Oral Answers to Questions

Stewart Hosie Excerpts

Thursday 17th October 2019 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

We all wish to see reform of the WTO and a functioning dispute resolution system, but given that the UK is responsible for 3.4% of global trade compared with the EU being responsible for 35%—a full third—of global trade, is it not the case that the UK’s influence inside the WTO is now massively diminished?

[Elizabeth Truss]

One of the groups we are working very closely with is our Commonwealth partners. We are developing a Commonwealth caucus at the WTO that represents a third of the world’s population and has a very strong stake in making sure that the WTO works for small states, in particular. Of course we will work with the EU and of course we will work with the US when it is in our mutual interests, but the fact is that the EU has pursued protectionist policies, and that has not necessarily helped some of the least-developed nations. I believe that the UK will have a unique voice, particularly in favour of free trade.

No-deal Brexit: Schedule of Tariffs

Stewart Hosie Excerpts

Monday 7th October 2019 Commons Chamber

[Conor Burns]

This Government take great pride in the number of those agreements that we have transitioned into continuity agreements. There are many more on the cusp of being agreed. We are dealing with some technical issues and there is ongoing engagement all the time. I was recently in Algeria and Morocco, where we are making substantial progress, and I returned yesterday evening from Vietnam—you might say that I am in another time zone, Mr Speaker, while the hon. Member for Brent North (Barry Gardiner) is on another planet. Even in Vietnam there is significant interest in coming to a continuity agreement with the UK. We will continue to work to deliver those. Of course, as my right hon. Friend and I will both agree, it would be much better if we did not have to go to continuity agreements but instead got the best continuity agreement, which would be a new agreement between ourselves and the European Union, which I hope the Opposition will finally support.

[Stewart Hosie (Dundee East) (SNP)]

When the temporary tariff regime was announced this March, the UK Government argued that if they maintained the current external tariff regime, there would be new tariffs on EU imports. They said that if zero tariffs were maintained with the EU, even though that would minimise trade disruption, that would be required to be extended to the rest of the world due to WTO rules. The Government also said that they would keep 43 of the existing trade remedy measures that were in place, but much has changed since then. There has been another round of US tariffs and there is the potential for another round of EU tariffs in response to the US action, so let me ask the Minister this.

Given new tariffs from the US and the EU, has the schedule in the temporary tariff regime changed and, if so, by how much? Has the list of 43 trade remedies to be kept and 66 to be abandoned changed and, if so, by how many? Most importantly, with barely three weeks to go to a potential no-deal Brexit—although the Benn Act should protect us from that—I say to the Minister that it is not irresponsible to publish the new schedule. It is absolutely necessary to publish it, not least to allow businesses—importing and exporting businesses alike—at least a little certainty and to ensure that they can continue to operate within the law. The Minister is having a great time teasing us about when the schedule will be published, so may I ask him to publish it today so that businesses understand precisely what they are dealing with?

Arms Export Licences (Saudi Arabia)

Stewart Hosie Excerpts

Thursday 26th September 2019 Commons Chamber

[Elizabeth Truss]

I can assure my hon. Friend that I have put in place an interim procedure to ensure that there is sign-off from senior officials in all three relevant Departments and ministerial sign-off on any proposed export licences to the relevant parties. I also assure him that we are conducting an investigation, which will be led by a director general from the Department for Work and Pensions, into exactly what went wrong in this case to ensure that it cannot happen again.

[Stewart Hosie (Dundee East) (SNP)]

I recognise and welcome the Secretary of State’s apology and acceptance of responsibility. It is true that the breaches in export licensing that are the subject of this urgent question may well be described, as she said, as “procedural”, but this case highlights some profound problems with her Department. We are talking about spare parts for armoured vehicles and for military radio used by Saudi land forces, which form half the Saudi military and were operating on the ground in Yemen when the licences were issued, forming part of the invasion by land into Yemen by a country—Saudi Arabia—found to be in breach of international humanitarian law, which is precisely what is supposed to be checked before licences are granted.

Can the Secretary of State tell us whether the provision of incomplete information shared across the Government was simple incompetence? Were her Department and others not aware of their responsibilities in this regard? She will have to be convincing, because I am not convinced that the actions being taken so far remove the perception that this Government and this Department are prepared to ignore the law—in this case, from the Court of Appeal—when it suits them to do so.

[Elizabeth Truss]

The Court of Appeal was very clear in its judgment that there is a rigorous and robust process in place across the Government. The question is about the specific sharing of information between Departments. I have absolute confidence that the unit, when it receives information, implements that in doing its work. The issue is the sharing of information. That is why we have conducted an internal review of the licences already issued as well as asking another Department to look across the board at where information was shared. This is not an issue about the process, which was deemed by the Court of Appeal to be rigorous and robust; it is about how that process has been followed. A lot of people are saying, “Why can’t we do this quicker?” It is very important that we get this right. In the interim period, I have put in place a procedure that makes sure that there is senior sign-off from all three Departments—the Foreign Office, the Ministry of Defence and the DIT—as well as ministerial sign-off. There was not ministerial sign-off on these licences. This was done under the previous procedure. There will now be ministerial sign-off on all the relevant licences.

NHS and Future Trade Deals

Stewart Hosie Excerpts

Monday 22nd July 2019 Westminster Hall

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Hartlepool (Mike Hill) for introducing the debate and speaking so well on behalf of the petitioners.

Let me start with a reference to Brexit, because I suspect that many of the concerns about trade deals, which may bring the NHS into play, will be driven by the loss of trade associated with Brexit. Let us remind ourselves of what the UK Government’s long-term economic analysis said. Under all the versions of Brexit that they analysed—the White Paper, the European economic area-type agreement, an average free trade agreement, and no deal—trade and GDP would be lower at the end of the forecast period than they otherwise would have been. The analysis went on to say that, under all those options—with the exception of the EEA, which does not apply—the situation would be worse if we had net zero migration from EEA workers. So before I come on to talk about trade, it is worth pointing out that we face a challenge relating to the retention and recruitment of staff if whatever Brexit we end up with drives a hideous and illogical end to the free movement of people.

The National Institute of Economic and Social Research’s analysis suggests that, depending on the type of Brexit, we could see a 22% to 30% fall in total trade. It went on to suggest that a free trade agreement with Brazil, Russia, India, China and all the major English-speaking economies, including the USA, would result in an approximately 6% uplift. I suspect that, if Brexit happens, Government thinking will end up being that, in order to make up some of the losses, we will have to have a quick win—a quick gain—probably with the USA. It is hard to see, for a variety of reasons, why the NHS would not be included in that.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does the hon. Gentleman agree that it is very concerning that, when the President was here on his state visit, he seemed to say that that was the No. 1 priority, despite the fact that our Prime Minister tried to deny that on the day?

--- Later in debate ---

[Stewart Hosie]

It was concerning that his initial response was, “Yeah, sure, the NHS—everything is on the table.” It was clawed back slightly the next day, but one wonders whether he understood what he said on the first day, or even what he said on the second day. The concerns out there among the public are very real, for the reasons I have set out. If we need to make up trade gains from the losses that almost every single forecast suggests we will have, it is hard to see how the NHS, or broader aspects of health, might not be included in some kind of trade deal.

The starting point for me is that we should not be contemplating exposing the NHS through trade deals, not least because the EU has made more trade deals with third countries than any other bloc, which we benefit from, and it has done so while protecting public services. It makes little or no sense to throw that away. The EU has protected public services such as the NHS in all trade negotiations. It has shown itself to be principled in its approach. Not only would we potentially lose access to those markets, but we do not have the means to replicate the agreements we already benefit from. The hon. Member for South Thanet (Craig Mackinlay) mentioned the Swiss deal, but it was of course not rolled over in its entirety. Indeed, a number of the reports that came out at the time said:

“The deal risks new limits on the export of agricultural products from the UK to Switzerland—for example, a possible ban on organic products…Switzerland may no longer recognise UK businesses as ‘authorised economic operators’, eligible for lighter controls at the Swiss border.”

At the same time, a second roll-over deal was announced—the Norwegian one—but while it included zero duty for industrial goods, it did not include services. It was described in the Norwegian press as a “crisis agreement”, and it did not cover technical regulations and rules for trade in food, animals or plants.

I mention those two because they highlight the UK’s weakness in the Brexit process. If we are not able to roll over in full with friendly countries with which we have long trading relationships, how on earth are the public expected to believe that we will be able to cut a deal with the USA to make up some of the losses from Brexit without having to sacrifice the NHS? On my last visit to the United States, I was told time after time that the UK will be required to put everything on the table, and the US will be required to put nothing on the table.

[Catherine West]

The hon. Gentleman is being very generous in giving way. Does he agree that one sector for which there will be implications is research and innovation? Is he as concerned as me about the prospect that a lot of our universities and the collaborations they do, which are in effect services, will be at risk? It will take an awful long time and an awful lot of effort to replicate them in a US trade deal.

[Stewart Hosie]

I am concerned about that. I am concerned that, even now, we are seeing relationships, partnerships and academic work being restricted, and doubt being cast on their continuation, for those very reasons. It would be tragic if health improvement work was not done or was lost from the excellent universities that undertake those studies.

The weaknesses that I speak about are where many of the concerns about the NHS lie, particularly in relation to a US-UK deal. They drive the impression, rightly or wrongly, that the UK will be involved in some kind of investor-state dispute settlement mechanism, and that Governments or other public bodies could be sued simply for protecting our health service.

I will give three examples to demonstrate why there are real concerns and why the public are extremely anxious. The first took place between 1995 and 1997. The Canadian Government banned the export of polychlorinated biphenyl waste to comply with obligations under the Basel convention, to which the US was not a party. The waste treatment company SD Myers then sued the Canadian Government for £20 million in net damages under chapter 11 of the North American free trade agreement—an ISDS-type arbitration scheme. That claim was upheld under NAFTA, even though Canada had taken action to remain in compliance with an international treaty.

In the second case, in 1997, the Canadian Parliament again banned the import and transport of the petrol additive methylcyclopentadienyl manganese tricarbonyl over concerns that it caused a significant public health risk. Ethyl Corporation, the manufacturer of the additive, sued the Canadian Government, again under NAFTA chapter 11, for $251 million to cover losses resulting from what it called the “expropriation” of its plant and to its “good reputation”. That action was upheld by the Canadian dispute settlement panel. The Canadian Government repealed the ban and paid Ethyl Corporation $50 million in compensation.

Cases that involve toxic polychlorinated biphenyl waste and a petrol additive that was deemed to have a public health impact were overturned. It is quite wrong for any corporation to be able to sue a Government simply for taking steps to protect the wellbeing of their citizens. I use those two examples on purpose; they may not have a direct clinical NHS procurement characteristic, but no one could doubt they were public health measures that were overturned as a result of a trade deal that allowed private investors to do certain things.

My final example is more local. Some time ago in Scotland, we had an increase in the prevalence of hospital-acquired infection. One of the actions the Scottish Government took was to remove private cleaners and return cleaning to NHS staff. Lo and behold, the incidence of hospital-acquired infection reduced dramatically. It does not take an enormous leap of the imagination for non-core work, such as cleaning, to be put out for competition. Had that been an international company, utilising an ISDS-type arbitration scheme, one can easily see how it may have sued the Scottish Government to win back that work and continue to make profit, irrespective of the health consequences.

I have heard what the petitioners have said, and I welcome the commitments made so far that the NHS will not be included in any future trade deal. However, it would be foolish not to recognise the concerns the public have or that fraying around the edges, when it comes to what appears to be non-core, non-clinical work, can still lead to the kind of problems the petitioners are concerned about. I await with interest what the Minister says. I congratulate those who signed the petition and brought this important matter before us today.

Oral Answers to Questions

Stewart Hosie Excerpts

Thursday 11th July 2019 Commons Chamber

[Dr Fox]

For Britain to be able to sell abroad, we need to be able to do two things simultaneously: understand what Britain has to sell abroad and understand the markets we are selling into. That is why my Department is bringing in a major change to rotate our staff from our international posts through our sectors in the UK, so that they can understand what the UK can do in terms of services and goods in a real-time way as well as understand the markets. It is not just about how many people we have in the market, but about how well they understand what is happening in the UK. I hope that this innovation will lead to an increased capability for the UK and improve our competitiveness vis-à-vis other exporting countries.

[Stewart Hosie (Dundee East) (SNP)]

We recognise the need to reform the WTO, not least in the area of speeding up dispute resolution. We also recognise the benefits of regional trade agreements and bilateral agreements that can be WTO-compliant. However, it remains essential that we have a fully functioning WTO implementing globally agreed trade rules, so may I ask the Secretary of State to take on board and to agree with me that in these negotiations on reform he should reject some of the approach of the United States, which is to suggest that it will walk away from the WTO if it does not get its own way?

[Dr Fox]

I absolutely agree that we need an international rules-based system based on the WTO. It does require reform, but the fact that it needs reform is not an excuse to leave—it is an excuse to be more engaged in those reforms. It is worth pointing out that the United States has done very well, winning around 90% of the cases it has taken to dispute at the WTO. I hope that we all understand that the alternative to a rules-based system is a deals-based system, and the biggest casualties of that will be developing countries.

Export Licences: High Court Judgment

Stewart Hosie Excerpts

Thursday 20th June 2019 Commons Chamber

[Dr Fox]

The Foreign Secretary and I have answered numerous questions on this issue in the House of Commons, and we have certainly cited some of those incidents and been questioned on specific incidents in the House. On my right hon. Friend’s key point, I do not think the proximity or otherwise to 9/11 is the key determinant here; rather, it is whether Saudi Arabia acts as an important source of intelligence for this country in our shared combat against a global terrorism. It is a valuable partner in that particular battle and has helped to keep numerous UK citizens safe.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Secretary of State for his statement and for giving me advance sight of it. I recognise that, under criterion 2c of the consolidated criteria, the Government will not grant a licence if there is a clear risk that the items might be used in the commission of a serious violation of international humanitarian law. I also recognise that the judgment is not about whether the Government made the right or wrong decisions, but about whether the decision making was rational. I also recognise the words from the 2017 ruling that there was

“anxious scrutiny—indeed…what seems like anguished scrutiny at some stages”

over the decision making process. However, that anxiety and anguish are as nothing compared to the civilians who have been on the receiving end of Saudi armaments since the war in Yemen began.

I also note that since that war started, the UK has licensed some £4.7 billion-worth of arms sales to Saudi Arabia in a conflict whose death toll is now approaching 100,000 people. So may I ask the Secretary of State two questions? The ruling means that the UK must retake its decision on the correct legal basis, taking into account past possible human rights abuses from Saudi Arabia. Will this Government now take seriously the deep concern, anguish and anxiety that there are substantial human rights abuses emanating from Saudi Arabia? Secondly, I was disappointed to hear him say that it was the Government’s intention to appeal. I understand the legal costs so far are somewhere over £100,000. May I ask him to respect the ruling today, not to proceed with an appeal, and not to throw good money after bad?

[Dr Fox]

The hon. Gentleman asks an important key question on the specifics. Of course, criterion 2c is a predictive element. We have to look at what we think the future risk is in granting licences, and we take into account all the information that we have had, not least since the last licensing period decision that we have looked at. That takes into account all the sources I have already given him. He asks about the wider issues. I want to make it clear to the House that in reaching the decisions, I have to rely on advice from those with specialist diplomatic and military expertise, but the law does not permit me, in taking these decisions on licensing exports of weapons, to take into account the UK’s strategic economic, social, commercial and industrial interests. These are very important issues, but there are areas of wider policy and they are not areas that I am allowed to take into account when I take these particular decisions.

Oral Answers to Questions

Stewart Hosie Excerpts

Thursday 6th June 2019 Commons Chamber

[Graham Stuart]

One of this Administration’s successes is the establishment of the Department for International Trade. For the first time, we have a dedicated, focused international economic Department that seeks to build our global prosperity. Africa, which is expected to double its GDP between 2015 and 2030 and whose population will nearly double in the not too distant future, is an area in which we need to up our engagement. That is why we are organising an African uplift this year, and we will continue to do more.

[Stewart Hosie (Dundee East) (SNP)]

Implementing the export strategy also requires us to implement the cyber-security export strategy, which relies heavily on UK Export Finance for direct lending, export refinancing and so on. If cyber-security exports are a genuine strategic priority, what proportion of UK export financing will be committed to its support?

[Graham Stuart]

UK Export Finance responds to the market. It is there to ensure that no viable British export fails for lack of finance. Therefore, predicting, let alone fixing, the percentage that will be put into any particular sector—even if it is a strategic priority for the Government —would, I think, be a mistake.

Future International Trade Opportunities

Stewart Hosie Excerpts

Wednesday 1st May 2019 Westminster Hall

[Stewart Hosie (Dundee East) (SNP)]

I shall be brief; I love these one-hour debates, but we are now seeing the limitations of them.

I agree with the hon. Member for North Warwickshire (Craig Tracey) in one or two regards: we will most certainly face stiff competition, there will be substantial growth outwith the EU, and there is a range of opportunities. Where I disagree with him is that I do not believe we are ready. In terms of the opportunities that exist—as I will explain later, and as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), who is Chair of the Select Committee, said—I do not believe that they will fill the gap we are about to create.

Along with many Members, including the hon. Member for North Warwickshire, I am keen to talk about services in this regard; they have been ignored so far in the debate over customs, tariffs and checks at the border. They are the largest part of our economy and they are a substantial minority of our total exports, but the starting point about services does not fill me with confidence. If one looks at the Swiss deal, the House of Lords report said:

“Most trade in services, which make up 52 per cent of all UK-Swiss trade, is not covered by the deal.”

Lord Boswell went on to say that the deal with Switzerland

“in many aspects differs significantly from the EU-Swiss agreements it replaces.”

Likewise, after the deal with Norway was announced it was confirmed that it did not cover service trade or technical regulations for food, animals or plants. If we cannot replicate in the continuity agreements what we already have with friendly trading partners, it does not augur well for cutting new and innovative deals. I hope the Minister will say a word or two about how he intends to get around that obstacle when we start negotiating in earnest.

[Angus Brendan MacNeil]

My hon. Friend was very kind, when he started his speech, in agreeing with the hon. Member for North Warwickshire (Craig Tracey). I am sure there is much to agree with, but I would like to pull the hon. Member for North Warwickshire up on the point he made about Scottish independence and the SNP. Scotland is not talking about walking out of trade blocs or ripping up trade agreements; it is talking about completing the process of political devolution, which would be independence. A country that has done that already and devolved from the UK—namely Ireland—is now in a trading bloc that represents about 22% of global GDP and it has an equal voice, while Scotland is stuck as a hostage in a little place that represents only 4% of global GDP.

[Stewart Hosie]

My hon. Friend makes his point himself; I will not spend time agreeing with him, although I do entirely.

The Swiss and Norway continuity agreements demonstrate what happens when negotiations take place from a position of weakness. In the EU-US negotiations we have seen the US adamant that agriculture would be included in any deal, but the EU trade commissioner Cecilia Malmström told the US trade representative that they could not negotiate on agriculture. She has been quoted as saying:

“We have made very clear agriculture will not be included.”

She can do that from a position of strength. My great concern is that the UK is negotiating from a position of profound weakness, as evidenced by the failure of the continuity agreements, meaning that we may well face all the downsides of the US and others seeking an agricultural deal that will weaken food, hygiene and environmental standards. How does the Minister respond to that? It would be useful to know.

I finish by making a key point that was mentioned by my hon. Friend the Member for Na h-Eileanan an Iar when he talked about export figures. The National Institute of Economic and Social Research suggested that any Brexit would see a loss of around 20% in total UK trade. Cutting a deal with the main English-speaking economies would see an increase of 2% to 3% and cutting a deal with the BRIC countries would see an increase of 2% to 3%. If we lose 20% of our total trade, the best we can do with the biggest economies in the world is to claw back maybe 5% or 6%. It is a pretty bad starting point. How does the Minister intend to ensure that there is a real focus on filling the gap and making sure that no part of the country, no part of the economy and no workforce is sacrificed on the altar of Brexit ideology?

Oral Answers to Questions

Stewart Hosie Excerpts

Thursday 14th March 2019 Commons Chamber

[Dr Fox]

It would be absolutely ridiculous of any Minister to try to tell businesses what they can and cannot do. I can tell the hon. Gentleman, though, that last year foreign direct investment into the United Kingdom rose by 20%; in continental Europe, it fell by 73%. The hon. Gentleman should draw his own conclusions.

[Stewart Hosie (Dundee East) (SNP)]

In the recent debate on international trade, I cited two examples of the Canadian Government’s having to withdraw public health measures after legal challenges by businesses under the terms of the North American free trade agreement. When the Secretary of State is considering health protections in future UK FTAs, will he ensure that they go wider than direct NHS provision and encompass wider public health policy?

[Dr Fox]

We will look to replicate the success we have already had in bilateral investment treaties. UK investors have successfully brought around 70 cases against other Governments. No private company has ever brought a successful case against the United Kingdom in respect of our bilateral investment treaties.

Trade Remedy Measures: UK Interests

Stewart Hosie Excerpts

Monday 25th February 2019 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

In evidence given about the formation of the TRA, the Law Society of Scotland said:

“it is important that any assessment of impact of particular trade measures takes into account a wide range of stakeholder interests. This should involve balancing the interests of producers and consumers, which may sometimes be directly opposed, as well as consideration of the wider public interest.”

That, of course, means consideration of measures such as the anti-dumping and subsidy measures that were in the provisional report published last July.

The methodology for determining whether measures would be maintained or rescinded, again published last July, included a great deal about production—supporting firms’ production, total domestic production, opposing firms’ production—and a great deal about the market, UK firms’ domestic sales and total domestic sales including imports. Those who have solely producer metrics are in the tables that were published last July—the producer application received, the support threshold met, the market share threshold met—and that led to some apparently contradictory decisions. Reinforcing bar from Belarus would have its measures terminated, but reinforcing bar from China would have its measures maintained. Tubes and pipes of ductile cast iron from India would be terminated, but welded tubes and pipes of iron or non-alloy steel from Belarus would be maintained. There were contradictions in what were apparently similar items.

May I therefore ask the Secretary of State—I know the updated version will be published soon—why was no weight given to the consumer interest explicitly? Why was no weight given to the wider public interest explicitly? Why do those outcomes seem so arbitrary for what would appear at face value to be similar products?

[Dr Fox]

Our intention is to maintain protection where there is a case to protect British businesses from unfair trading practices. We have looked at the evidence that the EU put in place to have these remedies in the first place and we think there is a suitable case for doing it. The hon. Gentleman asked me a very specific question about rebar steel. The reason that we have maintained measures on China and terminated measures in other cases is because no producer interest was expressed. They made no application for that to happen during the call for evidence and therefore, it did not fall within the criteria that we set out for the consultation and which I reiterated in my statement.