Trade Bill

Lord Wigley Excerpts

2nd reading (Hansard): House of Lords
Tuesday 11th September 2018 Lords Chamber

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Viscount, Lord Trenchard, although I cannot possibly agree with him on most of what he said, particularly not on his last comments about medical products. I invite him to reconsider very carefully what he said about the precautionary principle not being overused where facts were not available. Surely the whole point of having a precautionary principle is to deal with cases where the facts are not always available, as a means of making sure in such cases. My real fear is that deregulation is going to drive us down this road and leave vulnerable people exposed. I also congratulate the noble Baroness, Lady Meyer, on her moving maiden speech, which I think was very well received in the House.

I can understand the logic of the Bill before us tonight, but it is a sideshow compared with the main issue, as outlined so clinically by the noble Lord, Lord Kerr. As noble Lords might expect, I shall be looking from the viewpoint of industry, business and consumers in Wales, as well as in the context of the powers of devolved Administrations. As I understand it, the Scottish Government recommended against giving legislative consent to the Bill, and the Welsh Labour Government said that amendments would be needed before they could recommend legislative consent. Government amendments to the Bill made in the House of Commons reduced the restrictions on devolved Ministers’ use of the relevant powers but did not address all the concerns raised by both the Scottish and the Welsh Governments. I noted from the Minister’s opening comments that the Government are willing to conduct further discussions with the devolved Governments. I very much hope that the House can be kept informed of progress on this, as was requested by the noble Baroness, Lady Henig, a few moments ago.

In this context, I seek an assurance from the Minister that nothing in the Bill will restrict the Welsh Government from maximising the extent to which their procurement policies encourage expenditure to go to suppliers in Wales, within the context of the existing EU guidelines. This is so that the Government’s expenditure in Wales can help to support the Welsh economy—something which has been done very effectively over the last 10 years. I also flag up the issue touched on by the noble Lord, Lord Browne of Ladyton, in relation to geographic labelling, which other colleagues also mentioned, including Scotch whisky, Welsh lamb and Cumberland sausages. I hope there will not be any question of these being actively discouraged as labels by the UK Government. The issue is already a hot potato in Wales, as was shown in the Royal Welsh Show in Builth in July, when it became a very controversial issue indeed. It is undoubtedly a matter that will cause rancour, and—I suggest to the Government—unnecessarily so.

Notwithstanding the comments of the noble Lord, Lord Tugendhat, I suspect that many colleagues on all sides might wish to ask the House of Commons to consider again an amendment requiring the Government to seek to remain in the customs union with the EU if it cannot negotiate a frictionless free trade area. I note that attempts to secure this in the Commons were defeated by a majority of only six votes, and that was after a considerable amount of arm-twisting. If the Government insist on pulling us out of the single market and customs union, their action will scrap existing free trade deals with over 50 countries outside the EU, as well as endangering our trade with the 27 member states themselves. That, of course, is what this Bill is all about.

Trade with third countries with which we have free trade agreements arising from our membership of the European customs union account for almost £140 billion of UK trade. If we were to lose, even for a transitionary period, any significant proportion of that trade, it would have a major effect on the UK economy. In moving Second Reading, the Minister claimed that the Bill will simply translate those deals into domestic legislation. However, the Bill’s Delegated Powers Memorandum describes the process of,

“transitioning EU-partner country trade deals into UK domestic law”,

as “uncharted territory”. Furthermore, the Bill’s own Explanatory Notes admit that:

“It may also be necessary to substantively amend the text of the previous EU agreements … so that the new agreements can work in a UK legal context”.


We are reliant on the immediate co-operation of 50 nations with which we have existing deals if those deals are to continue. That is something that the Secretary of State and his chief negotiator, Crawford Falconer, admitted in oral evidence, which they gave to the International Trade Committee on 1 November last year, to be matters on which they have been unable to secure guarantees. I understand that we still do not have cast-iron guarantees on those matters. Will the Minister tell the House what evidence she has that this has changed since last November? And in doing so, will she indicate whether the public consultations launched by the International Trade Secretary, Liam Fox, on 18 July, on potential future trade deals the UK might seek with the US and New Zealand, have proven to be fruitful in any way?

It seems to me that President Trump is blowing hot and cold on the promise of a trade deal with the UK in the wake of the Chequers declaration, and that this bodes badly for any assumption of an automatic endorsement on rollover agreements from such unreliable partners. I also ask the Minister, in this context, to address the issue of New Zealand’s opposition to the EU and UK’s proposal to split tariff rate quotas on lamb, which is clearly a matter of huge significance in Wales. In leaving the EU, the UK will have to separate its tariff rate quotas from the EU, and its new schedules would be subject to approval by all WTO members. New Zealand might well choose to block such approval.

I now return to the implications of this Bill for the devolution settlements in Wales. It seems to me that the Government are indeed ignoring the existing pattern of devolved powers and the engagement of devolved Administrations in helping to formulate new trade agreements. The Welsh Government have a responsibility for the economic development of Wales; they receive financial assistance from the EU for that purpose. The success of Welsh agriculture and industry in exporting its products is fundamental to the well-being of the Welsh economy. The Welsh Government have, over the past 19 years, undertaken a wide range of initiatives to boost Welsh exports for the benefit of both our own economy in Wales and that of the UK, and they have of course done so most often in partnership with the UK Government. We need to build on that, and in the post-Brexit world we need to harness all such resources. The UK Government should be seeking a new and ambitious role for the devolved Administrations that will ensure that they have a real say over important issues that impinge on their responsibilities. If the UK is a union of equals, the Government should really start to understand this.

Time is squeezing and I point out only that over the last year consideration has been given, in the context of securing some understanding between the devolved Administrations and the UK Government, to the need for the existing Joint Ministerial Committee to be overhauled and rebuilt into a statutory UK Council of Ministers covering the various aspects of policy for which agreement between all four UK Administrations is required. In my opinion, any future trade deals should require statutory endorsement by the devolved Administrations, and in this context there should clearly be Welsh and Scottish representation on the new UK Trade Remedies Authority.

The degree of wishful thinking on which this Bill is based beggars belief. I hope only that the Government will face reality: they cannot expect to have all rollover trade links in place by 29 March next year, less than seven months away, and, in a panic to achieve that wholly artificial and unnecessary deadline, they will sell out on myriad issues in order to get nominal trade deals in place in time. This is not the way to conduct international trade agreements. In considering the Bill in detail in Committee, this House should do its utmost to force the Government to face up to the folly of a rushed Brexit and, more than anything, enable the other place to think again on the central issues of an ongoing customs union relationship with our European partners, which would make this Bill totally unnecessary.

Trade Bill

Lord Wigley Excerpts

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

Amendment 100 is in my name and that of my noble friend Lord McNicol to ensure that transparency. It is important as it means we will see a draft and be able to consider its implications. If we have asymmetrical devolution—it may be an ugly term—when it comes to an agreement such as the GPA, if the United Kingdom is in that in its own right, we need a debate, and we need it now, on how the devolved Administrations will be included. When we consider the proportion of public procurement expenditure, which has been estimated by the International Trade Centre as between 10% and 15% of GDP, when we are working with international partners on our development side and when it comes to countries which will potentially have access to the UK market, it is vital that the devolved Administrations and, increasingly, mayors and the regions of England are included. I therefore support these amendments.

[Lord Wigley (PC)]

My Lords, I am grateful to the noble Lord for introducing this amendment. As far as it goes, I support it, but I shall take up a point that was made a moment ago by the noble Lord, Lord Purvis, from the Liberal Front Bench that trade agreements will certainly need not just consultation with, but the agreement of, the devolved authorities. Let us think of, for example, the trade in lamb in Wales and how basic it is to the rural Welsh economy. Pressure is coming from New Zealand, which is threatening to block movement in the international trade discussions on these matters. If New Zealand were pressing for certain agreements that would undermine our Welsh lamb sector, that would be devastating. The devolved authority has responsibility for economic development, agriculture and rural affairs in Wales. That is an example from Wales. I can well imagine examples from Scotland, such as in the whisky sector. There should be more than just consultation. As I said at Second Reading, there should be a requirement for statutory agreement, a statutory endorsement by the devolved authorities in these areas. It may not be necessary in all areas, but there are certainly some where it is needed.

Therefore, between now and Report I hope there will be an opportunity to explore this area more in conjunction with the devolved Administrations to make sure that at this stage, before a specific difficulty arises, these matters are thought through because when a difficulty does arise, the tension builds up and it becomes a battle of attrition. We need a system that avoids that, and now is the time to get the system right.

[Lord Hain (Lab)]

My Lords, I apologise to the Committee for coming into the Chamber just a couple of minutes into my noble friend Lord Stevenson’s speech. I hope that it is in order to continue to make a brief contribution.

I follow the speeches of my noble friend Lord Wigley and the noble Lord, Lord Purvis, as well as that of my noble friend Lord Stevenson, in saying that it is vital that, particularly in respect of the devolved Administrations— I speak as a former Secretary of State for Wales and Secretary of State for Northern Ireland—we do not see an action replay of what we saw earlier in this whole fiasco. I am talking about a power grab by the Government that repatriated to Westminster powers that had already been devolved but were under the European Union’s aegis. That showed a cast of mind in the Whitehall machine of the Government that I encountered as a Secretary of State, whereby the natural instinct of other departments—particularly Defra and the Home Office, although it went more widely—is to centralise, grasp and keep power, not to devolve it. It is essential that, as the amendment seeks, there is a recognition by Ministers that the natural instinct will be to consult the devolved Governments—and in the case of Northern Ireland, whatever is there; maybe senior civil servants, as now. That should be the immediate instinct of every Minister and every senior official in every government department as they process all this.

My second point relates to paragraph (e) in the amendment, which refers to “appropriate consumer groups” and so on. Will the Government consult the CBI, the FSB, the IoD, the TUC and consumer groups, let alone all the other NGOs that might have an interest? Will that be a natural reflex, as in consulting the devolved Administrations, or will they have to come back in right at the end? I hope that the Minister will be able to give us some reassurance on the record about all that.

--- Later in debate ---

[Baroness Fairhead]

Again, we are talking not about the future but about continuity. When we discuss these clauses, I would ideally like to focus on what we need for continuity. We have time allocated to discuss future changes in Committee; I think that that will be the right time to discuss them.

[Lord Wigley]

On that point, might there be a disagreement between Westminster and Cardiff, or Westminster and Edinburgh, on what continuity is —in other words, on the interpretation of where these definitions apply? For example, it is not just medical matters that arise in the health sector: purchases for hospitals and all the rest cover foodstuffs, et cetera. In Wales, we have succeeded in raising the level of local procurement from 35% to 50%, which has had a significant positive economic knock-on. One does not want any of that to be lost in any of these changes. If the Minister could give an assurance that there is no possibility of that happening it would help us.

[Baroness Fairhead]

I will confirm this, but my understanding is that the schedules will be exactly as they are now. The procurement agencies in Wales will be able to put in their own procurement rules in that context, provided that they meet the GPA rules and are done on a level playing field. That will continue. The whole purpose of this is to make those changes and to have continuity—but if there is any change in what I said to the noble Lord I will revert.

Amendment 2 would require the regulations under Clause 1 to make provision to amend retained direct EU legislation only in accordance with the provisions of the European Union (Withdrawal) Act 2018. As I understand it, the amendment seeks to ensure that the powers in Clause 1 cannot be used to amend retained direct EU legislation in a way that is contrary to the provisions of the EU withdrawal Act. This is a concern that I have sympathy with and which the Government have considered carefully. I am therefore happy to assure the noble Lord that the powers cannot be used in this way. I hope that noble Lords will take reassurance from this and will agree that the amendment is unnecessary. Paragraphs 10 to 12 of Schedule 8 to the EU withdrawal Act cover powers to make subordinate legislation on or after the day the Act was passed, so they will bind legislation made under Clause 1 of the Trade Bill without further provisions being made. In addition, I inform the Committee that the Government intend to bring forward an amendment on Report to include the same definition of retained direct principal EU legislation used in the EU withdrawal Act in this Bill to clarify the position even further.

I again thank the noble Lord, Lord Stevenson of Balmacara, for bringing forward Amendment 3. Parliament’s ability to scrutinise the UK’s independent accession to the WTO Agreement on Government Procurement prior to ratification is incredibly important and one that the Government have considered. I can assure noble Lords that it is entirely the Government’s intention to comply with their legal obligations under CRaG to offer Parliament the opportunity to scrutinise the UK’s accession to the GPA. In the light of this assurance, the Government believe that it would be unnecessary to have an amendment that compels this. However, to provide further reassurance to the Committee I will state clearly that the UK’s accession to the GPA is to be on the same terms and with the same rights and obligations that we currently enjoy as a participant through the EU. As with all the Bill, this is about continuity. The UK’s GPA schedules, which have been accepted in principle by the GPA parties, can be viewed publicly on the WTO’s GPA website under the UK portion of the EU schedules.

The noble Lord, Lord Purvis of Tweed, raised some issues about Canada and how we might think about our policy in future. Again, that is for the future and not related to this clause and the Bill.

Amendment 100 was tabled by the noble Lords, Lord McNicol of West Kilbride and Lord Purvis of Tweed. It seeks to change the regulation-making powers in Clause 1 from being subject to the negative procedure to being subject to the affirmative. As drafted, this power would apply only when the powers are exercised by a Minister of the Crown. They would remain negative when exercised by one of the devolved Administrations.

I understand entirely and share the House’s desire to ensure that due parliamentary scrutiny is given to the use of any statutory instruments. However, the report of the Delegated Powers and Regulatory Reform Committee did not raise any issues with the power, which I hope provides further reassurance that the Government are using appropriate procedures under the power in Clause 1.

Trade Bill

Lord Wigley Excerpts

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

[Lord Kerr of Kinlochard]

My Lords, for this House it is déjà vu all over again. We voted for a customs union in the withdrawal Bill on 18 April, by an enormous majority of 223. The amendment then was in my name, and I made a speech of coruscating brilliance taking up several columns of Hansard, advancing five very strong arguments for the customs union. I refer the House to my speech on that occasion.

[Lord Wigley (PC)]

My Lords, I shall try to be as brief as the noble Lord, Lord Kerr. I too tabled an amendment early in the Committee stage—the predecessor to the amendment that he so ably moved at that time. My feeling is that we have lost an opportunity to find a satisfactory compromise in the negotiations. The red lines laid down by the Prime Minister have stopped the possibility of getting a deal, including a customs union and possibly a single market—that would have avoided the difficulties with Northern Ireland and safeguarded the position of Gibraltar. More than anything, it would have looked after the manufacturing industries for which we in Wales worked so hard, with different parties in government, to secure over the past 30 years. I think that it was 52 Japanese companies that came to Wales, to sell to the European Union: they came for that reason. We now see the danger of Japanese companies and others being lost. Let us also look at the situation of the agricultural industry, and the need to ensure that we have that export market. For all those reasons, I hope that the amendment will be carried—by the same majority as last time.

[Viscount Trenchard (Con)]

My Lords, I know I am in a small minority in your Lordships’ House on this one, but I would like briefly to put the other argument. According to the trade data published by the ONS in September 2018 the customs union, of which noble Lords would like us to remain a member, has not actually achieved any benefits for the UK during the 20 years for which we have been a member. The UK’s slowest-growing export trade since 1998 was goods exports to the EU.

Trade Bill

Lord Wigley Excerpts

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

[Lord Wigley (PC)]

My Lords, I too welcome the amendment. I apologise for taking so little part in the Bill’s progress since participating at Second Reading. This intermittent pattern has been due largely to being stretched on Brexit matters across many different committees and calls.

I support the comments of the noble Lord, Lord Purvis, on the devolution situation. The position in Wales is different from that in Scotland because of the different natures of the devolution Acts—no doubt the Minister is well aware of those. However, similar issues can arise, particularly in the contexts of agriculture, procurement and competition law. Those areas are sensitive and there are strong feelings in the devolved regimes on the powers they can exercise. No doubt many other issues will arise.

I do not think that we can answer this matter by strict legislation. The most important thing by far is the attitude of Governments towards dealing with each other. It is important that, when issues arise and are flagged up at this end, something is done early enough to get a constructive response from Cardiff or Edinburgh. Likewise, it is important that the devolved regimes are encouraged to flag up issues that arise, and that there is a mechanism to deal with them before they become polarised and unnecessarily political. To that extent, I believe that most of the work on this will have to be undertaken on a day by day, month by month basis after the legislation comes into force. Having said that, I support the amendment.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Stevenson of Balmacara, for moving Amendment 8 and for our fruitful discussions since Report, together with the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Hope, who is not in his place at the moment. I hope to provide some extra clarity on the interaction between the UK Government and the devolved Administrations.

It might help if I summarise my understanding of the amendment’s purpose. It would require the Government to seek the consent of the devolved Administrations when making regulations under Clauses 1 and 2. As we have said, it is the Government’s intention always to consult and seek the consent of the devolved Administrations when exercising the powers in this Bill in areas of devolved competence. We want to form a trade policy that works for the whole of the UK. However, there are good reasons why we do not want to amend the Trade Bill either to extend the operation of the Sewel convention or to replicate the recent amendment to the healthcare Bill, as proposed by the noble Lord.

Let me just touch on the Healthcare Bill. The noble Lord, Lord Stevenson, suggested during the debate on this issue on Report, on 13 March, that a recent amendment to the Bill strengthened the case for what is being proposed here. However, there is a significant difference, both between the powers in the two Bills and between the texts of the two amendments.

First, the concurrent powers in the Trade Bill allow for devolved Administrations themselves to legislate in areas of devolved competence. As mentioned last week, should the UK Government use the powers of the Trade Bill to legislate for the whole of the UK, it will be for the purposes of legislative efficiency, following consultation with the devolved Administrations. The Healthcare Bill does not provide for this: it does not delegate any powers to devolved Administrations. Introducing consultation requirements in lieu of a power for the devolved Administrations to legislate for themselves is understandable—but this clearly is not the case for the Trade Bill.

Secondly, the amendment to the Healthcare Bill introduced a requirement to consult the devolved Administrations, whereas Amendment 8 would require the UK Government to secure the consent of the relevant devolved Administration before legislating in areas of devolved competence. As is well recognised in your Lordships’ House, to “consult” and to “secure consent” are very different concepts.

I turn to the Scotland and Wales Acts, which already enshrine the Sewel convention in legislation. I am happy to restate this Government’s continued commitment to this convention in relation to all future primary legislation. However, it has been suggested that this amendment would put regulations under the Trade Bill in the same position as Westminster primary legislation under the Scotland and Wales Acts. It must be recognised that those provisions were passed in a very different context and in recognition of an accepted political convention relating to primary legislation. Moreover, as the Supreme Court has recognised, those provisions were carefully worded in a way that demonstrated Parliament’s clear intention that they should not be justiciable.

This amendment, however, goes further by effectively proposing an extension of this convention to apply to secondary legislation. It does so in a way that does not reflect the language of the Scotland and Wales Acts provisions, which would risk making the term “not normally” into a legal test. As I stated on Report, I do not believe that it is the intention of this House to introduce new legal uncertainty to our statute book—especially when that could ultimately obstruct the programme of continuity that this Bill seeks to deliver, to the detriment of the UK as a whole.

I would like to touch now on Section 12 of the EU withdrawal Act and its interplay with the Trade Bill.

[Lord Wigley]

Does the Minister accept that the problem as seen from the devolved regimes is that, very often, consultation does not amount to very much indeed? That is why the word “consent” is very much more powerful. If consultation was something that was driven with the intention of having a meeting of minds, rather than just sending a message down and forgetting about it, there might be a better chance of getting that form of words to be applicable.

[Viscount Younger of Leckie]

The word “consultation” is well known and well respected. I would like to pick up on what the noble Lord said earlier about the fact that there is much interaction, and consultation, going on; and it generally works very well. I would also like to say how well it has worked in respect of Wales. It is a term that is well recognised and works well.

Turning back to Section 12, I am aware of the letter from the Scottish Government Cabinet Secretary, Mike Russell, which noble Lords have referred to in earlier exchanges and which raises a specific concern in the third paragraph about the effect of Section 12 regulations on the Scottish Government’s ability to exercise powers in the Trade Bill. I am disappointed that, unlike the Welsh Government, the Scottish Government have not seen fit to recommend consent to the Trade Bill. I would like to make it clear that any frameworks-related restrictions on the devolved Administrations’ use of the powers apply only if a Section 12 regulation is first in place.

Due to the collaborative and constructive work that is taking place to establish UK common frameworks once we leave the EU, the UK Government have not yet identified a need to bring forward any Section 12 regulations. The Government have committed to work with the devolved Administrations in the preparation of any Section 12 regulations that would maintain existing frameworks. This was set out in the Inter-governmental Agreement on the European Union (Withdrawal) Bill and the Establishment of Common Frameworks, which ensures that those regulations are subject to scrutiny by the devolved legislatures and the UK Parliament.

In addition, I can reassure your Lordships that, were a Section 12 regulation in place that would restrict the power of the devolved Administrations to use Clauses 1 and 2, the Government’s commitment always to consult would remain. As we have repeatedly said, the UK Government remain committed to the principle of not legislating in devolved areas without seeking the agreement of the respective devolved Administrations. The UK Government have been working productively and collaboratively with the devolved Administrations on a number of fronts, including the development of common frameworks. As a result of this work, the UK Government and the devolved Administrations recently agreed to this joint statement:

“On the basis of the significant joint progress on future frameworks, and the continued collaboration to ensure the statute book is ready for exit day, the UK Government has concluded that it does not need to bring forward any section 12 regulations at this juncture.


On this basis, the Scottish and Welsh Governments continue to commit to not diverging in ways that would cut across future frameworks, where it has been agreed they are necessary or where discussions continue.


UK Government officials are working with devolved administration officials to revise the Common Frameworks analysis and take into account progress on framework areas since March 2018. We anticipate publishing a further iteration of this analysis shortly”.


To conclude, I hope that I have demonstrated that the amendment is unnecessary. The Government are committed to not normally using the powers in the Trade Bill to legislate in areas of devolved competence without the consent of the relevant devolved Administration—and certainly not without first consulting them. I believe that this is proportionate and appropriate to the powers as they currently stand, which have received consent from the National Assembly for Wales, as I said earlier. If passed, this amendment would depart significantly from this. I therefore ask that Amendment 8 be withdrawn.