Trade (Disclosure of Information) Bill

Lord Lansley 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

[Lord Lansley (Con)]

Since this is both a Second Reading debate and, in effect, a debate on all stages, I hope noble Lords will forgive me if I make points that would be more relevant to a Committee discussion, rather than talking mainly about the principles of this short but important Bill. I completely understand that the Government are, rightly, taking steps to ensure that there is no gap in the availability of powers to share information between HMRC and other public authorities at the turn of the year, and I fully support the Bill.

On 9 January, I think, we will reach the third anniversary of the Second Reading of the original Trade Bill. I and the noble Lords, Lord Purvis of Tweed and Lord Stevenson of Balmacara, have been involved in each of the Trade Bills we have dealt with, so in a sense this is the son of the second Trade Bill. I hope that we can have it all done and dusted by the end of January, as was indicated in another place yesterday. That would be a relief to us all.

What is urgent is not necessarily controversial; this Bill is urgent and non-controversial. I think we all agree on the purposes we are pursuing: to make sure that the border operations centre can manage the flow of trade down to a commodity level on things such as food and medicines, in real time, in the early part of next year. I think we all agree that that is essential. We are also all aware that some of the changes reflected in this Bill, compared with the Trade Bill as introduced here, are useful in particular to make it clear that the devolved authorities are among those with which HMRC can share its information for the purposes of these functions.

I turn to some of the rather more nitty-gritty questions. I would be grateful if my noble friend could address them when he replies, if they are not too detailed. I would completely understand if he felt the need to reflect and respond in writing, not least because we will reach Clauses 8 to 10 of the Trade Bill on day three of Report, which is scheduled for 6 January. There will be a further opportunity for any questions to be addressed then, because, as my noble friend said, the substantive permanent provisions relating to the disclosure of information are those that will, I hope, be enacted in the Trade Bill, which we will discuss early in the new year.

For those following this debate who perhaps do not have all the papers to hand, if one really wanted to look at this, one would have to look at the Bill we are addressing today, as well as the Trade Bill, which is currently on Report, and the Marshalled List to see the amendments my noble friend the Minister tabled for consideration on Report, which we will reach in the early part of the new year.

My first question is very simple, but I am afraid it may be esoteric. This Bill’s structure, in at least a couple of respects, is different from what my noble friend the Minister proposes by way of amendment to the Trade Bill, which we will consider on 6 January. As a former Leader of the House of Commons, I was responsible for the Office of the Parliamentary Counsel. I realised that the nature of parliamentary counsel is that they, more than anybody, realise that the writing of legislation is never perfect, and that it is always necessary to see whether one can further improve drafting. However, it is slightly odd that we are in a position where amendments to the Bill were tabled in November, then in December we consider a Bill to achieve the same effect where the drafting is different.

This is particularly true in two respects. There is a saving provision in Clause 1(6) of this Bill, which states:

“Nothing in this section authorises the making of a disclosure which would … contravene the data protection legislation, or … be prohibited by the investigatory powers legislation.”


The language of the amendment that has been tabled to the Trade Bill is

“save that the powers conferred by this section are to be taken into account when determining whether a disclosure is prohibited by those provisions”.

This Bill is different. It says:

“In determining whether a disclosure would do either of those things, the powers conferred by this section are to be taken into account.”


I hope that the meaning is exactly the same, but I do not understand why the drafting is different.

In that respect, I have a substantive question: what does it mean to say, “taken into account”? Legislation should be clear. The Explanatory Notes say in terms that Clauses 1 and 2, which say effectively the same thing, mean that this legislation would not authorise the making of a prohibited disclosure under data protection legislation or investigatory powers legislation. What does it mean, then, to “take into the account” the “powers in this section”? Does it mean that they can be made? If the answer is that they cannot, why is the saving provision in the Bill? I would be grateful for my noble friend’s reply on that point.

Secondly, in more detail, the reference to the investigatory powers in this Bill is different from that in the Trade Bill, which refers to specific parts and chapters of the investigatory powers legislation, not the investigatory powers legislation as a whole. Why is that the case?

The noble and learned Lord, Lord Judge, raised a point on other legislation that also relates to the Trade Bill and to this Bill at Clause 2(2), which refers to the functions relating to trade, “among other things”. The noble and learned Lord asked why are we including this: what are these “other things”? Should we not be told what they might comprise? I do not require the Minister’s response on this as it is a drafting matter, but it would be very useful if the message was consistently sent back to suggest that the phrase “among other things” should be avoided where possible.

Those are all the points I wanted to make. My noble friend has been very clear about the sequencing. We can take comfort that, in so far as we will consider Clauses 8 to 10 of the Trade Bill in January, if this House and, in due course, another place were to change the Bill in any way—that is not impossible—those would become the substantive provisions and the permanent legislation. We are dealing now with something that is temporary by its very nature. I hope that that means that my noble friend’s amendments on Report will perhaps change a little to bring them in line with this Bill, but also that Report will be an opportunity for us to make sure and double-check that we have the permanent provisions in the right form.

Energy White Paper

Lord Lansley Excerpts

Wednesday 16th December 2020 Lords Chamber

[Lord Callanan (Con)]

I know the noble Baroness has strong feelings on this because she has asked me this question before. She should bear in mind that hundreds of thousands of jobs are dependent on the North Sea. We are delivering the North Sea transition deal, providing support for the people and communities most affected by the eventual move away from oil and gas production. We are supporting the transition of skills and supply chains for a clean energy transition and focusing export finance on low-carbon opportunities internationally. Many companies producing in the North Sea are committed to the net-zero challenge, so, rather than just say that they cannot produce any more, we need to work to help them in the transition away from fossil fuel production.

[Lord Lansley (Con) [V]]

My Lords, the White Paper refers to the creation of a net-zero hydrogen fund. As my noble friend knows, achieving production of clean hydrogen at a commercially viable scale is challenging but necessary if we are to achieve the switch to hydrogen fuel in our heavy goods vehicle fleet. Can my noble friend say whether the fund will enable us to achieve that objective of switching HGVs to hydrogen?

[Lord Callanan (Con)]

My noble friend is right to point out the scale of the challenge. We are investing £240 million of capital co-investment in low-carbon hydrogen production, which was committed to in the spending review. That is just one of the measures that will support our ambition for five gigawatts by 2030. The hydrogen strategy package, planned for next year—I am sure my noble friend will follow it with great interest —will set out more details in this space, including how we intend to leverage private sector investment through business models to satisfy the demand he suggests.

Trade Bill

Lord Lansley Excerpts

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

Moved by

[Lord Lansley]

12: After Clause 2, insert the following new Clause—
“Ratification of international trade agreements and treaties
(1) The Constitutional Reform and Governance Act 2010 is amended as follows.(2) In section 20 (treaties to be laid before Parliament before ratification), after subsection (1)(b) insert—“(ba) where the treaty is an international trade agreement as defined in the Trade Act 2020— (i) a Minister of the Crown has published an analysis of the requirement for the treaty to be implemented through changes to domestic legislation, and(ii) where changes to domestic legislation would be required as described in the analysis under sub-paragraph (i), the necessary legislation has been laid in the form of a statutory instrument or the necessary primary legislation has been enacted,”.(3) In section 21 (extension of 21 sitting day period), after subsection (2) insert—“(2A) Where a relevant Committee of either House of Parliament has recommended that a treaty constituting an international trade agreement as defined by the Trade Act 2020 should be debated in that House, the Minister of the Crown must ensure that the period does not expire before that debate has taken place.””Member’s explanatory statement
This new Clause amends the Constitutional Reform and Governance Act 2010 to require analysis of the domestic legislation needed to implement a trade agreement to be laid with the Treaty; that the legislation should be enacted or laid before ratification; and that the Minister must allow a debate on the Agreement if sought by a Committee in either House.

[Lord Lansley (Con)]

My Lords, Amendment 12, in my name and that of the noble and learned Lord, Lord Goldsmith, was debated along with Amendment 6 on day one. It relates to the parliamentary scrutiny process for international treaty agreements under CRaG. In view of the support it received in the course of that debate, I wish to test the opinion of the House and beg to move Amendment 12.

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[Baroness Kramer (LD) [V]]

My Lords, I will speak to Amendment 15 in my name and that of my noble friend Lord Purvis of Tweed. It is in essence very similar to Amendment 19 in the name of the noble Lord, Lord Stevenson of Balmacara. Great minds, as it were, think alike. I should give notice that, given the breadth of the agreement, I am minded to press the matter to a Division, unless the Minister concedes.

If anyone thinks for a moment that dispute resolution in a trade deal is a minor issue, I would point them to the impasse in the UK-EU trade negotiations. A trade dispute resolution goes to the very heart of any trading relationship, and that sits behind these two amendments. Traditionally, disputes under a trade agreement have been adjudicated through arbitration schemes—which are generally labelled investor-state dispute settlement, or ISDS—rather than a court system. To say that this has become problematic is an understatement. Decisions have a history of being inconsistent, they award compensation that can undermine domestic law, they typically act in secret, and they cannot be appealed.

ISDS arrangements are no longer fit for purpose. They have led to public suspicion and, frankly, hindered the drive to increase global trade; they were a major reason for the collapse of the TTIP negotiations. For this reason, during its time in the EU, the UK was instrumental in pushing for the replacement of ISDS with a multilateral investment tribunal and appellate mechanism—the appellate part being very important—thereby removing any suspicion of bias and providing for appeal. The EU has been clear, even with the UK’s departure, that it intends to pursue this change, and it has been introduced in a number of its revised and latest trade agreements, notably, but not exclusively, with Canada.

I would argue, and I think many others were arguing, that the UK needs to remain at the forefront of this change. I am afraid that I am unclear whether the terms that the EU has agreed with Canada over dispute resolution have been replicated in our trade deal with Canada. Perhaps the Minister will enlighten me. The EU-Canada deal gives us a template. It will appoint 15 judges to hear cases on a rotational basis: five from the EU, five from Canada and five from among third-country nationals—in other words, neutrals. The rules ensure transparency of proceedings and clear standards of investor protection. But they also limit the grounds on which an investor can challenge a decision made by a state. For example, a challenge cannot be made simply on the grounds that profits are affected.

Amendment 15 would ensure that in all future trade agreements, the UK agrees with its trading partners at least on the principle of moving to such a mechanism for dispute resolution—it would be even better if it actually achieved it, but at least the principle is agreed. Amendment 15 also ensures that in the interim, until the new system is in place, the UK does not depend on arbitration systems to resolve trade disputes but is heard in the courts and tribunals of the UK. Amendment 19 follows a similar path of logic.

Effectively, these amendments stop the abuses associated with ISDS. I suspect that future speeches will provide some significant illustrations of the problems that have occurred. These amendments provide an incentive and create an opportunity to achieve the goal of a multilateral tribunal system. For that reason, I beg to move.

[Lord Lansley (Con)]

I am very pleased to follow the noble Baroness, Lady Kramer. We are grateful to her and to the noble Lords, Lord Purvis and Lord Stevenson of Balmacara, for raising this important issue. Since we touched on these issues in Committee, events have moved on a bit, which allows us to further explore the Government’s approach. I do not support the amendments, but they create a very good opportunity for the Government to tell us more about their approach to investor-state dispute settlement in the negotiation of international trade agreements.

I say to the noble Baroness, Lady Kramer, just to put Canada in context, that the Government did lay the Canada-UK agreement last Thursday, which I have had a chance to look at. What it effectively does, across a wide range of chapters, is incorporate the EU-Canada partnership agreement. But in this respect, on investor protection, it says that this is not to come into force. It says there will be a period of time during which the United Kingdom and Canada will review what their investor protection arrangement should look like, and, if they agree within something like a three-year period, they will replace what is in the current EU-Canada agreement.

Although the noble Baroness, Lady Kramer, said that the EU-Canada agreement is a model, it is not the model she is looking for in her amendment. The tribunal is a bilateral investor protection arrangement, with judicial members from the two parties plus independent members, but it is not multilateral. What it does say, in Article 8.29, is that both parties agree—and here the words are reflected in her amendment—

“to pursue with other trading partners the establishment of a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes.”

Clearly, Canada has done that; it has put into the United Kingdom-Canada rollover agreement the opportunity to consider a multilateral investment court system. But we are not signed up to one, and we will have to see what the Government’s approach will be. The EU and Canada have not actually brought this into force—it has not been ratified—so we have not seen anything final.

Having a multilateral investment court system depends on the consent of parties around the world, and they have not signed up to it. The New Zealand and Australia Governments resisted ISDS in the context of the CPTPP, or TPP 11 as they call it. That makes it difficult for us, in New Zealand and Australia agreements, to invite them to do more than they have already done. On the other hand, Japan has remained consistently supportive of ISDS provisions, and that, I suspect, is probably a simple reason why the EU-Japan comprehensive economic partnership agreement does not have an investment chapter.

I am afraid that the conditions for an amendment to the Bill that sets such a prescriptive approach to international trade agreements on investor protection do not exist. With too many of our leading partners—including, for example, Japan—we would have no agreement that would allow us to sign an agreement if this provision had been in statute. That is especially true where the United States is concerned. Japan does not have a difficulty with ISDS, not least because it has not been a respondent country to a claim. As it happens, only on five occasions have Japanese companies pursued ISDS claims against other countries. When we come to discuss this with the United States, the difficulties are legion because, when I last looked, the United States had 190 claims against other countries and ISDS procedures reported to UNCTAD and was the respondent to 17 claims. It not only adheres to ISDS provisions but uses them a lot. Therefore, it may be difficult to persuade the United States to adopt a multilateral investment court system. The other difficulty is that it would prevent us from pursuing our bilateral investment treaties in the way we have. We may want to continue with that, and assuredly we will. We have over 100 of them, and I do not think we want to let them go, until and unless there is a multilateral investment court system in place.

It would be interesting to know from my noble friend the Minister if the Government have a plan to pursue a multilateral investment court system, as has been the EU’s approach in its negotiations. If so, I would agree, but that does not mean we should have a prescriptive measure in statute that means we cannot agree an international trade agreement with another country, except in the circumstances in which this is incorporated, not only for us but for the other parties. It is an interesting opportunity, but I fear I cannot support Amendment 15.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise briefly to speak in favour of Amendment 16 in the name of the noble Lord, Lord Purvis of Tweed, and Amendment 25, in the name of the noble Lord, Lord Purvis, and the noble Baroness, Lady Sheehan.

I want to reflect on the context in which we are having this debate: a double blow has come forward in terms of our international aid budget. Someone came to me on Twitter and said, “I’m really confused, because it seems like our GDP is going down, so our aid is going down anyway, so why are we also cutting the percentage of aid?” I had to say, “No, you’re absolutely right, this is a double blow.” We have often given very effective help to some of the poorest people in the world, so it is important that we do whatever we can to make sure that aid is directed in the right kind of way.

The second, contextual, point I want to reflect on is why these countries are in the least developed and lower middle-income categorisations. If you go down the road to the Foreign Office, up to Liverpool or across to Bristol, you will see the colonial legacy of lots of the wealth of these countries, which was sucked out in the past. That legacy continues to have extremely deleterious effects. There is also the impact of multi- national companies—very often corrupt—today, which hold down the essential development of many least developed and lower middle-income countries. I note what the noble Baroness, Lady Sheehan, said too about the history of how DfID came to be split from the Foreign Office, and the concerns that have to be expressed about that reunion.

In those contexts, it is really important to do whatever we can in your Lordships’ House to defend, to hold the line and to keep whatever we have now. We will have the fight about the aid budget percentage when it comes along, but let us do what we can now in the Trade Bill.

[Lord Lansley (Con)]

My Lords, I am very glad to follow the noble Baroness, Lady Bennett of Manor Castle, and to speak to these two amendments.

May I first say a word about Amendment 25? As the noble Lord, Lord Purvis of Tweed, said in introducing it, we had an interesting debate in Committee on the trade preference scheme—our unilateral preference scheme —and, indeed, I might say to my noble friend the Minister, an even more useful subsequent round table, although we were virtual, about the structure of the trade preference scheme when it comes.

As far as I can see, Amendment 25’s objectives should be able to be encompassed within the trade preference scheme using the Taxation (Cross-border Trade) Act 2018, and the regulations under its Section 10. I just want to see those regulations and have an opportunity for us to talk about them to check that they achieve that objective.

Trade Bill

Lord Lansley Excerpts

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

During this process, I have got to know the Minister as an honourable man, but I suspect that he may not have a damascene conversion at the Dispatch Box over this matter. I give notice that, if that does not happen, I intend to seek the opinion of the House. I beg to move.

[Lord Lansley (Con)]

My Lords, I am glad to follow the noble Lord, Lord Purvis of Tweed, who set out the arguments for Amendment 6 with his customary clarity and precision, for which the House will be most grateful. In large measure, I agree that we have managed to secure quite a degree of consensus on many of these issues, and it is useful now, on Report, to see to what extent we want to put statutory backing behind that consensus. We have come to the right place at the right time.

I will in due course refer to Amendment 12, which is in my name, but I shall start with Amendment 6. Both amendments are concerned with the processes by which international trade agreements are scrutinised and approved by Parliament. I emphasise to those worried about the wider aspects of treaty making that this is about international trade agreements; we are not seeking to go beyond the scope of this Bill and impact on the Government’s treaty-making powers in general.

Amendments 6 and 12 seek to achieve different purposes. Amendment 6 would require prior approval, by each House of Parliament, of the draft negotiating objectives before the Government could proceed with negotiations. It also places a number of statutory obligations on the Government to report developments to Parliament, and it would require Parliament to approve a draft agreement before it is signed. I emphasise signed—not, in this case, ratified. In each of those three respects, Amendment 6 marks a significant change in the extent to which Parliament is not only engaged in, but to some extent potentially able to control, the process of making a free trade agreement. I say to the noble Lord, Lord Purvis of Tweed, that despite the assertion in the first subsection of his amendment that it would not restrict the prerogative power, it would in reality do so—by placing statutory limitations on the exercise of the prerogative power to proceed with negotiations.

Secondly, I share the view of the Constitution Committee of this House, which said in April 2019:

“We do not believe that Parliament should be required to endorse the Government’s mandate prior to commencing treaty negotiations.”


In that regard, I cannot support Amendment 6, because subsection (3) makes it very clear that parliamentary approval for such negotiating objectives is required.

However, I agree with the noble Lord, Lord Purvis of Tweed, that there is a degree of consensus, and I subscribe to much of what is implied in Amendment 6: that the Government should seek the views of Parliament, as well as conduct a public and stakeholder consultation, when setting negotiating objectives. Parliament should be directly involved in that process, and the Government should provide updates to Parliament when significant developments occur during negotiations. Speaking as a member of the EU International Agreements Sub-Committee, I should say that our experience over recent months has been that the Minister and colleagues in his department have engaged with us substantively and constructively in the way that we would wish.

Secondly, the text of the Written Ministerial Statement, which the Minister was kind enough to send me last night, gives some reassurance as to the way in which Ministers intend to engage in future. It does not extend the nature of that engagement or change its statutory force, but to some extent it helps to answer the question that we asked repeatedly, at Second Reading and in Committee, about the extent to which the Government reiterate what was in the Command Paper back in February 2019. I hope, therefore, that my noble friend the Minister, in not only laying the WMS but responding to this debate, will continue to reiterate the Government’s full intentions in those respects.

That brings me to Amendment 12, which is in my name. This does not seek to restrict the Government’s right to initiate and conduct international trade agreements. It is focused only on the procedures by which Parliament is able, under the Constitutional Reform and Governance Act—CRaG—to approve an agreement before ratification. Amendment 12 would strengthen the CRaG processes in relation to international trade agreements in three respects.

First, it would require Ministers to publish, with their agreement or before it, an analysis of how an agreement would need to be implemented into domestic legislation. As we have learnt repeatedly during debates on this Bill, Parliament’s principal constraint over the Government’s treaty-making power occurs when it requires changes to domestic legislation. Parliament has control over that. For example, there is no merit in a Government agreeing a treaty offering access to the UK market for a product that it would be unlawful to sell in this country, when they know that Parliament would not agree to change the law. We need to know if an agreement would require changes to domestic legislation, and that should be a key issue in deciding whether Parliament will approve ratification. Ministers should not ratify an agreement that Parliament would not implement.

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[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I declare my position as co-chair of the All-Party Parliamentary Group on Hong Kong, which may have some relevance to this. I join with many other noble Lords in thanking those noble Lords who have tabled and supported these amendments. I should warn the House that, in about the next minute of my contribution, I am going to be very concrete and graphic—this needs a trigger warning for anyone who has been a victim of torture or abuse.

This is an account provided by Ömir Bekali, a Uighur Muslim from Xinjiang in the far south-west of China, the former owner of a small tourism business, who spoke to the “Varsity” magazine in Cambridge in October. The noble Lord, Lord Alton of Liverpool, talked about the big picture of what is happening in Xinjiang, but this is one man’s story. Ömir said:

“They shackled my hands and put black fabric [over] my eyes … I feel my body tremble whenever I remember that moment … My feet and my hands were tied up with iron shackles and they beat my hands, they beat my feet … they beat my back and my stomach … They put needles in between my nails and my fingers”.


After I have spoken, I will tweet a link to the report, which contains much more and worse than what I have just put on the record.

The world has, sadly, been hearing reports of human rights abuses for decades, centuries and millennia. I have to respectfully disagree with the noble Baroness, Lady Noakes, who suggested that these amendments would not help the Uighurs. What we are doing is making sure that we do not go backwards from the inadequate but still existing controls that we have with regard to human rights and trade under our former EU membership. I agree with the noble Earl, Lord Sandwich, who said that the calling out of human rights abuse and putting it on to the international agenda is crucially important in terms of influencing the behaviour of peoples and nations.

In the UK, we have often had the cover of saying, “Perhaps little can be done in far-away places with few connections with over here, and there is little that we can do to help.” It was often the excuse—a very thin and inadequate excuse—that that was only the word of one individual; it was not hard evidence of what was happening. But that is not the case anymore, because we now have satellite pictures of massive so-called re-education camps, concentration camps or straight-out prisons in Xinjiang. We have even, due to the globalisation of the economy, the occasional desperate note pleading for rescue from abusive forced labour falling from a holiday present into the living-room of a shocked British household. That is a practical demonstration of the fact that we know well: our trade, companies and society, and our prosperity, are inextricably linked in a crucial way to the economic structures that are fed by these abuses. Our economic structures and political arrangements all too regularly, either tacitly or even explicitly, condone or accept such behaviour.

I note that Amendment 8, in the name of the noble Lord, Lord Collins of Highbury, has been criticised as being too weak, but it is a start and a step in the right direction of acknowledging the link between trade and human rights. Amendment 10, in the name of the noble Lord, Lord Blencathra, steps up to and links with Amendment 9 that we will consider in the next group. The Green group will support them all. The amendment provides a strong and clear focus on genocide, even if it is limited in scope.

Let us start here and see how far we can get. I would say to Members of your Lordships’ House that if you will not be joining the many Lords who have said that they will back at least some of these steps, my question is this: what will you say to Ömir, who has spoken out bravely in the hope of action to protect people still in Xinjiang and people around the world who are suffering human rights abuses? Choosing not to do something is not a neutral act, but an active choice, a choice of morality, a choice about the kind of world we all live in, now and in the future.

I am sure that many noble Lords will be familiar with the short story by the late and brilliant Ursula K Le Guin, “The Ones Who Walk Away From Omelas”. For those who are not, it is about a wonderful, prosperous and flourishing city that relies for its prosperity entirely on the permanent misery and the deliberate abuse of the human rights of a single child. Those who walk away are those who reject this bargain. We have today a trade system built on the misery not of one but of millions. Will noble Lords reject that bargain?

[Lord Lansley (Con)]

My Lords, I am glad to have an opportunity to contribute to this important debate. I thank the noble Lords, Lord Collins of Highbury and Lord Alton of Liverpool, my noble friend Lord Blencathra and other noble Lords for bringing forward amendments. They give us an opportunity to consider some important issues. I will talk about Amendments 8, 10 and 45, and refer to Amendment 9. Having done so, I will not speak on the next group.

With Amendment 8, the noble Lord, Lord Collins, has set out an encompassing process for an examination of the human rights situation in countries with which we might enter into international agreements. The list of agreements to be included at the end of his amendment is very wide ranging indeed. Many of these agreements would extend far beyond trade, but it is not criticised on that account; it is intended to be encompassing. This is a very wide-ranging process on the route into trade agreements, on the point at which they are laid before and, if necessary, reported to this House and subsequently in annual reports.

The question that immediately comes to mind is what happens as a consequence. What happens is that one of the two Houses of Parliament has to do something about it. From listening to the debate, noble Lords have specific and sometimes compelling examples of the human rights abuses, violations and even—as Amendment 9 refers to—genocide that may be the responsibility of states with which we enter into agreements. The first point to make is that we should be responsible for thinking in precise terms about whether to enter into those kinds of agreement with those states and under those circumstances. We should not set up a wide-ranging, encompassing, endless process of bureaucratic scrutiny but take responsibility for determining with whom we have relationships, the character of the relationships we enter into and whether to sustain them.

That brings me to my second point, where I agree with my noble friend Lady Noakes: how can we abdicate that responsibility to the High Court? We have spent a lot of our time debating whether Parliament should intervene in the Executive’s prerogative power to initiate, conduct and enter into trade agreements and treaties. Here we are discussing an amendment in which people seem to think that Parliament should not do that but hand responsibility to the High Court to determine whether we remain in an agreement or should revoke an agreement that we have entered into. I cannot, for the life of me, see that it is right for Parliament to abdicate its responsibility to the High Court.

In practice, I come back to how we have to take that responsibility ourselves. Everybody has talked about China, but the noble Lord, Lord Collins, made an interesting speech illustrating this by reference to Egypt. I am not going to take a view on that today, because I do not have the knowledge to argue that it is right or wrong to roll over the agreement with Egypt in the way in which we intend, but the noble Lord asks the right question, in my view, at the right time. We have all the powers available to us to decide whether to enter into such an agreement. We do not need to change the Bill to change that fact; it is a matter only of looking at the circumstances of an individual agreement with an individual counterparty, and asking whether we should do it or not.

Another thing to mention is the timing of this. There is always, “If not now, when?” This is difficult because, yesterday, the Government initiated a review of our own human rights legislation. Our Human Rights Act requires that, if a court were to determine that we are acting in a way that is incompatible with the European Convention on Human Rights, it can make a declaration of incompatibility. Then Ministers can make an order—they do not have to—to remediate that incompatibility.

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Thirdly, we have heard many very strong arguments tonight about the moral case for this amendment and the previous group of amendments. That is enough on its own; it really should not need any more. However, there is a crucial point to be made: defending, speaking up for and creating a world in which there is more respect for human rights—as this amendment, which simply attempts to stop genocide, would do—makes the world safer and more stable and secure for everybody. Making this amendment is not just morally the right thing to do; it is also in our self-interest.

[Lord Lansley (Con)]

Contrary to my intention, I must intervene to correct what I regard as a mischaracterisation of my views. It was not my view, and not the view I expressed, that courts have no role: I entirely accept the proposition at the heart of this that courts will make a determination relating to whether a state has committed genocide. My point was that that being the case does not lead to the executive action that follows from it.

The noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Kennedy of The Shaws, said that the authority of the court would lead to the revocation of an international trade agreement. That is not what the amendment says. I am constantly being told in this debate that the amendment is precise—it is not precise. It does not say that; it says:

“International bilateral trade agreements are revoked”


by the action of the High Court. I object to the fact that a High Court determination leads directly to the revocation of the agreement entered into by the Government and endorsed by Parliament. If that determination takes place and we want to pass legislation, it should say that Ministers should act to revoke that international trade agreement in these circumstances, not that it is revoked automatically by the determination of the High Court itself.

Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020

Lord Lansley Excerpts

Friday 27th November 2020 Lords Chamber

[Lord Lansley (Con) [V]]

My Lords, supplementary protection certificates have been a feature of EU patent protection for medicines and plant products for some 30 years. I am very grateful to my noble friend Lord Callanan for setting out the structure of these regulations and their purposes very clearly. Of course, as we exit the transition period, in the absence of a mutual recognition of marketing authorisations between the United Kingdom and the EU regulatory authorities, it is necessary to provide for the SPC systems to work both in Great Britain and Northern Ireland. These regulations deliver such a system.

The timing of our scrutiny of these regulations is interesting. On Wednesday this week, just two days ago, the European Commission published its pharmaceutical strategy for Europe alongside its intellectual property action plan and its evaluation document on the system of supplementary protection certificates. That evaluation offered some interesting observations on the impact of SPCs in meeting their objectives. Of course, the principal purpose was to promote the quantum of innovation in Europe. The level of global R&D in new medicines remains high. The US is the largest component of that, and the proportion of new chemical entities originating in the United States has grown, with Europe in second place but China catching up fast.

The evaluation found that SPCs are valued by stakeholders, and it further suggested that they have contributed significantly to the return on pharmaceutical R&D in Europe. It calculated—I do not vouch for this—that 13% additional turnover has resulted from access to SPCs where they apply. Of course, this is only for new active pharmaceutical ingredients—APIs—and not for patents for such things as new formulations. None the less, this was able to support higher levels of R&D: an estimated €37 billion in total, which is sufficient for the development of between 39 and 62 new treatments.

The regulations for the European Union also have the objectives of supporting the location of pharmaceutical research within it and securing a harmonised framework for SPCs in Europe. The evaluation did not offer definitive evidence on the former—the location of R&D investment in Europe—and it reported little progress on the latter. As one might expect, the European Commission strategies published the day before yesterday now focus on what they describe as the “fragmentation” of the SPC system. With the establishment of the Unified Patent Court—alongside the European Medicines Agency, of course—according to my interpretation of the documents, the European Commission is now looking for the SPC to be a European, rather than a nationally determined, right.

So does any of that make any difference to us? Yes, in that the incentive to seek a marketing authorisation and an SPC in the European Union will be further strengthened and the regulatory costs in the EU will be less if one system is created. We are not in the Unified Patent Court. I recall the views of the noble Earl, Lord Devon, on that subject recently so I will not repeat those.

The United Kingdom is 3% of the global pharmaceutical market but we are 10% of global pharmaceutical research and development and of new innovations. There are many reasons why that is the case, and I believe that we can sustain that; indeed, it is one of the principal subjects for debate as we are considering the Medicines and Medical Devices Bill. SPCs themselves are a modest contributing factor but we should make the protection for new APIs in the UK at least comparable to that in the European Union. The simplest way to do that would be through the mutual recognition of marketing authorisations and, even better, shared work on the scientific evaluations leading to that. However, if we cannot achieve that, we could pursue an aligned structure for SPCs.

I offer a few questions to the Minister, partly because of my own lack of understanding, and I would be grateful for his response. First, I understand that a Swiss SPC is recognised within the European Economic Area by virtue of the fact that it is applicable in Liechtenstein. Logically, would a UK SPC be similarly recognised within the EU single market by virtue of its direct applicability in Northern Ireland?

Secondly, if an SPC is granted by the European Medicines Agency that applies in Northern Ireland but no marketing authorisation is given to that product in Great Britain then, at the point when the SPC takes effect, the opportunity to extend the territorial application of that SPC will end. That should be a rare event as there may well be a period of some years between the SPC being granted and it coming into effect. However, is it necessary for that option to be removed? The principle of one SPC per product applies, but can the Intellectual Property Office in this country enable a European supplementary protection certificate to be recognised, applying for the same period as it would have remaining effect elsewhere in the European Union?

Thirdly, the so-called Bolar exemption is important for generic biosimilar producers so that they can meet the trial data requirements to offer competing products at the end of exclusivity. The Commission’s IP action plan talks of further clarifying the provisions relating to this, so we may see legislation in the EU. Will the United Kingdom seek to do the same and keep our law in this respect in line?

Lastly, could my noble friend explain further the legal provisions on the granting of the six-month paediatric extension to which he referred? Is this achieved in the human medicines regulations amendments that we are to consider next Wednesday, which were also laid in mid-October? Why was Article 36 of the EU human medicines regulation excluded from applying in Northern Ireland by the protocol? Does that not create a potential discontinuity between the SPC for a product and its paediatric extension? I would be grateful to understand this better, not least before next Wednesday. I am grateful for the opportunity to ask a few questions on this.

Comprehensive Economic Partnership (EUC Report)

Lord Lansley Excerpts

Thursday 26th November 2020 Grand Committee

[Lord Lansley (Con)]

My Lords, I am very pleased to follow my colleague on the International Agreements Sub-Committee, the noble Lord, Lord Oates, and our chair, the noble and learned Lord, Lord Goldsmith, who has so well set out the basis of our report that I will not follow him in most of that. I will focus on what I think is really important, which is that this is a continuity-plus agreement. I want to focus on the plus, which I think is more significant than people have perhaps yet realised.

I declare an interest. In addition to being a member of that committee, I am the UK chair of the UK-Japan 21st Century Group, which was in online conference with our Japanese colleagues on 11 and 12 September this year, when the agreement was signed. Among our colleagues from Japan were seven members of the Japanese Diet and former Ambassador Tsuruoka, who will be known to a number of Members.

The sense of positive welcome given by our Japanese colleagues to the agreement reflected their view that this was not simply a rollover of the EU agreement—although much of it might look that way—but presaged a significant broadening and deepening of the UK-Japanese trading relationship. I will focus on that. First, on digital trade, I think the EU, because of its lack of a digital single market, continues not to enter the kind of expansive agreements available with other countries. This agreement much more nearly reflects the content of the CPTPP, the Trans-Pacific Partnership Agreement: things such as free flow of data, net neutrality, consumer protection online, no data localisation and more open government use of anonymised data. All of those are really important for digital trade, and the United Kingdom is a world leader in digital trade. For us to have such agreements is increasingly important.

That is also true on financial services, where the lack of potential agreement in the EU-UK agreement is a matter of continuing regret. Here, with Japan, are some starting points much welcomed by the City on facilitating UK firms licensing in Japan, on regulatory co-operation and reference and deference to each other’s regulatory structures and, generally for service industries, the mobility of staff and their families to work in Japan.

There are improvements on agricultural tariffs and things such as the administrative scheme enabling more geographic indications to be protected in the Japanese market—they are modest, but they can be developed, as the noble and learned Lord, Lord Goldsmith, said, in the CPTPP context, as long as we make progress there. I think we can and we will. It is not unimportant that Japan holds the chair of the CPTPP in 2021, and things such as digital trade developments and agricultural market access will be much improved if we are able to accede to the CPTPP. I hope that the Government will take that forward early in the new year.

The plus also includes areas where we want to go further—on financial services, on mutual recognition of qualifications, on the ability of people from this country to go to work in Japan, on the environment and sustainable development and for there to be an investment chapter, given the relative significance of Japanese investment in this country and that in the opposite direction, and in audio-visual and creative industries, where both we and Japan are world leaders and should be encouraging continuing trade. The noble Lord, Lord Foster, may want to say something about that.

Finally, using this agreement is really important, and I commend our colleagues in the embassy in Tokyo, because they recently appointed a digital trade and an agricultural trade attaché. If they, business, including SMEs, and the department use this agreement fully, we can make this a significant increment to our UK-Japan trade.

Continuity Trade Agreements: Parliamentary Scrutiny

Lord Lansley Excerpts

Wednesday 18th November 2020 Lords Chamber

[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.

Competition (Amendment etc.) (EU Exit) Regulations 2020

Lord Lansley Excerpts

Monday 16th November 2020 Grand Committee

[Lord Lansley (Con) [V]]

I thank my noble friend for his clear and full explanation of these regulations. Perhaps I may start with a little reminiscence. It feels slightly as if I have come full circle because I was a member of the Standing Committee on the Competition Bill in the Commons in 1998. I remember being in opposition at that time and tabling amendments for the purpose of defining the approach to vertical agreements in what became the Competition Act. Nigel Griffiths, who was then the Labour Parliamentary Under-Secretary in the Department of Trade and Industry, said that he thought the amendments were very interesting and might even agree with them. However, he could not possibly accept them because the Government had not yet been told by the European Commission what the structure of vertical agreements would be in the EU regulations. Instead of being rule makers, we were rule takers at that point. We will become rule makers where this is concerned in the wake of our departure from the EU.

Like their predecessors a year or so ago, these regulations set out a comprehensive set of mechanisms for ensuring that there is a transition, without falling through the gaps between EU competition responsibilities and the UK responsibilities being assumed. I will resist the temptation to ask my noble friend about the competition policy aspects of our negotiations with the European Union, albeit that they might in some specific circumstances impact upon how these regulations are interpreted or whether they will survive the deal itself, when we come to legislate for that.

I will make a couple of points, though. For my first, the best example is given by the question of block exemptions for vertical agreements. A number of definitions have to be understood in relation to that, but the one that illustrates the nature of the point I want to make is the threshold of market share for the assumption that a vertical agreement might—not does—have anti-competitive impacts. In the EU regulation, that is a 30% market share.

The issue is: what is the market? Defining the relevant market is very important. There is a whole raft of circumstances in which defining the relevant market when we leave the EU—that is, from 1 January next year—will be a different and potentially debatable proposition. For example, is Northern Ireland in the relevant market for United Kingdom purposes or in the single market? If it is in both, the calculation of the 30% market threshold would be distorted in potentially both jurisdictions. Determining what the relevant market is for a range of different circumstances leads to my first question: what are the Government’s and the Competition and Markets Authority’s intentions relating to the definition of markets in a range of contexts?

My noble friend referred to my second point: the regulations revoke EU regulation 2019/452, which sets up a screening mechanism for foreign direct investment. Appropriately, they revoke it because it will not apply in the United Kingdom. Indeed, as we discovered in recent weeks, it does not apply to the United Kingdom now. It was not introduced in the United Kingdom on 11 October, as it was, in theory, introduced across the EU, but of course in practice only in those member states that have chosen to implement it. Some have; many have not yet. There is a wider move across many EU member states to try to screen for foreign direct investment. It is part of a broader push on the part of the European Commission to understand how far foreign investment and foreign ownership impact on strategic value chains as part of what it describes as strategic autonomy.

In our context, tomorrow the House of Commons will debate at Second Reading the National Security and Investment Bill. What is the point of my referring to this? It is that I wonder whether my noble friend might be able to tell us a little more. It is clearly not the case that the National Security and Investment Bill creates a directly comparable structure to that revoked in these regulations; it is potentially more interventionist than the screening process in the EU regulation, but it is also in its way much less broad in its application. For example, comparing the list of sectors affected, the EU regulation refers to water infrastructure, which is not mentioned in the 17 sectors in the NS&I Bill. The EU refers to elections infrastructure, food security, sensitive information—I am not quite sure what sensitive information is in this context, but the regulation includes it—and freedom and pluralism of the media.

One or two of these issues continue to be covered by the public interest notifications under the Enterprise Act, with which I was involved. Those will continue and will give us potential remedies, but others will not. Indeed, in my view the Enterprise Act needs some amendment for public interest grounds for the media. I hope we will find an early opportunity to do that. So my second and final question to my noble friend is: are the Government considering any further measures to try to screen foreign direct investment and its impact on our critical infrastructure more generally?

Prevention of Trade Diversion (Key Medicines) (EU Exit) Regulations 2020

Lord Lansley Excerpts

Tuesday 10th November 2020 Grand Committee

[Lord Lansley (Con)]

I thank noble Lords for the opportunity to participate in this brief debate on these regulations. I do not dissent from anything that my noble friend Lord Grimstone of Boscobel has said about the regulations, although I have one or two questions about the manner in which we are proposing to adopt them and incorporate them into UK practice.

I particularly wanted to come to say a word about the regulations themselves. Tiered-price products—which is, I think, in a sense what we are talking about here —or the concept that developing countries can have greater access to medicines in circumstances where the price can be lowered is a very important objective. Indeed, it is in the EU regulation, in these terms:

“to encourage pharmaceutical manufacturers to make pharmaceutical products available at heavily reduced prices in significantly increased volumes by ensuring through this Regulation that such products remain on the … markets.”

That is an entirely laudable objective, as my noble friend rightly said.

Of course, this regulation was established with, I think, initially three principal disease groups in mind. One was HIV, the second was TB and the third was malaria. Of course, where TB and malaria were concerned, there were relatively few requirements for those drugs in the most developed countries, so, in fact, the scope for diversion was relatively modest. However, the scope for diversion in relation to HIV products was potentially much greater.

I want first to say that my noble friend did not offer a view about the long-term future of the regulation but, of course, back in 2015 the European Commission undertook an independent evaluation of the regulation. At that time, the evaluation took the view that trade diversion from poor countries into high-income countries was still largely theoretical. It did not find that much evidence of it. The question is, why did it not? On the face of it, you would find low-price products. Partly it was because of the disease groups it was looking at, but it is also because, notwithstanding the regulation, there are mechanisms by which many pharmaceutical companies are able to segment their markets.

They do so by way of second brands, different branding in different markets, different packaging and often different formulations, which make it very difficult for people to try to divert product. Of course, product traceability is an essential part of pharmaceutical marketing, so one hopes it makes it increasingly difficult for these products to be diverted. Of course, some of these products can be counterfeited or falsified, and those who want to make illegal profits are perhaps more likely to go down that route than simply through diversion. Indeed, many of the supply chains we are talking about are becoming more secure; organisations such as the Global Fund and Gavi are making supply chains more secure over time.

So, the evaluation of the regulation back in 2015 did not arrive at the conclusion that the regulation had achieved much. However, it arrived at the view that the regulation was itself an important signal in relation to tiered pricing and the desirability of securing additional lower-cost, higher-volume pharmaceutical presence in developing country markets. It was also a backstop power. If there were not to be many of these other pharmaceutical industry initiatives that would enable these products to be available in those markets, this would create a mechanism by which that could be achieved. On the basis of that, the Commission renewed the regulation, and I think we are due to see the Commission come back to this, after a five-year period, in the latter part of 2021. So the first question is: will we review the regulation, or is our intention for the time being simply to carry on and wait and see whether the Commission proceeds with it?

I will make a general point. The Bill and Melinda Gates Foundation has done research and published its views, with which I very much agree. I take the view that value-based pricing is important for this country—I talked about this in our discussions on the Medicines and Medical Devices Bill. Actually, value-based tiered pricing in different markets across the world is an extremely important objective. It enables the expectation to be that pharmaceuticals are priced at different levels in different markets according, substantially, to the capacity to pay in those markets.

In the absence of that, we are at risk of what is called reference pricing, where everybody thinks that they should pay no more than other people. Very often, what they say is that they should not pay any more than the average; in fact, they all aim to be below the average. We know where such a policy leads us: to a downward spiral in pricing. The significance is that the present United States Administration have pursued the concept of reference pricing themselves, which creates perhaps the largest single threat to the long-term capacity of the pharmaceutical industry to undertake innovation and drug development. As such, as an objective, value-based tiered pricing is really important.

Finally, will my noble friend explain why it would not be simplest, from the industry’s point of view, to retain the EU logo? In this particular context—the one in Annexe V—this is not particularly indicative of the European Union; it is a winged staff with a set of stars around it. It would not hurt us too much to accept the same logo. To be clear: from the point of view of the desirability of making it possible for pharmaceutical companies to produce, the more we add cost and inconvenience, the less likely they are to use this regulation. Many do not do so as it is because of the additional bureaucracy involved, which is not great. We need to minimise the bureaucracy on this regulation.

Additionally, however, I was rather pleased to see that the Government will not try to reproduce the European Commission’s biannual reports. It is reasonable for them simply to review the products that have been put forward. Presumably, it will be the Government’s intention—I hope the Minister can confirm this—that the bureaucracy involved in putting a product into our regulation in parallel with the European Commission’s regulation will be kept to an absolute minimum because the benefits of having products in this regulation to the pharmaceutical companies can sometimes be quite modest. With that, I hope I have explained why I think that there is an interesting issue here, but I do not think it is completely obvious that we would keep this regulation for ever.

Trade Bill

Lord Lansley Excerpts

Committee stage
Thursday 15th October 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I am delighted to follow the noble Lord, Lord Wigley. I fell foul of the procedures myself today—I think I am still a new girl, navigating my way through these extraordinary times, but I pay tribute to the facilities we have and we are grateful to have the hybrid system that is working so well.

I shall speak to Amendments 81 and 83 and later amendments. For the record, I perhaps misled my noble friend the Minister in my question at Question Time, but I have the highest possible regard for members of the Trade and Agriculture Commission—they have proven their independence and their value to date. My noble friend said that they take no money for their role, so we are particularly grateful for their public service contribution. My noble friend will be under no illusion, however: I would like the commission to be independent and to have its own resources, its own staff and its own offices, and I shall continue my little campaign in that regard.

On appointments made under Amendment 81, can my noble friend put my mind at rest? What does the Governance Code for Public Appointments say about non-disclosure agreements? I am sure they do not sit comfortably within the present arrangements.

On Amendment 83 and the trade advisory groups, I noticed in the previous group that we had 17 expert trade advisory groups in July with, I think, 250 representatives. In August, we had fewer representatives and only 11 trade advisory groups. I would like to clarify, if I may, what the current composition is. Do they include, for example, anybody—a British national, ideally—who has first-hand experience of negotiating trade through the EU Commission, which would obviously be hugely beneficial at this time, as we set out negotiations on our own? To what extent is industry involved, either through the CBI or otherwise? I understand that the CBI was represented in the earlier trade advisory groups and it is extremely important, if the CBI is not represented, that we have some kind of business representation.

Can my noble friend also put my mind rest that services, both professional—such as legal services—and financial, have bodies that are represented through the trade advisory groups? If that is the case, could he please explain which they are?

I was delighted to sign Amendments 106, 107 and 108. I support the sentiments behind them and I consider them, at this stage, probing amendments, but it is extremely important that the Trade Remedies Authority also represents those categories. In Amendment 106, under proposed new sub-paragraphs (a), (b), (c) and (d) I would add (e) and (f) to include representatives of business, professional and financial services as well, because services are so important to our future trading potential.

On Amendment 108, I repeat my earlier remarks and endorse the provision that a person should hold office

“for a fixed period of five years”,

which would, I think, increase the potential for independence. A fixed term would give Trade Remedies Authority members greater security of tenure and therefore reinforce their independence and impartiality. A commitment was given by my right honourable friend the Minister, Greg Hands, in Committee in the House of Commons, that people are appointed on merit following fair and open competition, in keeping with the Governance Code on Public Appointments. The code itself states that there is a strong presumption that no individual should serve more than two terms or serve in any post for more than 10 years, other than in exceptional circumstances. I therefore hope that my noble friend will see fit to put this in the Bill through this amendment.

[Lord Lansley (Con)]

My Lords, I am glad to follow my noble friend. My amendment in this group is Amendment 113, which I shall come to at the end, where it is listed. However, there are two other areas that I shall briefly touch on.

First, Amendment 81, and those linked to it, cover appointments to the Board of Trade, or indeed to the trade advisory groups. I have a disinclination, I have to say, for statute or, indeed, the Select Committees of either House to be reaching into government departments and telling Secretaries of State who they should have to advise them. Amendment 81 probably misses the point, in that there are, as I understand it, very few appointments to the Board of Trade as such; most of the appointments being discussed are appointments of advisers to the board rather than members of the board itself. However, that is neither here nor there from my point of view. If Ministers are able to give the Committee assurances about the balance they will bring, I would be perfectly happy that they are getting balanced advice—that is terribly important.

Secondly, on Amendment 107, the noble Lord, Lord Stevenson, and my noble friend Lady McIntosh are venturing back into the territory I ventured into on Tuesday. I said that there should be a pre-appointment hearing of the International Trade Select Committee of the other place for the appointment of the chair. I await a letter from my noble friend the Minister explaining why I am wrong. I may well be wrong, but the point was well made by the noble Lord, Lord Rooker: we are dealing here not with the appointment of those who advise the Secretary of State in his own department but an independent body. That independent body is accountable to Parliament, and Parliament should have a say, although not a determining say, in who is appointed to chair it.

I am not proposing, as Amendment 107 does, that these appointments of non-executive members of the Trade Remedies Authority should be subject to consent—that goes further than I would—but the appointment of the TRA chair is important. It has impact and, if not wide public importance, very wide business importance. It is something that should be clearly commented on by Parliament. That does not mean that Ministers cannot go ahead and appoint whom they wish. Indeed, even where there is a pre-appointment confirmatory hearing in other cases, Ministers, when I last looked, on nine occasions made recommendations to which Select Committees objected, and on six of those occasions, Ministers went ahead anyway. It would not prevent Ministers doing what they want to do, but it would give them Parliament’s view, so I am rather sympathetic to that amendment.

Amendment 113 is not about appointments or the membership of the TRA; it refers to Clause 6, which gives the Trade Remedies Authority the power—indeed, the obligation—to give advice to the Secretary of State in a number of respects, and the Secretary of State can request such advice. The Trade Remedies Authority is an independent body; there is a statutory relationship with the Secretary of State and the Secretary of State may ask for advice. For example, and I make no apology for coming back to this, let us say that we are talking about the Airbus and Boeing dispute, and the Secretary of State has asked the Trade Remedies Authority for advice on the “trade remedy measures” adopted by the United States in relation to that dispute, as both sides have secured World Trade Organization consent to the imposition of additional duties. When the Secretary of State asks for that, it is something on which the Trade Remedies Authority should expose for accountability purposes that it has given advice when it comes to the annual report.

It is important, and the fact that its advice has been sought is also important. I do not expect the annual report to go into obsessive or spurious detail, but, when one makes an annual report for an independent body accountable to Parliament, it should tell us how and when this statutory provision has been deployed during the year.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

I call the noble Lord, Lord Judd. No? Let us go to the noble Baroness, Lady Bowles of Berkhamsted.

--- Later in debate ---

Moved by

[Lord Lansley]

92: After Clause 10, insert the following new Clause—
“Preferential rates given unilaterally
(1) In section 32 of the Taxation (Cross-border Trade) Act 2018, subsection (3), at end insert—“(d) the first regulations under section 10 (preferential rates given unilaterally).”(2) In Schedule 3 to the Taxation (Cross-border Trade) Act 2018, Part 4, paragraph 2(1), at end insert—“(c) in the case of the list in Part 2 or 3, the government of that country has committed abuses of human rights of such a character and scale that, in the view of the Secretary of State, unilateral trade preferences should be withdrawn.””Member’s explanatory statement
This new Clause relates to the Scheme of Preferences as provided for in Section 10 and Schedule 3 of the Taxation (Cross-border Trade) Act 2018. The first sub-clause requires that the first regulations made to establish the scheme (to apply from IP Completion day) must be made by an affirmative process. The second sub-clause confers a specific power to remove a country from the list of those benefiting from unilateral trade preferences where the government of that country has committed human rights abuses.

[Lord Lansley (Con)]

My Lords, we come to the last group of amendments in Committee. It is my privilege to move Amendment 92. It may be last, but it is not least: it is of considerable importance to our future trade relationships. It concerns the provisions of the unilateral scheme of preferences, as it is referred to. It might be referred to as the generalised scheme of preferences to bring it into line with the naming of the scheme under the European Union. Noble Lords will recall that the Taxation (Cross-border Trade) Act 2018 made statutory provision for the granting of unilateral preferences to eligible developing countries and least developed countries.

The structure of the provision in that Act is such that it would enable us to replicate what has been until now, and will be until the end of this year, the European Union’s generalised scheme of preferences. We have been reminded during the debates that the European Union scheme consists essentially of a generalised scheme of preferences, which grants for a wide range of products the absence of tariffs or a reduction in tariffs; and a generalised scheme of preferences-plus, which, by virtue of adherence of these least developed countries, and sometimes, I think, low-income countries, to 27 international conventions, including those on labour rights, environmental protections, human rights and good governance provision, gives them access to essentially a zero-tariff arrangement. In addition to that, for the least developed countries, there is what is known as Everything But Arms, which is in fact everything but arms and ammunition—a zero-tariff commitment for all their products apart from arms and ammunition.

The European Union scheme that we are presently part of was reviewed in 2018. In the early part of this year, the European Commission undertook a consultation to which responses were received and it closed in June. I do not know that more has been said about the further revision of the European Union’s regulations, which I suspect would not come into effect until the end of 2023, when the current scheme expires. So, to an extent, although we might replicate the European Union’s generalised scheme of preferences to begin with, from the outset we will have our own scheme and diverge from that scheme. I have no problem with that; my point is about how we go about this process.

The Taxation (Cross-border Trade) Act says that Ministers may make regulations. Section 10 of that Act gives Ministers the power to make regulations for the purposes of the unilateral preferences. Section 32 determines which of those regulation-making powers is to be exercised by reference to the negative or affirmative procedure. In this instance, it is all by the negative procedure. The first part of Amendment 92 is to change that, but not to make all regulations relating to the unilateral scheme of preferences affirmative—there will be a lot of such potential regulations. It is one of those areas where, rightly, Ministers do not want to burden the House with a constant stream of regulations.

However, as is the case for the global tariff, where Ministers put into that Act provisions whereby the first regulations made in relation to Section 32 would be subject to the affirmative procedure, this amendment would provide that the first regulations made for the unilateral scheme of preferences, our GSP, would also be subject to an affirmative procedure. I hope that those regulations will be made by the end of this year because we need them to be in place by then. If that is not the case, it would be immensely disappointing and could lead to considerable dislocation.

The second part of the amendment relates to the question of whether, when the Government make the regulations, Ministers have the power to disapply, suspend or withdraw the unilateral preferences when a country or territory is responsible for significant human rights abuses. This is not an idle point. On 12 August this year, the European Commission suspended GSP access for Cambodia, which will affect some 20% of its exports to the European Union, on the grounds of significant human rights abuses in that country. About three weeks ago, the European Parliament passed a resolution—not obligatory but a substantial expression of European opinion—suggesting that there should likewise be a withdrawal or suspension of preferences in relation to the Philippines by virtue of that country’s human rights abuses and lack of good governance. That was not responded to well by that country’s regime.

These are not idle points and potentially are issues on which we would have to make our own decisions. This Parliament has for decades not been used to taking decisions about such trade preferences and their relationship with developing countries. I am pleased that we will have that opportunity; it is one of the few effects of Brexit that would be positive, whereby we can positively influence developing countries through our trade preferences.

Interestingly, only today, the UK Trade Policy Observatory from the University of Sussex posted a blog stating that it was worried that the unilateral scheme of preferences will not compensate many developing countries for loss of their competitiveness in the United Kingdom market because our global tariff reduces tariffs on a most-favoured nation basis. That is part of a liberalising process and I do not object to our overall reduction in tariffs, which is not large in scale. However, it reduces the preferential margin for the unilateral scheme of preferences. Therefore, countries that benefit from our preferential scheme will see less competitive advantage as compared to many other countries that will be able to access our global tariff.

The TPO also said that difficulties are being experienced by low and low-to-middle income countries in relation to rules of origin, access to origination from those countries giving them access to the preferential scheme, certification and the like. This is one of those technical areas in which it will be important for us to make sure that the regulations are right in that respect, not least because there is a complex interrelationship between the free trade agreements that we are entering into and the origination of product from countries with unilateral preferences because they can use cumulation in relation to other countries and those countries with which we have a free trade agreement. Of course, we do not have free trade agreements with all the countries with which the European Union has such agreements. They might lose some of that potential for cumulation at the end of the year if we do not put all these provisions in place. Instanced in the TPO’s blog are Ghana and Kenya, which might thereby lose out. I shall not go down that path because I know that the noble Lord, Lord Chidgey, who was kind enough to co-sign the amendment, might want to talk about some of those effects in Africa, given his expertise. I am grateful to my co-signatories on the amendment.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank my noble friend Lord Lansley for his interest in the UK trade preference scheme. The Government share his interest in using trade preferences to support trade and development, and I am happy to discuss the Government’s commitments in this area.

I reassure the Committee that the Government have made long-standing commitments, including to Parliament, to replicate the EU trade preference scheme. The UK trade preference scheme—UK GSP—will provide the same level of access as the current EU trade preference scheme by granting duty-free, quota-free access to the UK market to least developed countries and by granting tariff reductions to other developing countries. It will replicate the three levels of market access provided by the EU, including an enhanced level of market access for economically vulnerable countries that ratify and implement 27 international conventions.

As noble Lords will be aware, coronavirus has had a severe impact on trade for many developing countries. Providing certainty that we will continue their GSP access is an important way of supporting their economic recovery.

I can confirm that the first set of GSP regulations will be laid before the end of the year and that they will maintain continuity of market access. I listened carefully to the points made by my noble friend Lord Lansley and the noble Lord, Lord Purvis, but, as these regulations do not effect any significant changes compared with the EU’s generalised scheme of preferences, the Government consider it more appropriate, when parliamentary time is stretched, to keep these as negative procedures.

However, I say to noble Lords that, after we have ensured continuity of the EU trade preference scheme in the transition period, we are committed to improving the UK’s trade preference scheme further in due course. I can confirm that we want the UK’s unilateral preferences to be as effective and simple to access as possible, to best support economic development in poor countries and to support UK businesses and consumers to access competitively priced goods. I reassure the noble Lord, Lord Purvis, that we will make available the information in the autumn that we said we would make available.

I turn to the second part of amendment on human rights, and reassure noble Lords that the power in Section 10 of the Taxation (Cross-border Trade) Act allows for preferences to be varied, suspended or withdrawn and, by extension, allows the Government to address human rights violations of the type that this amendment seeks to address. I can assure the House that regulations to create the UK preference scheme will include provisions for the variation, suspension, or withdrawal of trade preferences where the beneficiary country engages in serious and systematic violations of human and labour rights. The noble Lord, Lord Chidgey, gave us some very powerful and chilling reasons why it is very important that we have these options. The Government will look at range of options in the event of human rights violations, and we shall balance the need to act decisively, where required, with the need to follow due process.

My noble friend Lord Lansley raised the question of Cambodia. The UK shares the EU’s concerns over the human rights situation in Cambodia, and continues to raise them with the Cambodian Government. However, the UK, rightly and properly, will take into account all the available evidence before taking a decision on whether to partially suspend Cambodia’s preferences at the end of the transition period.

The UK has a strong history of protecting these principles and promoting our values globally, and we will continue to do so. The Government do not shy away from issues of human rights, including during our discussions on trade. Moreover, the introduction of political considerations related to human rights does not fit with the purpose of the list of countries in Schedule 3 to the Act. This was intended to determine eligibility based on objective classifications by international bodies. The proper place to include these provisions is in the regulations that we will be introducing before the end of the year.

I undertake to write to noble Lords who raised detailed questions in the debate that I have not covered in this winding-up.

As this is the last amendment we are debating, I ask for the Committee’s indulgence to put on record my gratitude and appreciation to noble Lords, who have spoken with great passion, knowledge and experience during all the debates. I have personally found the expertise and constructive engagement I have had extremely valuable, and I thank noble Lords for their patience as I have begun to learn my trade as a Bill Minister. I thank the noble Lords, Lord Stevenson, Lord Grantchester, Lord Purvis and Lord Fox, the noble Baroness, Lady Kramer, and my noble friends Lord Lansley, Lady Neville-Rolfe and Lady Noakes. I think that noble Lords will also want to join me in paying tribute to my noble friend Lord Younger, whose support, guidance and good humour has been invaluable to me. On a personal level, I also thank the Bill team in my department for some tremendous work, and my private secretary, Donald Selmani, for spending long hours sitting in the Box.

The debates that we have had in Committee have allowed a detailed assessment of this Bill, as well as of wider trade issues. We now have some time in which to reflect on the views that we have heard—and, of course, I undertake to do that. I will use this time carefully and I look forward to engaging with Peers and debating the Bill further on Report.

On the amendments that we have been discussing, that just leaves me to say that I am grateful to my noble friend Lord Lansley for raising these important issues. I hope that I have been able to reassure him and other noble Lords, and that he will agree to withdraw his amendments.

[Lord Lansley (Con)]

My Lords, I am grateful to the Minister for his response to this debate. I am pleased that we have finished with an illustration, and I am grateful to the noble Lord, Lord Chidgey, in that regard, and to the noble Lord, Lord Purvis of Tweed, for giving powerful, relevant examples of how the trade preferences and the way we manage our trade in future can have substantial impacts in some of the poorest countries of the world.

It is rather important that we finish by recognising that, while we do our dry legal work here, there will be powerful, real-world consequences of the decisions that we take. It is precisely for that reason that I tabled this amendment—to illustrate that, as a Parliament, we want to get involved in the debate about how we can make our UK trade preference scheme more generous, more accessible and able to support sustainable development around the world more effectively. We may well start by replicating the EU scheme, and I think the EU would legitimately argue that its generalised scheme of preferences is a world leader, but that does not mean it is perfect. It is important for us to recognise that there may be ways we can further develop it, given our ability to deploy our development expertise around the world.

I also understand the Minister’s argument about the first regulations being essentially to replicate the EU scheme, so why should we take up our valuable time debating them? The noble Lord, Lord Purvis of Tweed, shared the point that our global tariff is not the same as the EU’s tariff. In so far as there are differences, it will have consequences for the least developed countries. Some of those consequences—for some products for some countries—might be really significant, and the noble Lord gave us examples of that. That is especially true if we do not have rollover agreements. It is bound to be true in that the EU has, for example, regional trade agreements that give rise to accumulation opportunities that we will not necessarily have in place early next year. So, easy as it is to say that we will simply replicate the EU scheme, I am afraid that there will be differences from the outset. I want to make sure that those differences are not negative and we find ways to deal with the potentially negative consequences for the neediest countries, but also go on, perhaps, to find new opportunities in the future.

I hope this is a debate that the Minister wants to have and that we will continue to have but, in view of everything he said, I do not want to press it now. As someone who has participated in all these Committee days—as my noble friend Lord Bates will recall, we did the same back in the early part of 2019—I think the Minister can rest assured that he has had an effective, capable and impressive first outing as a Minister working on a Bill. In response to his kind words to noble Lords, we have all very much appreciated the way that he, my noble friend Lord Younger of Leckie and officials have gone about the process of working with us. We look forward to that being continued on Report. I beg leave to withdraw Amendment 92.

Amendment 92 withdrawn.