examples to illustrate the point made very powerfully in the report at paragraphs 83 and 85.

I shall begin with Ofwat, about which the noble Baroness, Lady Jones, has spoken so eloquently. The Government have said they are reviewing regulation of the water sector. Because of the financial crisis at Thames Water, there is now a Water (Special Measures) Bill before the House. However, I wonder whether the Government will also review Ofwat’s announcement only a week after the election, clearly made with pride, that it had knocked £16 billion off the water companies’ investment plans for the next five years. The noble Lord, Lord Hollick, referred—correctly, in my view—to catastrophic underinvestment in the sector. It does not sound as if the water regulator agrees. Perhaps the Minister could tell us whether the decision announced a week after the election stands. It seems a little odd, given the national revulsion against polluted rivers and beaches. One wonders whether the regulator was not perhaps operating under an injunction from the previous Government to give paramount priority to keeping prices down. We do not know whether that is the case because all such injunctions are not necessarily public. Like the committee, I think that is wrong.

I have the same concern about Ofgem, the energy regulator, about which I know rather more because throughout the Cameron, May and Johnson years I was on the board of a company running extensive electricity networks. Ofgem cut back its investment plans in every one of the years that I was on the board, by over £1 billion in some years—it was not just us; our competitors fared no better—although everyone agreed that on present plans the national electricity grid would be quite inadequate to meet future demand. Think data centres, road transport, rail transport, domestic heating and net zero. The biggest problem is not generation but distribution.

I do not know whether the Government, anxious to keep today’s prices down, were urging Ofgem not to take a long view, or whether—although this is a little implausible—they were simply looking the other way, passively allowing Ofgem to forget about tomorrow. However, we should have known and the country should have known. The report by the noble Lord, Lord Hollick, is spot on when it says at paragraph 83:

“The Government’s strategic steers and policy statements to regulators often do not provide adequate clarity on how to make trade-offs between their objectives, especially in relation to political and distributional issues, such as balancing the affordability of utility bills with the need for future investment … The Government must not duck responsibility by delegating political or distributional decisions to regulators without clear objectives or any sense of priority”.


I agree with that; it has to be right.

Ofgem says on its website:

“We are a non-ministerial government department and an independent National Regulatory Authority”.


Is there not a contradiction there? How independent can a government department be? It continues:

“Our role is to protect consumers now and in the future by working to deliver a greener, fairer energy system”—


not a clearer, fairer and adequate energy system. Must protecting consumers now mean curtailing tomorrow’s consumption? I do not think so. Clearly there is a balance to be struck but, equally clearly, striking it is a political decision that should be public—announced to Parliament and accountable to Parliament. He who pays the piper calls the tune, but he must not pretend that it was the piper alone who picked it.

Also, Mrs Badenoch really should not have refused to give evidence to the committee.

Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Kerr of Kinlochard Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

It is a great pleasure to follow the noble Lord, Lord Marland. I shall be slightly less concise, but I bear the earlier discussion in mind.

On my tombstone will be the words: “He was an inaugural member of the International Agreements Committee”. No more need be said: it is the peak of my career. I was lucky enough to be on that sub-committee of the EU Committee which preceded and then became it, under the inventive chairmanship of the noble and learned Lord, Lord Goldsmith, and then the skilful Socratic reasoning of the noble Baroness, Lady Hayter. From the word go, I thought it was a good idea that we should accede to what I am going to call the Pacific partnership treaty—because I do not believe that any sane human being can say “CPTPP”.

Our work in the IAC on the treaty was helped hugely by the constructive approach taken by successive Ministers: the noble Lord, Lord Grimstone, who is not in his place today, now a poacher, then a gamekeeper; and the noble Lord, Lord Johnson, who was extremely forthcoming to the committee. I am glad that the committee has produced such a positive report. It is much more supportive than we were able to be about some of the Government’s bilateral trade agreements earlier on.

It is easier to be supportive because the Government did not oversell the deal, and they did tend to oversell some of the previous simple rollover deals. Back then, of course, we had a Trade Secretary and a Prime Minister who were determined to declare total victories—black-and-white, total triumphs. The Trade Secretary pronounced it a “disgrace” that we sell so little cheese to countries where cheese is not eaten, and the Prime Minister proudly proclaimed that his trade treaty with the European Union contained “no non-tariff barriers”. I cannot recall any trade treaty that does contain non- tariff barriers. Most good trade treaties remove or limit them; his ignored them and so legitimised them and introduced them, as the noble Lord, Lord Purvis, has explained.

In the case of the Pacific partnership, on the other hand, I recall no photo ops, no soundbites. We were spared the obvious soundbites about the merits of selling Bovril to Borneo, and the economic benefits were not exaggerated. The OBR says they are perhaps rather less than the Government had previously suggested, but the Government were putting the figure at under 0.1% of GDP, and the various upside possibilities that the noble Lord, Lord Lansley, mentioned had been taken into account in their calculations.

The deal was not oversold; it was sold on the potential of the partnership to develop. That was quite right, and I believe the partnership will develop. The digital economy deal between Chile, New Zealand and Singapore is a harbinger and a signpost. I hope that is the way it will develop, and I commend the call on the Government, in paragraph 118 of the IAC’s report,

“to set out and publish its priorities”

for this year’s quinquennial review of the partnership.

The Canadians, who are leading on the review, want to see a deepening of the deal, particularly in the area of digital trade. I hope we will row in behind them and help them on that. I also attach importance to the various recommendations to make British business better aware of the new opportunities the partnership opens and how to access them. The task force is a good idea; the roadshow is a good idea; the website clearly needs reform. Other than for command economies, trade treaties only enable: the greater part of their job is making sure that the opportunities for actual and potential exporters are used, and our Government need to do better. Explaining the partnership’s complex rules of origin has hardly begun.

With the indulgence of the House, I would like to offer one more general point—a coda to my time on the IAC, drawing on my experience of it. It serves the House well within the confines imposed on it by the CRaG Act, but I very much hope that the next Government, of whatever political complexion, will be readier than this one have been to look again at these constraints. When CRaG was passed, no one foresaw Brexit. Trade agreements back then were negotiated for us by the European Commission’s experts, most of them British, and overseen by the Council in Brussels and the European Parliament in Strasbourg. It was all very transparent. So the EU Committee, when I served on it, looking at trade agreements, was far better informed back then, pre-Brexit, than the IAC is now.

Brexit meant that Whitehall took back control but Westminster was shut out. Although my past was in Whitehall, I believe that the reduction in Westminster’s scrutiny is actually bad for Whitehall and for the country. Let me explain.

The principal reason why the EU drives harder trade bargains than we do—the contrast between our deal with Australia and its was striking—is that it is holding the keys to a larger market so it can extract greater concessions for handing over the keys. The EU is also more practised, but we may be getting better. It sounds as if we have been more resolute with the Canadians and Mexicans, whose agricultural exporters pricked up their ears at seeing how the Australians and New Zealanders had taken us to the cleaners. Wiser counsels have prevailed on India; I was concerned by the Johnson press for an agreement—any agreement—soon.

However, I believe that the Commission’s hand on trade negotiations is greatly strengthened by the effective scrutiny of its work that the Council in Brussels and the Parliament in Strasbourg hold. American negotiators can and do point to their separation of powers, and congressional oversight and veto rights. When American negotiators reject a proposed concession or a trade-off, they can and do say, “Sorry, Congress wouldn’t wear it. It wouldn’t fly on the Hill”. EU negotiators can and frequently do play the same card. Ours cannot because the world knows that, in London, parliamentary oversight is pro forma and perfunctory. Trade policy in London is a black box and Parliament is put in the picture about treaties only once it is too late to change them.

It is different in Ottawa, Canberra and Wellington, so our weakness is not a function of a parliamentary system; in other parliamentary systems there is far closer scrutiny than we are allowed here. When the IAC tried to find out what was happening in the negotiation with New Zealand, our principal source was the New Zealand Government’s website, which gave a very full account of each negotiating round. In London, the Minister—the noble Lord, Lord Grimstone—was allowed to send us a regular letter saying that there had been a round, a chapter had been opened, a chapter had been closed and there would be another round. He was allowed to give agendas and dates, but not information on substance, issues or trade-offs. There was nothing remotely useful, although it was all available on the New Zealand government website and so available to the committee. This is all a great pity, because greater transparency elsewhere means greater public understanding elsewhere. It means that exporters elsewhere are better prepared for new opportunities when they arise as a consequence of trade deals.

Reform of the CRaG Act, allowing for a real parliamentary role in approving mandates, following negotiations and ratifying trade treaties, would produce better outcomes for the United Kingdom. It is not a zero-sum game, with Westminster’s gain meaning Whitehall’s loss. It honestly is not; it would be a win-win. The IAC does its best for House and country, but I am quite sure that it would be better for everyone if the Government could be more grown-up and trust the country to be more grown-up about trade. We still need a clear trade strategy to be agreed and published. Here I disagree with the noble Lord, Lord Lansley. Grown-up countries do this: the Americans do it, the EU does it, France and Germany do it. Most countries publish their trade strategy, promulgate it, defend it and act on it. We should do so too. Real parliamentary association with the negotiating process would be in everybody’s interest.

Since I have disagreed with him on one point, I end by saying that I disagree with the noble Lord, Lord Lansley, on another. I am afraid I cannot share his optimism about the possibility that a Trump Administration would look again at participation in the Pacific partnership treaty. I am afraid that that ship has definitively sailed.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I thank the noble Baroness. The checking is a matter for the Food Standards Agency. We have made a number of assertions. It believes that this FTA will not result in additional risk for it. I do not wish to be contentious. I always listen very closely to the noble Baroness’s comment about free trade. We do not share the same views on its benefits. I listened to her very carefully and I noticed that at no point did she mention the principle of the consumer. I am particularly focused on making sure that the consumer benefits from these free trade deals—that they see prices come down and the range of products broaden.

A number of noble Lords, including the noble Lord, Lord Fox, and the noble Baroness, Lady Bennett, mentioned the concept of proximity being at the core of trade. For many goods, it is right and in fact efficient to have a proximous concept of trade. I think of the idea of swapping beef herds, in terms of practicality—although I think we sell better beef than the Australians, and certainly more specialist types—so there is a market in that sense. However, if we look at investment, which is an important element of the CPTPP, our two biggest investment partners in terms of growth and current value are the United States and now India. They are clearly not the most proximous countries to the UK, so it is important to understand that, in modern trade, in services, the digital provision of services and financial investment, the world truly is our oyster.

Speaking of investment: the ISDS concern is raised continually. As Investment Minister, I believe that strong investment protections for investors into the UK are at the core of our offering. If, at any point, investors felt that their investment rights would be derogated, it would be much harder for all of us—and whoever stands in my place as Investment Minister—to get the vital money that we need for our infrastructure into this country. These ISDS provisions are enormously beneficial for us. I feel totally safe in offering them to other countries. I do not believe that there is any derogation of our ability to manage our economy, our ambitions for net zero, how we treat our workforce or any other measure. Investing in these CPTPP countries protects our businesses, particularly in countries such as Malaysia where we now have these protections.

That brings me briefly to the services point—

[Lord Kerr of Kinlochard (CB)]

I entirely agree with the Minister about ISDS. Will he confirm that ISDS will be in any trade deal we sign with India?

[Lord Johnson of Lainston (Con)]

This is not in my notes. I cannot confirm what will be in our trade deal with India. I stress the importance of protecting our investor base when we invest internationally. It is right that the services principle has been raised. One of the most effective elements of the CPTPP treaty revolves around our agricultural access, where there is a high degree of compatibility between what we produce and what these markets want, as there is with goods. Noble Lords have raised this on a number of occasions. The noble Lord, Lord McNicol, raised the point about the Society of Motor Manufacturers and Traders, which particularly welcomes the relationship with Malaysia, where there is a different tariff approach. The rules of origin will simplify a lot of activity when we come to work with these countries. We do a lot of manufacturing trade with countries such as Japan, Malaysia, Vietnam and other CPTPP countries.

Services are the future. Some 80% of our economy and its growth are structured around services. The services chapters in the CPTPP can go further. This is a living agreement. We will build on the chapters, particularly on digital, that allow us to expand our services access. There are important basic building blocks around professional qualification recognition and plans to develop this effectively, to promote collaboration between professional qualification providers. It promotes collaboration between regulators. It allows for more effective business mobility, which is important. Someone who is posted to Canada on a work contract can take their spouse. There is first-time access and security for business mobility in countries such as Malaysia and Brunei, as well as other opportunities, such as transportation in Chile, and a number of other key points relating to digital provision and preventing data localisation. These all sound quite technical but are very important in firing the starting gun on further discussions.

A number of Peers, including the noble Lords, Lord Purvis, Lord Kerr and Lord Anderson, and the noble Baroness, Lady Hayter, have mentioned that these further discussions are encapsulated around a general review. This is a useful mechanism for us to participate in before we become a full member, as we are doing. This conversation will certainly include how to build on the services offering that is in the CPTPP. We welcome it. Our teams will be fully dedicated to it.

The noble Lords, Lord Kerr and Lord Marland, looked at the secretariat which will help us in these negotiations. I ask noble Lords to forgive me if I have missed any who also made this point. We have 14 full- time personnel who are part of the negotiating team and who now make up the CPTPP unit within the Department for Business and Trade. As I understand it, they are permanent and will not be moved to negotiate another deal. They will stay, I hope, to focus on making sure that we have a close relationship with the CPTPP countries. If a permanent secretariat is developed in the coming years, they would feed into that.

We want this organisation to grow, have deep roots and be strong for the future. I do not know what the plans are relating to the secretariat, but these are always live conversations, and of course we will feed in where appropriate. Once we become a full member, we will be able to put our platform forward with more vigour.

A question which is oft raised is how the department promotes the CPTPP to small businesses. I am very pleased that there is an SME chapter in the CPTPP; it is important, because it helps all economies focus on how they can help small and medium-sized enterprises to make the most of the CPTPP. This is at the core of all the economies that are participating in the treaty.

I am aware of the difficulty in promoting quite a complex treaty principle—there are rules of origin and comparable treaties, as we have treaties with many of these countries already, so it is not necessarily clear sometimes which treaty you should use, and you have to pick which of the two. We have done a great deal of work to ensure that our online access is powerful enough to enable people to make these decisions. We have a unit which specialises in promoting our free trade agenda and the treaties that we have signed up to. It has run a number of workshops. We need to work with the Chambers of Commerce to make sure that we get the message out.

I am totally aware of the need to ensure that this is a success, and I welcome the challenge. Crucially, the department sees it as part of its conceptual and fundamental mission. This Government want to be proud of their post-Brexit vision of Britain. Therefore, it is up to us to ensure that we deliver, by making the necessary noise to get as many businesses involved, both in exporting and in taking advantage of this treaty.

I hope I have covered the majority of the points raised. I am always comfortable coming back to noble Lords and the committee. Again, I congratulate the committee, and the noble and learned Lord, Lord Goldsmith, and the noble Baroness, Lady Hayter, for the work they do and the high degree of collaboration that they have with me.

On the question of our trade policy, people hunt for a matrix or template of what tomorrow holds. Looking back on our accession to the CPTPP, I am reminded that it has been likened to the next-door neighbour’s cat with a cough—I cannot remember quite what the quote was from the noble Lord, Lord Purvis. But I think this is a lion that will roar. Think of the rather extraordinary counterintuitive decision to say that we are going to pivot—that we had a relationship with the European Union and are now going to look for bigger and better relationships around the rest of the world. That is exactly the sort of economic decision that a good businessperson would take. Unquestionably, there is no derogation in the need to have the highest-quality trading relationship with our European neighbours, but where is the future? That is the point.

If you asked any of the next generation coming through—some of them are in this Chamber today—they would say that we should look to Asia and the growing populations. My noble friend Lady Lawlor rightly pointed to the astonishing levels of growth coming from those economies. In this country, for a politician, Cabinet Minister or Prime Minister—the leadership in this great nation of ours—to decide to go for the Pacific in this way and join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is an astounding jump of the mind that I am sure previous senior mandarins of the Foreign and Commonwealth Office must be aghast at—such out-of-the-box thinking.

I am enormously proud to have been party to bringing this legislation through this House and promoting it with all noble Lords in this place. If I can repeat them, the countries are Australia, Brunei, Canada, Chile, Peru, Singapore, New Zealand, Vietnam, Japan, Malaysia and Mexico. We are proud to join that phenomenal cohort. I am excited about the future and very positive about the opportunities that this trade treaty will bring. In my view, it will far outstrip the predictions made by everyone in this House, and even the Government themselves. I am grateful for this opportunity to discuss it.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Kerr of Kinlochard Excerpts

Tuesday 23rd January 2024 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, the Companion is quite clear that we do not reopen at Third Reading elements of the debate that we had at earlier Bill stages, so this is an opportunity for me to thank the Minister for his openness. He has been assiduous in replying to questions, as I am sure he will be for those asked of him today. It perhaps illustrates that while we are passing this Bill which facilitates the UK ratification of the accession, the other member states will also have to ratify and go through their own constitutional processes to do so. Many of the issues raised during the passage of the Bill will continue to be relevant, such as the impact on developing countries and the standard issues on impacts that my noble friends raised. We will continue to engage with the Minister with regard to all those.

I also welcome the diplomatic community who have been gathered by the Minister to bear witness to this. They are excellent representatives of their countries. Notwithstanding that, according to “Rotten Tomatoes”, “Ocean’s Twelve” is the weakest of the film series, as my noble friend Lord Fox pointed out, we always consider the Minister as the George Clooney of the Government in this House. For myself, I think Brad Pitt probably had the better role.

However, if the whole country is to benefit from the largesse of the 0.08% growth over 15 years, it will be as a result of the Minister’s enthusiasm. If we could market and export ministerial enthusiasm, we would be on to a winner with that he presents. All six of his predecessors whom I have shadowed in this House had equal levels of enthusiasm for growing British trade. We will see the operationalisational elements of this agreement by the fact of British exporters needing support to access the markets, for there to be an industrial strategy from the Government and for the export strategy to be grown. We want success for our exporters, trading with our friends, using this agreement and I am sure this will not be the last time we will debate our trade with these nations.

In the meantime, I congratulate the Minister and thank him for what he has done during the proceedings of the Bill.

[Lord Kerr of Kinlochard (CB)]

I too congratulate the Minister and thank him for the way he has handled relations, not just with the House but with its International Agreements Committee. He has been open, transparent and forthcoming with documents.

I also make a public service announcement. In the next couple of weeks, the International Agreements Committee will be publishing a full report on our accession. Let me reassure the House, as we pass this Bill, that the International Agreements Committee will not say anything which would imply that we should not pass it. We too very much welcome this accession.

[Lord Johnson of Lainston (Con)]

I appreciate all the comments made. I will revert back on the principles around legislative consent, but I can assure your Lordships that we are having very constructive conversations with all the devolved nations. I beg to move.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Kerr of Kinlochard Excerpts

Committee stage
Thursday 14th December 2023 Grand Committee

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I will speak briefly to Amendments 25 and 30 and then touch even more briefly on Amendments 13 and 14.

Amendment 30, which will shortly be spoken to by the noble Lord, Lord Purvis, calls for a parliamentary debate on a CPTPP impact assessment. This is really important, because the influence of this House is not in the big decisions we take but over the Government—although it is too late when they have already signed a treaty—and the House of Commons. Although we do not normally tell the House of Commons what to do—I am sure the noble Lord, Lord Purvis, chose his words very carefully—in this circumstance it is really important.

In addition to the impact assessment, the International Agreements Committee, which the noble Lord, Lord Kerr, and I sit on, will also write a report on the treaty. We can get that to influence the real decision-makers down the Corridor only if this amendment is agreed and we ensure that a debate happens there. The request for an impact assessment is a nice little segue into a debate on our report as well. By concentrating on the wider impact assessment, it also allows a wider range of issues to be considered, such as prices. Nobody ever talks about the impact of these agreements on prices. We hope that and other issues will be very good for consumers but we need to see that, so a debate will be important.

Amendment 25, which my noble friend Lord McNicol will speak to, requests an impact assessment on labour and ILO standards. This is key. We want this and any other FTA not just to maintain but, we hope, to bolster ILO standards—not just through paper adherence but enforcement. I think we all agree that trade is good for jobs, consumers, our exports and the economy, but that must not be at any price. It cannot undermine any ILO standards. Indeed, I hope it will enable us and others to be rather more observant of them.

Very briefly on Amendments 13 and 14, I strongly concur with the noble Lord, Lord Holmes, about the importance of increasing investment. As I will make a wider point, I declare that I am a leaseholder and am on the board of the ABI, but I bring to the Committee an issue of core importance to prospective overseas investors that I have read about in the financial and specialist press rather than know about through any personal connection. In a completely different part of government, there is an attempt, with leasehold reform, to make retrospective legislation to reduce ground rents to peppercorn rents. That is very attractive for lots of people, but there is a real clash with the desire to increase overseas investment via the CPTPP, because many overseas investors—to say nothing of our domestic pension schemes—are concerned about non-compensated loss of property rights or contracts if their ground rents are suddenly taken away from them retrospectively.

That retrospective nature could undermine the Government’s welcome attempts to get more international investment into the country, because the attractions are not just over trade agreements such as this but over all the other things that we know we are known and valued for: stability, certainty and the rule of law. That needs to go hand in hand if the objectives of this deal are to be taken into account.

That was a little off-piste, but I could not resist it. My real point is that we need to know far more at a more granular level and after the event about what this agreement has produced. That needs to be debated in this House and elsewhere so that the influence of, in particular, my colleagues and the specialists we have heard from, who put so much into this, can be heard at the other end of the building.

[Lord Kerr of Kinlochard (CB)]

It is a great pleasure to follow the noble Baroness, Lady Hayter, who was an extremely effective chairman of the International Agreements Committee. I have only two points.

First, in response to overwhelming demand across the Committee, I have agreed to repeat the extraordinarily boring technical point I made in our first day in Committee about deadlines. The majority of the amendments in this group set deadlines that hang on the passing of the Act. I respectfully suggest that what matters for reports is the date on which our accession takes effect. That might be in the course of next year—I hope it will be—but that is not certain. Some of these amendments would call for reports almost certainly before we have actually acceded. Accession takes place when the last ratification is received by the depositary power, so the right peg to hang it on is not the passing of the Act, which permits us to ratify, nor our ratification, but the 12th ratification, which allows us in. I know that these are mostly probing amendments, but I suggest to their drafters that it might be a good idea to use the peg of our actual accession rather than the passage of the Bill. I exempt some of the amendments in this group; this is only for the ones that hang on performance and how it is working out, because it would be well for us to be in before we require the Government to report on how being in is working out.

Secondly, I am a little concerned about Amendment 32— the accession amendment in the names of the noble Lords, Lord Purvis of Tweed and Lord Foster of Bath. It would require the Secretary of State to produce

“an impact assessment of the impact on the United Kingdom of the accession of countries that have submitted a request … to accede to the CPTPP within the last five years”.

That would include us; it would be jolly useful to have an impact assessment for us, but I do not think that is the purpose of the amendment. The deadline is

“within three months of the passing of this Act”,

which is the wrong deadline, for the reason I gave.

However, my point is more substantive than that. Apart from us, there are six countries whose applications to join the CPTPP have been received in the last five years: Ecuador, Costa Rica, Uruguay, Ukraine, China and Taiwan. The rules of the game, of course, are that consensus is required before a negotiation starts with any applicant country and consensus is required before a negotiation is closed, completed, and then the ratification process starts. It is also the case—not so much in our case but in previous cases—that there have been a lot of side letters and deals done in the margins of the main accession negotiation.

It is misleading to call for an impact assessment of what would be the impact of the outcome of any of these six negotiations. One cannot do that now. A very good moment for dialogue with the Government would be when CPTPP was considering whether to open negotiations. It seems that three months after the passing of the Act, one simply does not know. I add, on a personal basis, that I do not think that six negotiations will start in the foreseeable future. The applications of three of these countries pose serious political problems. In one case, there will be an enormous change to the nature of the CPTPP if the accession took place—a change that I think would be undesirable and, I believe, a majority of members think would be undesirable. There are, however, two other cases where considerable political problems arise.

Setting early deadlines and calling for the Government to go public with their analysis, which would in fact present the Government’s negotiating position, would be unwise. I do not think that we should ask our Government to go on the record in advance about a hypothetical negotiation which, in my view, in three of the six cases is unlikely to start in the foreseeable future. The Government would not be wise to act on that requirement, so I hope that they will resist that requirement—or, rather, I hope that the noble Lord, Lord Purvis, will have second thoughts about Amendment 32.

--- Later in debate ---

[Lord Kerr of Kinlochard (CB)]

I understand why this amendment was put forward and presented so well by the noble Lord, Lord Leong, but I do not support it. I do not think it necessary or desirable.

There are three politically controversial applications to join the CPTPP. The Chinese application is, of course, much the most controversial. If I were asked to predict what will happen, I would predict that nothing will happen, and that the Chinese application and, sadly, the Taiwanese application will remain in the “too difficult” tray for a very long time. Unanimity among existing members is required both to open a negotiation and to end a negotiation by agreeing to accession, and that is not foreseeable under present circumstances. The amendment is unnecessary because the condition that it sets—the peg for the report it calls for, which is a decision on Chinese accession—is unlikely to happen in the foreseeable future.

It is also undesirable because, in general, there is quite a lot to be said for not requiring Governments to come clean on hypothetical questions. I admit that I used to work in government and, to put it in a pejorative way, it might be desirable to hide behind “There is no consensus”, rather than revealing which side one was actually on. That is conceivable and I do not think it is desirable.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Kerr of Kinlochard Excerpts

Committee stage
Thursday 7th December 2023 Grand Committee

[Lord Davies of Brixton (Lab)]

My Lords, Amendment 34 is in my name. I first have to repeat what I discover is true of quite a few participants in today’s debate: I did not speak at Second Reading. I am afraid my excuse is not quite as good as those of some Members, as I was on holiday, so I ask noble Lords to forgive me for that. It was arranged some time before.

I understand that it is not in order to give a Second Reading speech and I do not intend to do so. However, I will say that I am in favour of free trade—of ever loosening-up trade—and I recognise the remarks that the Minister made at Second Reading and has repeated in today’s discussions. I could chase that issue but I will resist the temptation, except to say that free trade comes with conditions. The “free” aspect has limits, which have regard to wider policies, most obviously climate change but there is also food safety—the whole range. They are part of the process of agreeing free trade, and the objective of free trade should not supersede those other objectives. They have to work together; we have to find a balance between them and I accept that. In addition, I point out that this is an advance in free trade. The biggest blow that we have had to widening free trade over the last 10 years is of course, Brexit—I will leave that one there.

My amendment introduces some requirements on the Secretary of State. On reflection, it does not fit all that well with the first amendment in this group. However, we are where we are, and the common theme is placing a requirement on the Secretary of State to report. This is one of the shortcomings of the Bill. It is of course only narrowly focused on the technical aspects that require changes in domestic legislation, the treaty having been decided and promulgated on the royal prerogative, hence the involvement of Parliament in drawing up what is, effectively, a form of legislation has been limited. We have two committees which look at these sorts of issues, and I understand that we are still waiting to hear their views on the overall structure; here we are just looking at these technical aspects. Having said that, it is reasonable to introduce these obligations on the Secretary of State. They are broadly self-explanatory; it does not need me to explain to your Lordships the importance of these requirements of policy that have to fit with freer trade.

I will say just a bit more about proposed new subsection (1)(b), on the importance of the precautionary principle. As ever, it is a question of balance. You can carry the precautionary principle too far but it comes into this discussion. My understanding is that the CPTPP preferences the science-based approach to regulation over and above the precautionary principle in what is acceptable in limitations. The science-based approach requires parties to demonstrate a scientific basis for regulation, which could of course be a problem where there is no such basis, there are no means to develop it, or scientific papers have been published by an industry which has a vested interest in avoiding the difficult questions of supporting a particular outcome. Therefore, I stress that it is important that we understand the extent to which the precautionary principle has been superseded by vested interests in particular approaches. This is not a new principle; it is there in the Environment Act 2021. I should like the Minister to say in reply that he understands that issue, and perhaps it could be discussed in more detail prior to Report.

[Lord Kerr of Kinlochard (CB)]

I will say a brief word on Amendment 8A. Contrary to the habit of a lifetime, I played by the rules and did speak at Second Reading. I made clear that I warmly welcome our accession to the CPTPP and that I have no difficulty with the main points in this Bill.

On Amendment 8A, I am sympathetic, but I think that one needs to think quite hard about the timing. Within 12 months of the passing of this Act, the Government would be required to submit reports on two important areas of performance: how the—very welcome—rules of origin provisions are working out, and how respect for geographical indications is being honoured.

I do not know when our accession will take effect—none of us does—because it will depend on who is last to ratify our accession. It is conceivable that it might take all of 12 months or more than 12 months before this happens. To say that the report will be required within 12 months of our passing the Act is slightly odd. If the report is going to be useful, it needs to take account of what has actually gone on—the experience—with regard to how the rules of origin are being respected and how self-certification of rules of origin is working out.

Although I support the principle of the report—because these are both extremely important provisions within the CPTPP, and a report to see how they are working out seems a good idea—I really do not think that it is a good idea to ask the Government to do so within 12 months of the passing of the Act.

[Lord Alton of Liverpool (CB)]

My Lords, unlike my noble friend Lord Kerr of Kinlochard, I am afraid that I was not present for the Second Reading debate—I was with the noble Viscount, Lord Trenchard, who spoke earlier on, as the other half of the reception committee that welcomed the President of the Republic of Korea. I hope that we played our small part in deepening the friendship and relationship between this country and the wonderful, vibrant democracy of the Republic of Korea, with which I hope we will deepen our trade relations as the years go by.

I also have an amendment for consideration later, which will probably be reached on our second day in Committee. It also has within it a reporting mechanism. I agree with my noble friend that 12 months may not be the right time, but the noble Lord, Lord Davies of Brixton, and my friend, the noble Lord, Lord Purvis of Tweed, are right to have both articulated the need for Parliament to have reports laid before it. That is the principle, but how one does that, the mechanisms that we use and the timeframes we place on it are surely open to discussion. The Government should not quail at the idea of there being time for Parliament to look back at what has happened to something such as the CPTPP. I must say that I also welcome the CPTPP; I strongly believe that the Government have done the right thing in promoting this opportunity for the United Kingdom. I have no issues whatever with that; my issues would come later about some of the partners we might have in the future. We will discuss that later on.

This idea that Parliament should discuss the nature of trade is not new. With the help of the House of Lords Library, I was looking at the debates that took place in 1857 when the great champion of free trade, Richard Cobden, denounced the opium trade in a three-day debate in which two relatively young MPs—William Ewart Gladstone and Benjamin Disraeli—joined forces across the political divide to support him, just as Cobden had stood with William Wilberforce in denouncing the trade in human beings. He was against the slave trade. There were red lines not to be crossed.