Trade Bill

Debate between Lord Lansley and Lord Judd

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

[Lord Lansley (Con)]

Since I have no text, it will not be the same speech, so if you will forgive me, I will not do that. It will appear in Hansard, and I encourage Members to read it there. In any case, I am now talking about the amendments in this group, as opposed to responding to the noble Baroness, Lady Chakrabarti, which noble Lords can read in Hansard.

On these amendments, I have great sympathy with what the noble Lord, Lord Hendy, was saying. When Philip Morris was frustrated on an investor-state dispute settlement, it effectively used Honduras and the Dominican Republic to use WTO procedures. So the absence of ISDS is not enough in itself—we have to ensure that we are proof against that. In fact, where Australia was concerned, as it happens, the public health exemptions in the WTO were sufficient in the last decision of the appellate body that the noble Baroness, Lady Kramer, regrets the absence of: the last decision it made in June was to uphold Australia’s position. We have to be very mindful of that.

Before I get to my own amendment, I will speak to the others. There is a very legitimate question. Are the Government planning simply to roll over existing EU agreements as they are, including where there are ISDS provisions and including with CETA in due course, where there is an investment court system? I am very interested to know what the Government’s intentions are. Certainly, my expectation is that it will be very difficult to have a continuity agreement while departing substantially from continuity.

As regards Japan, I do not have the text of the UK-Japan Comprehensive Economic Partnership Agreement, but while the EU-Japan agreement encourages mutual investment, Article 8.9.4 of it makes clear that, while market access, national treatment without discrimination and most-favoured-nation status are offered, it says that for “greater certainty”, most-favoured-nation treatment

“does not include investor-to-state dispute settlement procedures provided for in other international agreements.”

I will be very interested to know in due course whether the UK-Japan agreement says the same thing. I know that my friends in Japan take the view that we will not be able to accede to the CPTPP without accepting an investor-state dispute settlement. So this is a very interesting moment in understanding whether we are joining with the European Union in moving away from investor-state dispute settlement, or whether we subscribe to the Japanese view that it remains a legitimate vehicle in international trade agreements.

Amendment 43 proposes a multilateral investment tribunal. I wish that we could use such a process. The Doha round did not accept a multilateral investment provision—the proposal failed. We have bilateral agreements, but while they might be desirable they are not sufficiently widespread to allow us to get to a multilateral tribunal. Putting in legislation a requirement for such a tribunal when people have not yet signed up to one seems heroic.

Amendment 91 is not about investor-state dispute settlement; it is about disputes between states. The best example to have in mind is the dispute between the European Union and the United States. As a result of US action, the dispute reached the point where it was lawful under WTO rules for the EU to apply specific import duties against US exports into the European Union.

The Taxation (Cross-border Trade) Act 2018 relates to this, but why I am talking about a different piece of legislation? The original Trade Bill and the Taxation (Cross-border Trade) Bill were introduced at the same time, at the end of 2017. They were intended to be considered side by side and they cross-refer considerably. In this instance, it is entirely right for us to look at the Taxation (Cross-border Trade) Act and ask whether the parliamentary scrutiny arrangements relating to it are correct. Section 15 of the Act gives the Secretary of State the power to impose through regulations additional import duties as a result of an international dispute—for example, regulations to impose import duties on US exports. That power is exercisable through the negative resolution procedure, but in my view it should be an affirmative resolution procedure—this should be added to the list of affirmative resolution procedures in Section 32 of the Taxation (Cross-border Trade) Act.

The argument in the Government’s Explanatory Notes for using the negative procedure in the great majority of cases where customs duties are imposed is that there are so many such regulations that they have to be made in that way, otherwise they become impractical. That is patently not the case here. In this instance, I encourage my noble friend the Minister to agree that there will be relatively few international disputes that give rise to the imposition of such duties and that, when that happens, it will by its nature be of considerable significance and therefore should be in the form of regulations subject to the affirmative procedure.

[Lord Judd (Lab)]

My Lords, we are indeed fortunate to have had someone with the huge experience, not least internationally, of my noble friend Lord Hendy introducing the amendment, as reflected in the authoritative way in which he did so. I always applaud my noble friend Lord Hain, who said that he could not understand why the Government did not accept amendments. I am sorry to bring controversy to this discussion, but we must face the truth. I suggest to my noble friend that the explanation is quite clear. A bunch of ideologues in Number 10, such as we have never been exposed to in my time in politics, are determined to drive their strategy through. Their strategy is for a free-for-all and a totally unregulated society. They are fundamentally opposed to regulation and, with that, accountability. Unless we face that reality, we are just tackling everything down river without going to the source of the problem.

My noble friend was right to underline the importance of the protection of labour and employment standards. I was glad to hear my noble friend Lady Blower speaking. She was absolutely right to emphasise the importance of the UN and UNCTAD in particular. UNCTAD has played an important role in bringing the nations together to find a workable and just system across the world. My noble friend Lady Chakrabarti also has considerable experience. She emphasised the fact that we are talking about the law and our need to be vigilant in protecting the environment and the NHS.

Trade Bill

Debate between Lord Lansley and Lord Judd

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

[Lord Judd (Lab) [V]]

My Lords, I want to take up one point made by the noble Lord, Lord Fox, about today’s drugs not always necessarily being the cheapest. I accept that, but on the other hand, I am sure he would agree that in the overwhelming range of medicines, today’s drugs are highly valuable and economic.

I remember that during my time as director of VSO, I attended a training course for medical personnel of all kinds, doctors, nurses and so on, who would be going off to take up exacting assignments in the poorest parts of the world. The lecturer was absolutely brilliant. He was an eminent physician who has gone on to even more eminent positions. At a certain point he dished out two pieces of paper each to everyone in the room. He said, “Please write down on one piece of paper the last drug that you prescribed for a patient. On the second piece of paper, please write down the name of the last drug that you took.”

The lecturer collected these in and then went into a state of outrage—he was a very effective performer—saying, “You are going to do vital medical work in various parts of the world”. As he went through the bits of paper, he said, “Look at this! You know that, for this patented drug, there is a generic drug available at a cheaper rate. You know that—why have you done it?” People were just flummoxed; they did not know why they had done it. They had got into a culture where too much of the sale of medicines was in the hands of PR and advertising companies that were, on the back of drugs, making a lot of money by finding more attractive ways of presenting things that were available generically.

I also remember at that time that, in Bangladesh, there was a great deal of concern because we were trying to support a factory—an enterprise—that was making generic drugs available in Bangladesh. My goodness, the moves that were afoot to try to undermine the viability of that company.

I thank my noble friend Lady Thornton for having introduced her amendment because, if there is one thing that we must hold dear, it is that we cannot allow any further privatisation of the health service by the back door. It is inadvertent sometimes, but sometimes it is quite deliberate by those who try to manipulate trade deals in the interests of their own countries and industries.

I also commend very warmly my noble friend Lord Bassam. He is absolutely right that it is vital that Governments of all persuasions have available without inhibition the opportunity to introduce public ownership where it becomes essential. We again know that there have been too many dangers that these rights may be curbed. We have had a peculiar situation in Britain where, because of the curbs that already exist, we have had nationalised companies in other European countries running British rail systems. That is just absurd. We must not open the door to the possibility that more of that could occur. My noble friend is absolutely right to have brought his amendment into the context of the Bill.

[Lord Lansley (Con)]

My Lords, I say first that I very much agree with everything that my noble friend Lady Noakes had to say, which means that I can save myself saying some of those things by thoroughly agreeing with her, in particular on the point she made about the disinformation about private ownership in the NHS.

When the noble Lord, Lord Patel, whom I regard as a friend, makes his points, he has to answer the following question. Is it his proposition that when the Priory Group, which was a UK company for many years, was bought by an American company, that should have been prevented by the UK Government? That is the question that he has to answer. In fact, it was not prevented by the UK Government, and indeed for decades Governments in this country have allowed foreign ownership of UK companies. If we were to stop that, it would of course have very big implications for the investor relationship that we have with other countries. However, that is not what we are proposing, and I do not think that it is what either the Official Opposition or the Liberal Democrats are proposing, so it does not really have any force as an argument.

More to the point is whether anything in our trade relationships and trade agreements that we enter into prejudices our ability to have a National Health Service free at the point of use, paid for out of general taxation and controlled by us as a public service? There is nothing in those trade agreements that allows that. In response to my noble friend Lady McIntosh, the EU International Agreements Sub-Committee—she might care to look at the evidence that has been given—is examining in detail the Government’s proposals for negotiations with the United States on a prospective free trade agreement. That expressly excludes any measures that would have any impact on the NHS or on our ability to control our pharmaceutical pricing and supply system. That is very clear; she can look at it.

All three amendments relate to rollover agreements; they do not talk about future trade agreements. Therefore, the debate about the American free trade agreement is irrelevant to these amendments. I looked at one example —the Canada-EU agreement, which is able to be rolled over with the benefit of implementation through this legislation. A description on the EU legal database of Chapter Nine of the agreement on cross-border trade in services says that

“this chapter fully upholds governments’ ability to regulate and supply services in the public interest.”

On Chapter Eighteen, which relates to state enterprises, monopolies, and enterprises granted special rights or privileges, it says, in terms:

“The rules ensure that both parties have the full freedom of choice in the way they provide public services to their citizens.”


There is a general exception which says that provision can be made

“to protect human, animal or plant life or health”.

I think that the proposers of amendments of this character have to look at what they are proposing and ask whether it changes anything. The rollover agreements comply with those requirements, and therefore the legislation is entirely robust.

I rather deprecate the idea that one proposes amendments and, before listening to the debate, says, “Well, I might bring it back on Report”. I suggest to noble Lords that they listen to the debate and, if they propose to bring back an amendment back on Report, they redesign it so that it bites on future trade agreements. At least we could then have a debate that was relevant. There is nothing in what is proposed here in relation to health or public services, in particular, that bites in any sensible way on the existing trade agreement.

We should remember that these trade agreements do not change domestic law. I say to the noble Lord, Lord Rooker, for example, that the law of the land says that you cannot introduce charges for NHS services other than by new primary legislation. That is the only way in which it can happen. Therefore, we do not need to trust the Prime Minister; it is in the law. Of course, one can change anything through primary legislation, but the Prime Minister has not done so, and I can confidently say to noble Lords that I know that he will not do so to introduce charging for NHS services. He would not get it through even if he tried.

Therefore, I do not quite get any of this. Frankly, Amendment 13 feels a bit as though the noble Lord, Lord Bassam, wants to ignore the result of the last general election. If the election had gone another way and Jeremy Corbyn had become Prime Minister, he could have done these things and trade agreements would not have stopped him. It is the election that stopped him, and not trying to legislate to stop trade agreements being irrelevant.