Trade (Australia and New Zealand) Bill

Lord Lennie Excerpts

Committee stage
Monday 23rd January 2023 Lords Chamber

Moved by

[Lord Lennie]

1: Clause 1, page 1, line 10, leave out subsections (2) and (3)
Member's explanatory statement
This amendment prevents regulations being made in relation to cases falling outside the scope of procurement Chapters of the FTAs.

[Lord Lennie (Lab)]

My Lords, Amendment 1 would prevent regulations being made in relation to cases falling outside the scope of the procurement chapters of the free trade agreements. The noble Lord, Lord Purvis, will speak to Amendments 6 and 19 in this group.

Amendment 1 would remove subsections (2) and (3) from Clause 1. Clause 1 provides a power for appropriate authorities to make regulations for two purposes. Subsection 1(a) allows an appropriate authority to make regulations for the purpose of implementing the government procurement chapters in the FTAs. Subsection 1(b) allows an appropriate authority to make regulations for the purposes of making other changes for matters arising out of, or related to, the government procurement chapters in the FTAs.

The Explanatory Notes state:

“Clause 1(2) allows the regulations under subsection 1(b) to be made also for cases falling outside the scope of the government procurement Chapters to provide for general application”,


and that

“Clause 1(3) clarifies that a case is outside the scope of a government procurement Chapter if that Chapter does not impose an obligation on the UK in respect of that case, i.e. it is not an obligation owed specifically in the Chapter … The effect of subsection 1(b) read with 1(2) is that certain changes made to domestic law to implement the UK-Australia FTA, i.e. in respect of the rules in the text of the government procurement Chapter … can apply generally and not only to suppliers from Australia. This will ensure procurement regulations remain uniform and coherent by not imposing different or conflicting procurement procedures on contracting authorities for procurements covered by the FTA, and ensure the UK can implement its obligations in the FTA in a way that is consistent with the UK’s other international procurement obligations.”

This explanation makes sense; it is of course important that procurement regulations remain uniform and coherent.

Our intention with this amendment is simply to probe the scope of this, as it reads as almost limitless. Can the Minister tell me whether any case could be outside the scope of the Government’s procurement chapters? Are there any limits on this? What is a “case” defined as?

[Lord Purvis of Tweed (LD)]

My Lords, I will speak to Amendments 6 and 19 in this group. The questions posed by the noble Lord, Lord Lennie, in moving Amendment 1 are very sensible. I look forward to the Minister’s reply.

According to today’s press, we are now 15 years behind on the commitment that we would reach £1 trillion of trade within a decade. It is now estimated that the target set by the coalition in 2012 will not be achieved until beyond 2035. This highlights the fact that we are starting to see the consequences of the significant non-tariff barriers introduced by this Government over recent years. Therefore, it is vital that mechanisms are as streamlined as possible for procurement and the rest of the trade agreements.

Amendment 6 is designed to probe the discrepancies in threshold levels in the Government’s procurement legislation, currently going through the House of Commons and which has been through scrutiny in the House of Lords. It probes why they are different for those seeking procurement opportunities for Australia as compared with those seeking them here at home. If you are a business seeking to bid for procurement in the UK, you now have to operate under quite a markedly different approach from that if you are looking for procurement opportunities within Australia.

I welcome the Minister’s letter to noble Lords, which he promised at the end of Second Reading and fulfilled. It highlights what we knew: that, factually, there is a difference in the threshold levels. The letter simply states that Australia was not willing to have the same thresholds as us, and so we simply said that we would have its thresholds. What did we get in return? If this is a concession to Australia then surely we got something in return as far as access is concerned.

The report on the agreement from the Australian Parliament’s treaties committee makes for interesting reading, as does our own report from the House of Lords International Agreements Committee. The Australian report is 225 pages long and can be summarised as: “We got a good deal.” Our House of Lords report, which is 36 pages long, can be summarised from our point of view as: “No, we didn’t.”

The Australian report highlights the fact that the Australians wanted to maintain their levels of thresholds—that was very clear. Thresholds are important; a considerable amount of scrutiny that we did on the procurement agreement was about whether the procurement would be below or above the threshold. If it is below the threshold, the reporting mechanisms, the contracts approach, and the way that schemes or pooled contracts can be put together are different. So we now have a higher rate for Australia.

At Second Reading, I raised the fact that this was done by subcentral contracting bodies. The Minister’s letter to me says that in effect I was wrong in saying that Australia was unique, because Canada has the same approach as Australia’s—but not for subcentral levels. The agreement that we rolled over for Canada for the CETA agreement, has the lower threshold, and we have now gone to the higher one. We are simply trying to find out what we got in return for providing a concession to Australia over the threshold levels. The higher threshold means that there will be extra complexity for businesses.

Amendment 19 is simply a probing amendment on the point that was raised earlier on the Procurement Bill by the noble Lord, Lord Lansley, which was simply trying to seek protections. If we try to change this Bill and its mechanisms for the good, those changes will be protected by the Procurement Bill, which, as the Committee will be aware, will automatically repeal this one. We have the rather ridiculous situation that we are in Committee for a Bill that will be automatically repealed by a Bill that is going to go into Committee in the House of Commons. This is a mechanism to try to protect any of what we do. On that basis, I hope the Government might be minded to accept Amendment 19, or indeed they might have their own mechanisms or commitments, so that we are not wasting our time in Committee.

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[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that intervention. I think I have made my position clear that any concomitant actions following on from this Bill will relate specifically to the matters necessary for bringing it into force. Pursuant powers—this is an important commitment—are very much linked to what we would describe as minor and specific issues. They could relate to changes in government departments’ names, such as the Department for Culture, Media and Sport adding “Digital” to its name. The effective implementation of that in the agreements is relevant in these texts, so it would be confined to errors such as that. I know that we will discuss the concept the noble Lord raised regarding Scotland later in Committee, so I will be delighted to go into more detail on that then.

[Lord Lennie (Lab)]

My Lords, the problem is that the Bill does not say that. That is the point being made by the noble Lord, Lord Kerr. I thank noble Lords who have spoken: the noble Lord, Lord Purvis, on his two amendments and the noble Lord, Lord Lansley, for a lot of helpful clarification. Given any future misuse of power through statutory instruments, our super-affirmative proposal later will no doubt be supported, because that will make the scrutiny of the Bill that much more thorough than is intended as we speak. The Minister said that no powers beyond these FTAs are proposed by the Bill, but it does not say that—it indicates that there may be powers in other places that we need to watch for. However, with that, I beg leave to withdraw my amendment.

Amendment 1 withdrawn.

Moved by

[Lord Lennie]

2: Clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of such public consultation as the appropriate authority considers appropriate with the relevant—(a) Scottish Ministers,(b) Welsh Ministers,(c) department of the Northern Ireland Executive, and(d) representatives of the English regions.”Member's explanatory statement
This amendment requires a consultation before regulations implementing the procurement Chapters can be made.

[Lord Lennie (Lab)]

My Lords, this amendment would require a consultation before regulations implementing the procurement chapters could be made. It would require that consultation to involve the relevant Scottish Ministers, Welsh Ministers, the department of the Northern Ireland Executive, who are not currently sitting, and regional representatives in England, as the appropriate authority considers appropriate.

Colleagues in the Welsh Government have stressed the importance of improving the process by which the devolved Administrations are consulted and formally engaged in trade deal negotiations. Labour is committed to working to improve the negotiation process to better engage with them and we are calling for a commitment from the UK Government to undertake nation-specific impact assessments on trade deals. These two steps would ensure a clear understanding of the implications and opportunities for each part of the country from any new deals—a common-sense step to make sure that new deals are as good as they can be for the whole of the UK in the era of individual trade deals.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will make one brief observation. It seems a deficiency in our processes for negotiating important agreements of this kind that there is no mechanism, as in so much else, for ensuring that we remain a united country. The Government of the United Kingdom also represent the views of the devolved nations. Although it is very important for the United Kingdom that it is seen to be an honourable state that carries through what it negotiates, and although I support this amendment, I also support what was said by the noble Lord, Lord Lennie—that this has been designed after the horse has bolted. Hopefully, we can do something before the horse bolts next time.

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[Lord Johnson of Lainston (Con)]

I thank my noble friend for his comments. Consent is either given or not given. For the reasons why, he must make inquiries of the various Assemblies that have not given their consent and ask them why they are not supporting this free trade agreement, which I think will bring them enormous benefits. We remain committed to the consultation process in all our activities. Frankly, it would probably be impractical not to do so in any event.

[Lord Lennie (Lab)]

My Lords, I am grateful to the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Howell, for their contributions. On the question that the noble Lord, Lord Howell, asked and the Minister tried to answer, the withdrawal of consent is probably a consequence of the lack of consultation—not necessarily the quality of the agreement but the lack of involvement in its development. This amendment is trying to obviate that for the future, so that if there is a formal consultation, it is seen to have taken place, and then an agreement on behalf of the UK is reached and can be properly explored—or not—throughout the UK. However, consent could not then be withheld by Parliament or an Assembly in one of the parts of the UK. That seems to me the main benefit of the amendment, but for now, I will beg leave to withdraw it.

Amendment 2 withdrawn.

Moved by

[Lord Lennie]

3: Clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of a review by the Trade and Agriculture Commission of the potential impact of the procurement Chapters on industry in the United Kingdom.” Member's explanatory statement
This amendment requires a review by the TAC before regulations implementing the procurement Chapters can be made.

[Lord Lennie (Lab)]

This is a bit like a jack in the box; I apologise. There are a number of amendments in this group in my name, which I will briefly run through. There is also an amendment from the noble Baroness, Lady McIntosh, and four, I think, from the noble Lord, Lord Purvis. They will explain theirs as we get into it.

Amendment 3 requires a review by the TAC before regulations implemented in the procurement chapters can be made. Amendment 4 requires an impact assessment on employment and human rights and climate change to be published before regulations implemented in the procurement chapters can be made. Amendment 5 requires a regional impact assessment to be published before regulations implemented in the procurement chapters can be made. Amendment 8 requires an impact assessment within 12 months, and every three years thereafter, of regulations made under Clause 1. Amendment 9 requires a regional assessment of the impact on farmers of the procurement chapters. Amendment 11 requires an NHS impact assessment of the procurement chapters. Amendment 12 requires a review of the negotiation of the procurement chapters. Amendment 13 requires a climate change impact assessment of the procurement chapters. The final Labour amendment, Amendment 14, requires a labour rights impact assessment of the procurement chapters.

All these amendments require impact assessments addressing different areas of the procurement chapters of the Bill. While predictions can be made, they are generally vague and broad, and specific impact assessments would not only give better insight into the deals but help learn lessons for future deals. We have tabled amendments requiring assessments across specific areas that are particularly pertinent to the deals. On employment and labour rights, while agreements do make reference to workers’ rights and labour standards, a prospective Labour Government would seek to establish a gold standard of workers’ rights in trade deals. Also, it is unacceptable that the Government have failed properly to engage with workers’ representatives through the negotiation process, as union members are best placed to outline many of the tangible impacts of trade policy.

The TAC has noted that the agreement

“does not contain commitments to ILO core conventions and an obligation for both parties to ratify and respect those agreements. Rather it contains a much weaker commitment to just the ILO declaration”.

Labour is concerned about the precedent this may set, especially for ongoing and future trade deals with countries that have significantly worse protections than the UK. UK agri-food producers are concerned that

“the Agreement increases UK market access for food produced in ways that would be illegal in the UK, making for unfair competition.”

The National Farmers’ Union has been critical of the impact the trade deal may have on farming, saying:

“We see almost nothing in the deal that will prevent an increase in imports of food produced well below the production standards required of UK farmers”.


It continued:

“There is little in this deal to benefit British farmers.”


It is little wonder that Australia’s former negotiator at the WTO said:

“I don't think we have ever done”


a deal as good “as this.”

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[Lord Johnson of Lainston (Con)]

I always appreciate the noble Lord’s interventions. Hopefully, I will cover this issue as I go through my notes. I will continue to go through these points because they are important, and it is important that noble Lords hear from me the relevance we place on these discussions. This really is the meat, as they say, of the free trade debate, although I do not see that it relates specifically to this Bill. I appreciate that I have gone into a lot of detail, but these are important issues. I am grateful to the noble Lord, Lord Purvis, for his comments and to the noble Baroness, Lady Bakewell, and my noble friend Lady McIntosh for tabling their amendments in the interests of our frankly brilliant farming communities. I hope I have to some extent been able to reassure them that their amendments are not required.

Turning to Amendments 4, 13, 14, 17 and 18 from the noble Lords, Lord Lennie and Lord Purvis, and the noble Baroness, Lady Bakewell, on environmental, social and labour considerations, I want to reassure the House that both the Australia and New Zealand FTAs include comprehensive chapters that cover labour and animal rights and commitments not to derogate from environmental and labour laws, to reaffirm our climate commitments under the Paris Agreement and to strengthen co-operation in a number of areas. The Government are committed to upholding the UK’s high environmental standards, and we will continue to ensure a high level of environmental protection in our trade agreements.

These chapters also include commitments not to derogate from laws, regulations and policies in a manner that weakens or reduces the level of animal welfare protection as an encouragement for trade or investment between the parties. For example, the UK-New Zealand agreement contains the largest list of environmental goods with liberalised tariffs in any trade deal, supporting both countries’ climate and environmental goals through trade policy. I think the noble Lord, Lord Lennie, touched on that—the importance of trying to ensure that we benefit in the area of net-zero in particular. We have that specifically in our treaties. Provisions included under these FTAs went further than both Australia and New Zealand had previously gone before.

I turn to the review of negotiation and Amendment 12 in the name of the noble Lord, Lord Lennie. This would create a duty of the Secretary of State to undertake and publish a review of the lessons learned from negotiating the procurement chapter. I agree that learning the lessons from negotiations is crucial to the UK getting the best outcome from them. Indeed, we already do this, so it is not necessary to create a statutory requirement to undertake such a review. All negotiations are different, as I have said, but my department is committed to learning from each negotiation and applying those lessons directly to its work, both in chapters and across negotiations. DIT has a continuous improvement team dedicated to learning lessons from trade negotiations. I am confident that this approach towards negotiating procurement chapters allows for high-quality chapters that work well for British businesses and consumers. I hope this provides reassurance to the Committee.

On SMEs, which are very relevant and relate to Amendment 16 in the name of the noble Lord, Lord Purvis, I reassure the Committee that the procurement chapters of both agreements include articles on facilitating the participation of SMEs in procurement. Both chapters also include provisions on continuing to co-operate with Australia and New Zealand to facilitate participation of SMEs over the lifetime of the agreements.

We worked very hard to ensure that SMEs were engaged before and during the negotiations. Indeed, Lucy Monks of the FSB gave evidence to the Commons on the engagement the Department for International Trade has carried out with SMEs. Hopefully, what she said is heard:

“The Department for International Trade has been talking to us and other bodies about encouraging opportunities. It is an ongoing process.”


I know the department is extremely keen to see these agreements brought into effect. We are very serious about our ambitions to support SMEs in trade, and we seek a dedicated SME chapter and SME-friendly provisions throughout all our trade agreements, as we have done in these ones. I am grateful to the noble Lord for raising this issue during the passage of the Bill; however, I do not believe his amendment is necessary, given what the Government are doing to support SMEs and appropriately assess the impact of our trade deals on this vital part of our economy.

In concluding, I wish to return to the point on impact assessments being required prior to any regulations being made. In addition to the reasons I gave earlier in relation to what the Government have already done on impact assessments in each area raised, requiring further assessments to be done before regulations can be made would delay the entry into force of these agreements, as I am sure noble Lords will agree. This would delay the point at which UK businesses and consumers could benefit from the advantages of these agreements with Australia and New Zealand—an outcome to which I simply do not believe your Lordships’ House aspires.

We have covered a lot of ground in this debate, but I hope I have been able to demonstrate in each important area the wide range of work and analysis that the Government and other groups independent of government have done and will do to ensure that these specific issues are addressed. I ask noble Lords to withdraw or not press their amendments.

[Lord Lennie (Lab)]

My Lords, that was a long one. We have been here for half an hour listening to the response on what is essentially a fairly simple set of amendments about impact assessments and reviews.

I start with the noble Lord, Lord Lansley, who brought up the behaviour of his right honourable friend George Eustice. I am quite grateful to George Eustice, because he wrote my speech for me when he was critical of this agreement to the degree that he was, but I would say that you are going to get that kind of discipline back into the Tory party only when it becomes a single party. There are at least three Tory parties continuously at war with each other. It seems to me that, as long as that continues, it is good for us but not so good for the Tories. We have been there before ourselves; we are not in that position now, thank goodness. We will see what happens with that one.

The Minister listed the areas where impact assessments have already been undertaken or are no longer necessary, but Labour’s stand is that climate change, the NHS and the regions were missing from that list. It seems to me that the purpose of an impact assessment in a trade agreement is to give a more precise prediction of what is expected in these areas from the agreement, then the reviews measure whether the impact assessment proved to be about right, wide of the mark or different. The Minister said that this does not set a precedent for other agreements, but it does, whether he likes it or not. Everyone will be looking at this agreement, as it is the first one, and will be looking to make predictions about their own position in relation to the UK as we come to trying to make agreements with those countries. The noble Lord, Lord Kerr, is right: the nearer we are to import products, the higher the risk for the UK. It is an obvious statement, but Australia is as far away as we can get. It does, however, have an impact. This agreement has a bigger impact than just the pounds and pence that it will produce for the UK and Australian economies.

With those remarks, I beg leave to withdraw the amendment; we will probably return to this issue at a later stage.

Amendment 3 withdrawn.

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With those few remarks, I beg to move my opposition to the clause.

[Lord Lennie (Lab)]

My Lords, I will speak to Amendment 10 and Amendments 20 to 35 in this group, which are consequential to it.

As the UK Government have prerogative powers to negotiate international agreements, Parliament has limited scope to make substantial changes to such an agreement, not least as it has already been formally signed, and opportunities to block ratification are therefore limited. As a result, it is of concern to see the Government waiting so late in the day before tabling the agreement to meet the statutory 21-day scrutiny period. It was not tabled until 15 June, which limited the time available for Members to scrutinise the Bill and for the International Trade Committee to publish its report. The Secretary of State for International Trade also failed to attend a meeting of the International Trade Committee to answer questions on the agreement on 29 June, despite a commitment to do so. This made it impossible for the committee to take account of her evidence on the new agreed date, 6 July, and still publish the report before the end of the scrutiny period.

Furthermore, it is shameful that Ministers have taken such a long time to conclude negotiations and long ago signed the trade deals but have not appeared before Parliament to give a full account. Ministers have been granted significant powers in the trade negotiations. The Labour Party will continue to push for more and wider scrutiny, so that parliamentarians and wider groups can properly impact on the process.

To help achieve this, our Amendment 10 and those that are consequential to it would bring in the super-affirmative procedure where an instrument is, or, as the case may be, regulations are, subject to the super-affirmative procedure. Under the super-affirmative procedure, a Minister presents a proposal for a statutory instrument and an explanatory statement. Committees in the House of Commons and House of Lords consider the proposal and can make recommendations. The Minister can then formally present or lay a draft of the statutory instrument under the affirmative procedure. We consider this necessary due to the limited other opportunities for scrutiny that come from legislation stemming out of negotiations, not least with the Procurement Bill changes that will limit this further and the Government’s steps to avoid scrutiny.

Our other amendments would implement some of these steps individually, such as requiring draft regulations to be laid in advance, but without the requirement for committee consideration that the super-affirmative procedure would bring. Amendments 34 and 35 would sunset the ability to make regulations, either two years after the Bill passes or on the UK’s accession to the CPTPP—which the Government said would happen last year.

[Lord Kerr of Kinlochard (CB)]

My Lords, I have considerable sympathy with those who argue that the regulatory procedure is insufficient for looking at these regulations for all the familiar arguments, which I need not go into.

Our role in the House of Lords in relation to the negative procedure is nugatory. I do not think that that is quite right. The matters we are discussing are quite important, so I support Amendment 20. Part of my concern is that I am worried about Clause 2 itself. I have mentioned this before. I would be very grateful if the Minister would construe what Clause 2(1)(a) means. It says that:

“Regulations under section 1 may … make provision for different purposes or areas”.


What does “different” mean? Looking at it, I see that regulations under Section 1 must be provisions to implement the procurement chapters of these two agreements. So what are the “different purposes” mentioned in Clause 2(1)(a)? This is rather permissive drafting. I want to know what “different” means. Could “different” mean going beyond the scope of the procurement chapters in the free trade agreements with Australia and New Zealand? If it does mean that, we are giving the Government a pretty wide power in Clause 2. If it does not mean that, why is it necessary to have the language at all?

[Lord Johnson of Lainston (Con)]

My Lords, I thank all noble Lords for their comments. I am delighted to respond to the thoughtful contributions we have heard—from the noble Lords, Lord Lennie and Lord Kerr, and my noble friend Lady McIntosh—on the issue of scrutiny and how regulations made under the Bill will be made.

Before I focus on the amendments themselves, I would like to draw attention to the beautifully short report published by the Delegated Powers and Regulatory Reform Committee on this Bill, on 11 January. Unlike my previous response, as has been alluded to, it was extremely short. The committee found that there was nothing to note on this Bill’s use of delegated powers. The Government are of course extremely satisfied that the committee is content with the use of the negative procedure in the Bill.

I reiterate that the Bill is required to implement two free trade agreements that Parliament has already scrutinised. The scrutiny process under the Constitutional Reform and Governance Act was completed for the Australia FTA in July 2022 and for New Zealand in December 2022. We engaged extensively with Parliament throughout the negotiation process. For these deals, this included eight public progress reports during talks, including extensive information published at agreement in principle, and 12 sessions with the International Agreements Committee and the Commons International Trade Committee, both in public and in private with Ministers and/or officials, before and after signature. There were nine ministerial Statements—three oral and six written—and eight MP briefings, plus one on the Trade (Australia and New Zealand) Bill.

A programme of statutory instruments has been put in place to implement the agreements to ensure that the UK is not in breach on its entry into force in the following areas: rules of origin and tariffs, intellectual property, government procurement, immigration rules changes, and, for the New Zealand FTA only, technical barriers to trade.

The Government have long acknowledged that, due to their length, complexity and importance, FTAs warrant a bespoke framework of scrutiny, and our full range of commitments is contained within the exchange of letters conducted last year between my predecessor, my noble friend Lord Grimstone, and the International Agreements Committee.

I turn to the specific issues raised by these amendments. It is the Government’s view that the amendments would require disproportionate scrutiny of the regulations to implement what Parliament has already had the opportunity to scrutinise, including through noble Lords’ scrutiny of this Bill. As it may be of interest to noble Lords, I can commit to sharing the draft procurement SIs ahead of Report. They will be in a draft version subject to change, due to consultations, as noble Lords can imagine, legal checks and recognising that the Bill is still undergoing scrutiny by your Lordships’ House. I hope that the noble Lord, Lord Purvis, is satisfied by that.

[Lord Lennie (Lab)]

In all the meetings and information provided in various forms throughout the process—and I accept that there was a lot—was any opportunity given for anyone to say no to any of it?

[Lord Johnson of Lainston (Con)]

This is a consultative process designed to get as much as much input as possible into what is ultimately a negotiated outcome. As a House, we have the opportunity to vote on this Bill alone. I hope that we certainly will decide to support it, so I do not really understand the noble Lord’s point, in the sense of people being able to say yes or no. We are voting on a piece of legislation that is extremely relevant to the execution of our free trade agreements, which is why, if I may be so bold, we have had a wide-ranging debate in this House on the issues behind the free trade agreements specifically relating to this Bill, which, I think we all agree, is particularly specific and without contention. My answer to the noble Lord is that we have had a huge debate and a very high degree of consultation and have followed more than the process laid out for scrutinising free trade agreements in Parliament and nationwide.

The noble Lord, Lord Lennie, will want me to be specific in my response to the amendments, but he will be glad to know that there are significantly fewer pages in my response to this group than in the previous response. There is precedent for the approach the Government have taken. Clause 1 of the Trade Act 2021 was used to implement the UK’s accession to the WTO agreement on government procurement, the GPA, and the regulations made there were subject to the negative procedure, so that is important to note. Parliament had the opportunity to scrutinise the UK’s accession to the GPA through the CRaG process before the subsequent regulations were made. This is the same situation we have here for the Australia and New Zealand free trade agreements. I am very comfortable in confirming that as the ultimate point.

Amendments 10, 21, 22, 24, 26, 28, 29, 31 and 33 relate to the super-affirmative procedure, which I believe the noble Lord, Lord Kerr, raised, and are tabled in the name of the noble Lord, Lord Lennie. This is the process used for statutory instruments when an exceptionally high degree of scrutiny is thought appropriate. An example is remedial orders, which the Government can use to amend Acts of Parliament should the courts find them in breach of the European Convention on Human Rights. That example seems significant, but I respectfully suggest that it is disproportionate to use this process to approve the minor technical changes needed to implement the procurement commitments in the Australia and New Zealand FTAs. It would also represent a significant use of parliamentary time when Parliament has already debated the fundamental issues.

Another important consideration is how the use of the super-affirmative procedure will lead to delays in these agreements entering into force, which I think we have all agreed is not desirable. Parliament has had sight of the Australia and New Zealand agreements for 13 and 11 months respectively. It is right that we take appropriate time to scrutinise these deals properly, but we must now get on with entering these agreements into force to ensure that UK businesses and consumers can benefit from the significant economic advantages as soon as possible. This is also the shared desire, as I stated earlier, of the Labour Governments in Australia and New Zealand.

In terms of modifications, there may be small changes to be made to the procurement chapters—for example, machinery of government changes. It is important to stress that the Government have no intention of making significant changes to these agreements. I have stated this before and do so again. The Government are proud of the Australia and New Zealand FTAs and have no intention of significantly modifying them in structural terms.

The amendments tabled by the noble Lord, Lord Lennie, also deal with the scrutiny of regulations made by devolved Ministers and regulations made by a Minister of the Crown jointly with a devolved authority. The increased level of scrutiny set out in the proposed amendments would be as disproportionate in the devolved legislatures as in the UK Parliament. The reasons I have already given are as applicable to secondary legislation made in Scotland, Wales and Northern Ireland as they are to secondary legislation made in Westminster concerning the specifics of secondary legislation relating to this Bill, such as technical changes relating to machinery of government changes.

Trade (Australia and New Zealand) Bill

Lord Lennie Excerpts

2nd reading
Monday 9th January 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, I begin by declaring my interests in Australia. They are not about having relations who vote Labour in New Zealand, having the accent or being born with the accent, having been the high commissioner in Australia or having relatives in Australia. I was simply born there and, aged nine months, I was removed by my parents, brought to the UK, and have stayed here ever since. So there is no declaration of interest other than that.

I welcome the noble Lord, Lord Johnson, to his first Bill as a new Minister for trade. I wish him not a long period in office but a reasonable time in office to get used to the seat and so on before the next election. I also congratulate the noble Lord, Lord Swire, on his maiden speech. He has much experience in Northern Ireland, the Foreign Office and elsewhere, and he will bring much to bear in this debate and others in this House. I welcome him. I also thank all other noble Lords for their contributions to the debate.

It seems to me that we have identified two key issues: one is about strategy, or the lack of strategy, and the second is about scrutiny, or the lack of scrutiny. That seemed to be a running theme whichever side of the House, or none, people were speaking from.

I am grateful for this opportunity to add my own remarks to the debate, which presents an opportunity to scrutinise the deals covered by this Bill, as short as it may be, with only four clauses and two schedules. But these are the first trade agreements made from scratch, as others have said, since the UK left the EU, and in the absence of a published government trade policy, this Bill, and the FTAs it helps to implement, represents the premier evidence available of the Government’s post-Brexit approach to trade. This is what we will be judged on. These deals set a precedent both for what the rest of the world will expect from us in this era and, to a certain extent, for the process that we can expect in parliamentary scrutiny of these and other trade deals that will follow. This is a proper precedent. This particular Bill may not have much life, and may be replaced by the Procurement Bill in a matter of weeks, but at least it sets a precedent. I have more to say on that point later.

Before that, let me express our welcome that these trade deals have been secured, with the deepening of links with two old friends—Australia and New Zealand—and the elements of both deals which will be beneficial for our country. The Government have of course highlighted some of the key benefits of the trade agreements—indeed, the noble Lord, Lord Johnson, has not just highlighted them but been vociferous in his welcoming of their benefits, which we also welcome, such as the elimination of tariffs on all UK exports to Australia and New Zealand, creating new opportunities for UK professionals and businesses in both countries, and more. However, while they are welcome, it is impossible to ignore—as referred to by a number of noble Lords—that the financial impact of both deals is insignificant and, we might say, wrapped in a degree of uncertainty. As we have heard, the Government’s own assessment estimates that the Australia deal will increase UK GDP by only 0.08% by 2035 and the New Zealand deal by only 0.03% by 2035. So they are not a big deal for our economy, even though they are a big deal given the precedent that they set for deals that we might negotiate in the future.

Given the significant uncertainty that the impact assessment openly admits, when paired with what is missing it is hard to disagree with the assessments of the Prime Minister, who called them “one sided”, or of the former Environment Secretary, who has been referred to, when he said that the best clause in our treaty with Australia is the one that allows us to rip it up with six months’ notice. They both also suggested that the UK

“shouldn’t be rushing to sign trade deals as quickly as possible”.

Given the lack of progress in deals with the USA and India—we had a Written Statement today on India, which says that there is no deal yet and that the seventh round of negotiations is under way, but nothing like a deal is in sight—that does not seem to be the issue, but may certainly explain the continuing stasis.

These deals were supposed to pave the way for easier CPTPP membership. The Government have said that they hoped to conclude joining by the end of 2022. After 15 months of negotiations, that date has been and gone. What has happened to our purported membership of the CPTPP? Are we waiting to sign individual deals with as many countries as possible before that negotiation can be concluded? Which way is it? Are we trying to join the CPTPP or are we awaiting further deals before we push that attempt?

As for what is missing from the deals, where do we start? Where is the leadership on tackling climate change, as the noble Baroness, Lady Bennett, the noble Lord, Lord Inglewood, and others asked? The Australia agreement fails to set out specific commitments on climate change, with no sign of the reaffirmation of commitments under the Paris Agreement that was promised by the Government. Properly addressing this would enhance all our trade deals, not least because this is a key and growing market for international trade. This was the first opportunity to set the important precedent, and we missed it.

An absence of engagement with workers’ representatives is clearly shown by the lack of a gold standard of workers’ rights found in these agreements. The TUC highlighted the lack of

“commitments to ILO core conventions and an obligation for both parties to ratify and respect those agreements.”

As I said, these deals set a precedent. When we turn to negotiations with countries with inferior worker protections to those of Australia and New Zealand, this will certainly not set a positive foundation for ensuring that workers’ rights are protected there.

The hit to the agriculture sector has been well documented: the noble Lord, Lord Inglewood, and others made this point. The Government’s own impact assessment shows a £94 million hit to farming, forestry and fishing and a £225 million hit to our semi-processed food industry from the agreement with Australia. This has rightly been criticised for both lowering standards and hurting British farmers, as others have said. The procurement provisions in the Bill, while certainly welcome, lack a requirement for the specific support that UK firms could benefit from in order to take advantage of the opportunities created by the agreements in both Australia and New Zealand.

Turning to scrutiny, the elephant in the room is that both of the agreements which form the basis of this legislation are long overdue and have already been signed between the respective Governments. As a result, the scope for changes to the agreements at this time is extremely limited, and we anticipate that our amendments at future stages will show this, through a focus on better assessing the impact of the agreements. In that regard, I particularly thank my noble friend Lady Hayter. She is not in her place today, but I think five members of the International Agreement Committee have spoken in this debate. We are grateful to that committee for its excellent work in scrutinising the agreements themselves through two reports last year, both of which have been very helpful in examining these agreements. The Australia report also presented an additional opportunity for a very useful debate last July, and I understand we are expecting a response to the report on the New Zealand agreement from the Government, probably tomorrow: I await that with keen interest.

This work has given us something of an advantage over the other place, where opportunities have been particularly lacking. It was deeply concerning that the Government limited the time available for scrutiny of the Australian agreement by tabling it late in the day and by the Trade Secretary delaying an evidence session. I understand that provisions in the Procurement Bill, currently in the other place—it has its Second Reading today—will also make Bills such as this one unnecessary for future trade agreements, further curbing available opportunities for scrutiny. I hope the Government will learn from this and not continue to avoid scrutiny in this manner. Ministers have been granted significant powers in trade negotiations and they can expect that we will continue to push for more scrutiny, so parliamentarians and wider groups can properly impact on the process.