Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Consideration of Commons amendments & Lords Hansard
Tuesday 23rd March 2021 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Baroness and endorse the points that she made. This may be the final debate on this issue for the moment, but it has nevertheless been a strong one.

In my mind, the noble Lords, Lord Lansley and Lord Adonis, got to the nub of the issue: the dilemma that we face when we seek to trade with countries that move away from the human rights standards that we seek. However, that dilemma is not new; what is perhaps new is the scale of it over the past few years. I remember clearly when, as a Member of the Scottish Parliament, I and a number of committee members shook hands with the Dalai Lama on a visit to Edinburgh. An official Government of China communiqué said that the economy of Scotland would be harmed as a result of this handshake. This was 15 years ago, so there is no new element of the line—as the noble Lord, Lord Adonis, put it—that the Foreign Office has trodden for a great number of years, in raising human rights aspects but also seeking to increase trade with the largest trading country in future.

The noble Lord, Lord Lansley, indicated that it is not just FTAs that cover this gamut. I am interested to know whether the Minister at the Dispatch Box can confirm that the Office for Investment, set up and chaired by the Prime Minister, is not proactively seeking investment agreements with China at the moment. If the Minister can confirm that, that would be reassuring, because it would be a live-time example of whether or not a government office chaired by a trade Minister is seeking new financial trading relationships on a preferential basis with China. If the Minister could confirm that in his winding-up speech, I would be grateful.

Perhaps it is different now because the tightrope—as the noble Lord, Lord Adonis, called it—is impossible to straddle because of, as the Foreign Secretary said, the

“industrial-scale human rights abuses.”—[Official Report, Commons, 22/3/21; col. 622.]

The question is what consequences there are in our trading relationships with preferential trade. Sir Geoffrey Nice, who is held in very high regard in this area, communicated with me and my noble friend Lady Northover today. He said something in his email which I asked his permission to quote as it really struck me. He reflected on the fact that, in my opinion, somewhere in the last two generations we have lost something. He said that we should understand and recognise that human rights exist for and should be honoured by

“every citizen of the world for every other citizen of the world, not just sometimes by some governments when it suits them.”

Some people argue that trading relationships are between businesses and people and treaty-making and diplomacy are Government-to-Government, but now, in this very interconnected and complex trading world in which we live, with comprehensive trading agreements, investment partnerships and strategic alliances, there is a wide gamut of preferential terms of access to the UK financial sector, the UK market or areas where we have sought the competitive advantage of China’s massive industrial and commercial manufacturing base.

It is the moral ambiguity that my noble friend Lord Fox and others have indicated at the heart of this Government’s policy that we have been highlighting. I would go further and say that there is a degree of intransigence and contradiction at the centre of the Government’s policy in this area. One contradiction is that the very approach outlined by the Minister today at the Dispatch Box and in his letter this afternoon, in which he describes the process now going forward, is against the mechanism that he and the Government have indicated for other trading agreements, and parliamentary approval is against UK constitutional approaches with regard to scrutiny. We cannot have both, so I hope that the Government will see that opening up scrutiny and allowing greater parliamentary say, as the noble Lord, Lord Lansley, indicated, is of benefit, not against UK constitutional approaches. In my view it should be one of the core elements of the UK constitutional approach that Parliament has a key role in these areas.

I share, as have others, my noble friend’s perseverance on this issue and that of those on the Government Benches in the Commons who have consistently told the Government to think again. On our Benches, Alistair Carmichael and Layla Moran were part of a wide coalition that will not now go away. The debate that has been started—the persistence and the perseverance —indicates that there will need to be much greater comprehensive elements in the Government’s approach to trade and human rights. We have said repeatedly that there should be a trade and human rights policy that outlines the Government’s policy, with triggering mechanisms that will suspend bilateral agreements, not just FTAs, when there are significant human rights concerns.

There needs to be a triggering mechanism, because we know that the nuclear option of cancelling all trade with a country should be reserved for the most grotesque situations, as we have been debating. However, there are other situations where we wish to use UK preferential market access as a lever around the world. It is a contradiction because we have moved away from an approach, which we were party to in recent years as part of the EU, of having triggering mechanisms to suspend bilateral agreements when countries are in breach because of significant human rights concerns. Indeed, there is a contradiction at the heart of what the Government are currently doing by reinstating preferential terms for Cambodia while the EU had withdrawn them because of human rights concerns. This Government have reinstated them without any indication of why.

When it comes to wider aspects of the partnership agreements, strategic alliances and other preferential areas, as mentioned by the noble Lord, Lord Lansley, in response to the Statement earlier today, I asked the noble Lord, Lord Ahmad, whether any of our current preferential trading agreements with China have been suspended as a result of the alleged genocide against the Uighur community in China. It is quite clear that the noble Lord, Lord Ahmad, did not have an answer in his briefing pack—if he had, he would have said so—so I hope that the Minister for Trade will give an indication of whether we have indicated that any preferential trade agreements with China are now open for suspension.

As the noble Baroness, Lady Kennedy of The Shaws, indicated, it is now time to open the debate about moving some of these decisions away from Governments. If this Government are refusing to, or perhaps any Government cannot, tread the line the noble Lord, Lord Adonis, indicated, of making decisions about suspending trading relations or preferential trading relations when there are gross human rights abuses, now is the time to start debating whether the UK should have an independent trade and human rights commission, not only for the sanctions regime but for other areas of new trading relationships.

When the noble Lord, Lord Alton, was a very young MP for Liverpool—I hope he will not mind me saying so since it was his birthday recently—he was a street campaigner and coined one of things that every Liberal campaigner, including me, has copied since, which was a slogan on the focus leaflets: “A record of action, a promise of more”. We have seen his record on this issue. I know there is a promise of more. As a veteran of three trade Bills in three years, I will not say goodbye to this issue but “Au revoir” until the next one. Inevitably there will be one. These issues—the contradictions at play and the moral ambiguities—need to be ironed out. This House and many others will do our best to do so.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this is the last round on the Trade Bill—for the moment, as has just been said—and, as my right honourable friend the shadow Secretary of State said in the other place, it has taken

“three years, two months and two weeks”—[Official Report, Commons, 22/3/21; col. 668.]

to get to where we are today, which is quite a record and may indeed be worthy of the Guinness Book of Records. Given the length of time we have been involved in this, it is appropriate to thank all involved in this parliamentary marathon, not least both Ministers, the noble Baroness, Lady Fairhead, and the noble Lord, Lord Grimstone. Of my colleagues, I make special mention of my noble friends Lord Grantchester, Lord Bassam and Lord Lennie and, in particular, my noble friend Lord Collins, who has been taking the weight over the past few weeks while we have been discussing this issue and hoping for a better resolution than we have got.

I also thank the noble Lord, Lord Lansley, for his work in trying to forge an amendment on scrutiny issues that we could persuade the Government to accept. As he said, we have not got there yet, but it is a work in progress and I am sure we will get there eventually. The noble Baronesses, Lady McIntosh of Pickering and Lady Jones of Moulsecoomb, were instrumental in keeping the pressure on in relation to non-regression of standards. I pay tribute to them for their tireless work on that, and I pay particular tribute to the noble Lord, Lord Alton, who has been much in our thoughts in the past few weeks, particularly today. He again made a wonderful speech and covered the ground so carefully and so well that we cannot forget the issues that we have in front of us.

In almost three and a quarter years, trade policy has been transformed from being a largely commercial issue handled at arm’s length, because it was dealt with in policy terms by the EU, to being a central policy driver as important to the people of this country as every other mainstream policy—arguably more so, because trade deals that we sign in the future will shape who we are as a nation and how we will be regarded as a partner, even though we have made a bit of a bad start on that.

In some senses, the narrow issue which, sadly, is being determined today in favour of the Government, against the strong wishes of your Lordships’ House over three successive ping-pongs, is a measure of how much further we need to go to complete the work of creating an appropriate structure for the determination of trade policy in this country in the future. I think the noble Lord, Lord Lansley, pointed out rather effectively the gaps that already exist in the new arrangements; they are not as comprehensive, and certainly not as complete, as we would wish. But he also urged us, rightly, to make the new system work and to learn the lessons from the activity in the committees and in Parliament when we are able to do so, which will allow us to inform future debates and discussions.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Consideration of Commons amendments
Tuesday 23rd February 2021 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I, too, thank the noble Lord, Lord Lansley, for moving this amendment and allowing us to debate this issue. I will turn to that in a moment.

When the noble Baroness was speaking, I reflected on the constitution arrangements that we have. I think that she and I both favour change in our constitution to change the mechanism of appointment to this place and make it a fully democratic House. Nevertheless, in his remarks the Minister referred to having trade scrutiny and decision-making that is appropriate to our constitutional arrangements. Our constitutional arrangements say that this is a revising Chamber, and we are doing our duty in asking the Government to think again. When the House has voted by large majorities on every occasion that it has debated scrutiny amendments in either my name or that of the noble Lord, Lord Lansley, it has made its view plain. It is therefore incumbent on the Government to reflect on that, not simply to exercise the Whip.

One of the votes that the Minister referred to tested this point slightly. Last time round, the other place was not asked to have a separate vote on these amendments because, in the way that they scheduled all this, the Government bundled them all into one. Members of the Commons with a particular view on scrutiny, human rights, genocide or anything else were asked to support or oppose the Whip in one particular vote. I do not think that that reflects very well on the way in which the Government have approached the Trade Bill and these stages.

However, as people more famous than me have said, we are where we are. I thank the noble Lord, Lord Lansley, for his work on getting us to this position. I have enjoyed working with him, the noble Lord, Lord Stevenson, and others. It has genuinely been cross-party work. I also share the thanks expressed by the noble Lord, Lord Lansley, to Jonathan Djanogly and others in the House of Commons for their work. In many respects, they have been courageous. Consistently voting or making a case against one’s own Government is a courageous thing in politics, but they are doing it out of a great sense of sincerity that going forward trade agreements for the UK are now deep and comprehensive by definition and touch on very wide aspects across public policy and regulation and therefore for parliamentary scrutiny to be effective, it should inform debate, and if accountability is to be operable, that debate should lead to votes. Ultimately, that is the approach about which we have sought to persuade the Government.

There have been indications of the Government being more flexible in certain areas. This is an interesting Bill which, as the noble Baroness said, has taken so long. A White Paper about trade policy appeared and disappeared mid-Bill; there has been no successor to it. The words of the Minister today are helpful and we now have the Grimstone rule, which is that ratification of a new trade agreement will not take place without a debate. That is important. It is not as much as I wanted or as much as the Government were going to give us at the start of this process, many years ago, but this is the third Minister who has handled this Bill and it is third time lucky, as far as the commitment that we will at least be able to vote on the agreements coming up.

There had been a rule for treaty ratification called the Ponsonby rule. It was replaced by statutory provision, because we were not satisfied that simply a ministerial rule, commitment or convention would be appropriate. While we may be putting this issue to bed in this Bill, at this moment, the issue has not been put to bed. Other Bills in the future will do as we did with the Ponsonby rule, which was to put it on a statutory footing. We will have to live with the Grimstone rule for the moment. It is perhaps, shall we say, a tweaking of the Government’s position. Nevertheless we accept it for the moment, as the House was clear, in all its votes, that more scrutiny, accountability and debating are required. I assure the Minister that we will come back to this at other times.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank the Minister for his comments and the noble Lord, Lord Lansley, for moving his Motion 1D on a cross-party basis. I put on record, as he did, how enjoyable it was to work with him, the noble Lord, Lord Purvis, and Commons colleagues of all persuasions to see whether we could progress this important issue. Although I have some sympathy with the comments made by the noble Baroness, Lady Jones of Moulsecoomb, I agree with the Minister and others who have spoken that the speeches we have heard draw discussions on the parliamentary scrutiny of international trade deals to a close, for the moment. This issue will not go away, although I believe that the Grimstone rule—if that is what we are to call it—will help us to work through a process to consider trade agreements in the future. That is for the good.

I will make three small points. First, it is difficult to make constitutional change. Anybody who has operated in either House of Parliament knows that to be the case. It should be hard—and it is right that it is—but it is sometimes frustrating if the pace of change does not match some of the aspirations and recognise some of the wrongs committed. As the noble Lord, Lord Lansley, said, although we have not managed to set in statute that which a significant majority in this House, across all parties, would have liked, we have agreed a way of working with the Government for the future—the Grimstone rule—that strikes a workable balance between the rights and responsibilities of the Executive and those of Parliament. Time will tell. We are in the right place and no doubt will benefit from the experience to be gained in the next few years, but we should record that progress has been made.

Secondly, one key turning point to have emerged from the discussions is the need to ensure that we have a process, in any future agreement that we might make, which properly engages the devolved Administrations and civil society—and on a sensible timescale. I will come back to that. This Parliament will now need, in the way that it works, to address four major points in any future statutory system, although they will be covered by the Grimstone rule: approval of the initial objectives, review of the progress of negotiations, considerations of the final proposed agreement including changes to existing statutory provisions, and parliamentary approval of the deal and any subsequent changes to legislation that may be required. We have analysed that to the nth degree in our discussions during the last four years; now we have a model for how it can work. If there is good will on both sides, as I think there is, we should let that run for a while before returning to it.

My third point, on which I will end, is that in these debates over the last four years we have made it clear that UK trade policy and the trade deals that will be the basis of our future activity and prosperity are important. They deserve the sort of focus and interest envisaged under the protocols described as the Grimstone rule. We can be confident that, with the work of the Select Committees in the Commons and the International Agreements Committee in the Lords complementing the interests of a range of other bodies, including devolved Administrations and civil society, that debate will continue to be an important aspect of our public policy.

Finally, although we have gone as far as we can on this today, we will keep a close eye on it and look forward to resolving outstanding issues in the not- too-distant future. We have worked closely with the Government and with successive Ministers. I thank the noble Baroness, Lady Fairhead, and the noble Lord, Lord Grimstone, for their engagement since 2017. We have built a coalition of interest across parties in this and in the other House, which has been rewarding, positive and a model for how issues of this nature can be resolved in the public interest.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 6th January 2021 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I am less squeamish that the noble Baroness about the amendment of the noble Lord, Lord Lansley, and I am grateful to him for bringing it forward. As our discussion about the Trade Remedies Authority demonstrated, the framework for how the UK, now outside the European Union, will approach trade remedies on disputes where we believe that another country is acting beyond WTO standards and principles, is much more to do with public debate and full, wide parliamentary scrutiny than whether the parent legislation involved financial privilege. Our debates about the Trade Remedies Authority lead naturally to asking what is going to provide a framework of accountability for any decisions taken as a result of its recommendations.

I have only one issue to raise with the Minister. I was not satisfied with the response in Committee to a matter I raised. One of the justifications for not supporting the amendment was that, as the noble Lord, Lord Lansley, said, the Minister said that there is sensitivity to some of these aspects. Of course there is sensitivity: that is true by definition. In any trade dispute, there will be sensitive aspects; I do not think that is denied. The noble Lord, Lord Lansley, is absolutely right: we were discussing a previous version of this Bill on Report when the WTO authorised the United States to impose $7.5 billion-worth of tariffs on the EU. The WTO subsequently authorised the EU to impose countermeasures of $4 billion and, as the noble Lord said, from the United States’ point of view, the question whether to make a recalculation for the EU 27 is now being reviewed.

The most important element, to my mind, is that the WTO authorised it. I do not think anybody on any side of this House is proposing that the UK should act illegally in a trade dispute in which we are then seeking to be on the right side, inasmuch as we would not use WTO procedures. The WTO procedures are quite clear: you cannot put forward countermeasures which will include tariffs unless they have gone through the due process in the WTO.

Therefore, the notification of the WTO, with the tariff measures as part of the countermeasures, will be in the public domain. It will be debated. It is therefore nonsense to think that there will be scrutiny, transparency and a public debate regarding our measures to the WTO, but not in Parliament. Many sectors will be involved, as we saw with the US measures. I do not need to go into the detail, but be it whisky, textiles or the metal industry, these measures and potential countermeasures have an impact domestically on certain sectors, regions and nations of the UK. Therefore, it is right that, if we are to make a measured and targeted response to a third country that we believe has acted against its obligations, we ensure that we are not acting in self-defeating self-interest, and a degree of accountability is thus required.

I simply cannot understand why the Government believe that measures that have been made public cannot then be approved by Parliament. I continuously support the efforts of the noble Lord, Lord Lansley, in this regard.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the noble Lord, Lord Lansley, has raised a very interesting question. We need to think a bit harder about it than we did when we first looked at this in Committee.

The issue is not so much with the powers split between the Commons and Lords in relation to financial matters, which I think was the point made by the noble Baroness, Lady Noakes. It is more to do with—as the noble Lord, Lord Purvis, was trying to get us on to—the reality of the grounds on which we have to consider more widely and the relationship between a pure measure, such as tariffs, and the way in which it might be used in any trade dispute, or any day-to-day consideration of our trading relationships. Out of that comes a consideration about whether this is an executive issue or there are also parliamentary concerns.

Taking it from the other end, the fact that the powers enshrined in the original legislation are for a negative instrument suggests that the Government have taken the view that this needs the very lowest level of parliamentary scrutiny. As the noble Lord, Lord Purvis, pointed out very well, this cannot be right. These areas often deal with very important and quite meaty issues to do with industrial policy, employment and the whole economy. There seems to be a distortion being built up between the particular issue in hand, the remedies available and the role of Parliament in considering it.

Surely it would be wrong if we ended up in a situation where the only parliamentary process was consideration of a negative statutory instrument when, in truth, the effects it was trying to ameliorate were causing concern on quite a large scale in the country. I do not have a solution to this. I do not think this Bill is going to provide us with an outlet. I wonder whether the Minister might consider taking this away. Perhaps a more considered review is needed in a couple of years’ time, when we have had experience of how it works in practice.

Without wishing to put words in his mouth or ask him to commit to something he cannot commit to, can he give an assurance that this is something the Government will keep a close eye on? Should issues arise during the next year or so, an appropriate way forward would be to take this as an issue and see whether, as a result of the scale of the penalties, the style of the approach being taken through Parliament and the impact this is having on the economy more widely, it might be best dealt with through a review process.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

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

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure, as always, to follow the noble Baroness. I have a great deal of sympathy with the intention behind these amendments, which also relate to the fact that, from January onwards, the Bill will have to operate for agreements it was never intended to implement. The House does not need reminding that it was the Government’s categorical position in the past that there was no doubt that all continuity agreements would be signed by March 2019, then summer 2019, then the end of 2019—it goes on. The reality is that there are currently 13 countries outside the EU with which we will be trading on terms less favourable than we did before, because those agreements have not been rolled over. The status of those agreements, with regard to this Bill, is now in a degree of limbo. For example, we know that our agreement with Canada is a temporary continuity agreement because we expect the negotiations to roll on regarding an almost immediate successor agreement. It is justifiable for the Government to clarify what status that has with regard to these powers.

Some of the agreements that we did reach have run out of time for full ratification, so they will have to be provisionally applied. That means that the Bill will be used for implementing agreements as well as adjusting ones that are made and ratified, ones that have been made but not yet ratified, and ones to be made and to be ratified. This is a very broad scope for these delegated regulatory powers. In Committee, the Government said that these delegated powers had a purpose. The Minister was quite clear that they are simply for technical adjustments to things, such as the names of quangos or certain terminology, that you would not wish to reopen a treaty for. That has a degree of sense; they should be limited. However, we are in a different position now, even from where we were at the beginning of Committee, with the full knowledge that there will be very many agreements that have not been successfully rolled over and will have to be implemented, some of which will be initiating new agreements at the same time.

I am, therefore, glad that the noble Baroness has again asked the Government to be clear what the intended purpose of these powers is. We want to avoid them being used to implement agreements. We also want to completely avoid them being used for implementing part of a border operating model that we know the Government are not ready for. We want the reassurance that any implementation of a response to questions for our export procedures which are still outstanding will not be used under the Bill. It would reassure the House if the Minister gave the assurance that the intended purpose of these delegated powers remains technical and limited.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I am grateful to the noble Baroness, Lady McIntosh of Pickering, for raising this issue and, through her, to the Law Society of Scotland for reminding noble Lords of some of the detailed points which we often ignore when we put down amendments, particularly at this stage of a Bill’s progress. As the noble Baroness said, and as was picked up by the noble Lord, Lord Purvis of Tweed, some rather unforeseen issues are now arising, particularly in relation to the rollover agreements which were originally intended to be done and completed by 31 December but which, for a variety of reasons, are not going to be. Some of them are being done under emergency power provisions; some will not be done at all. We need to have on the record from the Minister where exactly these will fit in the structure of this Bill. I look forward to his response.

United Kingdom Internal Market Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is a great pleasure to follow my noble friend, with the very great experience and knowledge that she has on this issue. Given the fact that all four speakers so far in this group have been from Wales, I thought that, to avoid a degree of market distortion across the United Kingdom, there should be a little bit of northern balance. All I wish to do is to endorse the points that they have so ably made.

I put my name to this amendment, and if the noble and learned Lord, Lord Thomas of Cwmgiedd, presses it and the House agrees, the Government have an opportunity now to bring back a more considered proposal as a result of some consultation. None of the speakers in this group has indicated that it is easy. If it was easy, agreement would have been reached at the outset. It is about being aware that the frameworks update highlighted that one of the four areas of dispute around where the competences lie with this power being repatriated is state aid. It is obvious that it was not a straightforward situation of saying that this had been uniquely a United Kingdom responsibility—so by definition, it is an issue.

It is also perfectly clear from all speakers that, without there being an understanding about the tests, de minimis levels, the administration and the type of ministerial direction that has existed up to now—without clarity as to how all that will go forward—any Minister in a devolved Administration will quite rightly be concerned about what impact this will have on the economies of the powers that they do have under the devolved competences.

I just wish to reinforce the point that the letter from Jeremy Miles to Alok Sharma, which I read, made a very fair offer. We share the concern that, without there being a further set of discussions to seek a degree of common ground on a framework agreement about how this will operate in the future—which there is time to do, because the Government have indicated that they are seeking to effectively have a window under the WTO approach, and there is consensus that that will be respected—this is potentially the way forward.

I hope that, although often it may not seem so, the Minister will see defeat as a bit of a silver lining in order for him to come back with a more considered approach, to take the Welsh offer and to allow us to consider the Government’s position from a degree of consensus and agreement. I support the noble Lords who have spoken on this group so far.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, like the noble Lord, Lord Purvis, I agree with the case that has been made so well by the previous speakers. I put my name to the amendment put forward by the noble and learned Lord, Lord Thomas, and we would support him if he chooses to divide the House.

It is very simple: we agree that there has to be a UK-wide policy on state aid—or subsidy, if that is what it is to be called. The question that hangs around but never seems to get answered is: why has it not yet been articulated what this policy would be? It cannot be a question of timing. This suggests yet another shroud of mystery that surrounds this increasingly perplexing Bill.

It is certainly a novel way of developing policy for a Government to remove policy that is in force and that everybody knows and understands, increasing the uncertainty and making it more difficult for businesses. However, as the noble and learned Lord, Lord Thomas, said in his opening speech, the statutory instrument removing the current rules—taking us out of the current system that has been operating for a great number of years—has already been laid and will be debated next week, and we will not be able to stop it.

We therefore seem to be heading towards WTO rules, which are not well respected and do not seem to be applied properly, and there is no policing or organisational structure in which they can be dealt with properly. If that is where we are, we would at least have a period of stability during which we can sort out how we want to set up the rules that will apply to the internal market and how, if necessary, they are to be policed. This could all be part of the yet-to-be-announced deal with the EU—and it may be that is the case, because it is clear that this is a significant area of interest within the negotiations. But without any further detail on that, it is hard for us to speculate.

However, as others have said, the Welsh Government have come forward with an extraordinarily generous offer to expedite work on a common framework that relates to state aid and make a voluntary agreement to pause any legislation that would impinge on that in the intervening period. That is almost too good an offer, and I hope that the Minister has an adequate response to it.

United Kingdom Internal Market Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to those who have spoken in this debate, because we have all narrowed into one area on which we are seeking some clarification: the distinction between the language in the Minister’s email referring to the teaching profession and that in this amendment, which are not the same.

If the Government’s intention with the amendment is that they wish to exclude the teaching profession from the provisions, that will be universally welcomed. At this stage, therefore, from these Benches I thank the Government for listening to the debate in Committee and for acting, and also for engaging with the various stakeholders, primarily in Scotland and Wales. I am also grateful to the Ministers, the noble Lords, Lord Callanan and Lord True, for listening and acting on meetings that I and my noble friend Lord Fox had with them, at which we raised these matters, on which we had been in correspondence.

That said, some further clarification on specific points would be helpful. As my noble friend Lord German indicated, the reference in the government amendment to the profession of “school teaching” is not really language that is used. It is certainly not used by the General Teaching Council for Scotland in registering teachers, and clearly it is not used in England, although I thought that perhaps it was. I searched “school teaching” on legislation.gov.uk, but, to my knowledge, it is not used in any legislation, although I am sure that officials in the Box can clarify that for the Minister. It does not seem to be a term, so we might find ourselves inadvertently creating a new term or definition in this legislation. I am sure that this can be tidied up but, if we agree to this amendment, as we will, I will be grateful to know how the Minister intends to do so.

To give an illustration, the General Teaching Council for Scotland registers those who seek to be teachers in primary or secondary education, those who want to be registered as teachers for additional support needs or in named schools only, and, since 2017, college lecturers and those who teach in independent schools. Therefore, in the categories of teaching within the overall teaching profession, at no stage does the term “school teaching” apply.

I will give the Minister an example of why “school teaching” is problematic within the context of Scotland. Innovations that the Scottish Parliament brought in when I served on the Education Committee meant that there is now much more blended learning in Scottish secondary schools. Students who are nearing the end of their time in secondary school can now start to study for further education qualifications on practical courses provided by college lecturers within the school setting. That is very progressive and is working. An inadvertent difficulty might be that we create a false distinction between those who simply teach within a school setting and those who are in the profession of school teaching.

I hope that the Minister will be able to clarify the points that have been raised about the difference between the categories and that she will set out the intention behind the amendment. If it is the intention that the registry bodies—in their functions of carrying out the registration of teachers and in setting standards and qualifications—are excluded, that will be reassuring. I think that that is the intention behind the amendment. I hope that it is, and if the Minister is able to confirm it, that will be reassuring for many of us.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the key word of this debate has been “clarity” and the fact that clarity is required. I think that the Minister needs to get to the Dispatch Box and answer as many of the questions as she can, but I assume that government Amendment 51A is intended to answer the points raised by the noble Baroness, Lady Bennett of Manor Castle. But questions have been raised that do not seem to point in the same direction, so I look forward to hearing from the Dispatch Box that the amendment does what it is required to do. If not, perhaps the Minister will confirm that she will come back at Third Reading with a better version of it, to make sure that the doubt is removed.

--- Later in debate ---

[Lord Purvis of Tweed (LD)]

My Lords, I have only one element to ask the Minister about; it refers to some questions that were asked in Committee with regards to regulations that have no effect. Is it the entire regulation or the component part of that regulation that would be considered to have no effect? As my noble friend indicated, many regulations are fairly extensive and will have many component parts to them; the Government or the legislation may consider that the direct discrimination part could be only one part. Is it the Government’s intention that the entire regulation would have no effect? Indeed, how would the process be carried out to identify the specific element of that? The questions raised by the Law Society of Scotland and put forward so well by the noble Baroness, Lady McIntosh, justify a very clear response. As we have said previously in Committee, the scope for those seeking legal redress within this legislation is huge, so ensuring as much clarification on this element as possible would be very helpful.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the general theme here, I suggest, is that we need the Minister to respond very clearly and precisely on this matter. My noble friend Lord Foulkes used the rather nice and elegant Scottish word “fankle” to describe where we are at, suggesting that this needs to be undone. I was going to use the Gaelic word “bùrach”. I suddenly thought that Hansard might have difficulty with it, so I checked it on a handy electronic device close to me—and came up with a rather interesting extension, which I leave with the Minister. You can use the word “bùrach”, which in Gaelic means a “right mess”, but I think a more appropriate term in this case is a “clusterbùrach” which, as the article on my device goes on to say, is

“a Scottish term for a hopelessly intractable mess made by hapless politicians.”

United Kingdom Internal Market Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.

As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.

Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:

“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.


Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.

I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.

This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.

Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

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

[Lord Purvis of Tweed (LD)]

My Lords, I am very pleased to follow the noble Earl, because of his dogged approach on this issue, not only on this Bill but on the predecessor Bill and the Agriculture Bill. I commend him on his work and I will be referring to some of the points he raised, because I was reflecting on them as he spoke.

I shall primarily address Amendments 43 and 44, in my name and that of my noble friend Lady Kramer, and also reflect on what I thought was a very comprehensive speech by the noble Lord, Lord Lansley, and some of the points he raised within it. I have supported Amendment 91 in his name. This was raised at Second Reading by the noble Lords, Lord Hendy and Lord Freyberg, and the noble Earl, Lord Caithness. I commend the noble Lord, Lord Hendy, on the way he introduced this group and on allowing us to have this important debate: it is extremely important for the Bill and for UK trade going forward.

The Minister said, in summing up on Second Reading:

“ISDS is a subject which often causes excitement … I confirm that ISDS tribunals can never overrule the sovereignty of Parliament … There has never been a successful ISDS claim against the United Kingdom, but our investors operating overseas have often benefited from these agreements”.—[Official Report, 8/9/20; col. 749.]


I do not know about “excitement”, but there is genuine concern, which primarily comes down to two areas. One is that it is not clear yet what the Government’s position is on the agreements that are yet to be made, which will be continuity agreements, primarily with Vietnam, Canada, Singapore and Mexico, where, as we have heard in this debate, the European Union agreements have moved beyond ISDS. Can the Minister confirm that, in our negotiations with them, we will have follow-on from the European Union position? The second area of concern is what the Government’s position will be in the longer term. Are we moving away from the position we held when we were in the EU and towards a multilateral system?

I think it is helpful to remember the scale of this issue. It is not a minor issue. Across the European Union member states, more than 1,300 investment treaties have been signed with third countries, in addition to some 200 between EU member states. Non-EU states within Europe are party to more than 500, and we will now be in this category. This is just part of the 3,000 that exist worldwide. Most of these include ISDS provisions and often, as we have heard from UNCTAD—I shall refer to UNCTAD in a moment—it is very clear from the annual reports on the use of ISDS that companies have a view that public policy choices made by Governments will have an impact on their profits, and therefore they will use that ISDS.

The Minister seemed to suggest that the Government are in favour of ISDS because it disproportionately benefits British investors around the world. Statistically, that is true about the use of ISDS, so UNCTAD’s data is interesting. The United Kingdom is the third-highest home state of claimants of ISDS around the world. From 1987 to 2018, in the number of known cases, the UK was third, with 78. As the respondent state, we have had only one. So there have been 78 where we have been the home state and one where we have been the respondent state—so, on one reading, the Minister could be correct that this has been of benefit to British-based operations. But a bit more analysis is required as to what “British-based” means when it comes to some of the commercial operations, and where some of those cases have primarily concerned developing countries.

On the second aspect, it was helpful that the noble Earl raised some of the consequences of Covid-19, because it is not just America lining up. We have had reports that law firms have been studying decisions made by British authorities, including the London Mayor’s decision to close Crossrail construction during the pandemic, during the lockdown. While this was not underpinned by a statutory requirement, it is potentially vulnerable to those seeking compensation under the investment treaty. Will the Minister respond to the noble Earl’s question on how vulnerable the UK is at the moment?

The issue moving forward, as my noble friend Lady Kramer indicated, is that the EU has ratified four agreements with an ISDS mechanism: the Energy Charter Treaty, to which 53 European and central Asian countries are party; CETA, with Canada; and agreements with Vietnam and Singapore. Only the ECT is fully in force; the ISDS provisions in the three others will be implemented after all member states have ratified them. More importantly, those agreements include investment court systems and, last year, the Commission presented procedural proposals for the more transparent ICS for CETA. Can the Minister say what approach we will be adopting in our discussions with Canada? Are we seeking, in our agreement with Canada, an investment court system? These new transparent approaches will allow for mediation, which ISDS has largely overlooked, and an appeal mechanism that will then be binding on the parties. All of this has a public interest test, because they are party to the agreements with regards to the making of public policy, so what is our position on Canada, Vietnam, Singapore and Mexico?

It would, for many, be a fully retrograde step if we were not to seek continuity in those new agreements: it would negate the progress that has been made by the EU moving away from the ISDS system. Why is it progress? Well, as many in this Committee have indicated, it is not just the fact that Parliament remains sovereign—of course it does—but what use is sovereignty if the constraints on using that sovereignty are so significant? It is the chilling effect, as the noble Earl said, that is potentially blocking. We have seen attempts against France, Australia and Canada, all attempts under ISDS and intellectual property disputes, seeking either policy change from the Government, or compensation. Some of those could mean that regulations would have to be changed. This is the point: public policy should be made in the public interest, not in the shareholder interest.

The noble Lord, Lord Lansley, made the point about moving towards the long term. We have included that in our Amendment 43. He may refer to it as “heroic”, but that has never stopped the Lib Dems seeking those aims in the past. However, I think we have some strong supporters in the European Union with this approach, and we had strong support in the United Kingdom. The United Kingdom took part in the Council giving the mandate to the Commission for the negotiations towards a multilateral court system for trade. On 1 March 2008, the Council approved negotiating directives for a convention establishing a multilateral court for the settlement of investment disputes. That was a unanimous decision. The Minister will have to remind me, because I have slightly lost track of which Councils the Government refused to attend after we voted out of the European Union, but I am going on the basis—and he can correct me if I am wrong—that we were part of the unanimity in the European Union to move towards a multilateral court for the settlement of investment disputes. After that mandate was secured with United Kingdom support, discussions started on existing agreements, which we have rolled over, for moving towards an ICS approach rather than an ISDS one. We have rolled over 20 agreements so far. Where there have been elements of ISDS provision, the European Union is looking at them again to move towards a court system. Can the Minister say whether we will do the same?

The benefit of moving towards this is that we will be able to be part of an aligned movement of countries looking towards a more open and transparent approach, and that approach has been taken squarely from the European Union with regard to our colleagues in TTIP. The noble Lord, Lord Lansley, is right to ask this question. This will be a choice for the Government. Because of the transparency in the European Union, we know what the position is. We know what the mandate was. We know what the Government’s position was up until the end of December. We need to know their position now with the agreements yet to come.

Finally, I support Amendment 91 and will be brief on this. The noble Lord, Lord Lansley, is right. Any consequence of taking retaliatory action or imposing sanctions under the WTO—which we will be able to do under our membership of it—will, by definition, and inevitably, be serious and impact our country-to-country relations. As I understand it, we would be able to bring these forward only if we had the previous authorisation of the dispute settlement body at the WTO, having made a public case to it. It seems incongruous to me that we would have made a public case to the dispute settlement body of the WTO for approval but will not be doing the same to our own Parliament to make a decision on the ongoing consequences of the implementation of those regulations. I hope the Minister can clarify that the Government would be open to supporting that aspect.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank all the speakers in this debate. I also echo the thanks from the noble Baroness, Lady Chakrabarti, to the staff for allowing us to get to where we are. We might have had a rocky ride and have missed a few words here and there, particularly the exchange between the noble Baroness and the noble Lord, Lord Lansley, but we are here and we are making progress and we owe them a vote of thanks for keeping us going.

The debate has been rich and the issue has been given a good going over. As the noble Baroness, Lady Chakrabarti, and others have said, my noble friend Lord Hendy spoke powerfully on the key amendment with a huge amount of knowledge. He confirmed that we took the right decision to hold his speech over from last Thursday. It would not have done well to have had the first part last week and the second part today. I am glad we were able to hear it—some of us got it twice, but it was still jolly good—and I congratulate him on that.

Japan Free Trade Agreement

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Thursday 17th September 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I congratulate the department and its officials on reaching this agreement in principle with Japan. It is a much-needed relief for all those UK companies that would have seen their trade with Japan reverted to WTO terms if the agreement had not been reached by the end of the transition period.

It is also a welcome benefit at a time of great economic uncertainty for the UK’s digital and tech sectors and for other key exporters which, we assume, will benefit from greater access, faster tariff reductions and stronger GI protections under this agreement than they enjoyed under the previous EU-Japan agreement. However, I hope the Minister will accept that in the absence of sight of the actual treaty text, and a full updated impact assessment, there is much about the UK-Japan agreement that we still do not know until these documents are published.

I welcome what is said in the Statement about the extensive scrutiny of the deal itself that will be offered to the International Trade Committee. I also note that there is a reference to an independently scrutinised impact assessment that the department will produce, so that

“parliamentarians are able to interrogate the deal and prepare a report that is debated in Parliament.”

I ask the Minister to confirm that this offer is also available to the International Agreements Committee of your Lordships’ House, and to confirm also that the timing of these releases of documentation will be such that the necessary scrutiny can be done well before the ratification processes of the CRaG Act are triggered—as of course will be the case in Japan, whose Parliament has to ratify the deal before it can be signed.

I have four other questions. The Statement says there will be a tariff reduction on British exports of food and agriculture, which is welcome. However, presumably this is contingent on sorting out the shared quotas we currently have under the existing EU FTA. For example, does this mean that exports will continue to be restricted unless and until other EU countries fail to use them?

The Statement talks up a new area of co-operation with Japan in the automotive and electronic sectors and suggests there will be considerable growth in new areas such as aeronautics. But, as we discussed in an Oral Question earlier this week, is this not likely to be heavily contingent on final decisions on accumulation and rules of origin after the transition period ends? Can the Minister update us on progress in this area?

I ask the Minister what ISDS clauses are contained in the final agreement. If there are any, how can the Minister justify such secretive and unwelcome provisions when there are ample opportunities for agreed parties to use the normal legal processes operating in both our countries?

Finally, can we get behind the headline comparisons that were fed to the press about the benefits this agreement will produce for the UK? Would the Minister agree with me that the correct comparison is what would have happened if we had simply rolled over the existing EU-Japan deal? To put it another way, can the Minister say what we will be able to do after this FTA is ratified that we cannot do now under the existing EU-Japan FTA—and can he quantify that?

As welcome and necessary as this deal with Japan is, it is still nothing like as important, in terms of our global trade, as reaching a deal to maintain free trade with the European Union. Our trade with Japan is worth 2.2% of our current global trade, which does not come anywhere near the 47% that we have with Europe. That is why commentary on this deal from Japan suggests that the deal that will determine the future of the investment and jobs that Japanese companies bring to UK communities is not the FTA we have just signed, but the one we hope to sign shortly with Europe.

[Lord Purvis of Tweed (LD)]

My Lords, because these Benches want the UK to prosper, we welcome the agreement. However, rather like industry groups, we do so not by hailing it but by sighing a collective sigh of relief that we have secured simple continuity of the benefits we secured as part of the EU. It has come to this—simply securing the trading terms that we had as a member of the EU now that we are out of it was described as “heroic” by a Conservative MP in the Commons on Monday.

It is customary to thank the Government for advance notice of a Statement’s accompanying published documents. However, as referred to, in this case it would have been good to have notice of the text of the agreement—which has yet to be signed—so that we could offer proper scrutiny. In Japan, both Houses of the Diet will need to approve the Cabinet’s decision to endorse the treaty. That is not afforded to our Parliament; we will not have an opportunity to do so. British parliamentarians did with the EU agreement. However, as I said last week on the Trade Bill, the Government seek continuity on most things but not on parliamentary accountability. Can the Government Whips indicate that we will have a substantive debate on this agreement in this House before the Government indicate that they seek ratification?

The Minister gave specific details of the agreement when answering questions on Monday, but we have had no sight of the agreement in order to consider the context and scale of what the Minister said. Like the noble Lord, Lord Stevenson, I welcome what Liz Truss said on Monday in the House of Commons, with regard to a copy being given to the International Trade Committee. I also would like to know whether that will be afforded to our committee, the International Agreements Committee, and when this will be done. Will the text also be made available, as is common in other Parliaments, to Front-Bench spokespeople on a private briefing basis at the same time as it is sent to the committees? What will be the timeframe between it being sent to the committees and a debate in this House?

We have to reserve judgment on the wider benefits the Government claim for the agreement until we have seen them. Over recent months, we have seen the enormous capacity of the Government to oversell and then underdeliver. For example, there was massive fanfare over securing tariff-rate quotas for British agricultural products in this agreement, but then reports suggest that we have actually secured access to any non-utilised quota for EU goods.

With even greater heralding activity, the press release announced:

“New protection for more iconic UK goods … from just seven … to potentially over 70 under our new agreement”.


Understandably, MPs in the Commons lined up to welcome this, but can the Minister confirm that the agreement has no new protections creating GIs, as Japan is under no obligation to expand further its recognition in the future to beyond what we have in the EU deal? Rather, it will simply be able to consider further requests from the EU to a limit of 70.

If it transpires that this spin—which has also described the agreement as “gold standard”—is actually just a commitment to talk about further potential agreements, such as geographical indicators, the Government are building up a huge amount of expectation for very limited benefit. Given the fact that Japanese company Hitachi’s agreement for nuclear power on Anglesey is likely to have a bigger negative economic impact on the United Kingdom than any benefits of this trade agreement, context is all.

On state aid, the Minister referred to a Question I asked on Monday, and he said clearly that this a perpetuation of EU rules which we will be bound by. Can the Minister be clear and tell the House whether it will require domestic state aid legislation to implement this and, if so, will it be a continuation of the EU regime? When will that be brought forward? On tariffs, what will the overall average Japanese import tariff on UK goods be under this agreement, compared to what we have at the moment?

Finally, the Government said that the benefits are likely to yield £15 billion to the UK economy, but they have not given a timeframe. I looked at the Government’s scoping paper, and it said that that source simply stated over “the long term”. The source for that, in the footnote, was internal DIT analysis from 2018. Will the Government publish that? What is the timeframe for that £15 billion—with no caveat—the Government have announced, overselling and underdelivering again? What is the figure? The Government did not quote from that scoping exercise that that figure does not take into consideration the economic impacts of Covid-19, so what is the real likely benefit?

If we are to see the benefits from this agreement, which we wish to, the Government have to be open and transparent. So far, that transparency is lacking. I hope that the Government will be far more open in the coming weeks.

Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) (No. 2) Regulations 2019

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Wednesday 8th May 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, there may be a slight feeling of “mea culpa Wednesday” when people read through today’s proceedings in Hansard. However, we are grateful to the noble Earl for picking up this issue at the first opportunity since his noble friend Lady Fairhead stepped down. She sent me a very kind email yesterday, indicating that she was stepping down. I wish to put on record how much all of us across the House enjoyed working with her on the Trade Bill and on these issues of international trade. I hope that the noble Earl can forward those remarks to her.

This issue is necessary, and there will be no opposition from these Benches to what the noble Earl has indicated. We are very grateful to him for clearly outlining the actions taken by the Government in correcting the errors in the original drafting and in ensuring that there is no gap in the annexe that he outlined would need correcting. However, in terms of preparedness, this continues to damage our reputation for good governance. There was the botched deadline of 29 March; it was known that defective legislation would be on the statute book and that further legislation would have to be put forward to correct it, which this does; advice to businesses was published and then withdrawn; and, to some extent, continuing concerns on operability were not addressed.

Given that this issue impacts on defence and security industries, and is linked to organised crime and non-state actors, as well as human rights and our adherence to international obligations, while it is reassuring that there would be no gap because we have not yet left the European Union—and will not do so without any agreement —there are people who will look for any gap in any legislative coverage, including those within who do not have the best interests of our country at heart. Therefore, the prospect that there could have been gaps is quite alarming. In the other place, the Minister, Graham Stuart, said when he moved this measure that any gap in competent legislation would put us in breach of international obligations. I accept the seriousness with which the noble Earl has brought this forward.

I shall ask two questions, which I hope the noble Earl can address. First, Regulation 3(27)(d)(iv) amends annexe IIe of the European regulations to omit reference to the European Charter of Fundamental Rights. As I mentioned, this is an issue that impacts on human rights, and a specific measure that highlights that human rights are included within the provisions. How do the Government see the definition of such violations, if we are to stand alone? We referenced this issue during the Trade Bill. Commitments were provided by the former Minister, so clarity on how the Government intend to take this forward would be welcome.

Secondly, by definition, many of the technologies move fast and need continuous updating, while licensing regulations need to be ahead of those that do not have the best interests of our country at heart. There is a dual-use co-ordination group currently chaired by the Commission, in which the UK participates by virtue of our membership of the European Union. By leaving, obviously we are also leaving the dual-use co-ordination group. However, it is a given of the significant correction that the Government are making that we will have an ongoing relationship with this dual-use co-ordination group to ensure that there are no emerging gaps. How do the Government envisage our having a relationship with the dual-use co-ordination group if we will be out of it? If the Minister can respond to these points I would be most grateful. We share the intention of ensuring that in any situation there is competent legislation.

[Lord Stevenson of Balmacara (Lab)]

My Lords, like the noble Lord, Lord Purvis of Tweed, I put on record our thanks to the noble Baroness, Lady Fairhead, for her work and for the excellence of her contributions during her time as Trade Minister. We are sorry to see her go but obviously delighted to see such a wonderful substitute in her place before us, beautifully adorned as the noble Earl is with the White Rose of York. I see nothing in that; I simply make that comment in case it would not be picked up in Hansard.

In his contribution, the noble Earl made it clear that he offered his apologies on behalf of the Government for the mistakes made in the original drafting and took full responsibility for them. What we are left with is the Government taking the opportunity to pick up drafting errors drawn to the attention of your Lordships’ House by the Joint Committee on Statutory Instruments. These have been worked into the draft before us and resolve the problem referred to by the noble Earl and the noble Lord, Lord Purvis. I have very little to add to that. We covered the original drafting in some detail but did not pick up the mistake, which is one of those things. I do not think there are any further issues to raise. The points largely concerned how this fitted into the overall scheme for the control of goods which could be used by others to whom they are sold for suppressing civil rights, et cetera, in other countries. We are clear that that is happening.

There was one thing I meant to ask at that time. I am sure the noble Earl does not want me to go on to this but I offer it to him as a question to which we may need an answer in some sense. The change on page 2 of the statutory instrument to Regulation 3(22)(h)(ii) is a substitution. The change made is,

“for ‘either non-EU Member States or Wassenaar’ substitute ‘non-Wassenaar’”.

I have got lost in the double negative there and I wonder whether the noble Earl, either when he is on his feet or in responding by letter, if he prefers, could explain to us who exactly makes up the non-Wassenaar group. If there are any issues there to which he wishes to draw attention, I should be happy to hear those but with that, I am happy to support these regulations.

Protecting Against the Effects of the Extraterritorial Application of Third Country Legislation (Amendment) (EU Exit) Regulations 2019

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Tuesday 26th March 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I do not think there will be any difficulty on these Benches about ensuring the continuity we will require in order that there is certainty for British businesses that they can operate on the correct side of international law. The only areas that I hope the Minister will clarify—her introductory remarks were quite helpful—concern, first, the application process that will be required if we are to have a stand-alone position outside European regulations. The applications for authorisations will have to be made to the Secretary of State, as the regulations state. Will the Minister indicate what process such applications will involve?

The second area, which the noble Baroness will not be surprised that I raise, concerns the matter of another judiciary within the United Kingdom. While, as part of Scottish criminal law, this will be a reserved power, nevertheless the criminal penalties that may well apply on the potential breach of some of these things by Scottish businesses would have to be prosecuted by the Scottish courts. One of the examples the Minister raised, that of Iran, is very relevant for the very large Scottish oil and gas industry that trades across the whole region, including within Iran. It is a relevant point, given the not-so-subtle threats from the United States that it will consider breach of its sanctions policy by those British businesses that continue to trade with Iran under a perfectly legal framework. If we are to have a stand-alone approach, absolute certainty, clarity and reassurance would be very helpful. The Government indicated that no consultation was necessary in bringing forward the statutory instrument. I was slightly surprised about that, given that we have two distinct judicial systems in the UK.

The Government also indicated that before the UK leaves the EU, guidance on how a blocking regulation would apply to the UK would be published. Given that when this instrument was drafted the intention was that, potentially, we would leave on Friday without an agreement, can the Minister say whether this guidance has been published? If it has not, when will it be, to offer that reassurance?

Finally, the Explanatory Memorandum states:

“The Blocking Regulation currently provides that the Commission is to regularly report on the effects of the extraterritorial third country legislation. This will become a requirement on the part of the Secretary of State in the retained version”.


Through what mechanism do the Government intend to do that? Will it be through Written Statements to Parliament, or will a public document be laid before Parliament to provide that transparency? I hope that the Minister can clarify all those aspects.

[Lord Stevenson of Balmacara (Lab)]

I, too, am very grateful to the Minister for her very full introduction to this SI. It took us into areas new to me, such as the intersection between foreign policy and trade policy. That is an interesting issue and the noble Lord, Lord Purvis, was right to focus his remarks on how these things will work in practice. I look forward to the Minister’s response.

When the Minister introduced the SI, she pointed out that much of the regulation that has been transposed was originally introduced in 1996 in response to the extraterritorial reach of certain sanctions imposed by the US in relation to Cuba in the 1990s. Obviously, it has been updated since then, particularly with reference to Iran. It set a train of thought in my mind about how exactly our current foreign policy meshes with these regulations. With particular reference to Iran, the commentary I have been reading seems to suggest that the package of measures that is being transferred across would encourage the European Investment Bank and banks in the UK—possibly even the Bank of England—to finance activities in Iran and to strengthen ongoing sectoral co-operation and assistance to Iran. That would include financial assistance through development corporation or partnership instruments, and encouraging the UK to explore the possibility of one-off bank transfers to Iran’s central bank, which would allow Iranian authorities to receive oil-related revenues.

I suppose this is all right—I do not really understand very much of this; it is way above my head—but when the Minister responds perhaps she could explain exactly how that meshes with our current policy towards Iran, which I understand is not as sympathetic or supportive as might be suggested by the rather large cash transfer opportunities which were being discussed.

This statutory instrument follows on from activities that have been going on in Europe for a number of years in relation not just to Cuba but to the other countries that were mentioned. It requires companies to notify the Commission within 30 days whenever renewed US extraterritorial sanctions directly or indirectly affect the economic or financial interests of the company in question. Various other things apply. EU companies can recover damages in EU courts from persons causing damage as a result of the sanctions, and it nullifies the effect of any court judgments or decisions of administrative bodies that are based on the reinstated US sanctions. My question here is: has anything happened in that regard? Do we have details on the number of companies that have notified the Commission within 30 days, as required? How much money has been recovered, and how many times have the courts been subject to recovery requests? I am sure that it will not affect the way in which we respond to the SI, but it would be interesting to have on the record whether this has been an active process or one that is more observed in the absence of activity than in the reality.

My attention was drawn to a quote from what is in some senses a rather unusual source, since I do not often quote this person. The UK Foreign Secretary at the time that this instrument was brought in, Boris Johnson, said that he thought it was rather difficult to protect European businesses due to the extraterritorial effect of US sanctions and the difficulties companies have when they touch the live wire of the American financial network—they find themselves sanctioned almost immediately. So my third request for more information is to ask whether the former Foreign Secretary is right that this has been rather difficult for companies to access and use.

I suppose I am leading to this question: what rationale do the Government give for continuing this transfer? It would clearly be inappropriate to have a situation in which an EU regulation had legal effect in the UK when we had not properly transferred it. If the ends do not justify the means, I am rather surprised that the Government are taking this step forward, so could the Minister reassure me when she comes to respond that this is a necessary instrument, that it fits with our current foreign policy operations and thoughts and that there is no concern in that respect?

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

3rd reading (Hansard): House of Lords
Wednesday 20th March 2019 Lords Chamber

[Lord Stevenson of Balmacara]

It is Balmacara. It means “the town from which the Macraes come”—Macrae being my mother’s maiden name. I thought the House might enjoy that little moment of clarity.

Amendment 8 in my name and that of the noble Lord, Lord Purvis of Tweed, comes from a concern that the regulatory power-making in the Bill as originally drafted would cause difficulties for the relationships that should exist between the UK Parliament and the devolved Administrations. There have been two developments since the original amendment went down. First, the continuing debate on a series of matters involving trade issues to be brought back to the devolved Administrations has yet to be resolved in discussions between the UK Ministers and devolved Administration Ministers. Also, the Healthcare (International Arrangements) Bill, which recently went through your Lordships’ House, was subject to an amendment that seemed to suggest that there was a requirement in most of the legislation coming forward, particularly this Bill, to reflect how, and on what basis, Ministers of the UK Parliament could engage with the devolved Administrations over how regulations should be framed and consulted on, and under what conditions consent would be given.

Since this seemed to involve a number of different issues, not just those related to trade, the noble Viscount, Lord Younger, kindly held a meeting at which we were able to discuss this in more detail, attended by myself, the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Hope. I think we got a long way on that issue in trying to understand how these various matters came together. I think the broad position that affects all these issues is set out in the Scotland Act 2016 and in comparable primary legislation affecting Wales and Northern Ireland.

In respect of the possibility of having a convention that would echo that relating to regulations that will need to be made under the powers given under primary legislation, I think the noble Lord has something to say that will be helpful in resolving whether Amendment 8 is required. I beg to move.

[Lord Purvis of Tweed]

My Lords, I was interested to hear the clarification of the title of the noble Lord, Lord Stevenson. The House will not be interested, but my title of “Tweed” is because of the river, not because I have a penchant for tweed suits outside this place, which most colleagues from England assume is the case. However, because my title is from the Tweed, because I am from the border and live on the border, and because I was a Member of the Scottish Parliament for the Borders, the legislative competence interaction on trade agreements is of significance, not just for Borderers but for the relationship with the devolved Administrations. I am therefore very happy to add my name to this amendment.

In so doing, I also recognise the patience of the noble Viscount, Lord Younger, in meeting us and hearing our case for the need for an extra level of clarification on the interaction of the areas where discussions continue with the devolved Administrations. In some areas, there is disagreement over where the legislative competences of areas that had been EU areas of legislation will lie, when they are repatriated, if we leave the European Union. As the noble Lord, Lord Stevenson, said, the Scotland Act’s approach to devolution is that if those powers are not spelled out in the Act’s reservations, they are recognised as fully devolved to the Scottish Parliament. This is about how the order-making powers in the Bill interact with those powers. Clarity on the areas of interaction between the devolved competences would be helpful.

Finally, clarity would be helpful in looking at those areas of legislative competence where there are ongoing discussions: agricultural support, organic farming, animal health and traceability, animal welfare, chemical regulations, state aid and food labelling. All are likely to be important not just for continuity agreements but for future trade agreements. Some of these issues are politically sensitive, so getting the required clarity on how they will be legislated for in trade agreements is important. It would be regrettable if the competences ended up in the Supreme Court for dispute; further clarification on current interaction is desirable. I know that the Minister will probably not be able to answer my questions entirely but I look forward to his response to this short debate. I hope he can add an extra level of clarification, which would be satisfactory at this stage.

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[Lord Stevenson of Balmacara]

My Lords, it usually falls to me to embarrass Ministers, not the other way round. I felt myself blush just then, and I hope it was not caught too closely on television—but I thank the Minister very much indeed for her comments.

Leading on a Bill in your Lordships’ House, whether in a government position or in opposition, is an honour and a privilege—but those who have done it before will know what I mean when I say that it can take over your life. It is not just the bad dreams and the nightmares of waking up and thinking, “Did I actually say that?” or “Did I forget that amendment?”; it is all the other work that goes with it: meetings with third parties who feel that they should participate in the Bill, and in our case—this may not be true of the Government—talking to our colleagues in the Commons, and to other groups in this House that have to be involved. It is well known that it is simply not possible to improve a Bill unless those of all parties, and none, join together to see what the public interest requires.

There are also meetings with the clerks, and Back-Bench liaison on our side, and voting strategy meetings. There is a lot going on, and that does not get any less as we come towards the end of the process. It gets to the point where you eat, sleep and dream the Bill. That is fine when it takes six weeks, but it is not fine if it takes six months, as this Bill has done, to get through to its final process.

There are pluses too. Working on a Bill means working intensively with colleagues. I do not just mean my noble friends Lord Grantchester and Lord McNicol, and our extraordinarily hard-working legislative assistant Ben Wood; it also means working with the Bill team. I agree that all credit is due to Suzanne Greaves and her team, because they have been fantastic to us as well as to Ministers, giving us information and responding, to a very high standard, to often ridiculous requests at very short notice. Ministers, including the noble Lord, Lord Bates, and the noble Viscount, Lord Younger, have been excellent at the Dispatch Box, both in what they have said but also in saying it very quickly. That is, I believe, often the hallmark of a good Minister.

I am sure I speak for the whole House when I congratulate the noble Baroness, Lady Fairhead, on what is, extraordinarily, her first Bill. She has it brought it to the House with consummate skill and considerable confidence. She ensured that we met regularly outside the Chamber for the meetings we have referred to, which were robust but extremely good and fruitful. We made progress and we were given all the information we needed.

We did not always agree—the Minister has acknowledged that—but where we differed, we did so only after all avenues for compromise had been explored and we proceeded on the basis of mutual respect for each other’s point of view. In doing that, we upheld the best standards of this House.

[Lord Purvis of Tweed]

My Lords, at this awards ceremony I am delighted to be nominated for best supporting actor. I, too, thank the Members of the Government Front Bench for their patience and their willingness to engage. The Minister said this was the first Bill she has taken through. This is the first time I have been on a Bill’s scrutiny team, although I have had the privilege of taking through a Private Member’s Bill.

The Minister and I now know more about World Trade Organization terminology than we ever wanted to know. We hope it will become useful in the future. The Bill arrived in this House eight months ago. It started its considerations 15 months ago and the Trade Bill 2017 is now the Trade Bill 2017-19. That demonstrates that it has been a long process. The Minister said in her speech at Second Reading on 11 September that this was merely,

“fundamentally a pragmatic and, in most parts, a technical Bill”.—[Official Report, 11/9/18; col. 2204.]

We have had to scrutinise many technicalities and the Minister has been pragmatic in the way she has responded. She also said that the Bill was about continuity and certainty. These two things have been lacking on Brexit over the last months. On this Bill we have been unaccustomed to having such a large attendance in the House as there is now; given the next Statement on Brexit preparedness, I am sure it is in the context of this Bill having to be in place to provide some of that preparedness.

In thanking the Government Front Bench, and having worked closely on a cross-party basis with the noble Lords, Lord McNicol and Lord Stevenson, and others, I should also mention that I have had the stalwart support of my noble friends Lady Kramer and Lord Fox, and the unsung heroes of our Benches, Andrew Burrell and Elizabeth Plummer.

This is now a better Bill having gone through this House. We sought to enhance parliamentary power in setting the negotiating objectives and a mandate, and that is now in the Bill. We sought that consultations with the devolved Administrations would be enhanced, and that is now in the Bill. We said that there should be parliamentary approval of these continuity and ongoing agreements, and that is now in the Bill. Participating in a customs union is now in the Bill. A mobility framework for the movement of people is now in the Bill. Non-regression of standards—important across different areas from animal welfare to food standards—is now in the Bill.

The Minister said that this was a rewarding, constructive and challenging experience for her. In many regards she has met that challenge and I commend her for it. She has certainly been constructive in how she has engaged with us. The rewarding aspect will be how she can persuade her colleagues at the other end of this building to ensure that all the wise amendments that this House has passed are not overturned. We will have to see how she does on that business. If she does it, I commend her for it.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow my noble friend, who speaks with great authority on this issue. In following him, I will use one example to highlight the importance of this amendment in maintaining the spirit and including the contents of the agreement. I use the example of today’s announcements on the proposed tariffs that may be applied on a no-deal Brexit and the Written Ministerial Statement on how that will impact on the Northern Ireland border, already referred to by the noble Lord, Lord Kerr. I was grateful for an opportunity to have a conversation with the Minister about this today.

The proposals for the tariff regime, which would be an increase of 489 tariff lines on goods from the European Union and would have to have some form of mechanism across the border of Northern Ireland, need to be seen in the context of operating within a year. This is not simply an emergency or temporary proposal, and a year is a long time in the context of some of the statistics referred to by the noble Lord, Lord Hain. There were 46 million vehicle crossings at the 15 Northern Ireland border locations in the last year, according to the Northern Ireland statistics agency—3.8 million of those were goods vehicles, nearly three-quarters of deliveries involve small businesses, and two thirds of cross-border trade is bilateral agri-food and intermediate trade. That means these are small businesses—as already referred to, 80% are low-value—and often individual businesses trading on a self-employed basis, but every one of those people will have to be registered with an economic operator’s index number, or EORI. Only one-sixth of all businesses have so far registered, so the system, even as published today, is not operable, but new processes and procedures have to be carried out. The Government are giving no advice to Northern Ireland businesses on that. They believe a unilateral action, against the spirit of the Good Friday agreement and the spirit of an all-island economy, is the way forward.

How can it be a unilateral approach if tariffs will not be applied to goods coming from Ireland, but will subsequently be applied if those goods are part of intermediate trade with Great Britain? Liz Truss, the Chief Secretary to the Treasury, was asked at lunchtime where the checks would be carried out. She said that she believed it would be at “a border in the UK”. This is the Chief Secretary to the Treasury today. What does that mean? If one is tolerant, one may forgive her not knowing the terminology of Great Britain and the United Kingdom, but that is unforgivable, given that she said she will vote for a no-deal Brexit in the other place this evening. What kind of consultation is being carried out, not just with the Irish Government—which, as my noble friend indicated, is urgent—but with businesses on both sides of the border that will be operating?

Linked with the long-term basis is the fact that the unilateral approach is not WTO-compliant, unless the Government trigger one element in WTO processes on public morals. There are some dispensations that can be provided, in extremis, on the basis of public morals that can set aside a system where we will not apply tariffs from one country, if we have no intention of applying them to the rest of the world. It would be a retrograde step if the Government activated a public morals clause at the WTO on a situation as delicate as that on the Northern Ireland border. The Government are setting aside security and border integrity as the basis of the unilateral no-deal proposal. The Government should see sense and support this amendment, because it provides the framework for these consultations to be carried out.

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a short but poignant and moving debate. We have reached back into history and tried to articulate fears and concerns.

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[Lord Stevenson of Balmacara]

My Lords, it is a test of the abilities of Ministers to be able to breathe life into a list such as that we have just heard. This is a case of drafting amendments beyond the boredom threshold of many people who have to sit through these debates, and I congratulate the noble Viscount on his ability to do that well. I have no objection to the points that he has made and will support them enthusiastically when asked to do so.

In this group, which includes a lot of one-line amendments, is a large amendment dealing with the Sewel convention, which has operated for a number of years in relation to devolved matters in the Assemblies in Scotland, Wales and Northern Ireland—when they meet. It is there because there is concern that the Government have still not bottomed out their arrangements for how all such matters are to be dealt with going forward. While there is no complaint that the convention has not worked well until now, conventions are conventions and there is an argument, at least in principle, that at some point—either now or at some later stage—an attempt should be made to clarify the rules by which it operates and the conditions under which it exists.

I say that particularly because there remains a continuing concern over how the Government attempted to legislate in the withdrawal Bill, in particular on matters being devolved—as they may be under any agreement with the EU or if we crash out—to the UK but for which there was a strongly persuasive case for them going directly to the devolved Administrations. In those circumstances, a great deal of work has been done and a lot of the individual issues have been settled, one way or another. However, a list of matters relating to devolved issues still needs to be resolved so that where they intersect with other geographical locations, there is a workable scheme under which progress can be made.

One issue that arose previously was the extent to which the devolution legislation passed in this House to set up theses bodies could be invoked for issues concerning who has the authority to legislate where a matter is devolved. If a matter is not reserved under the Act, it is devolved, so matters that fall to be devolved must have the consent of the body to which the issue is devolved under the Sewel convention. I am putting this simply; the arrangement is more complex. In the case before us, with trade being such an important issue, we felt that there should be some measure in the Bill to explain exactly the conditions under which the convention would operate and the extent to which it would or would not be concerned. The amendment’s wording is quite clear:

“Regulations made … by a Minister of the Crown may not normally make provision which would be within the devolved competence of a devolved authority”,


unless the Ministers consent. It goes on to say that it would normally be within the devolved competences of the devolved authority, to which conditions are attached. That applies to all areas.

That would have been a very simple introduction to a very simple issue on which I would expect the Minister to respond. However, it will not have escaped the House’s attention that only yesterday, a very similar amendment to another Bill—the Healthcare (International Arrangements) Bill—was moved by the noble Baroness, Lady Manzoor, on behalf of the Government. It covered almost exactly the same territory. It was phrased positively, in a way that the amendment before the House today is not, but it covers the same ground. It said:

“Before making regulations … that contain provision which is within the legislative competence of a devolved legislature, the Secretary of State must consult the relevant devolved authority on that provision”.


It goes on to explain the conditions under which that would operate. The wording is not identical but I would argue that the sensibilities and principles behind this matter are identical to those of that amendment. Does the Minister therefore recognise that, to the extent to which the Government have already considered this issue and legislated for it, it may be in the Government’s best interests to accept Amendment 28, since to do otherwise might cause difficulty for what has already been agreed to in the healthcare Bill? Alternatively, would he agree to meet me and other noble Lords to discuss this, so that we can come back at Third Reading with wording that is consistent with what will soon be in law via the healthcare Bill and appropriate for the Trade Bill?

[Lord Purvis of Tweed]

My Lords, I will also speak to Amendment 28, to which I have added my name. There is not much to add to the persuasive case made by the noble Lord, Lord Stevenson. I welcome the Minister, who is always assured at the crease even as the third batsman. His clarification on Ministers of the Crown acting jointly with devolved Ministers is helpful; Clause 2 has always been a bit of a puzzle for me when it comes to the joint working of the two sets of Ministers.

As the noble Lord, Lord Stevenson, pointed out, our discussions in Committee concerned the areas of interaction where either devolved and reserved competences align themselves clearly or there is dispute as to where they fall—that is, whether they fall fully in the devolved competences of the Welsh or Scottish Parliament, for example, or are reserved. When we discussed the withdrawal Act, the Government put forward all the different policy areas to be repatriated from European Union legislation. There were no issues with 49 of them. It was recognised that a common framework between the UK and the devolved Administrations was needed for 82 of them. The Government said that there was to be further discussion on 24 of them. In 12 areas, there was no agreement; the UK believed that they were reserved but the devolved Administrations, particularly the Scottish Parliament, believed that they fell fully within the devolved competences.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, first, I thank the Minister for her efforts to meet the requirements of the Motion in the name of my noble friend Lady Smith of Basildon, who is unfortunately indisposed at the moment. I know that my noble friend keeps a beady eye on everything that goes on here, so she will have noticed the welcome given to her Motion, even though it was not quite so well received on the Government Benches at the time. Nevertheless, we are where we are and we have made some progress. It cannot have been easy for the Minister or the Government as a whole to get a White Paper prepared and laid in an atmosphere that is probably best not gone into and in the very short time available. It is a major achievement and we appreciate it. It is also clear that the Government’s thinking has progressed in recent weeks and we welcome much of the analysis set out in the White Paper.

As we all know, trade negotiations are complex and difficult. They should engage civil society and feed in the views of consumers, trade unions and companies. The negotiations require a proper and effective system, involving this Parliament and the devolved Administrations, in relation to the negotiating mandate, and feedback on the negotiations as they progress and the final agreements. We think that requires underpinning with a statutory framework so, in the absence of any government amendments covering these points on Report, and in view of the assertion in the White Paper that no legislation is needed to deliver the Government’s proposals, we have tabled an amendment setting out a possible scheme. It is on that basis that we are happy to agree with the Motion moved by the noble Baroness and proceed to Report.

[Lord Purvis of Tweed (LD)]

My Lords, like the noble Lord, Lord Stevenson, we welcome the Minister’s comments from the Dispatch Box. This is an occasion when parliamentary persistence has proved effective. We started this process when the Government had indicated that the Bill would be about only the existing continuity agreements and we made a very strong case, across all parts of the House, that it should also signal a direction of travel which, in many respects, would create precedent. It is on that basis that we on these Benches welcome the Command Paper that the Minister has published and her willingness to engage with and meet opposition parties and Members from across the House.

One reason this has been so important is that it has been a consistent practice of this Government, in relation to continuity trade agreements or starting discussions with countries about future trading relationships, to delude themselves that it will be easy, then deny that there is a problem when it is highlighted that they are difficult. Then they demur when frustrated officials leak information that allows us to glean the reality from the media. Then, unfortunately, on occasions, they deflect the problem, saying that is not their problem or responsibility; it is other countries that are not lifting the burden, or the European Union that is not being forthcoming with its position on a future relationship. We want to be in a position where we can put all that behind us and move on to a platform where we have much greater clarity as to what the trading relationships, and the role of Parliament and the devolved Administrations in their oversight and approval, will be. I welcome the Command Paper as the start of that.

To quote the noble Baroness, Lady Manzoor, from Question Time, this can be only the start of the process, and this is the platform on which we will seek to build. This is not the end. In that spirit, I hope the Government will be very favourable to Amendment 12 later today to ensure that that platform can be built on in the most constructive manner. On that basis, I look forward to hearing the Minister’s comments.

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[Lord Purvis of Tweed]

As the noble Lord will know, we have engaged in a number of legislative standards across all the different aspects of the British economy. If they are not captured in proposed new paragraphs (a) to (g), which we believe to be comprehensive, and if there are some elements of the economy where legislative standards currently exist and we would consider them to be of equal status, there is a requirement for them to be protected. That is why these are baseline standards. If areas are excluded, they will be captured by “not limited to”. The list of standards is not necessarily designed to be open-ended; these are meant to be the existing legislative standards that are already on the statute book that we wish not to be impacted by any of the regulations that could be made through this legislation.

[Lord Stevenson of Balmacara]

My Lords, we have had a very good debate on an important and long-lasting topic which we need to draw to some form of conclusion. We have before us two amendments that cover the ground very admirably, although their approaches are rather different. Indeed, the essence of what we are trying to get at may become a little masked in the timing. That last exchange is a good example of the way in which aspiration, interests and enthusiasm can sometimes lead us to a position where the drafting does not support where we are trying to go to.

We should be clear that there is support around the House for putting into the Bill at an appropriate place a clear and unambiguous statement which reiterates what the Government have said on a number of occasions—and we will probably hear again in a few minutes when the Minister responds—that they are committed to not lowering domestic standards in the EU agreements that are transitioning into bilateral agreements or in any future trade agreements that they wish us to enter into. If we can hold on to that and find the appropriate words rather than the ones before us, which need to be merged if we are to get the best out of this, we might make a way forward. I hope the Minister will give us hope that there will be the opportunity for further meetings and discussions on this issue. It is worth trying to go the extra mile to get us to a point where, by Third Reading, we have an agreed procedure.

The noble Lord, Lord Purvis, was right to try to drill down into some of the points that may need to be bottomed out. I will not repeat where there are difficulties but simply acknowledge that we need to be clear about whose standards we are talking about, where they are to be found in current statute, how they apply to UK interests and how they are limited in what they might say to any future Government about third-party Government arrangements, which are clearly not right.

Another point is to pick up how the WTO and other international agreements and treaties that we make covering the list in subsection (5B)(a) to (g) would fit best in a statutory form. That is the way that we need to go. I therefore hope that all parties will accept that this is not the time to force through either of these amendments but to come forward with an agreed position, if we can, in time for Third Reading.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, the purpose of the amendment is to give the other place a chance to consider whether the UK should seek to remain in a customs union with the EU. It is an option that we know is realistic and negotiable, as signalled by senior EU figures over recent weeks and months. It has demonstrable support among communities throughout the United Kingdom, this House and the Commons, as well as business and trade unions, and would go a very long way to providing a permanent solution for Northern Ireland.

A customs union with the EU would guarantee continued UK access to existing EU trade agreements without having to roll over after 29 March, although that does not seem to be going terribly well. It would enable the UK to have a say on the direction of future European trade negotiations, allowing us to push forward our principles of development and strong standards, and our values in tackling issues such as climate change. It would offer certainty and stability to British industry, thereby protecting jobs and allowing businesses to secure new trading opportunities. When coupled with a close single market relationship, it would create the conditions for our vital services economy—80% of our GDP—to flourish and grow. The other place narrowly rejected a customs union when it considered the Bill, in part because the Prime Minister promised to replicate the benefits in her deal. However, they are for negotiation and certainly not yet agreed.

If this House supports the amendment, we are doing our duty in allowing the Commons to think again about a really important issue. I beg to move.

[Lord Purvis of Tweed]

My Lords, there is no doubt that we on these Benches support the free economic movement of goods and people, which benefits all parts of the British economy and of our United Kingdom. The news today from the motor manufacturing industry is no surprise to those who have been following the assets leaving the United Kingdom and seen the people leaving the United Kingdom. There is a growing and depressing trend of businesses making a choice to move away, or at least to move some elements away, from the United Kingdom.

One of the principal reasons for that is the uncertainty about our trading relationship with our biggest market. The amendment, to which I have put my name, is better than the Government’s current position, or any position they are likely to take. That is why I support it. It is becoming a cliché that business needs certainty, but for many businesses it is now too late. The least this House can do, through the Bill, is to offer a higher level of certainty to businesses that there is some support for the UK remaining a member of a customs union.

I shall give one small example, of the many that could be offered, of why it is important to avoid the kind of disruption that leaving a customs union would bring about. This was highlighted in the Government’s recently published paper, Implications for Business and Trade of a No Deal Exit on 29 March 2019, and it illustrates what leaving a customs union would mean. There is a requirement for all businesses trading with the European Union to have an economic operator registration and identification number, in order to,

“complete the necessary customs documentation for goods they are importing”.

It is not simply desirable; it is necessary. As the Government themselves say,

“an EORI number registration is one of the most basic and straightforward parts of the process most businesses would need to undertake to prepare for no deal”.

Businesses will need that number on exit day. The government document goes on:

“As of February 2019 there had only been around 40,000 registrations for an EORI number, against an estimate of around 240,000 EU-only trading businesses”.


So we are one-sixth ready to leave.

The document highlights the fact that on an issue for which government communications have been strong, and the information to businesses about the fact that they needed to prepare has been clear, they have not done so—for a number of reasons. This illustrates the complexities required of the business community if we are outside a customs arrangement that would amount to a union. That is one reason, among many others, why we support the amendment.

We on these Benches reserve our right to campaign strongly for the UK to retain membership of the single market, as well as the customs union, of the European Union, and to say that if there is to be a withdrawal agreement it should be ratified by the people in a referendum. I hope that those on the Labour Benches are also moving faster in that direction. That debate is for another time. The debate on the movement of people is for the next day on Report, but for the moment we can give a signal to businesses across the country that the House of Lords, at least, is focused on providing a degree of certainty, even if the Government are not.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, Amendment 45 is in my name and that of the noble Lord, Lord Purvis, for whose support I am very grateful. We are reaching the last quarter of our time on this Bill in Committee, and we have never touched, in any serious way, the question of services, which make up 80% of our GDP; they are an important part of our economy now and will be in the future. That curious absence of services has prompted this amendment; it is a probing amendment in the sense that I do not think there is any issue between the Government and us on this. We both recognise the importance of it and want to make sure that it is successful, but it is an opportunity for the Government to set out clearly what they intend to do in this area and to bring forward any thoughts they have about how the importance of services might continue, as the negotiations, which are currently with the EU and will return to the other place shortly, progress.

We hear a lot, importantly, about manufacturing and the physical goods that this country makes and imports. We do not hear nearly as much about services, and that is curious. It is important to be clear why that is. Direct trading of services across borders by purchasing or selling architecture, legal opinion or forms of insurance is a well-known measure of activity. This area has grown considerably and the UK economy is strong and strengthened by that. Business services, financial services and other aspects such as travel, including the tuition fees of foreign students who study in the UK, transportation and telecommunication information services make up the huge proportion of our activity in this area. Most trading of this type is with the EU. It is over 50% if Switzerland is included in the figures, but we also have considerable trade outside the EU and we should not forget that.

It is also important to recognise that, in some senses, exactly how this takes effect is hidden from plain sight. I should explain: we know a lot about the physical movement of things like car parts, because we are told, time and again, that the issue in modern-day trade is not so much the individual purpose of creating a particular object, machine or type of equipment; it is the assembly of the various parts. In the case of a car, bumpers, injectors and all sorts of things that go into the modern car cross the channel several times before being assembled, either here or elsewhere, in the final product, which is then sold. We are concerned about that and much of the Bill has this as part of its process, but the point is that this is not just about physical material. There is also a question about knowledge, intermediate input, services, financing and having the right people in the right place, which is necessary for this complicated pas de deux to work.

The single market, which underpins all this in the EU, plays a pivotal role in facilitating this process of increasing specialisation, because it includes as its basic point—this is derived from consideration within the GATS treaty under the WTO—the four freedoms for moving goods, services, capital and people. Hence, a focus on manufacturing the individual item sees only part of the story.

Why do services not feature more strongly in our discussion and debate? There are three reasons. First, services agreements are a relatively new form of trade negotiation. There are not that many around. They are difficult, because you have to negotiate and consider individual aspects, often regulatory and non-tariff barriers, to the way the trade happens. They cannot always be done by fiat from government; they have to involve large numbers of other companies and organisations. They are bureaucratic; they are not necessarily all organised from a particular aspect in government, such as BEIS or the Department for International Trade, because regulators and government departments will be involved in legal services and other areas. Finally, because different regulations belong to different bodies, it is more difficult to trade one sector, as it were, against another. There is not really an easy route through this, and that may explain why it is often left to the last.

I welcome the Government’s response on that, but it is a cynical response. We have done so well in services trade in recent years and our performance is one of the strongest in the world. We have more to lose in trade negotiations that focus on individual hardware and machinery parts if they do not also make sure that those trading in legal and other services are considered as well. We are in a quandary. We can argue the easy option of a goods-only agreement, because the rules for that are relatively straightforward: the tariffs are already very low anyway and we are not talking about substantial changes to the way in which we would do it. But if you include services then we are talking about a whole range of new activities, new players and the offering of new types of discretion. I will wait to hear the Government’s response, but it could be argued that we in Britain are not yet ready to engage with that successfully.

In that context, the opportunity is there for the Government to respond positively on how we are going to take forward this issue and how important it is to make sure that we get it right, and to make sure that we in this country do not suffer simply because the dog that did not bark—services—is still not barking. I beg to move.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for moving the amendment, which I happily signed. It will be no surprise that we on these Benches favour, still, the United Kingdom continuing as part of the single market of the European Union. However, in many respects this is a mitigating amendment on the basis that, if we are to leave the European Union, the most significant non-financial services sector for the British economy is, as the noble Lord, Lord Stevenson, said, the services sector. It is right, therefore, that we give proper focus to it in this Bill.

Up until this point, we have discussed the emerging elements of the continuity agreements. We have seen so far only one published, that of Switzerland, and are awaiting others. In the continuity agreement, Switzerland has components on services, and guarantees free movement of people for those providing services. That is beyond the elements in the immigration White Paper and in the withdrawal agreement from the European Union, and it is beyond what the Government have said. There are, however, some indications that the Government recognise that services are critical to the British economy. But it goes beyond that, as do our discussions with Switzerland, which are on the gold market and property.

This affects all parts of the United Kingdom. The UK is more dependent on services, especially non-financial, than perhaps any other country in the world. We export more in absolute terms than any country other than the United States. We have been able to get to that position because we have been doing so within an integrated market of the European Union. In many respects, we in the United Kingdom have been the driving force of the emerging integrated markets in the European Union. It is an irony that, as the architects of this approach to developing the services markets across the European Union to benefit our country, we are going to leave it.

If we are to have a future relationship, it is critical that we focus not only on tariffs and non-tariff barriers but on what is necessary to ensure that we can continue to benefit, at least to some degree, from a services relationship with the European Union. This applies particularly in digital services, as well as in the wider elements of research and development.

Many months ago, your Lordships’ committee reported on this, and in December 2017, in the name of the noble Lord, Lord Whitty, this House had an opportunity to debate the significance of the non-financial services sector to the British economy. Now, we have the Government’s clear position: we will be leaving it. We are choosing to leave an integrated market, which we have led, so how do we focus on some of the component aspects?

In the withdrawal agreement, we have seen some elements of mutual recognition of qualifications and some elements of professional standards being aligned so that those working in the services sector can be part of a wider operation on the continent and with the European Union. However, this is only a very small aspect of the overall need to have a much closer alignment. It requires government honesty: we may well be leaving the single market, but it needs to be clear what very close alignment would look like.

This applies to the discussions taking place this week and next week on the alternative to a backstop. The arrangements for the Northern Ireland backstop were as much to do with the continuity of the services sector for those providing professional and trade services from north to south and south to north as they were with the checking of the origin of goods at a border for tariff purposes. The all-Ireland economy is, by and large, an all-Ireland economy because of services. We are treaty-bound to protect that, so it is very important to have more clarity from the Government on what they expect to see as alternative arrangements to the Northern Ireland protocol if we are to protect the core elements of an all-Ireland services economy.

We know that we cannot rely on a much wider alternative, which is the WTO. In its last set of discussions, it could not even agree on a communiqué about taking forward future services agreements on a WTO basis. We know that the USA and China are in dispute not only on trade in goods, but also on services, and we know, as the noble Lord, Lord Stevenson, said, the complexity of even the European Union introducing services components to third-party trade agreements. If we know that it has been difficult, with the UK as the driving force, to secure agreements with other third countries, why do the Government think that it will be easy for the European Union to do it with us?

This amendment, therefore, is very important. I hope that it will allow the Government to be much clearer, because the services sector of the United Kingdom has, in many respects, been the driving force of growth in the UK, one that we cannot afford to put at risk.

--- Later in debate ---

[Lord Stevenson of Balmacara]

By this stage of the proceedings the Minister is usually tearing up her notes and packing her bag while the team are leaving the Box, and the Committee is allowed to descend into a sort of torpidity at the end of a long and heavy day—day four, in this case—while we heave a sigh of relief. However, I have always wanted to table an amendment about the commencement of a Bill because it is something that we always forget to look at.

I was mulling this over a few weeks ago and thinking about what aspects of commencement one could look at. It is all very straightforward, although Clause 7(1) has a strange thing where it says:

“Regulations under section 1(1) or 2(1) may … make transitional, transitory or saving provision”.


I was wondering what on earth they were and thinking about a suitable probing amendment when I happened to run into the noble Lord, Lord Hannay, who said, “I’ve been thinking about commencement and we ought to do something about it”. Out of that we hatched this wonderful amendment, which is the last one that we are going to move tonight, and I hope the Committee will accept it as it stands. It provides a sensible and clear exposition about what position Ministers should be in before they begin to implement these procedures. It is very simple, inserting a new clause further to Clause 15(2), which says that the powers that would otherwise,

“come into force on such day as a Minister of the Crown may by regulations made by statutory instrument appoint; and different days may be appointed for different purposes”,

Those are two quite clear conditions that have to be met. I beg to move.

[Lord Purvis of Tweed]

My Lords, I am happy to contribute to the successful realisation of the noble Lord’s ambition to have an amendment on commencement.

I want to make two final comments because I know the Committee has been working hard in offering scrutiny to the Bill, but before I do so I wish to thank the Ministers, and indeed the whole team, who have tried to answer on what was on some occasions an impossible situation. Earlier the noble Lord, Lord Bates, aptly commented on how fast things have been moving, and I think the Ministers have had a degree of sympathy from the Committee. However, this is serious. As the noble Baroness, Lady Neville-Rolfe, said, businesses need urgency as they operate. They need urgency in their day-to-day practices but also when it comes to knowing what the Government’s position is.

In advance of the next stage, if there is one, it is helpful that all the usual channels are here. I do not think the Committee needs any reminding of the decision of this House, very clearly stated, that greater information is needed on both the Government’s policy and intentions on how it sees trade agreements being put in place, as well as the relationship with the devolved Administrations. If that is not forthcoming, the House has sent a clear signal that there will not be a Report stage. However, on the basis that there will be, the information that is needed on the current position on the intended trade agreements needs to be forthcoming. There also needs to be clarity on—if we are going to be crashing out on WTO rules—the position of operating on non-certified WTO rules.

The relationship with the devolved Administrations, while a little clearer, needs more fleshing out. This is not just about constitutional courtesies with the Scottish and Welsh Parliaments and Northern Ireland authorities. Trade agreements could disproportionately affect parts of the United Kingdom, which will affect livelihoods and public services in those areas. They need to be not just consulted, but involved. Contrary to the Government simply wanting continuity agreements for trading relationships, we also want to see the rolling over of the same amount of parliamentary scrutiny that the European Parliament would afford trade agreements, which this Parliament will be denied unless this Bill is amended.

Finally, we need to be looking forward to the future. The noble Lord, Lord Lansley, and others, have made very constructive contributions. If we are to have a customs arrangement—which, if it covers the majority of our trade with our biggest market, will be a customs union—then the clarity about how that will be conducted will be important. While we are at the end of the Committee stage, I hope that the Minister has received strong signals that there are still questions that need to be answered. Those answers need to be forthcoming before this House will consider the Report stage.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Committee: 1st sitting (Hansarad): House of Lords
Monday 21st January 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we intend to exercise a considerable amount of scrutiny on the issues in Committee, but—as hinted at by the Chief Whip in his elegant speech, in which he kindly named me—we will also raise other points not specifically relating to the original narrow focus of the Bill but fitting more closely into the debate we have just had. I make no apology for that, because it is important that we probe the Government on their longer-term intentions and receive some assurances about where the particularities of this Bill fit in relation to that.

In moving Amendment 1, I shall speak also to Amendments 2, 3 and 100. This first group relates to the provisions in Clause 1(1) to set out the arrangements under which the Government can sign up to, and through regulations make changes to, the Agreement on Government Procurement. The GPA is an agreement between the EU and currently 18 countries to open up their public procurement markets, operating under a WTO framework. The Government intend that the UK should remain part of this system, becoming an independent member, and the Bill provides delegated powers to facilitate this, should it be required.

We have a number of concerns at that, some of which, in Amendment 1, are largely connected with the question of consultation about this process. The GPA itself is not a particularly interesting or informative document, but it does attempt to do something that I think all Members of the House would regard as a very good process and something we should support. It attempts to level the playing field for those who bid for and get government procurement contracts. It therefore makes it fairer, as all those involved in the GPA are able to bid for and secure work for their workforces, to earn money and to make profits out of that. In a sense it is an economic growth scheme founded on work that has been going on for some time trying to identify why relatively small numbers of companies bid for contracts offered by government under this system. I am sure the Minister, when she comes to respond, will say the UK is at the forefront of trying to open up its procedures; I know previous Ministers have also been concerned that we should have an open playing field and an open market here, so anything that can do that must be good and we would support that.

However, it is important that it is done in a process that reflects the wishes of the people more generally. It is therefore a little unfortunate that the Bill does not spell out the need for consultation not just among those directly involved, particularly local authorities and those groups, but also the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, when it is resumed, which have a considerable amount of contract work going forward. So this is a widely spread requirement that the GPA will open up for broader discussion and debate and, I hope, greater access to it; it is reciprocal in the sense that it should also make it available to UK companies. Before we make regulations, we should encourage much more consultation to make sure that the regulations are appropriate and that the benefits and interests of those concerned are taken into account.

Amendments 2 and 3 are largely taken from comments made in the report referred to in earlier debate on the Select Committee on the Constitution in its report in October on the Trade Bill, which raised a few issues on how the regulations will be framed and brought forward. The starting point is that these regulations will be enacted with powers under the provisions modifying retained direct EU legislation, but the committee pointed out that there was some variation in the wording. I do not wish to quote the committee directly, but the conclusion is that the Government were recommended to include in the Trade Bill the definitions of retained direct principal EU legislation and retained direct minor EU legislation as used in the European Union (Withdrawal) Act 2018, and these make the substance of our Amendment 2.

Amendment 3 follows the comment made in the next part of the report that the Bill’s Explanatory Note states:

“Parliamentary approval for ratifying the UK’s membership of the GPA will be sought separately from the powers in the Bill itself and will be done in accordance with the procedures set out in the Constitutional Reform and Governance Act 2010”.


However, there is some doubt about exactly what the sequencing of that should be and which particular regulations and powers would relate to which. The suggestion therefore made in our Amendment 3 is to restrict the timing and quantum of regulation to a point in the system where previous approval has been received from Parliament under the CRaG Act.

The final amendment relates to what type of regulation should be required. The comment in the Constitution Committee’s report is that the regulations should be subject to the affirmative procedure and our Amendment 100 would put that in clear prose on the face of the Bill. The Bill itself may have been due to be amended by the Government when they came to respond to the Constitution Committee report, but so far I have not seen those amendments so we have aided them by tabling them and I commend them to the Committee. I beg to move.

[Lord Purvis of Tweed]

My Lords, I support these amendments and will speak to Amendment 100, which is in my name and that of the noble Lord, Lord McNicol. The Committee will be grateful to the noble Lord, Lord Stevenson, for tabling these amendments and allowing us the opportunity of looking in a little more detail at some of the consequences of the Government’s intention to, in effect, join an institution by virtue of leaving it. It is not automatically as straightforward as the Government may suggest. My understanding is that the approval in principle that has been made for the UK to join the GPA in its own right, separate from being a member of the European Union, has a number of riders attached to it that we will discuss when we come to Amendment 4A in my name. But on the strength of the amendments tabled by the noble Lord, one core element of consultation will now be important.

I took the opportunity to look at the schedules to the Canadian annexes relating to its membership of the GPA. It was interesting. One annexe specifies the 82 federal bodies; there are further annexes for each of the federal provinces with the organisations, bodies or elements of government that are included at a provincial level and the exceptions that they all bring to the GPA agreement. There is no automatic consistency across Canada because it is a federal system. In many respects, it is a model of what the United Kingdom’s could be when it comes to procurement policy and procurement agencies.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, this group of amendments plays back themes that we have already discussed in the first and second groups, so I will not spend much time on them.

Amendment 6 suggests that additional consultation with relevant stakeholders would make it easier to understand what the process is in the clause. Amendment 7 tries to pick up the point which was made in a number of committees of your Lordships’ House and was raised in the other place when this issue was discussed. It replaces “appropriate” in line 16 on page 2 with “necessary”, because it implies that it is not a judgment on a passive basis of what may be considered appropriate, which may be a variable, and it has a particular purpose. I hope the Minister will respond to that.

Amendment 11 again came from the Constitution Committee’s comment, although it has not been picked up elsewhere, that it would be helpful to insert a refining phrase into the documentation related to whether legislation that is retained EU law might be better defined. We touched on this already. There was a concession that, although it was not thought to be strictly necessary in an earlier phase, it was appropriate that that phrasing could be adopted. I wonder whether that will also be the case here. I look forward to hearing the debate. I beg to move.

[Lord Purvis of Tweed]

My Lords, I support these amendments. They make eminent sense. I shall speak also to Amendment 101 in this group which, in essence, suggests that in moving forward on these agreements the CRaG process is not the most appropriate; and that there is a better way forward by ensuring a more appropriate role for Parliament, and for Parliament to have greater knowledge of why an agreement should be approved. In many respects, this is now becoming fairly standard procedure in other countries, where the Government give much greater information to Parliament about why agreements should be ratified and where each House of Parliament has a greater role on the basis of scrutiny by committees. I am convinced that when it comes to complex, deep and comprehensive agreements, the CRaG process will be shown not to be the appropriate route, and we will need to decide another. This Bill is a very good basis from which to start on a more transparent and open process.

As I mentioned earlier in the debate on whether the House resolve itself into Committee, our agreements amount to 60% of UK trade and are therefore highly significant. The complexity of trade agreements now—they go far beyond simply a discussion of tariffs and the financial element, and have wider impacts on domestic policy, as the noble Lord, Lord Kerr, mentioned—means they require a different form of engagement with Parliament. It starts with information and with greater understanding of the consequences of these agreements. It will no longer be acceptable that agreements such as these can be made under traditional prerogative power for Parliament simply to approve without there being a more meaningful process. That is the intent behind the amendment. It is meant in a positive manner. I believe it is framed in a better way than CRaG, and I hope it will gain support.

United States Tariffs: Steel and Aluminium

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Tuesday 13th March 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble Baroness, Lady Fairhead, for repeating the Statement. This is my first opportunity to debate her at the Front Bench, and I am looking forward to working with her on the international trade Bill when it reaches your Lordships’ House.

We have, over the past year, heard regular statements about problems affecting our steel industry, although this announcement of tariffs on steel and aluminium imports, blatantly aimed at protecting US producers, must rank as one of the worst because of its implications more widely for free trade.

The House of Commons Library briefing paper on the steel industry in the United Kingdom 2016 suggested that the steel sector accounted for £1.6 billion of UK economic output, which is about 0.1% of the UK economy and 0.7% of our manufacturing activity. It has about 600 businesses, and 32,000 people are employed in the sector. The UK is the 18th-largest steel producer in the world, the fifth-largest in the EU after Germany, Italy, France and Spain. Approximately 15% of 350,000 tonnes of steel was exported directly to the United States in 2017.

We should extend our concern and support to the employees of British steel firms and their communities, which must be very worried about this questionable and ill judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the economic hit that will be felt, particularly in communities outside London?

I have three further questions for the Minister. First, this announcement was not unexpected. It followed a series of pledges from President Trump to take what he calls “tough and decisive action” on perceived threats to the US national interest and to domestic producers as a result of international trade competition from overseas. It is very much in line with his “America first” platform. When did the Government become aware that President Trump was going to impose tariffs on imported steel and aluminium? What representations did the Government make to the White House prior to the announcement, and what assurances were sought that these tariffs would not be applied to UK exports?

Secondly, earlier this year, President Trump announced tariffs on imported washing machines and solar panels to give a boost to US producers in these sectors. President Trump also imposed a 30% tariff on imported solar cells, and last year the Department of Commerce sought to impose tariffs of up to 292% on imported narrow-body, medium-range jets until the US International Trade Commission accepted the arguments made by Bombardier and others and overturned that decision. What other sectors of the economy are the Government concerned about? What representations are they currently making to ensure that the UK will be able to export to the United States in the near term without facing unfair tariffs? For example, the President has mentioned additional protection for intellectual property. Given the strength of our creative industries, have the Government taken up that issue in particular?

Finally, the Secretary of State announced the establishment of a US-UK Trade and Investment Working Group in July last year, a group that has met twice since then. Given that the President has said he would welcome a trade war and thinks America would win it, what discussions have been had about steel, aluminium and the other new tariffs at these meetings? What assurances have been sought from the US Government about exemptions for UK exports in any free trade agreement that might be in consideration post Brexit?

[Lord Purvis of Tweed (LD)]

My Lords, we too are grateful to the Minister for repeating the Statement. Just at the time that we are loosening our ties with our largest single integrated market in the European Union, we see the next bilateral largest market in the United States moving towards a protectionist tone. Over recent months we have been repeatedly counselled by Ministers that we should look at not just the rhetoric of the United States President but at the actions. Now it is quite clear that there are repeated actions which are contrary to the interests of the British economy. The announcement of the Secretary of State today and of economic advisers last week are clear.

When I was in Buenos Aires as an observer at the ministerial conference of the WTO, the US left without a communiqué being signed. These worrying trends are clear to see. Last year, the Secretary of State, Dr Fox, said, while in the US, referring to the UK/US relationship:

“Firstly, we must lead by example, and work to encourage our trading partners across the world to support, and adhere to, the rules-based global trading system”.


Will the Minister therefore confirm that it is the view of Her Majesty’s Government that this action by the President is clearly contrary not only to how strong allies with a so-called special relationship should act but to international law?

We also know that in the presidential proclamation the President said that there would be a mechanism for reviewing the decision on impairing US national security if the countries concerned showed that their actions would not impair that national security. However, in recent discussions with the US, the EU and Japan could not discern on what basis these issues would be considered. What is Her Majesty’s Government’s view on these blackmail conditions that President Trump would seek to impose on allies for there to be adjustments to, or the removal of, these tariffs?

We have heard reference to the working group, which I have raised in this Chamber before. Did officials on the working group inform us that there was a likelihood of these tariffs being imposed on the United Kingdom? The Secretary of State indicated that he was due to visit the US and had no doubt planned to discuss the progress of the working group. What status does the working group now have given that we are clearly in a trade dispute?

Finally, we and our allies around the world continue to believe in free trade, even if the United States does not. How will we seek redress within the WTO mechanisms? Will the Minister reassure the House that we will be in precisely the same position as the European Union if we appeal for redress under the WTO mechanisms? This trend of protectionism cannot be in the interests of the United Kingdom. Clearly, our interests lie in standing shoulder to shoulder with our European Union allies on this issue.