Draft Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019

Debate between Matt Western and Bill Esterson

Tuesday 5th March 2019 General Committees

[Bill Esterson]

I think, Mr Hanson, we are in danger of wandering into a slightly different part of the forest.

The Minister set out the arguments in favour of creating a system that addresses what will be needed in this country for both registered and unregistered designs to apply in the UK, and I have relatively few concerns about his remarks. However, as always with such regulations, there is the question of whether Opposition Members are in a position to give our full judgment on both the available information and the responses from the technical experts in the sector.

I put on the record, again, our concern about our ability to fully scrutinise what we are being asked to support. It is a common problem with regulations, often related to the speed with which they are being pushed through, their detail and technical content, and their importance. As ever, it is important to get that point across, as this is another example of costs—albeit the Minister is claiming that they are relatively small —for creating a functioning regime after we leave the European Union.

As the sifting Committee said in its report when it recommended that the draft regulations be considered in Committee,

“The work of conversion is clearly a major exercise.”

That work will involve 700,000 registered Community designs alone. The preliminary estimate is of £375,000, which may appear to be a relatively small amount of money, but that is clearly not without significant amounts of work. The Intellectual Property Office says that it is able to address that and that costs are recovered through fees. The Minister has pointed out that the fees have come down. I have no reason to doubt him on that, but it will take time, both for the authorities to process the change in arrangements and for businesses to make sure they are covered. I believe there is a nine-month window for businesses to adapt to the new regime—the Minister may wish to correct me on that. Perhaps he could also answer how the Government intend to make sure that everybody has the cover that they need and is aware of the changes that they need to make during that transition period.

I have one question for the Minister, the answer to which I did not catch in his opening remarks. Perhaps he can explain how the unregistered Community design system operates and how businesses obtain their protection without having to register for it. I note that there is a three-year period. Can he clarify how that system operates so that the protection is in place? From what he said, it is clearly an important part of intellectual property protection. Perhaps he could give us some clarity on how it operates.

As ever, there is the thorny issue of consultation or, to be strictly accurate, the lack of public consultation that we see with the regulations going through Committees every single week. I notice that no formal consultation was carried out, but that stakeholders were asked to give their opinions. Perhaps the Minister can tell us—I cannot find the information anywhere—who was consulted and what their responses were to those informal consultation discussions. It would have been very helpful to have that information in front of us; it would have helped to ensure that we were in the best possible position to judge whether we should or should not support the regulations. I hope that the Minister, if he does not already, will soon have a note on what the consultations were, who was consulted and what the responses were.

I want to tell the Committee of the key concern raised by the Alliance for Intellectual Property. It is not particularly concerned with the continuing regime in the UK; it is relatively confident that what the Minister has described meets its requirements. Its concern is the lack of reciprocity. If equivalent protection is achieved through the withdrawal Bill, it believes that the design sector will still be gravely at risk without reciprocal protection from the EU27. After we have left the European Union, designs that are first disclosed in the UK might well be sufficiently protected here, but will receive no unregistered Community design protection in the EU, because we will no longer be members. The AIP’s view is that this would have grave consequences for UK designers: according to a recent survey by Anti Copying In Design, almost 80% of them rely on the unregistered Community design right to protect their designs.

The EU is the largest export market for many UK design sectors, contributing over two-thirds of UK furniture manufacturers’ export revenue. Such a loss of reciprocity poses a serious threat to leading industry events such as 100% Design, London Fashion Week and Top Drawer, which creators from all over the world attend in order to reveal new and innovative designs. Without protection, designers will either have to run the risk of copying throughout the EU27 following disclosure, or simply avoid first disclosure in the UK altogether. Perhaps the Minister can advise on which route the Government think designers should take.

[Matt Western (Warwick and Leamington) (Lab)]

On the point about designers and furniture manufacturers, there is a company in my constituency—a small business, which exports to 70 countries around the world—that faces significant costs in the enforcement of this design legislation and is up against a lot of copycat manufacturers, particularly in the far east. The company will be especially exposed, because Europe is such a big market for it.

[Bill Esterson]

Using the example of his constituents’ business, my hon. Friend has set out the sector’s exact concerns and the challenge for the Government to ensure protection of our innovative and creative exporters. Given the end of the parallel system to which the Minister referred in his opening remarks, perhaps the Minister can tell us how the Government will provide assurances.

What is the state of negotiations on achieving protection in this area in the European Union? We cannot overstate the importance of that protection for businesses such as that of my hon. Friend’s constituents. I hope that there is an answer to that, and that the Minister can give us some assurances. We know that all too often negotiations on the details of post-Brexit arrangements have not gone as well as they need to—I hope that this issue is not one of those.

I asked the Minister about consultation. As ever, the approach to impact assessment is limited. Paragraph 13 of the explanatory memorandum discusses regulating small businesses. How well prepared will they be? This picks up on my earlier point on ensuring that all businesses are aware of the changes that will happen and the actions they need to take. Again, the Government have chosen a very narrow interpretation of “impact” in their approach to impact assessment; they are not taking the wider impact on the economy as a whole. As I said on previous occasions, that is regrettable and does not set out the true impact of regulations such as these.

That brings me to a number of questions that arise from the commentary in the explanatory memorandum. Can the Minister explain how the system will work for existing rights that are granted by the European Union’s IPO? I am not entirely sure whether that question follows on from that asked by the right hon. Member for South Holland and The Deepings, but I think it is similar. If the Minister has not already answered it, perhaps he can pick up the point about ongoing validity for five years.

My next question is about paragraph 2.8 of the explanatory memorandum, which references action being taken by EU rights holders and their protections in the UK. My assumption is that those rights holders will be protected in the UK, and that the concern is about that lack of equivalence. Perhaps the Minister could clarify that point, along with the ones about protections of UK designers in the EU.

According to paragraphs 7.17 and 7.27 of the memorandum, 12,000 international trademark applications and 1,000 design applications are estimated to be pending on exit day. How are the Government making sure that all those applying know that they need to file a new application? That point is similar to the earlier questions about making sure that all businesses understand what they need to do.

Paragraph 13.3 of the memorandum states that

“there is sufficient time for all businesses to familiarise themselves with the changes”

before the regulations take effect, but there is a difference between there being time and businesses taking up the option. Certainly, many small businesses are not always equipped to address the regulations that come to them, so I really want to press the Minister on the impact on our small and medium-sized enterprise community.

In paragraph 7.33, there is a reference to

“the right to opt out”.

Again, what are the Government doing to make sure that businesses are fully aware of the options available to them, which are referred to in that paragraph?

I think this is my final question—[Laughter.] I am sure I can find some more if Members want me to, but on balance, I will stick to this one. The memorandum refers to fees of £63,000. Are those fees payable by businesses of all sizes, and is that going to continue to be the case? The Minister mentioned lower fees in his opening remarks, so perhaps he could link what he said then with the figure of £63,000 cited in the explanatory memorandum.

The example that my hon. Friend the Member for Warwick and Leamington gave about the furniture manufacturer in his constituency demonstrates how important it is that we get these regulations right and have arrangements in place. It is particularly important for designers for whom the EU is a major market; as we have heard, two thirds of designers export to the EU. I would particularly like to hear the Minister’s answer about reciprocal arrangements, and I hope he is also able to answer the other questions that I have asked.

Future Free Trade Agreements

Debate between Matt Western and Bill Esterson

Thursday 21st February 2019 Commons Chamber

[Bill Esterson]

The leave campaign pushed the point rather hard about Turkey’s accession to the EU.

My hon. Friend the Member for Bishop Auckland (Helen Goodman)—this is the bigger point about the Secretary of State’s involvement—spoke about the failure to ensure, when the EU-Japan deal was negotiated, that there was support for the foreign direct investment and its critical place in our car industry, whether at Honda or Nissan. The Secretary of State’s answer is that he will not change his approach in the future trade deals he negotiates once we have left the EU. That is a pretty grim predictor of what is going to happen under this Secretary of State and his colleagues in their support—or rather lack of it—for our industry, our manufacturing industry and our car industry in particular.

[Matt Western]

I mentioned Margaret Thatcher earlier. If she were still around today, she would not settle for Honda leaving the UK. She would fight with every fibre in her body to defend our interests in retaining that important business in the UK. Does my hon. Friend agree?

[Bill Esterson]

We have come to an interesting point, with Labour Members citing Margaret Thatcher and the fact that she founded the single market of the European Union to demonstrate just how wrong the current Government, who claim her inheritance, are in their international trade policy.

I have taken a number of interventions and I am very cognisant of your strictures for me to keep things to a minimum, Madam Deputy Speaker. As I was saying, the alternative is to deliver certainty. That alternative can come with a new customs union and a deal with the single market on regulations, standards and common institutions that protects our trade with the EU and with our partners around the world. The difficulties in renegotiating the deals with our partners have been laid bare in recent weeks by the failure of the International Trade Secretary to make progress on more than a handful of such deals, quite apart from the uncertainty over our future trading relationship with the EU. He wants to align with lower standards from the US.

Trade Bill (Sixth sitting)

Debate between Matt Western and Bill Esterson

Committee Debate: 6th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Bill Esterson]

I think we should press on. The Minister has enough to worry about.

As Mr Stevenson of the Manufacturing Trade Remedies Alliance told us last week:

“Some see trade remedies as purely protectionist and would abolish them completely”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 65, Q124.]

It is key, therefore, that Parliament, through its relevant Committee, should get to scrutinise who the Secretary of State appoints as the head of the relevant body, and that it should make sure it is someone with the competence, experience and disposition to stand up for the best interests of British industries and the British people.

Similarly, amendment 22 would ensure that the Secretary of State cannot appoint non-executive members to the TRA at his whim and fancy. He should not be able to stack the TRA with members of a certain political and ideological persuasion that would mean they would be less likely to act on complaints brought forward and less likely to recommend measures. We heard from Mr Stevenson of the MTRA last week that if all its members

“thought trade remedies were protectionist, we would never get any trade remedies through”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 65, Q124.]

Parliamentary scrutiny of the membership of the TRA is even more important in the light of the evidence given to this committee by Mr Tom Reynolds of the British Ceramic Confederation. He highlighted to us at column 67 that, within the context of our membership of the European Union, the UK Government took on the role of the “liberal counterweight” opposing strong trade defence measures. However, now that we will not have the other 27 member states, of which a majority is for trade remedies, we cannot afford to take the same approach.

Unfortunately, according to Mr Reynolds, UK civil servants and experts are “steeped in that heritage” of the UK being a neo-liberal counterweight. We cannot afford to let that institutional memory dictate how our independent trade defence policy is conducted. We need to ensure that the non-executive board of the TRA is a watchdog that ensures balance in the system. The only way to do that is to allow this House, through the appropriate Committee, to have a say on the appointment of the board members.

Finally and most importantly, amendment 23 would ensure that the TRA includes among its non-executive members representatives of stakeholder bodies potentially affected by the recommendations of the TRA. Those stakeholders are the producers, the trade unions representing the workers and a representative of each of the devolved Administrations. We have put that into our amendment because we believe that the key stakeholders affected by unfair trading practices should be represented around the table where decisions are being made that affect the survival of their industries and jobs, and the wellbeing of their communities. The TRA will only be enriched by experts from industry, trade unions and the devolved Administrations, who are the ones facing the realities of dumping on a day-to-day basis and close to home.

[Matt Western]

Does my hon. Friend have a view on the recent situation with Bombardier and the involvement of the US trade body that found in its favour? Are there any learnings from that? I am specifically interested in the role of the unions on that body, as well as industry representatives.

[Bill Esterson]

My hon. Friend is right to raise that. The Bombardier experience shows that countries are prepared to apply very significant trade remedies. We have to be realistic. We need to be in a position to have our own trade remedies system, be prepared to use them and not expect that not using such processes is always appropriate. That is why we must have the right membership, including from the trade unions, to protect jobs, as my hon. Friend has said, because otherwise we leave ourselves wide open.

--- Later in debate ---

[Bill Esterson]

Of course that is right. My hon. Friend deserves credit for taking the time and effort to go and meet the ITC and to make the case with the trade unions and others from this country. The lobbying that he and others were involved in played no small part in delivering for workers and business in the UK. He deserves a lot of credit for that. I will return to my speech—

[Matt Western]

Will my hon. Friend give way?

--- Later in debate ---

[Bill Esterson]

What a good idea.

[Matt Western]

This reminds me of Saturday afternoons watching wrestling. [Laughter.] The crucial thing about the TRA is that it is a facilitator, not a barrier, to ensure the needs of sectors and those involved in the sectors, whether workers or businesses. That came across very clearly in the representations from witnesses last week as something they want. My hon. Friend mentioned the chairmanship. As with the Office for Budget Responsibility, it is crucial that the chair is seen as an important role and not some political lackey.

[Bill Esterson]

Yes, that is exactly right. The point is to get the balance between how the Conservative Government under David Cameron blocked attempts to use appropriate trade remedy measures to defend our steel industry and the excessive use of them by the Americans. That is what the new TRA should do and that is why it needs to have the right balance of membership.

The message from the evidence given by the witnesses last week was loud and clear: stakeholders want representation on the TRA. They want their voices to be heard and their concerns taken into account, and they want that guaranteed in statute, not through ad hoc discussions with the Government. George Peretz QC told us that the composition of the TRA

“ought to be balanced by statute and that it ought to reflect a variety of different perspectives.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 55, Q105.]

We also heard from James Ashton-Bell of the CBI, that:

“In anything where you are making choices about trade and how it will impact the wider economy, you should have a wide and balanced group of people advising Government, or an independent authority, about how to make those choices.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 25, Q54.]

Chris Southworth of the International Chamber of Commerce concurred, saying that

“the representation is a critical point. An independent body, yes, but there must be representation within that independent body to represent all the important voices”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 25, Q54.]

That responds to the question by my hon. Friend the Member for Warwick and Leamington.

If the Minister will not listen to me, will he at least listen to business associations, industry representatives, trade unions, academics, QCs and civil society? They are all coming out against how he and his Department are going about this. I urge Members on all sides to support our three amendments, but if the inevitable happens and the Minister leads them into voting us down, I look forward to him bringing forward his alternatives later in proceedings.

Trade Bill (Fifth sitting)

Debate between Matt Western and Bill Esterson

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Bill Esterson]

I will not be drawn on everything the Minister said, but I will go back to what the hon. Member for Kilmarnock and Loudoun said in his short speech. The amendment and the Bill are about trade agreements and not about the single market. My hon. Friend the Member for Brent North made it clear on Second Reading exactly what our relationship with the single market will be once we have left the European Union—if we are not a member of the European Union, it is not possible to have a say in the rules, so we are therefore not a full member whatever our relationship with the single market. He explained it extremely well.

The amendment is about the relationship with future trade agreements and about having the right protections for public services. I go back to what I said in my speech: the amendment is about ensuring that we have the ability in law to bring services back in, in the light of Carillion, whether they are to do with the NHS or other services. In the public interest—the public good—this country should have the ability to decide where its public services are run.

[Matt Western]

Back in February last year, as I understand it, the Minister told the International Trade Committee that the NHS would remain off limits in trade negotiations and that he would not sacrifice the Government’s right to regulate public services. Does my hon. Friend therefore share my surprise that the Minister is not keen to include the amendment in the Bill?

[Bill Esterson]

I share my hon. Friend’s surprise because, as I said in my speech, repeated public reassurances and “best endeavour” commitments from Ministers are not the issue; legal certainty and absolute exemption are required. If the Minister will not accept the amendment, perhaps he will tell us now that he will bring forward his own amendment later in our proceedings to achieve exactly that.