United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

[Lord Naseby (Con)]

My Lords, I shall resist the temptation to follow the noble Lord, Lord Purvis, in what he has said. However, I reflect that in the other place I was responsible for, and chaired most of, the Maastricht Bill, with 500 amendments and 24 days of debate. Even there, I think that I would have been really stretched to have enabled what is labelled here as a new clause to be put into the purpose of Part 1 on an introductory basis.

I understand the feelings of Scotland, Wales and Northern Ireland. I had the privilege of being Parliamentary Private Secretary in Northern Ireland, and I was a local government leader. Of course they feel strongly, as I do about local authorities and the Covid situation. Nevertheless, it is quite clear that the purpose of Part 1 is

“the continued functioning of the internal market for goods in the United Kingdom by establishing the United Kingdom market access principles.”

It then lists what the mutual recognition and non-discrimination principles should be.

If the Opposition and those who do not like what is in Part 1 want to make a point, there is a case for having a small amendment including just the words “and services”. I see merit in that because, as I said earlier, that seems to have some validity, but to suggest in the introductory part, under “Purpose of Part 1”, that we have to await a statutory instrument

“containing regulations under section 56(3)”,

et cetera, is extraordinary. I cannot believe that there have ever been many Bills where that sort of new clause has been inserted into the introductory part.

Therefore, I say to my noble friend on the Front Bench that there are valid questions arising from this alleged new clause to be asked in the right place, but this is certainly not the right place in this Bill.

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

My Lords, as the noble Lord, Lord Dunlop, said, this debate is a sort of appetiser for the main course to come in later groups, when we will dig much deeper into the right approach to ensuring that our current well-functioning internal market continues after the transition period ends and that we can manage the necessary and inevitable policy divergences that we need across the United Kingdom and should welcome.

The noble Lord, Lord Bruce, said that the key questions are why we need the Bill at all, let alone now, why the Government are ignoring the evident successes of the co-operation and constructive progress which have been hallmarks of the common framework programme, why threaten the devolution settlement so directly, and what it is about the top-down approach that the Government wish to introduce that is so attractive, given the huge risks to devolution. Those are very important questions and I look forward to hearing what the Minister says when he comes to respond.

The noble Baroness, Lady Neville-Rolfe, said that she recognised the value of proposed new subsections (1) and (2) in the amendment but was worried that proposed new subsections (3) and (4) made it a wrecking amendment. I do not think that it is. Indeed, I make the same points about the need for a pause before we implement in my Amendment 178, which is in a later group.

I hope that the Government will think very hard about the clear message that seems to come from this debate. We need to carry on down the road well travelled in recent years, encouraging the devolved Administrations to continue to collaborate, to work together with mutual understanding until agreement is reached, and then to go further so that there is agreement on all the issues that need to be agreed and a way of resolving any issues that are left over. This is the way in which we make progress—not by imposing a top-down solution. Indeed, anything else risks destroying the complex but pretty successful devolution settlement that we currently enjoy.

[Lord Callanan (Con)]

My Lords, Amendment 4, tabled by the noble Lords, Lord Fox and Lord Purvis, would prevent the market access principles applying by the end of the transition period. As my noble friend Lady Neville-Rolfe pointed out, that would produce a considerable delay in providing certainty to businesses that free trade can continue within the UK’s internal market.

I heard the noble Lord, Lord Bruce, query my assertion at Second Reading about business support for these measures, but over 270 businesses and organisations responded to the public consultation on our proposals and, overwhelmingly, businesses supported our approach. Particularly as they look to recover from the impacts of Covid-19, businesses need certainty, and that is what this Bill, as drafted, seeks to provide.

I repeat that the aim of the Bill is to ensure that there are no internal barriers to trade within the UK, while respecting the devolution policies. All devolved policy areas will stay devolved. The proposals ensure only that no new barriers to UK internal trade are created. The Bill aims only to procure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for those Administrations. The Bill ensures that these local policies can be pursued while, at the same time, maintaining seamless trade in the UK internal market.

The noble Lord, Lord Bruce, asked me specifically about barley, and indeed the noble Lord, Lord Purvis, has written to me on the same subject. We believe that this provides a good example of the risks that businesses could be exposed to. Food produce placed on the market must comply with rules on pesticide maximum residue levels. These are currently set at EU level, and so are consistent across the United Kingdom, meaning that food can be traded across the devolved Administrations. This is an example of a policy area which will be devolved after 1 January. At the moment, all Administrations are supported by the same regulator—the Health and Safety Executive. That will, to a certain extent, aid consistency, and we are of course committed to working closely with the devolved Administrations to jointly agree consistent maximum residue levels across Great Britain.

However, without the Bill’s mutual recognition provisions, there would be the possibility of divergent decisions being taken, which would then introduce new trade barriers on food between different parts of our country. Depending on any particular decision, this could affect any agricultural or horticultural produce that has been previously treated with pesticides. For example, different residue rules might mean that it is not lawful to sell in Scotland barley grown in England.

More broadly, without the principles set out in the Bill, harmful divergence would be possible, in spite of the important protection provided by industry standards. That is because industry standards are voluntarily agreed between private economic actors and so cannot provide the same certainty for businesses and investors as the legislative principles set out in the Bill.

The consent process proposed in the amendment would remove that certainty and make operating conditions for businesses across the UK dependent on a number of fairly onerous conditions. These conditions include matters that would cut across ongoing collaborative work with the devolved Administrations. I say to the noble Lord, Lord Bruce, that these include the common frameworks programme and the intergovernmental relations review, both of which the Government are fully committed to pursuing. Indeed, in the next group, we will examine the common frameworks principles in more detail, and my noble friend Lord True will explain our position in more detail.

However, I assure noble Lords that the Government have already committed to appropriate consultation with the devolved Administrations on these matters. Furthermore, we are engaging them in all suggestions for how practically to improve intergovernmental relations, including both the machinery, such as dispute resolution, and the way in which these joint forums are run.

The noble Lords, Lord Fox and Lord Purvis, asked a question about dispute resolution. I can tell them both that the office for the internal market will support existing arrangements for dispute resolution. Its non-binding reporting will ensure that evidence-based dispute resolution takes place in line with the current memorandum of understanding on devolution. The OIM’s reporting will be available to all four Administrations and legislatures on an equal and purely advisory basis. It will provide information and support separate political processes to resolve any disagreements and enable intergovernmental engagement. The amendment would cut across all ongoing collaborative work with the DAs and remove our ability to give businesses the certainty they need at this time.

The noble Baroness, Lady Randerson, said that the Government would override the rest of the UK when legislating for England. That is certainly not our intention. The nature of our constitution is that the UK Parliament will be able to legislate over existing legislation, but the Bill aims to treat all domestic legislation in the same way. Her Majesty’s Government will be cognisant of the importance of market access principles in supporting any extra legislation.

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

My Lords, this has been an excellent debate, brilliantly introduced by my kinsman, the noble and learned Lord, Lord Hope of Craighead, and with some other excellent speeches, particularly from those who were members of your Lordships’ Select Committee and, of course, the chair, my noble friend Lady Andrews.

The weight of the arguments deployed in this group and the virtual unanimity of views expressed from all sides of the Committee were to be expected, but Ministers might not have expected to be offered a route out of the mess that they have got themselves into. If common sense prevails, there is a win-win here. As the noble Lord, Lord Dunlop, said, the Bill currently has things the wrong way around. The Government need to signal tonight that they will take away the amendments in the name of the noble and learned Lord, Lord Hope of Craighead, and work with him to find a structure that better delivers the aims of the Bill.

They should use this legislative opportunity to encourage the completion of the current work on the common frameworks, to encourage the process to cover the remaining outstanding issues and to anticipate future needs. They should then draft an effective safety net for the Bill, based on mutual recognition and non-discrimination, while, as the noble Lord, Lord Vaux, said, having regard to subsidiarity and proportionality. They should ensure that the current informal processes have a light-touch underpinning, with a regulatory framework that commands trust and the confidence of the devolved Administrations. If they do this, we will happily work with and support them.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, it has been a most fascinating debate. I endorse what the noble Lord, Lord Stevenson, has just said. While I sadly cannot claim to be his kinsman, I thought the opening speech by the noble and learned Lord, Lord Hope, was a masterclass in how to present a case. That does not necessarily mean that the Government accede to the case, but it was entirely clear. I also pay tribute to those members of your Lordships’ Select Committee on common frameworks who spoke. Their experience is obvious and the work of that committee is important. I believe it will shortly meet or hear from my honourable friend Chloe Smith.

Many businesses welcome this Bill. They welcome it on the basis that, after the end of the transition period, they hope, expect and require that they will be able to operate in a period of certainty, not buffeted by any unexpected or unreasonable developments. I respond to the general tone of the debate by saying that it is, of course, the Government’s intention—it always has been and remains so—that the functioning of the UK internal market will be driven by co-operation with the devolved Administrations. The market access proposals here are designed not to replace but to complement the common frameworks; I know that is a phrase I have used before. The common frameworks are the key. They support coherent policy-making across the UK by setting out terms of engagement between the UK Government and the devolved Administrations as well as, where appropriate, common strategic goals and policy approaches.

The Government remain committed to the common frameworks programme. As many noble Lords have said, it is progressing well. The UK Government and the devolved Administrations continue to co-operate closely as we jointly develop the programme. Yes, progress overall has been slower than we would have liked, and I acknowledge the effect of the resource constraints driven by the response to Covid, and the need to prioritise planning in advance of the end of the transition period. However, all parties remain committed to the programme. At a recent JMC (EN) meeting last month, both the UK Government and DA Ministers reconfirmed their strong commitment to it.

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Ever since the establishment of devolution, constitutional experts have warned about its flimsy foundations. However, it has continued to operate, largely on the basis of good will. This Bill is not offered in a spirit of good will. It also illustrates how easy it is to dismantle the process of devolution. My own experience of Welsh devolution—as a Member of the Welsh Assembly, as it then was; as a Welsh Minister; and, in this place, as a UK Government Minister—has brought home to me the importance of the detail of devolution powers. Welsh devolution powers came slowly and piecemeal, and only in the most recent Government of Wales Act were they given true coherence. I say to the Government: hollow out those powers now at your peril. A large majority support Welsh devolution, and it is cross-party support. There is also, to my regret, increasing support in Wales for independence. If the Government have any common sense, they will leave well alone. They will face renewed uncertainty in Northern Ireland with this, and will continue to face persistent problems in Scotland. They should concentrate on bridging the gaps with the devolved Administrations and not widening them.

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

My Lords, at the end of the previous group the Minister, the noble Lord, Lord True, kindly said that his mind was not closed to further discussion on this issue about common frameworks and how they relate to the Bill. I welcome that. In a sense, the amendments in this group are part of the same debate. I therefore hope that they will also be included in the next-stage discussions, as they are a variation on the theme.

I set out my route map for progress in my response to the previous group and I will not repeat it. However, I endorse the points made by the noble Baroness, Lady Finlay, my noble friend Lady Andrews, the noble Lord, Lord German, and the noble and learned Lord, Lord Hope, particularly their growing confusion about what exactly is in the Government’s mind on this issue. Perhaps the noble Baroness, Lady Bloomfield, coming fresh to the debate, can persuade us that there is indeed a coherent logic to the Government’s position—because it certainly eludes me.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I hate to disappoint the noble Baroness, Lady Andrews, but it falls to me to respond to this debate. I will now speak to the two amendments—Amendment 6 and the consequential Amendment 44—concerned with how UK market access principles, as proposed in the Bill, will apply. I understand that the noble Baroness, Lady Finlay of Llandaff, has tabled these amendments on behalf of the Welsh Government. Accordingly, I would like to begin by thanking the Welsh Government for their positive engagement on this Bill so far. The UK Government look forward to continuing constructive future engagement with the Welsh Government.

As my noble friend Lord True said earlier, we continue to work closely with the Welsh Government to develop common frameworks, in line with the framework principles agreed by the Joint Ministerial Committee (EU Negotiations) in October 2017. I know the Senedd were happy to see the Joint Ministerial Committee provisionally confirm the first two frameworks of the programme on hazardous substances and nutrition. Work continues in earnest to reach further such agreements in the coming months and beyond.

Before I turn to the detail of the amendments, I want briefly to cover the context of the Bill in order to explain the approach the Government took to applying the market access principles. At the risk of repeating the arguments of my noble friend Lord True, now that we have left the EU and as we recover after our fight against Covid, it is vital that we deliver legislation which allows the continuing smooth function of our UK internal market at the end of the transition period. The Bill aims to ensure frictionless trade, movement and investment between all the nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for each Administration. The Bill ensures that these local policies can be pursued while maintaining seamless trade in the UK internal market. There is no question of the UK Government intending to bypass the common frameworks; the Bill is intended to complement them.

The approach we have taken in the Bill will give businesses the regulatory clarity and certainty they want. It will ensure that the cost of doing business in the UK stays as low as possible, and without damaging and costly regulatory barriers emerging between the nations of the UK. With this context in mind, I turn to the amendments. They would, in combination, prevent the market access principles from applying at the end of the transition period. The lengthy process they put in place before the principles can apply, including the need to exhaust frameworks discussions, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. The resulting threat of unmanaged regulatory divergence would not provide the certainty businesses need and could deter businesses that wish to expand and supply customers across the UK. This is not desirable, especially as we continue our recovery from Covid-19.

The amendments would also limit the areas to which the market access principles can apply. Again, this would unduly constrain the scope of the principles and fail to protect the internal market fully. In contrast, the Government’s approach is more comprehensive and ensures that businesses in all sectors can continue to trade across the UK without facing new barriers or discrimination.

The amendments also present a challenge in defining the exhaustion of the frameworks process. In all cases, common frameworks are designed as living arrangements, capable of change by agreement as required. Thus, the process is never wholly exhausted. The new clause also specifies a consultation process with the devolved Administrations and the CMA, or, failing that, a 12-month delay before any regulations can be made specifying areas to which the market access requirement would apply. The Government are already committed to appropriate consultation with the devolved Administrations; however, under the terms of the amendments, the time limits proposed would create unnecessary delay.

The noble Lord, Lord German, asked about the timing of the Bill. Reduced certainty would indeed be a disaster to our recovery from Covid-19. We do not believe that it is acceptable for businesses to have less certainty on trade with their UK supply chain after 1 January 2021 than they have today and have had for centuries. The UK Government are committed to ensuring that the status quo of seamless internal trade is maintained for the shared prosperity and the welfare of people and businesses across all four nations of the UK. Without the internal market, livelihoods would be at risk. There is also the issue of future-proofing the Bill to allow that, for the jobs of the future, mutual recognition will apply across areas that we may know nothing about today, including things such as the artificial intelligence industry.

My noble friend Lady Neville-Rolfe and the noble and learned Lord, Lord Hope, asked whether reference should be made to the common frameworks should be made in the Bill. We already have a statutory obligation to report quarterly on progress on the common frameworks, so there is no need to put this in the Bill as well. Far from being silenced, as the noble Baroness, Lady Randerson, suggested, as she knows, two common frameworks have already been agreed. However, some 38 more have yet to be considered, with only nine or 10 weeks until the end of the transition period. They do indeed provide a very sensible framework, but they remain voluntary. Ultimately, the common frameworks depend on continued co-operation. In spring 2019, the Scottish Government walked away from the internal market project. This legislation is required to provide certainty for business and consumers.

The noble Baroness asked about labelling in Welsh. There is nothing to prevent labelling in Welsh for goods produced in Wales. I was also asked about the use of plastic teaspoons. The Welsh Government can still ban their use, but perhaps not their sale.

For these reasons, and for the uncertainty and confusion that it would generate for businesses and consumers, unfortunately the Government cannot support the amendments in this group and I would ask noble Lords to withdraw or not move them.

United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

2nd reading & 2nd reading (Hansard)
Tuesday 20th October 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, it seems a long time ago now, but I start by thanking the Minister, the noble Lord, Lord Callanan, for introducing the Bill. It was, as many noble Lords commented at the time, a little surprising that he did not cover Part 5, but he may have decided that others would focus on it—he was right. I thank too my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, for their excellent maiden speeches. We welcome them to full membership of the House.

We have benefited enormously from the advice of our Select Committees and our deliberations have been improved by the contributions of their members. I thank everyone, from all groups, who has contributed, and the House authorities and the technical wizards who made it all work seamlessly. It was a long but worthwhile day. It is an honour to wind on what I think will turn out to have been a significant debate.

There is usually little to say about why a Government, especially one recently elected with a huge majority, should bring forward a seemingly routine Bill for Parliament to consider. It would have probably appeared in their manifesto, it would have featured in the Queen’s Speech, and it would have been preceded by consultation, a Command Paper or two and possibly pre-legislative scrutiny—although that, sadly, appears to be out of fashion these days. However, this Bill has left no such traces, apart from a vapid announcement and a pretty token consultation over the summer months.

During the debate yesterday, two rather different narratives emerged. On the one side was an assertion that this was a vital and necessary Bill that was required to ensure that the internal market within the UK worked smoothly with effect from the end of the transition period, with Part 5 tacked on just in case it became necessary to legislate if the joint committee failed to resolve issues related to the complex customs and single market situation in Northern Ireland. On the other side was a feeling that the Bill could not be supported as it stood because not only was it asking Members of this House to be complicit in a proposal to take powers to break the rule of law but it was damaging, possibly fatally, to the devolution settlement, was packed with egregious Henry VIII powers and was full of internal inconsistencies about how and to what effect the single market and state aid rules would operate after the transition period ended.

I am not by nature a believer in conspiracy theories, but the communique issued by the Cabinet Office after yesterday’s withdrawal agreement joint committee meeting makes interesting reading:

“The UK reiterated its commitment to upholding obligations under the Withdrawal Agreement and protecting the Belfast (Good Friday) Agreement in all respects.”


It is hard to accept that the Bill before us is just a cock-up, but perhaps only time will tell. Whatever its provenance, the elected House has asked us to consider it, and that is what we have to do.

Before we joined the EEC, we had a well-functioning internal market. We have now left the EU, and with that decision comes the imminent end of the rules governing the single market. How do we move forward, preserving the best of what we currently have? How do we ensure that consumers continue to benefit as they have in the past because of the way in which strong EU competition and state aid rules protected their interests? We do not believe that the proposition for a top-down, centralised standard-setting system contained in the Bill is right for the modern UK economy. The EU single market rules governed trade in goods and services across members states. They recognised the diverse economic, social and legal contexts of those states and harmonised practice, or set minimum standards, only where it was agreed that it was essential to support the market while observing the important principles of subsidiarity and proportionality. Why are these principles patently not in the Bill? The principles that are there, of mutual recognition and non-discrimination, are good in so far as they go, but they will not prevent local divergence or a race to the bottom on standards.

The sensible way of managing policy divergence within the UK internal market is by continuing to develop a suite of common frameworks; that is, agreed common approaches in areas previously governed by EU law but otherwise within the areas of competence of the devolved Administrations or legislatures. The common frameworks are intended to be agreed by consensus, and surely that is a prize worth waiting for. The UK Government have collaborated on a common frameworks programme for three years; many are close to final agreement, with the remainder being progressed at pace. Given how close we are to agreement, why does this Bill ignore rather than build on that programme? We intend to strongly challenge this approach. The Bill threatens to frustrate the progress made so far and to undermine future trust and co-operation because, to quote the chairs of the Constitution Committee and the EU Committee:

“The Bill provides the Government with powers to alter the competences of the devolved administrations and risks destabilising existing devolution arrangements.”


The Bill also seeks explicitly to amend the devolution settlement to add the design and operation of a “subsidy regime”—it used to be known as state aid—to the list of reserved matters. This has been described as a “power grab”, and it cannot be right for the UK Parliament to press ahead with legislation on an issue which is causing such genuine anger and concern. Again, it is difficult to see what is to be gained by pushing ahead with the Bill when so much needs to be determined about how and in what circumstances the UK wishes to evolve its state aid regime for the future. When we learn that the Government intend to follow WTO rules on state aid after 31 December, we ought really to start worrying. We will suggest that the new UK state aid system be run by an independent regulator with the power to rule against illegal subsidies, taking an evidence-based approach to deciding when a subsidy is harmful or distortive. The OIM will not work unless it is independent, trusted and supported across the UK.

My noble friend Lady Hayter has outlined our approach to the CMA, and I repeat her call that the CMA’s present structure is inadequate, not simply because it fails to represent the four nations but because it lacks a clear duty to place consumers at the heart of its work. Competition is undoubtedly an important way of avoiding consumer detriment, but it is not, and never will be, an end in itself.

As I have hinted, most of the speeches in this Second Reading debate have focused on the egregious Clauses 42 to 47. Despite amendments to the Bill in the Commons, it has not been improved by the additions made and the arguments put forward yesterday by a huge range of speakers from all parts of your Lordships’ House were comprehensive and utterly convincing. As my noble and learned friend Lord Falconer and others reminded us, the tensions inherent in the protocol on Ireland/Northern Ireland were not hidden but were apparent from the outset. The breach of international law has been entered into knowingly. The Bill strikes at the heart not only of the protocol but of the withdrawal agreement. It could pose a threat to the maintenance of the Belfast/Good Friday agreement. In bringing forward the Bill, the Government alleged that the EU had not been acting in good faith, but they have not disclosed any evidence that it has acted in bad faith.

The government amendment in the other place does not alter the Bill’s fundamental incompatibility with the withdrawal agreement. The Government’s pre-emptive action has placed the United Kingdom in the wrong. The Bill has damaged the United Kingdom’s international reputation as a defender of the rule of law. As my noble and learned friend said yesterday, we will invite the House to remove Part 5 of the Bill neck and crop, to use his colourful language, at the earliest opportunity, and we hope that thereafter we can work with all parts of your Lordships’ House so that the House can do everything that it legitimately can to ensure that Part 5 remains removed permanently.

The amendments to this Bill put down by the noble and learned Lord, Lord Judge, and by the noble Lord, Lord Cormack, are supported by this side and, as far as I can judge, by the vast majority of your Lordships’ House and by the country at large. If moved, we will support them. I expect that the Government will be humiliated by the size of the majority against them, and a message will go out to the EU and the world that at least this House has standards and principles that others can depend upon, even if the present Government have not. When the history of these troubled months comes to be written, it will not be kind to the current Prime Minister and his Cabinet.

Trade and Agriculture Commission and Trade Remedies Authority

Lord Stevenson of Balmacara Excerpts

Thursday 15th October 2020 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

Decisions on financial privilege are taken by the Speaker, following clear parliamentary procedure. The Government do not have any input into this process.

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

My Lords, after the Trade Bill receives Royal Assent, the Secretary of State will have the power to appoint the TRA chair and its non-executive directors and approve the appointment of the TRA chief executive officer, all without independent scrutiny or parliamentary approval. How do those authoritarian powers protect the TRA’s operational independence and ability to make impartial assessments, as required by the Bill?

[Lord Grimstone of Boscobel (Con)]

My Lords, we will be debating these matters during the Trade Bill Committee this afternoon, when I will cover the topic in more depth. However, I can assure the noble Lord that, in appointing people to the TRA board, we will strictly adhere to the code on public appointments and make sure that people who are appointed are all completely fit for purpose.

Trade Bill

Lord Stevenson of Balmacara Excerpts

Committee stage
Thursday 15th October 2020 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I join the noble Lord, Lord Rooker, my noble friend Lady Bowles and the noble Baroness, Lady Ritchie, in favouring transparency, in particular for its salutary effect on the independence of a body such as the Trade Remedies Authority. I say that after looking at the report from the Select Committee on the Constitution, which is hot off the press. It speaks with real frustration when it says:

“We remain of the view that the Bill’s skeletal approach to empowering the Trade Remedies Authority is inappropriate.”


The committee points out that the TRA must have regard to guidance published by the Secretary of State but says, quite accurately:

“There is no further indication of the content of such guidance.”


It emphasises that

“it is not clear why, more than two years after the previous version of the Bill was introduced, the functions and powers of the Trade Remedies Authority cannot be set out in more detail in this Bill.”

So I think we can all agree with the underlying purpose of the amendments tabled by the noble Lord, Lord Rooker, and others that focus on trying to flesh out the contents of the Bill so that this House, and the other House, have a clue about what exactly we are signing off on.

Transparency is particularly crucial when it has direct implications for consumers, especially where safety is a concern. I am sure that is the logic behind the powers of the Food Standards Agency to make disclosures; I would like to see that logic carried over into the TRA. However, as my noble friend Lady Bowles identified, we must recognise that the TRA will be drawn into a wide range of industry sectors, where revelations may well have no safety implications and might be commercially sensitive. So, like my noble friend, I would like a more comprehensive set of criteria than those in the amendment as drafted. I say this in case the noble Lord, Lord Rooker, decides to bring the amendment back on Report. I recognise that, in Committee, we are discussing the principles of an amendment and not the precise wording. I am sure that none of us wishes to discourage applications to the TRA when justified, and nor would we want it used as a weapon of unfair competition. So getting the language right is important, and it is something that could be addressed in a further drafting exercise.

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

My Lords, I thank my noble friend Lord Rooker for his very good probing amendment. He has a habit of picking up on issues which, on first sight, seem not to be mainstream—but he is absolutely right that this is important, and I think it will be of long-lasting concern.

We believe that the creation of the Trade Remedies Authority is both necessary and welcome, but we are worried that, as presently constituted, the TRA lacks the stakeholder engagement or parliamentary oversight and accountability that would give it the visibility and independence that it needs. To this list, thanks to my noble friend Lord Rooker, we should add the question of transparency. It is up to the Minister, when he comes to respond, to explain how independence and accountability will be achieved without the TRA having the power to publish such information as it sees fit. I look forward to his response.

[Viscount Younger of Leckie (Con)]

My Lords, Amendment 80, in the name of the noble Lord, Lord Rooker, seeks to provide additional powers for the Trade Remedies Authority to publish information that it holds and advice it provides to the Secretary of State. This was not an amendment raised during the passage of the 2017-19 Bill, so it is interesting that he has chosen to raise it now. However, I fully recognise his desire to ensure that the TRA is impartial, objective and transparent, and I appreciate the opportunity to debate this aspect briefly. As I have said, the Government share these objectives. As can be seen from the trade White Paper that we published in 2017, they have been our guiding principles in establishing the TRA as an independent body. They are at the very heart of the trade remedies system set out in the Taxation (Cross-border Trade) Act 2018 and in the Bill.

The role of the TRA is to gather and assess information from manufacturers, businesses and others to establish whether there is evidence that trade remedy measures are needed to protect domestic producers from injury caused by unfairly traded imports. The TRA’s decision on whether to recommend the imposition of measures will be dictated solely by the evidence available to it, in accordance with WTO rules, as implemented into the United Kingdom’s own legal system, and nothing else.

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Moved by

[Lord Stevenson of Balmacara]

81: After Clause 6, insert the following new Clause—
“Board of Trade Appointments
Appointments to the Board of Trade may only be made—(a) following the recruitment process set out in the Governance Code for Public Appointments,(b) under the supervision of the Commissioner for Public Appointments, and(c) after appointees have appeared in front of the Select Committee for International Trade of the House of Commons.”

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

My Lords, this group covers a lot of ground, including some more discussion on the Trade Remedies Authority, on Board of Trade appointments and on trade advisory groups. In rising—not literally—to move Amendment 81, I shall speak also to the other amendments in my name and that of my noble friend Lord Bassam.

I think that we were all surprised and somewhat shocked at recent appointments to the Board of Trade, but the key issue here is accountability and transparency around appointments to such important bodies. Amendment 81 seeks to establish a public process for board of trade appointments, including advisers to the board. When the Minister comes to respond, I would like him to explain why such appointments do not follow the recruitment processes set out in the Governance Code for Public Appointments, why they are not made under the supervision of the Commissioner for Public Appointments and why prospective appointees —and certainly the senior ones—do not appear in front of the International Trade Select Committee.

Amendments 83 and 106 seek to broaden representation on the trade advisory groups and the TRA. Over the summer, the Government, rather surprisingly, cancelled all their previous arrangements for discussion about trade and launched 11 new trade advisory groups

“to support the UK’s ambitious trade negotiations.”

Apart from the agri-food trade advisory group, there is a considerable lack of wide representation, particularly for the trade unions, which Amendment 83 seeks to address.

Amendment 83 also refers to NDAs—non-disclosure agreements. In June, the Government requested that members of the expert trade advisory groups sign an NDA for seven years to be able to see confidential material relating to trade negotiations. One appreciates that there will be confidential material, but seven years seems out of proportion. Many groups, including the TUC, said that they simply could not sign such an NDA because it would limit their ability to consult their members. That is an important point to bear in mind. The sharing of documents is obviously not to be encouraged while trade negotiations are continuing, but can the Minister say when he comes to respond that the process of reviewing the NDA will end, why seven years was selected and why he thinks it so important that it should be in place?

In previous debates, I have said that Labour is also worried about the Trade Remedies Authority lacking effective stakeholder engagement across sectors and regions. Therefore, Amendment 106 would:

“ensure that the Trade Remedies Authority includes, among its non-executive members, representatives”

of

“producers … trade unions … consumers, and … each of the United Kingdom devolved administrations.”

On the TRA, the TUC has said that without trade union representation

“There is no guarantee provided that the non-executive members will represent the interests of workers in manufacturing sectors who will be severely affected by the dumping of cheap goods such as steel, tyres and ceramics.”


Such dumping has already happened recently. Amendment 108 would also ensure five-year terms for members of the TRA, renewable for a further term, to ensure a reasonable turnover.

Ultimately, we need to ensure a degree of transparency and accountability for trade advisers and trade negotiations. The Government insist on trying to hold these away from public scrutiny. These bodies are part of the process and they could, with advantage, listen to these arguments and open them up to a wider group of people. I hope the Minister will view these amendments as proportionate and see them as offering solutions that actually strengthen the Government’s hand in negotiations. I beg to move.

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

My Lords, I shall speak primarily to Amendment 81, in the name of the noble Lord, Lord Bassam, ably if very restrainedly just set out by the noble Lord, Lord Stevenson, and to which I attached my name, as did the noble Lord, Lord Rooker. Since we have yet to hear the explanations for Amendments 83, 106, 108 and 113, I will simply say that I offer the Green group’s support to all of them to increase the transparency and representativeness of advice to the Government. I particularly note the strong cross-party support for Amendment 106 and look forward to hearing the explanations for Amendments 110 to 112.

However, I turn to Amendment 81, which is about Board of Trade appointments—or, to give it its full title, the Lords of the Committee of the Privy Council appointed for the consideration of all matters relating to Trade and Foreign Plantations. As an aside, I think that the Government might use this legislative opportunity to bring our constitutional arrangements out of the 17th century, at least in a small way, by modernising the name.

However, Board of Trade appointments might normally be considered a rather arcane matter and something that would be of little public interest, although there would probably be a general assumption, if you were to be brave enough to survey 100 members of the public in the street, that such important roles would, of course, be filled by a fair, competitive and transparent procedure.

Then, of course, we come to Tony Abbott. Should my accent have yet to do so, I remind everyone that I maintain a residual interest in Australian politics. Your Lordships’ House has a tradition of politeness and a different kind of language to that often used in the other place. Normally, I do not find that a constraint; today, I do. Therefore, I will simply produce a factual list: there is clear evidence of misogyny, homophobia, climate change denial, a lack of trade expertise and a clear conflict of interest. The Government really could not have done a better job of highlighting the importance of the amendment. They might have intended the appointment as a blow in the culture war—it is hard to think of another explanation—but they set out their position of intending to use an important technical role for a clearly political purpose. I say very seriously to the Committee that your Lordship’s House has a major constitutional responsibility in ensuring that this amendment is sent to the other place. Defending the Nolan principles should not be necessary, but it clearly is.

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[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

My Lords, I have received no requests from noble Lords wishing to speak after the Minister, so I call the noble Lord, Lord Stevenson of Balmacara.

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

My Lords, I thank all noble Lords for their contribution to this debate. I especially thank those who supported the amendments in either my name or that of my noble friend Lord Bassam, particularly my noble friends Lord Rooker and Lord Judd.

My noble friend Lord Rooker made a very good point about the additional legitimacy which stems from public hearings, and he was picked up on this by the noble Lord, Lord Lansley, and the noble Baroness, Lady Kramer. Their points were strong enough to be convincing, although I am sorry that the Minister did not give a very explicit reason why he was not prepared to accept the amendment as it stood.

I am reminded that when we discussed this issue last time around, we had a slight advantage: we knew that the then Minister, the noble Baroness, Lady Fairhead, had actually been through that process of hearings as she had been the prospective chair of the BBC. Unfortunately, she was not terribly enthusiastic about the process itself, but I think she agreed with the points made today about the additional support it gives to those who have been through the process, and the general sense in which these appointments are, on one level at least, open for wider consideration and discussion.

In thinking through some of the issues raised later in the debate on the particularities of how organisations appoint, recruit and sustain their organisational structures, we need to have regard to the long-running debate—which I precipitated with some of the amendments that we tabled—about whether these people are to be seen as representatives or whether their background, having been gained in particular areas, would be of value to the organisation concerned. Perhaps I am not as naive as the noble Baronesses, Lady Bowles and Lady Noakes, alleged in suggesting that we needed to have a firm representative structure in place for the TRA; that would be ridiculous.

Taking a step back to look at some of the outcomes of processes to try to have a representative group on boards to help with better decision-making, legitimacy, transparency and all the other issues we are concerned about, it is quite interesting that we do not always get in place the sort of backgrounds reflected by the amendments in front of the Committee. I simply point that out. If the Minister is saying that the advisory committee may be the route here, that the words mentioned in this debate will be reflected on by the TRA, and that he will make sure that this is the case, I think we can feel we have made that point and do not need to continue discussing it.

I have two final points. First, to reassure the noble Viscount, Lord Trenchard, I did not mention any names when talking about appointments to the Board of Trade. Indeed, my amendment was specifically about the absurdity, or the Gilbertian situation we seem to be in, that there is one member and loads of advisers. This is more like a court than an advisory group; I wonder why we go through this charade.

If it is limited to privy counsellors that is one way of doing it, I suppose; it is probably better than some other routes we can think about. However, there are hundreds of privy counsellors. There are probably 100 engaged in this process at the moment—not including myself, of course, but others have been honoured by that. I would not have thought there would be difficulty in finding a privy counsellor if we wanted to make it two instead of one member of the Board of Trade. It really raises the question of why we have a Board of Trade with only one member if it needs advisers to advise it, but does not seem to produce anything one way or the other, yet we have thousands of other people sitting in trade advisory groups and other groups yet to be appointed. I leave that on the table.

My last point is that the Minister was intriguing when he said that the department hoped to deepen its engagement with the trade unions. I am pleased to hear that. I think I can speak for the trade unions to say that they are ready and willing to do what is required. I can only suggest that he gets ahead with his invitation, whatever it is he is going to do.

This is not an attempt to try to hijack things, but the feeling I am left with at the end of this debate, which has been a good, rich and important one, is that there is a bit of ground to make up. All that the Minister can do in using his experience of the processes needed to get fair appointments, the systems that need to be in place in the bodies once they are established, and the engagement with civic society and the wider group of people who are interested and want to support them, is important and will be the sustaining point as we go further down the track. With that, I beg leave to withdraw the amendment.

Amendment 81 withdrawn.

Rolls-Royce

Lord Stevenson of Balmacara Excerpts

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord has correctly predicted that the energy White Paper will be out shortly to provide more details on these schemes. We are extensively supporting Rolls-Royce. It has received £300 million from the Covid corporate financing facility, it has made extensive use of the job retention scheme for almost 5,000 employees, and we are providing it with large amounts in R&D support from the £26.8 million in grant funding for research activities. We think Rolls-Royce is a key company for the future of the UK, and we are supporting it extensively.

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

My Lords, Rolls-Royce is one of the world’s premier engineering companies. Despite substantial government support, the Barnoldswick site’s workforce has been slashed from nearly 1,000 two years ago to half that today. Now, 350 more jobs are on the line, threatening the future of not just the site itself but local communities, given the impact it will have. Once highly skilled jobs are gone, they are gone. What is the Minister doing to protect those important jobs, not just for the current workforce but as an investment for the workers of the future?

[Lord Callanan (Con)]

As I said in previous answers, we are supporting Rolls-Royce extensively, but Covid-19 has had a devastating impact on the aerospace industry globally—Airbus and Boeing, the two largest companies, have reduced production by around 40%. We are doing all that we can to help companies such as Rolls-Royce at this difficult time—as its chief executive, to be fair, made clear when making this announcement.

Trade Bill

Lord Stevenson of Balmacara Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, I too support the amendment. It is very important, and noble Lords who have spoken have made some very good arguments in favour of it. As we all know, free movement within the EU has been very important for education, services and other businesses as well as for people getting to know each other. It could easily and should still happen after Brexit, but that needs the Government to support the idea positively and proactively even after we have left.

Transport is of course part of mobility. It must be cheap, reliable and accessible. Although Covid-19 has caused a massive reduction in demand, it is still there and it still needs to be there. However, the situation regarding the Government’s support is still very confusing and uncertain for services and their users. I have been trying to get answers from the Government for several months on how much in loans, guarantees or grants they have given to each of the international transport sectors, by which I mean air, sea, road and rail. I have had two Written Answers saying that that information per sector is commercially confidential. Surprisingly, maybe, I got a letter from the noble Baroness, Lady Vere, this morning saying that providers have many options as to how to find money, but with no comparators.

I can see why the noble Baroness could not see tell me about comparators. If one digs a little deeper, one finds that in the maritime sector—ferries—the Public Accounts Committee recently reported that the Government had written off £85 million for cancelled ferry contracts, which included a settlement with Eurotunnel of £33 million because apparently the Government had forgotten that Eurotunnel took the same kind of traffic that the ferries do. Noble Lords will remember that the Government spent £14 million on a company called Seaborne Freight, which owned a non-existent ferry and whose terms and conditions of carriage on its website appeared to have been copied from an online takeaway.

In the air sector, airlines have had soft loans to keep them alive. The noble Baroness said in a Written Answer that the Government were

“working closely with the aviation sector to support it to ensure there is sufficient capacity”.

They have spent £3 billion on keeping the franchise railways going, and that is good, but for cross-channel rail there is not a penny to ensure sufficient capacity. According to a presentation by the High Speed 1 chief executive Dyan Crowther to the all-party rail group last week, Eurostar has received no government guarantees or support and is likely to reduce the number of trains a day that it operates, possibly to between three and five or even fewer in order to survive. These are of course low-emission services, and I remind Ministers that, according to Eurostar, if all the passengers who took Eurostar in the last few years were to transfer to air, the increase in emissions would be equivalent to 40 new Luton Airports. We love Luton Airport but the emissions from 40 of them is hard to imagine.

Is there a solution? I suggest there are many that the Government ought to adopt. The European Union Council has adopted emergency measures to give member states the opportunity to reduce infrastructure charges to zero for trains. Italy and France are thinking about it, Austria has done it and the UK could do the same; it would be nothing to do with Europe but they could do it for HS1 to reduce the track access charges to just the direct costs. That might cost HS1 about £100 million but let us not forget that the Government made about £2 billion selling HS1 to the private sector, so they could afford to do this through HS1. It would mean that all train operators got the same benefit on that loan.

I hope the Minister can provide some comfort that Eurostar services can survive, providing the availability of a cost-effective and environmentally friendly transport service for those who want to work, live or study for the purpose of trade and goods. It would be a disaster if it were forced to close.

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

My Lords, we all owe a great deal of thanks to the noble Lord, Lord Fox, for his amendment and for the very good speech that he made in support of his arguments. We have read them before but they have not gone away since we discussed them in 2019, and I look forward to seeing how the Minister responds to them. There were also some other very good speeches, particularly—although it is invidious to choose—those of the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bull, who put the case for the creative industries extraordinarily well, with a devastating analysis of the problems that they face.

This issue is primarily about how services are going to be dealt with after the transition period ends. As the noble Baroness, Lady Bull, put it, the issues that we face affect all trade but these days most trade in goods is also wrapped into a service that is provided; she quoted the figures for Rolls-Royce, which I think are instrumental. We need to be sure that the arrangements that are made post transition for this area are well founded and will continue. I assume that that means GATT, which will be applying, and its four pillars, which she talked about: the ability to operate in support of trade in-country, in another country, in support of the provision of services to that country and living and working there in order to provide such services as are required for that. These are important issues and we hope that they will get a full response from the Minister.

However, at the heart of the debate, in more ways than one, are the creative industries. We had an impassioned plea for more attention to be paid to the particular needs of the creative industries regarding mobility. That is not inappropriate in itself but it is also quite important to recognise that the creative industries are not having a good time at the moment, not least because of what appears to be a rather standoffish approach being taken by the Government, who question whether jobs in the creative industries are really “viable”. There is the extraordinary advert about looking for your next job when you are a ballet dancer and there is no reason why you should change, suggesting that the right thing to do is to move into cyber.

This is a bad time to raise this issue but it is one that needs to be raised. At the end of the day the creative industries, particularly the performing and visual arts, are about the personal and the sharing of personal experiences. Without people’s movement and engagement, it is difficult to see how those industries can survive, but it is important that they should. The question I want to leave with the Minister is this: will GATT be sufficient to ensure that the creative industries will thrive after the transition period comes to an end?

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

My Lords, I have a lot of sympathy with the points made by the movers of this amendment in their powerful speeches. What they propose ticks a lot of boxes. It is fair to say that, as we have just heard, this is closely modelled on the Trade and Agriculture Commission, and it may therefore suffer from some of the problems it has encountered in recent hours, let alone days. However, taken together, it is a bit surprising that those who drew up these proposals think that they are necessary, given that the intention behind the Government’s move is presumably to try to make sure that this whole area is tidied up and organised in a way that minimises the number of quangos and additional bodies that they have to consult, and gives them as much authority and freedom of movement as they would want in carrying out their negotiating mandates. That is of course what happens under the royal prerogative.

I took from the noble Baroness, Lady McIntosh, that this is really about trying to concretise the Government’s commitment—which they have made on many occasions, as we have heard—to our high environmental, labour, food production and animal welfare standards, and to protect our public services. A permanent commission, set up in the way that she talked about, adequately funded and properly located within the corridors of power, could contribute to that and allow a continuing review of how the Government are operating. Whether or not it is effective, I will come to in a minute.

I thank my noble friend Lady Henig for making the case for leading with our high standards. Despite the contention of the noble Lord, Lord Lansley, surely we should be saying to the world that we are proud of our high standards and that we challenge those who want to trade with us and access our markets to match us in every aspect, or to persuade us to raise them even higher. If that means that we cannot do trade deals with countries that cannot match our standards for imports, then that is the situation, as the noble Lord, Lord Purvis, clearly pointed out. It does not change things, and in any case, it is a good thing.

Further to the point made by the noble Lord, Lord Purvis, if it is true that food standards are set by secondary legislation—and, as he suggested, even by agencies responsible under the primary legislation to have power to change regulations—then, as my noble friend Lady Henig says, we do have a lower standard of scrutiny here. We have an obligation to do something about it. The question is what. I would prefer to see a firm commitment on the face of the Bill which sets our standards in a way that does not permit anyone to change them without full parliamentary scrutiny.

Can we see a way forward? I think we can. From what I have heard from the Minister so far today and in discussion with him, I am positive that we might be able to come forward with something. I would be happy to meet him, during the pause, to progress it. In the interim, I do not think that this amendment has got quite the essence that we are looking for. I believe that it would be perhaps better to focus more on other amendments that come forward.

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The Northern Ireland protocol is, we believe, the very minimum that is acceptable to defend and maintain the progress made on the island of Ireland. It is there to maintain the peace process and to prevent a hard border. Amendments 58 and 59 are both, in essence, restating what is—and I hope will still be—the stated policy of the Government. If there is any uncertainty, then that is also of the Government’s own making, with the introduction of the internal market Bill. On that basis, I very much look forward to hearing the Minister’s response to this debate and to these amendments.

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

My Lords, we have had a very interesting debate at a very high level. Of course, that is inevitable if you have a former Secretary of State and a former Minister of the Province lending their expertise and knowledge to the issues that we have before us. My noble friend Lord Hain was very precise when he said that it was a difficult group to speak to, because there seemed to be two parts to it, and almost a third one with the trader support service, as we have discussed. However, I think we gained by having all three amendments discussed together, focusing on all the problems facing this troubled area, and by having drawn to our attention, which we need from time to time, the hope and enthusiasm that there is for a future in the Province as a result of the changes that were brought forward through the Good Friday agreement and subsequently.

I just have two or three small points to make. My noble friend Lord Hain was right to suggest that, irrespective of recent events, we probably would have wanted to return to this issue in this Bill at this time from the prospect of international trade because of the concerns of people in the Province about how they will be treated as part of the United Kingdom. That has doubled in focus—if that is a possible term—because we are now aware of the machinations that the Government have thrust into the debate by seeking to legislate in the internal market Bill; but, of course, that will be for next week. We have to deal with where things are at the moment, with the international outrage over the breaches in international law that have been threatened. It is right, therefore, to ensure that, at the end of the day, the Government are forced to respect the law as it currently stands and have no wiggle room to change it.

Secondly, picking up the points made by both my noble friend Lord Hain and the noble Baroness, Lady Ritchie, there is much more to the Northern Irish protocol than simply issues relating to the border, important though they are. It would be completely beyond any sensible movement if we were to engage in a process that led to a block or discouragement in growth in the confidence and security that the Good Friday agreement has provided across all aspects of everyday life in Northern Ireland. It is, indeed, the cornerstone of peace and security there, and we change it at our peril.

Turning to Amendment 65 and the questions that it raises about the Irish Sea and its position in relation to the borders of both the European Union and Great Britain, I am beginning to think that this is beginning to adopt some of the aspects of the Schleswig-Holstein question of the last century or two, or even of Schrödinger’s cat, since we are talking about trying to legislate for an area that is simultaneously both a member of two customs unions and subject to variables in terms of the operation of the law, depending on which way it is facing. My noble friend Lord Hain was right to point out that we still do not know enough about where the EU-UK agreement will leave us; we do not know how the protocol will operate in practice and what will happen in the next few years; and we are uncertain about where the Northern Ireland operation will be in relation to the free trade agreement with the EU. Will it align more towards the EU, or will it be more like the FTAs that the UK will negotiate; and if that is the case, how will we make sure that they are properly applied? There are lots of questions here, and the amendment helps to clarify the issues. Whatever the truth of that is, Northern Ireland needs an assurance about how it should go forward.

On the trader support service, it might well be defective in law, but the intention is very clear. I hope that, when the Minister comes to respond, he can give support to the idea that it continues.

[Viscount Younger of Leckie (Con)]

My Lords, the amendments in this group all relate to various aspects of the Northern Ireland protocol. Amendments 58 and 59, tabled by the noble Lord, Lord Hain, the noble Baronesses, Lady Suttie and Lady Ritchie of Downpatrick, and my noble friend Lady Altmann, seek to make the ratification of any future UK-EU international trade agreement contingent on compliance with the protocol. I listened very carefully to the hard-hitting and long speech from the noble Lord, Lord Hain. I am very aware that he speaks passionately on Northern Ireland matters as an ex-Secretary of State for Northern Ireland and that he spoke again today with great passion. We have been clear that we remain completely committed to the Belfast/Good Friday agreement. We are committed to implementing the protocol in a flexible and proportionate way, protecting the interests of both the whole United Kingdom and the EU.

Our proposals for implementing the protocol will deliver unfettered access for Northern Ireland businesses to the whole of the UK market, ensure that there are no tariffs on goods remaining within the UK’s customs territory, discharge our obligations without the need for any new customs infrastructure for Northern Ireland, and guarantee that Northern Ireland businesses benefit from the lower tariffs that we deliver through our new free trade agreements with third countries. This approach is, in our view, the best route for commanding the broadest possible support across the whole community in Northern Ireland, respecting the myriad ways in which lives and livelihoods are intertwined right across our United Kingdom. This came out, again, in the speech by the noble Lord, Lord Hain.

The Bill that we are debating here does not address the UK’s future relationship with the EU. Other than the government procurement agreement, it is concerned only with continuity agreements: that is, agreements to which both the EU and the relevant third country were signatories before exit day. While I understand the noble Lord’s concerns, there will be better opportunity to debate them elsewhere. In accordance with the Constitutional Reform and Governance Act, both Houses will have the opportunity to debate any UK-EU future trade agreement before it is ratified. Similarly, as the noble Lord, Lord Hain, acknowledged—and the reasons were eloquently outlined in the speech of my noble friend Lord Lansley—noble Lords will soon have a chance to debate their concerns regarding the protocol when the United Kingdom Internal Market Bill reaches this House all too soon, on Monday, for scrutiny.

I turn now to Amendment 60, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie, and my noble friend Lady Altmann. As I set out during our debate last week on devolution, the Government have engaged closely with the devolved Administrations and have taken significant steps to improve this Bill. I hope this was made clear in the remarks that I made last week. I would like to take this opportunity to inform your Lordships that the Scottish Parliament consented to grant an LCM to the Trade Bill last week. I hope that this illustrates the close engagement that the Government have undertaken and will continue to undertake with the devolved Administrations.

On Amendment 65, the Government will ensure unfettered access for Northern Ireland goods moving from Northern Ireland to Great Britain, ensuring that businesses and individuals will be able to move goods from Northern Ireland into the rest of the United Kingdom on the same basis as now, while also benefitting from new trade deals. The United Kingdom Internal Market Bill will ensure that businesses based in Northern Ireland have true unfettered access to the rest of the United Kingdom by ensuring that they benefit from mutual recognition and are not discriminated against. This will be the case whatever the outcome of negotiations with the EU.

On Amendment 82, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie and Lady Suttie, and my noble friend Lady Altmann, I am pleased to say the new Trader Support Service—the so-called TSS—that the Government are introducing, will provide an end-to-end service that will guide traders through all import processes. It will provide extensive support to businesses engaging in new administrative procedures resulting from the unique circumstances in Northern Ireland. It is a free service available to all traders moving goods between Great Britain and Northern Ireland and those importing goods into Northern Ireland from the rest of the world.

In response to various questions on TSS, I shall give a little more detail. It will offer the following core services. The TSS will benefit trader education by educating businesses about what the protocol means for them and the steps they need to take to comply with them. Secondly, it will support businesses when submitting declarations and advise them about additional documents and licences they will need; for example, a permit is needed to import endangered species. It will provide a complete service that submits relevant declarations into CDS, submits relevant safety and security declarations into HMRC’s import control system, the ICS, and in some circumstances will transmit transit declarations on NCTS.

In answer to the question asked by my noble friend Lord Lansley, the TSS and its future will be reviewed after two years. My noble friend Lady Noakes asked about costs. She will know, and I want to emphasise, that the TSS is a unique intervention, backed by £200 million of government funding.

I hope that these explanations address your Lordships’ concerns and that they will not wish to press their amendments.

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[Baroness Northover (LD) [V]]

My Lords, this has been a passionate debate on an appalling subject: the brutality of man against man. It should be a given that we do not have a trade deal with a country that is responsible for genocide, but pressure can be irresistible and there will be little scrutiny of new trade deals going forward. As ever, I thank the noble Lord, Lord Alton, for ensuring that human rights are always at the forefront. I do not know how he can sleep, with all that he knows threading itself around his mind. Not everyone can do what he does. It is easier to turn aside, but we cannot and must not do so with this Bill.

We discussed this issue, as the noble Lord explained, at an earlier stage of the Bill. The Minister argued then that the Bill deals with continuity agreements and that they do not involve trading partners who might be implicated here. In the light of that earlier discussion, the movers recast Amendment 68 so that culpable regimes are more easily identified, as the noble Lord, Lord Alton, said. He also makes the point that the purpose of the Bill is drawn more widely than simply continuity agreements, including making

“provision about the implementation of international trade agreements”

and similar wider definitions. That is why Amendment 76A is within scope.

The United Kingdom is a signatory to the 1948 Convention on the Prevention and Punishment of the Crime of Genocide, which was established after the Nazi genocide. Many said then, “Never again”, but as the noble Baroness, Lady Deech, powerfully said, those are often empty words. As a signatory, we are required to prevent, protect and punish. The legal definition and threshold are set very high, as others have said. We know the difficulty of seeking international agreement that genocide has been carried out. After much delay and prevarication, a genocide was declared in Rwanda. However, even the Human Rights Council, set up to try to ensure that those whose record means that they should not qualify to be on it, now has its hands tied by those elected to be its members, including, of course, those Security Council vetoers, Russia and China.

The International Court of Justice has determined that the actions of Myanmar in relation to the Rohingya Muslims are genocide, but the noble Baroness, Lady Deech, has pointed to the limits of the ICJ. The noble Lord, Lord Alton, has cited the conclusions of the China Tribunal, headed by Sir Geoffrey Nice, whose work in the Balkans war crimes trials gives him the most terrible background to lead this, with crimes against humanity proved beyond all doubt. However, we also know that the scales are tipped when it comes to holding China to account. My noble friend Lady Smith of Newnham makes clear the hurdles for holding anyone to account on genocide.

Given the difficulty of establishing this internationally, the amendment proposes that the High Court should be asked to make a determination. I agree with my noble friend Lady Smith and the noble Baroness, Lady Deech, that that is an astute way to do this. If the court believed that the threshold of the 1948 genocide convention had been reached, trade arrangements with the offending country would be nullified. We need various means, including some of those mentioned by the noble and learned Lord, Lord Hope. I am struck by the noble and learned Lord’s conclusion on the rule of law here and the strength that that brings to this issue. The arrangement proposed by the noble Lord, Lord Alton, is in keeping with those that some key American lawyers are now arguing should be applied to the UN Security Council, which could itself be taken to the ICJ if it is not addressing genocide, given the responsibility of each country to adhere to the convention.

One would hope that amendments such as these were not required and no doubt the Minister will say so, as did the noble Baroness, Lady Noakes. However, we know that genocide continues to take place and we must face that. It is easier to turn away and that is why we must put this protection in the Bill.

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

My Lords, I add my thanks to the noble Lord, Lord Alton, for his amendment and his excellent speech, which said everything that needs to be said around this very difficult area, with considerable skill and a huge amount of information that we will need time to absorb.

The House seems united in the view that this is a serious issue that has a lot of support and needs to be implemented. I will be interested to hear how the Minister responds to it. What is most attractive about the amendment is the innovative use of the courts as a way of trying to give a point of factual accuracy around which decisions can be taken. I have not seen this before; it is not something that we have ever had proposed and it is worthy of further consideration. Indeed, it may have wider applications.

That puts the House in a bit of a spot. If it is clear that there is a way of checking, in a way that is respected in the use of our courts, to assess whether or not an action needs to be taken, are we not put on notice to live up to our responsibilities as signatories to this convention to prevent, protect and punish? Indeed, if we care about our moral values as a nation, we should have no grounds not to support the amendment.

Having said that, I wonder whether it is worth picking up one or two points that suggest that a bit more work on the amendment might make it achieve even more. Others have picked up on the question of why it is applied only to rollover agreements when it has the capacity to deal with all free trade agreements. Although this is a terrible thing to say, why stop at the issue of genocide? Are there not other egregious issues that would need to be considered in the same class as genocide? As my noble and learned kinsman Lord Hope said, the torture convention may well be an opportunity for further thinking around this area.

While I support what has been said today about the proposal and I want to give whatever assistance we can to the movers of the amendment, I suggest that maybe there should be other discussions before we reach Report, because what is said in the amendment goes with the grain of so many other amendments that we have looked at around the question of human rights that it would be good to see if we could find something that brought them all together. We need something that is helpful to the broader causes that the noble Lord, Lord Alton, espouses but is capable of bringing in other issues that other Members of the House also care about.

[Lord Grimstone of Boscobel (Con)]

My Lords, I turn to Amendments 68 and 76A in the name of the noble Lords, Lord Alton of Liverpool, Lord Forsyth of Drumlean and Lord Adonis, and the noble Baroness, Lady Falkner of Margravine, which seek to ensure that any regulations made under Clauses 1 or 2 are revoked in the event that the High Court makes a preliminary determination that they should be revoked because the partner country has committed genocide. I was very thankful for the opportunity to discuss the amendments with the noble Lord, Lord Alton, and my noble friend Lord Blencathra yesterday.

I unequivocally reiterate the Government’s commitment to upholding human rights and opposing genocide in all its forms. It is the British Government’s policy that any judgment on whether genocide has occurred is a matter for judicial decision, rather than for government or non-judicial bodies. Our approach is to seek an end to all such violations of international law and to prevent their further escalation, irrespective of whether these violations fit the definition of specific international crimes. Any determination as to whether war crimes, crimes against humanity or genocide have occurred is a matter for competent courts after consideration of all the evidence available in the context of a credible judicial process.

As your Lordships are aware, the Bill enables the Government to ensure continuity in relation to specific agreements we were party to through our membership of the EU. These agreements met international obligations in respect of human rights and we have maintained, and will continue to maintain, those obligations in the agreements we sign. Should we have any concern about the behaviour of any partner country in relation to human rights abuses, we would take it up with them through the appropriate channels. In continuity agreements —the subject of our deliberations today—there are often suspensive clauses that allow us to suspend agreements in the event of human rights breaches.

We have heard again today, as we did during the debate on Amendment 33, the passion of the noble Lord, Lord Alton of Liverpool. The examples he gave of the Uighur Muslims in China are truly chilling. I understand and share his concerns; the Government condemn any human rights abuses, including the egregious situation in China. As the Foreign Secretary told the Foreign Affairs Committee in the other place on 6 October, this is not something that we can turn away from. The UK Government are playing a leading role in co-ordinating international efforts to hold China to account for these violations and we will continue to do so. We will of course continue to raise these concerns with Chinese officials.

I do not disagree with what the noble Lord, Lord Alton, said about the amendment he and other noble Lords have tabled being within the Bill’s scope. However, and I say this with regret and almost in a sense that I am using bureaucracy to counter the most passionate arguments that we have heard today, Clauses 1 and 2 can be used only to implement the GPA and non-tariff obligations from those continuity agreements we signed as a member of the EU before exit day. China is not a party to the GPA. Additionally, China does not have a free trade agreement with the EU, so Clause 2 cannot be used to implement any future free trade agreement with it.

I am of course very happy to discuss these matters further with the noble Lord, Lord Alton, and the other sponsors of the amendment. I reassure noble Lords that the Government take issues relating to genocide extremely seriously. I hope, for the reasons that I have offered, that the noble Lord will have confidence to withdraw the amendment.

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

My Lords, I thank the noble Baroness, Lady McIntosh, and the noble Lord, Lord Lansley, for their amendments. As the noble Lord, Lord Fox, said, this is a slightly big reach for a group, but it has been worthwhile because we have had a bit of a fishing expedition dressed up as amendments and out of that have come a few fish, so that is quite good. It will be interesting to hear the Minister try to respond in full measure to the noble Baroness, Lady McIntosh, and I am certainly looking forward to that.

The noble Lord, Lord Lansley, has discovered a whole new area of interest with this identification of powers held by Treasury Ministers that are not subject to parliamentary approved procedure. That does sound a little exciting, even at this late stage of the day. We have primary and secondary legislation and now we have tertiary legislation. Perhaps, the noble Lord could speculate when he comes to respond how many more powers are buried deep in arcane laws and subplots that we have yet to discover. I look forward to hearing from him.

[Viscount Younger of Leckie (Con)]

My Lords, I do not know about fishing expeditions, but let me turn to Amendment 70 in the name of my noble friend Lady McIntosh of Pickering regarding securing an adjustment period with the EU after the end of the transition period. The Government have been clear, and I have made it clear today and on many occasions over the past few months, as has my noble friend Lord Grimstone, that our priority is to ensure we restore our economic and political independence on 1 January 2021. We want a relationship with the EU that is based on friendly co-operation between sovereign equals and is centred on free trade. As I have said today, that is what we are pursuing.

At the second meeting of the Withdrawal Agreement Joint Committee in June, the Government formally notified the EU that they would neither accept nor seek any extension to the transition period. The moment by when an extension could be agreed has now passed. The transition period will end on 31 December 2020, as enshrined in UK law. Any extension would only defer the moment at which we are in charge of our own destiny. An extension to the transition period would also bind us into future EU legislation without having any say in designing it, but still having to foot the bill as we would still have to make payments into the EU budget. We need to be able to design our own rules in our best interests without the constraints of following EU rules.

The “The UK new start: let’s get going” campaign clearly sets out the actions people and businesses need to take to prepare for the end of the transition period on 31 December 2020. I took note of the speech of the noble Lord, Lord Fox, and he is right to highlight these matters, but I reassure him that businesses have no excuse for not knowing about the matters that need to be addressed. Over the coming weeks, we will be intensifying our engagement with businesses to ensure they are well-prepared to seize the opportunities it will bring.

I turn to Amendment 93. If there is a theme to this short debate, it has been the considerable comment made by a few Peers about free ports or free zones. As one noble Lord said, they are one and the same thing. I thank my noble friend Lord Lansley for his foresight in this area; it was during the 2017-19 Bill that my noble friend raised the issue of free zones, as I remember—and I remember the response from my noble friend Lord Bates at the time. I warmly welcome his support for the Government’s policy in this area.

The Government plan to introduce up to 10 free ports across the UK. I have to disagree with the general sentiments raised by the noble Baroness, Lady Bennett, because these will be national hubs for trade, innovation and commerce, regenerating communities across the UK. They can attract new businesses and spread jobs, investment and opportunity to towns and cities up and down the country. Specific locations will be chosen according to a fair, open and transparent allocation process, which will include significant input from the port, local authority, local enterprise partnership, local businesses, and other local partners, ensuring robust consultation with the local area.

As my noble friend Lord Lansley highlighted, the Government ran a consultation on their free ports proposals earlier this year, and a response was published by the Treasury on 7 October that sets out the final policy in detail. Further policy on the allocation process, including a clear bidding prospectus setting out what free ports will offer and how interested parties may apply, will be announced by the Treasury in due course. I hope that my noble friend will agree that this is my helpful response; the narrative of this story has not quite finished.

My noble friend also raised the issue of the use of free zones in combination with other initiatives, such as enterprise zones. This is an important point, which I am sure that the aforementioned Chancellor and my colleagues in the Treasury have heard.

I turn to the new clause proposed in Amendment 95 by my noble friend Lady McIntosh of Pickering, which seeks to grant powers to reduce costs for the farming sector of complying with legislation related to the import and export of goods, including through minimising veterinary checks and physical inspections. We should be clear that government is already taking all necessary steps to support the farming sector after the end of the transition period. However, first we should highlight that export checks are set by trade partners as a condition of market access, and it is not within the Government’s gift to change these. In relation to import checks, we already carry out important physical checks on EU imports of live animals, and from January 2021 these will continue to be carried out at destination.

Secondly, the Government are committed to supporting businesses at the border after the end of the transition period. An updated publication of the Border Operating Model is now available for businesses and the agricultural sector, while the Government are holding a series of trader readiness forums open to just-in-time businesses. In addition, the Government are planning a series of seminars to support the agricultural sector through any new changes. Of course, noble Lords will be keenly aware of the support that we hope to provide to the agricultural sector through the Agriculture Bill, which, as noble Lords know only too well, is currently proceeding through the Houses.

I recognise my noble friend’s intention to support key businesses at the border, but I assure him that the appropriate actions are already taking place, and that it is important for legislation, such as this Trade Bill, to be passed to grant businesses security and continuity after the end of the transition period. In light of these explanations, I would ask for the amendment to be withdrawn.

Health Protection (Coronavirus, Restrictions) (Obligations of Hospitality Undertakings) (England) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Friday 9th October 2020 Lords Chamber

Moved by

[Lord Stevenson of Balmacara]

At end insert “but that this House regrets that the Regulations include further restrictions for the hospitality sector without introducing the additional measures which are needed to ensure (1) financial support for the businesses, and (2) the retention of the jobs of employees affected by the restrictions”.

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

My Lords, I am very grateful to the Minister for his comprehensive introduction to these SIs and for going over the background and the rationale for their introduction.

Local communities are centred on their local hospitality providers. When weddings and events are postponed, cinemas, theatres, churches and sports grounds are shut, exercise facilities are curtailed and local and overseas tourism disappears, the hospitality sector feels the strain. Unfortunately, it is these businesses that are most affected by the new measures to combat Covid-19. With the ending of the furlough, the growing number of cases and the tightening of restrictions, this sector faces even tougher times ahead. Only this week, UKHospitality predicted 560,000 extra redundancies in the sector by the end of the year.

Today’s first set of regulations introduces the rule of six for pubs, restaurants, cafes and other businesses, clearly placing responsibility on them to ensure that parties of more than six may not book or gain entry. This was noted by the SLSC, and we do not object to it. The second set of regulations amends the first to get businesses to take all reasonable steps to stop singing, dancing and event music, to deal with noise levels and to introduce new signage for face coverings. They also rack up the penalties—I suspect that that will give rise to further discussion this morning.

Labour supports public health measures to reduce the spread of Covid-19, but I argue in this amendment that these further restrictions on the hospitality sector should be introduced alongside additional financial support for the businesses affected and effective incentives to retain jobs affected by these new measures. In passing, I note that there are reports in today’s papers of a local furlough to be introduced for businesses forced to close because of Covid-19 regulations. Can the Minister give us any further details about that, because it clearly has a bearing on what we are talking about this morning?

We accept that it is challenging during a crisis such as Covid-19 to find the right balance between necessary public health measures and economic support. However, this Government have acted with alarming inconsistency and been guilty of mixed messaging on a grand scale. People were told to go back to work, and then to stay at home if possible; people were told to eat out, but then it turned out that the NHS track and trace app was not ready; and businesses were told that the furlough was ending without a proper plan for recovery and job creation in place. This one-size-fits-all approach is patently not working for, for example, the creative industries or the hospitality and events sectors.

Why is it that one in three freelancers—who make up 70% of the theatre workforce in this country—are ineligible for the SEISS or the CJRS? How do we expect regional theatres to survive if their staff are unable to get the support they need? Many restaurant owners and pub landlords believe that redundancies are only weeks away. When the Chancellor said this week at the Conservative Party conference

“I couldn’t protect every job or every business”,

the sector felt like he was talking directly to them. What on earth was in his mind when he raised questions about whether jobs in the creative industries were viable? It is one of our most effective sectors, which makes a huge and growing contribution to our economy and our national life. Indeed, Tim Burgess nails this argument in his Guardian article today.

The Government say that the Job Support Scheme is supposed to stop workers being laid off, but there are serious questions about the effectiveness of the scheme to incentivise employers to keep staff on by covering a percentage of their wage. Its design means that for some struggling businesses, particularly in the hospitality sector, it would be more cost-effective to lay off half their staff than pay £700 a month for each job they want to save. Other countries have done it better.

Surely we now need a job recovery scheme—regionally and sub-regionally based, to provide businesses with the incentives to keep staff on, not stack the odds against them—and a real focus on jobs for young people entering the job market for the first time. We all recall the scars of earlier recessions. We must learn the lessons. The Labour Party has called for the business grants underspend to be brought together into a hospitality and high street fight-back fund, so that local authorities can target financial support at businesses in distress. We need a sector-specific recovery plan which tries to reach out to the hospitality sector, the tourism sector, the creative industries and rural businesses in ways that give confidence that the Government recognise their particular circumstances and so that, when shut-downs and new regulations on behaviour are necessary for public health reasons, the collateral damage is recompensed on a fair and transparent basis, with local input. I beg to move.

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

My Lords, I am grateful to the Minister for his very full reply. He always does credit to the job of making sure that we fully understand the implications behind the regulations, and he has done us a service in responding to so many questions. We have covered a lot of ground. There is a lot to take away from this debate and I hope that he will ensure that we are informed of future policy.

There are two main asks for the Government. First, will they please share the evidence, otherwise people are going to lose faith just as we need everyone to pull together? Secondly, the Government have to improve their communications; it is a two-way process and the local dimension is clearly missing.

The best outcomes for public policy are those that seemed in retrospect to be common sense. We are not there yet. Having said that, I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Insolvency (Moratorium) (Special Administration for Energy Licensees) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Friday 9th October 2020 Lords Chamber

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

My Lords, I thank the Minister for his introduction to this SI. Insolvencies of energy companies have occurred in increasing numbers in recent years. They have a number of causes, but does the Minister agree that they include: undercapitalisation of new entrants to the supply market; overoptimistic plans for growth in new customers; and inadequate provisions of levies and other requirements on energy companies that are part of the funding landscape? Five relatively small energy providers, with fewer than 200,000 customers, went bankrupt last year and since 2016 a total of 13 companies, some of which were considerably larger, have gone under.

As the Minister said, the SI modifies the working of the moratorium regime in Part A1 of the Insolvency Act 1986 in respect of particular energy companies involved in the provision or distribution of gas, electricity and smart meter services. The key provision that the SI introduces will require struggling companies to notify the Department for Business, Energy and Industrial Strategy that they are in a moratorium, so that the Secretary of State can consider whether to apply for a special administration order that would enable Ofgem to protect continuity of supply and, if appropriate, commence proceedings for the transfer of supply to another company through the supplier of last resort proceedings.

Standing back from this process, in effect it is equivalent to a successful competitive bid from another energy company for the customers of a failed company, with provisions about continuity of tariffs, prices and so on being part of the bid process. The company taking over other companies may of course be compensated for the work involved in doing so through payments spread across the sector. But because of the risk of a high number of sizeable companies going bust, these payments have become a real source of concern for otherwise stable energy companies which find themselves having to underwrite payments for failed companies that may previously have tried to undercut them with cheap but unsustainable customer tariffs. Can the Minister confirm that this issue is being kept under review?

A related concern appears to be borrowing to fund the levy payments of troubled companies, as they are using the sums required to pay these levies to keep themselves afloat. In 2019 we lost eight domestic energy suppliers, meaning that half a million customers were moved to suppliers that they had not picked, with 87% ending back at one of the big six companies. Are the Government considering short or long-term changes to the conditions for payment of these levies by energy companies, in the light of this year’s circumstances?

A combination of the energy price cap, the effects of Covid-19 and the imminent emergence of this year’s levy payment point may cause a further number of energy companies to go under this year—perhaps the Government are effectively acknowledging this through the SI. Can the Minister tell the House how many companies he anticipates may become insolvent this year, and distinguish between those companies that are in difficulty because of immediate problems and those in difficulty because of their own business models and poor management of liabilities?

My party has always supported a competitive energy market that provides cheap and reliable services to customers, but this cannot be at the expense of letting consumers have rights of access to the essential energy provisions that they need. I look forward to the Minister’s response.

Trade Bill

Lord Stevenson of Balmacara Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020 Grand Committee

The UK Government have worked hard to ensure that the devolved Administrations’ views are reflected in this Bill—I hope that I have put that strong argument to this Committee today—and we have made a number of amendments and commitments to address their concerns. I hope that this provides more than enough reassurance to noble Lords, and I ask that the amendment be withdrawn.

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

My Lords, I thank all speakers, both today and on Tuesday, for a very good debate. I think that everyone who has participated will agree that there has been a huge degree of agreement around the issues and, in some cases, on the way in which they might be resolved. I agree absolutely with the noble Lord, Lord Wigley, who said that it was interesting that these issues seem to come back time and time again and do not go away. That gives rise to the suggestion that this issue is relevant not just in relation to this legislation but on a wider scale, and we should be aware of that.

One of the two strands around which this debate has been constructed is the Sewel convention—or, as we might want to call it, in the words of my noble and learned kinsman Lord Hope, the Sewel principle, since part of it is already in statute—and whether we need to think harder about the process under which consent is obtained, both through consultation and through direct negotiation, with whom it is obtained, since there is a suggestion that the focus should perhaps be on Ministers rather than on institutions, and how that plays back into the eventual organisation that we hope to see around trade in this country. That leads into questions about structure, about the JMC and the special agreements that need to be made in that and about how we resolve disagreements, should there be any. There is no debate, I think, on whether the UK Parliament has the final say on questions of international agreements. But, as several speakers, including the noble and learned Lord, Lord Hope, said, these agreements will live only if they are implemented properly, and implementation is clearly a shared obligation between the UK Government and the devolved Administrations.

Four points came through very strongly on this, and I hope that we will carry these forward. First, there is a genuine need to protect the union and to respect and strengthen the devolution settlement. Several noble Lords stressed that, and I shall come back to that. Irrespective of how we go about things and how successful we are in the day-to-day work, we will need to have a fall-back disputes mechanism that is based on the process of consultation and getting consent but has a structure in place for the resolution of disputes that is not, as people have pointed out, heavily weighted towards the largest member in the room, which is the UK Government—acting both for the UK and as an agent for England, which is of course the most numerous part of the country. So we need trust and we need dispute resolution that commands proper confidence. We also need to work together to ensure that all parts of this work together, not just on the creation of conditions under which agreements can be struck but on the way in which they can be implemented satisfactorily to ensure that there are no disagreements on that.

As I have said already, and as others have said before me, this issue will not go away. We need to test what the issues raised today have got to say against what the Minister, who spoke before me, said. I thought that he was slightly complacent—I hope that he will not mind me saying that—as I think that there are issues here that will not be resolved simply by assertion from a ministerial position. We may well need to pick up and identify further legislation that is required. This is a very fragile situation that we are in at the moment. I urge the Minister to take careful note of what has been said today and to make sure that what has been said today is circulated widely so that the sensibilities raised in this debate are not lost. I am sure that we will return to this at later stages, but in the meantime I would like to withdraw Amendment 26.

Amendment 26 withdrawn.

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[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Stevenson of Balmacara.

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

My Lords, I was delighted to hear from the Minister that a new trade agreement has entered the books. Could he confirm that the same arrangements that apply to the Japan agreement will apply to that agreement in respect of the ability of the International Trade Committee and the EU International Agreements Sub-Committee to have view of the documentation and to make a response to Parliament, should they wish to do so?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that question. The arrangements that we have put in place in discussion with the committees for the Japan free trade agreement relate to the fact that we described it as an enhanced continuity agreement, which is why we have been putting it through enhanced scrutiny compared to other free trade agreements. This latest agreement, the Ukraine free trade agreement, will be scrutinised in the same way as other continuity agreements were previously scrutinised.

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[The Earl of Sandwich (CB) [V]]

My Lords, I support Amendment 35 on parliamentary scrutiny. I am grateful to the noble Lord, Lord Purvis, for tabling it. Listening to the noble Baroness, Lady Smith, I felt she was a little bit nostalgic for the European Parliament. That was not surprising. I have felt it too. It is not nostalgia we need but the procedure and ideas that came from the European Parliament when we are discussing CRaG. I will leave it at that.

However, I was encouraged by the Minister’s reply to the noble Lord, Lord Stevenson, earlier on the enhanced scrutiny process, and of course this is only the preamble for Report, which will be very important. I hope and expect that the Minister will be sympathetic to this amendment. He should be, because I believe the Government have been working hard to stretch the CRaG framework above the baseline so that they can then cover a range of issues. For example, the new FCDO is looking at improving the EMs on human rights, and in Committee we have already covered matters such as food safety, health and the environment, which are all to be covered by a sustainability EM, as mentioned by the right reverend Prelate. All these issues, as the noble Baroness, Lady Finlay, so sensitively mentioned, and as the Minister knows, are of huge importance and concern to the public, and they will loom large in the US deal. I know we are dealing with Parliament now, but we are also aware of the public.

Amendments 36 to 38 are also needed because they set out the terms of the reporting arrangements required by Parliament for every relevant free trade agreement so that it can be examined and debated properly within the narrow timeframe of 21 days. I was fascinated by the conversation of the noble Lord, Lord Lansley, about Amendment 63, which we will come back to.

NGO and trade union interest in trade deals and fair trade these days is at a much higher technical level and, although stakeholders and civil society are consulted in advance, they also need to be properly informed after negotiations are over and as every deal passes through Parliament. That is part of the process described in these amendments. We owe a lot to Jonathan Djanogly, as has been mentioned, and while I am not sure why reporting comes up in later amendments, I support those too.

The Bill is restricted to rollover agreements, but I understand from previous ministerial replies and statements that the Government are generally and genuinely ready to listen to suggestions and, as has been said, open to improving if not amending the CRaG process. We all look forward to the Minister’s confirmation of this.

Reporting on an agreement is also important for the scrutiny committees themselves, because it is part of their mandate to follow its progress in the months following ratification. I think we were grateful for the intervention of the noble and learned Lord, Lord Goldsmith. The recently concluded Japan agreement, which we will shortly all be examining, will provide the first test of these arrangements.

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

My Lords, I thank all concerned for contributing to this debate, which has been of a very high standard. We should all acknowledge and thank the noble Baroness, Lady Fairhead, for deciding to use this opportunity to speak to the Committee about her experiences on the 2018-19 Bill. I was sorry to hear about the blood and sweat, although I can confirm that there was just as much on our side of the table as I am sure she was correct in describing was on hers. If there were any tears, I do apologise for that; we did not have those, and I am sorry if we were guilty of inflicting them.

Because we have a range of amendments here around this topic, we have a variety of suggestions for the Government to consider on how they might engage formally with Parliament. The common thread for all of them is that they build on steps already taken and, as others have said—I support this—many of these are very welcome indeed. Amendment 35 in particular sets a very high standard at the top end of the scale, where all approvals and all considerations of final remit have to be done by both Houses of Parliament, with full engagement with the devolved Administrations. There are some very good points in this amendment, which, broadly speaking, goes with the grain of where we are coming from. However, as other noble Lords have said, this may well not be the time to repeat this amendment back to the Commons, because it was considered and defeated at that stage. I take very strongly what the noble Baroness, Lady Fairhead, said: namely, that there are elements in what is in front of us today that would allow for some progress to be made. I hope very much that the Minister will be able to signal his willingness to engage further with us when he comes to respond.

Trade Bill

Lord Stevenson of Balmacara Excerpts

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.

--- Later in debate ---

Moved by

[Lord Stevenson of Balmacara]

26: Clause 2, page 2, line 33, at end insert—
“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.(6D) No regulations may be made under subsection (1) by a Minister of the Crown, unless they have consulted with devolved administrations on the implementation of international trade agreements.(6E) No regulations may be made under subsection (1) by a Minister of the Crown unless the Minister has laid before Parliament a statement that, in the Minister’s view, the regulations do not undermine constitutional arrangements related to devolution.”

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

My Lords, Amendment 26 is in my name and I thank the noble Baroness, Lady Finlay, for her support. This amendment would not only require Ministers to consult devolved Administrations in relation to trade matters but would provide a mechanism under which the procedures that flow from trade agreements would be dealt with in consultation, and with their consent. I shall also speak to Amendment 31, which is supported by the noble Baroness, Lady Finlay, and the noble Lord, Lord Bruce. Amendment 31 again deals with the question of consultation and would add a small section at line 40 of page 2 of the current Bill.

Amendment 50, which is also in this group, is a slightly different measure but an important one none the less; again, it is supported by the noble Baroness, Lady Finlay. Here, we try to bring forward for the consideration of the Committee the question of having a joint ministerial committee and the powers that it might need to discuss international trade issues in relation to the interests of the devolved Administrations. Before anyone in the Committee raises the question of whether we are aware of what we are doing, we are well aware that Amendments 26 and 31 deal with continuity agreements but that Amendment 50, being a proposed new clause, in fact points forward to the new free trade agreements in which we hope the Government will be engaged, and would provide a mechanism under which these could be considered in the context of the interests and involvement of the devolved Administrations.

As with all the others in this group, these amendments are about strengthening and protecting our current devolution settlement. In common with most amendments in Committee, they are probing in nature, although I hope it will be agreed around the Committee that they raise rather big issues, some of which overlap with the internal market Bill, shortly to be received in your Lordships’ House. My noble kinsman, the noble and learned Lord, Lord Hope of Craighead, has raised many of the issues covered by these amendments regularly over the years, and I look forward to his contribution later in the debate—although I think that is now likely to be on Thursday. I hope very much that he will be able to attend then.

These amendments stem from the well-known Sewel convention, which has served the country well for many years. But the problem with the Sewel convention, now incorporated into many devolution Acts, is that it covers only primary legislation. It was founded on the principle, however, that UK Ministers would not normally seek to legislate in primary legislation for issues that were not reserved under the devolution Acts. But the question of whether it should or could be made to apply to secondary legislation is still open.

At Second Reading the noble and learned Lord, Lord Hope, asked for clarification, but I am afraid that he did not receive much from the responses at that time. So I hope Ministers will take the opportunity now to be clear why, if the powers, for example, to modify retained EU law are to be used by Ministers in the UK Parliament to amend legislation in devolved areas, there is no mention of this in the Bill or a requirement to consult devolved Ministers, let alone a clear commitment not to legislate without obtaining their consent. These probing amendments give the Minister the chance to resolve these matters, which are of pressing importance given the imminent elections north of the border and in Wales. I look forward to his response.

Amendment 50 takes the argument a step further, post the implementation period, in the sense that we currently have very little understanding of what happens if consultation has been carried out but consent has not been obtained from any or all of the devolved Administrations on any matter, including, of course, trade. I am sure the Minister is aware that this is an important issue in the Internal Market Bill where mutual recognition and non-discrimination issues are the key to the smooth running of our internal sale and resale of goods and services.

We urgently need a means of settling disagreements, one that commands confidence and trust, so Amendment 50 is a probing amendment but it points the way, I think, towards reforming and restructuring the present, informal arrangements for the Joint Ministerial Committee in relation to international trade and gives it powers to approve mandates, receive progress reports and see the final agreements before they are ratified. The amendment is clearly complementary to Amendment 57, which is in my name, which deals with parliamentary scrutiny more generally and which is in a later group. I beg to move.

[Baroness Humphreys (LD) [V]]

My Lords, I begin by apologising for not having been able to take part at Second Reading. Amendment 27, tabled by my noble friend Lord Bruce of Bennachie, to which I have added my name, continues the theme that he and I highlighted at Third Reading of the Agriculture Bill: how we deal with conflict created by power being conferred on the Secretary of State or UK Ministers to make regulations in areas of devolved competence. I make absolutely no apologies for repeating our arguments in relation to the Bill today. It is in many ways similar in its objective to Amendment 26 and other amendments in this group to which noble Lords will be speaking. In essence, we are all seeking recognition by the UK Government of the powers of the devolved Administrations and, at the same time, a mechanism to ensure that their views are sought and taken account of.

In Clause 2, as the Senedd’s Legislation, Justice and Constitution Committee report on the Welsh Government’s LCM on the Bill points out:

“The international trade agreements potentially covered by this provision will encompass a wide range of policy areas falling within the legislative competence of the National Assembly for Wales”—


as it was at the time of writing—

“to include agriculture and fisheries.”

We all understand that the details of devolution settlements can be complex, but as the Senedd’s External Affairs and Additional Legislation Committee acknowledges and clarifies, international relations and the regulation of international trade are reserved matters, but implementing obligations arising from international agreements that relate to devolved matters, to which Clause 2 applies, are primarily the responsibility of the devolved Governments and legislatures. So why are the Government overlooking this?

The Senedd’s LJC Committee is also concerned, as I am, that the powers in Clause 2 (6)(a) allow UK Ministers to make regulations that amend the Government of Wales Act 2006, a legislative provision that is worthy of attention and scrutiny by this Committee as well. These powers, we are assured by the UK Government, will not be used to legislate in devolved areas without the consents of the devolved Governments. This wording, it has been argued, has presumably been used to exclude the devolved Parliaments from consultation. I would be grateful if the Minister will clarify this.

Herein lies another problem for those of us who wish to support and defend our devolved legislatures. Are we to believe those words, “We are assured by the UK Government”? There was a time when a response from a Minister at the Dispatch Box would be accepted as the word of the Government, but experience has shown us that we need to be wary. How easily, it seems, the hard-earned powers gained by the Senedd and the other devolved Administrations can be clawed back by this Government. For more than 20 years, successive Labour, coalition and Conservative Governments have added to the powers of the devolved Administrations, making them the effective legislatures we have today. They crave more powers and, in the case of the Senedd, more Members.

Sometimes Governments can behave in the same way as the very worst of parents in exercising their powers. Domineering and unthinking, they eventually and sometimes belatedly understand that removing rights bestowed on their children leads only to resentment. The best of parents listen to the opinions of their offspring and build a relationship of mutual respect and trust, ensuring that the family remains close. The UK has often been described as a family of four nations, but it is a union that we all agree is most unequal. For many of our citizens, it is a union that is no longer working as well as it could, hence the calls for Scottish independence and a growing openness to the prospect of independence for Wales. Chipping away at the powers of the devolved Administrations only adds to the volume of those calls.

I know how willing the Welsh Ministers are to work co-operatively with the UK Government and the other devolved nations. They have contributed effectively to the development of frameworks in many areas and are content to take that process further. In reacting to the publication of the internal market Bill the Counsel General for Wales, Jeremy Miles, said that the Welsh Government were the first to highlight the need

“to develop a new form of joint governance .... in order to manage the intersection between devolved competence and the internal market”.

His comments are equally relevant to this Trade Bill.

As a signatory to Amendment 27, it has my support. Proposed new subsection (6A) would allow for consultation with the devolved Parliaments in order to obtain their consent to regulations and proposed new subsection (6B) would provide qualified majority voting, ensuring that if more than one Parliament withheld consent the regulations could not proceed. It would provide a mechanism for that co-operation, consultation and consent.