Trade Bill

Viscount Younger of Leckie Excerpts

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

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

My Lords, I am very grateful to my noble friend Lord Hain for pursuing these issues of such immense importance to the lives and prosperity of the people who live on the island of Ireland. I thank all those who have contributed to this rather good debate on the issues he raised. As the noble and right reverend Lord, Lord Eames, reminded us, successive UK Governments of all political colours have supported the people of Ireland and the peace process.

These amendments speak to that history. The Northern Ireland protocol is now the definitive statement about how trade in goods, but not services, is to be organised going forward. However, as my noble friend Lord Hain said, it must be supported, and, as the noble Baroness, Lady Ritchie, reminded us, it is really complicated. Amendment 26, which we support, raises how future UK FTAs will impact trade in goods and services in Northern Ireland, with particular reference to any discrimination which might arise, directly or indirectly.

The Minister will almost certainly say that we should not worry and that all the issues raised today are covered. Indeed, the noble Baroness, Lady Neville-Rolfe, urged us to move on. However, as my noble friend Lord Hain said, future free trade agreements may well raise issues, and he is right to insist that this Bill makes the position crystal clear. As the noble and right reverend Lord, Lord Eames, warned us, the absence of such a clause may have a disproportionate impact on the current situation. We should heed carefully his words about fear and uncertainty ahead and do what we can to mitigate it.

I agree with the noble Lord, Lord Cormack, that the Government should offer to bring this issue back at Third Reading, but I am not optimistic. If they do not, we will support my noble friend Lord Hain if he decides to divide the House.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie, and my noble friend Lady Altmann for their amendments.

Amendment 17 strives to make the ratification of any future UK-EU trade agreement conditional on compliance with the Northern Ireland protocol. As noble Lords will be aware, and as the noble Lord, Lord Hain, himself has said, we have been overtaken by events—I think the word used by the noble Baroness, Lady Ritchie, was “eclipsed”—and the EU-UK trade and co-operation agreement has now been ratified. Noble Lords will also be aware that we remain fully committed to implementing the Northern Ireland protocol.

However, I am happy to provide further reassurances in my remarks today—I hope I will be able to do so. Our commitment is demonstrated by the agreement we have reached with the EU in the withdrawal agreement Joint Committee on the implementation of the Northern Ireland protocol. To reassure my noble friend Lady McIntosh, this upholds unfettered access for Northern Ireland businesses to their most important market, eliminating any requirement for export declarations for goods moving from Northern Ireland to Great Britain. It safeguards Northern Ireland’s place in the UK’s customs territory, establishing the platform to preserve tariff-free trade for Northern Ireland businesses, protect internal UK trade and maintain the UK’s VAT area.

On the question raised by my noble friends Lady McIntosh and Lady Neville-Rolfe on supermarkets, the Government acknowledge there are some teething issues and are working closely with the relevant stakeholders to urgently iron them out. The issues are being addressed, to give some reassurance.

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[Lord Bruce of Bennachie (LD) [V]]

My Lords, like others who have spoken, I recall that I have spoken several times on similar amendments to this Bill, the then Agriculture Bill and the then United Kingdom Internal Market Bill. I do not intend to repeat previous speeches, but rather to challenge the Government to wake up and smell the coffee. Because, in spite of paying lip service to the contrary, Ministers have been careless or dismissive of the concerns of the devolved Administrations and clearly disregard the impact of this insouciance, coupled with incompetence, on the mood across the devolved Administrations, which has hardened. If they had a voice, mind you, I suspect that that mood would be articulated by a number of English regions as well.

Before we got here, the interconnection of the EU, the UK and devolved decision-making worked pretty well, but the transition to the UK outside the EU is clearly having a disruptive effect. The rise in the support for separatism, which has been commented on across the devolved Administrations, has been driven by the combination of incompetence and scathing indifference to the concerns of a growing number of our citizens. The combination of Brexit, the Covid pandemic and an ideological, right-wing Government has created a toxic mix that is putting the future of the UK as a working enterprise at grave risk.

I believe there is a positive case to be made for the United Kingdom, and for the benefits to all its parts of staying together, but it will not be achieved by London-centric English exceptionalism. All the peoples of the UK benefit from both our own achievement in developing the Oxford AstraZeneca vaccine and the UK’s ability to secure significant quantities of this and other vaccines and begin the process of distributing them fairly, on a pro rata population basis, to all corners of the kingdom. The resources of the UK have delivered furlough to millions and survival support to businesses to try to get us through the crisis, and that has reached all corners of the UK.

Our security and defence capacity and diplomatic reach across the world may not be appreciated on a day-to-day basis by the average citizen, but they would certainly be missed if they were disrupted by the break- up of the UK. So that is a warning. It is the case, unfortunately, that much of this has been compromised by the Government’s cavalier disregard for international law, the surrender of many of the hard-won advantages and influences we had secured through the EU and the cut to our aid budget—much of it administered, as it happens, from Scotland.

The defeat of President Trump and the election of the new, more constructive and engaging Administration in the United States surely demonstrate that we should not lightly throw away the things we share across the United Kingdom just because we dislike or even despise the current Prime Minister and his self-serving cronies. However, with elections in Scotland and Wales in May, the Government need a desperately urgent reset of their stance towards the devolved Administrations. As has been said, the fact that trade policy and, more pertinently, trade treaties are reserved does not justify excluding Scotland, Wales and Northern Ireland from having a say in shaping them.

The noble Viscount, Lord Trenchard, may be right in saying that the negotiation of these treaties is a reserved matter exclusive to the Executive, and that this amendment is unhelpful, but I say to him very gently that I think he is totally failing to understand the mood that is growing in the devolved Administrations about this approach. If the UK Government could secure more preferential access, for example, for Scotch whisky into India, it would be a cause for rejoicing—but not if at the same time we saw a relaxation of standards for imported beef. So the devolved Administrations would first want to have a positive input into the things they wanted to secure, as well as a protective input and concerns about agreements that might damage significant parts of their interests in the economy. Surely the UK Government should seek to represent the whole of the UK in their approach to trade negotiations and agreements.

So I support the basic aims of this amendment tabled by the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bennett. It is, I believe, weakened by proposed new subsection (5) which, although requiring the UK Government to seek the consent of the devolved Administrations, allows that to be set aside. However, I understand that that has been put in in a spirit of compromise. Personally, I would prefer some form of qualified majority voting, and also a way of testing the interests of English regions. Unless the Government respond to the spirit of this and similar amendments, by engaging much more positively with the devolved Administrations, they will face a constitutional crisis on top of the pandemic and Brexit—a perfect storm.

I say to Ministers that they should recognise that this has been a growing movement since the Brexit scenario has developed and the legislation relating to it has come forward—on agriculture, trade and the internal market. As has been clearly stated, we have tabled and supported a series of amendments seeking to secure the role of the devolved Administrations in the decision-making process. If the Government choose to disregard that, they will only be fuelling the centripetal pressures on the future of the United Kingdom, and I plead with Ministers to recognise that it is not just about the terms of the legislation, it is about the mood, the spirit, the language and the body language of Ministers when they speak to and about the devolved Administrations. Because, right now, that body language is driving support away from the future of the United Kingdom. I do not believe that that is the Government’s intention, but it is the effect of their behaviour and I think they should really reflect on that.

[Viscount Younger of Leckie (Con)]

I thank the noble Lord, Lord Stevenson, for Amendment 24, as it provides a further opportunity to talk briefly about the important issue of the devolved Administrations’ role in our new international trade policy.

The UK Government are committed to working closely with the devolved Administrations to deliver an independent trade policy that works for the whole of the UK, and this has been reflected by statements from the devolved Administrations. For example, as I noted earlier in previous debates, the Counsel General for Wales, Jeremy Miles MS, recently said in his evidence to the Welsh Affairs Committee on 19 November that the department has listened to the devolved Administrations and established a new ministerial forum for trade, which we have used to consult them on all our trade agreements. The forum met four times last year, most recently on 9 December, and regular engagement will continue in 2021. I listened to the speech by the noble Lord, Lord Bruce of Bennachie, and do not entirely agree with his version of how the continuing talks are going.

This engagement has meant that the devolved Administrations’ views have already begun to be reflected in our free trade agreements. For example, the devolved Administrations made it clear that they supported high ambition for the mobility of professionals in all our FTAs. With regard to the Japan FTA, the UK Government delivered this by securing more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction.

I also listened to the brief speeches by the noble and learned Lord, Lord Morris, and the noble Lord, Lord Wigley, on their concerns over Welsh lamb. As noble Lords will know, the Bill does not give the UK Government powers to implement future trade agreements with partners, including New Zealand, but we will continue to work closely with the devolved Administrations on all our current FTA negotiations, so that their interests and priorities are reflected through negotiations.

However, while it is absolutely right that we engage meaningfully with the devolved Administrations, we must do so within our existing constitutional framework. That is why the DIT has sought to strike the proper balance between engaging with the devolved Administrations and respecting that, under our constitutional settlement, international trade is both a reserved matter and a prerogative power.

My noble friend Lord Trenchard spoke at greater length—and in my view, very wisely—on these points. I agree with him that, unfortunately, this amendment would upset that balance. It would require the UK Government not only to consult but to seek the consent of the devolved Administrations for FTAs covering areas of devolved competence. This goes far beyond what is appropriate, given that international trade is a reserved matter and would have significant implications for the strength of the UK’s negotiating position. I believe that my noble friend Lord Trenchard also made that point.

The principle that the UK Government have sole responsibility for decisions on international trade negotiations is not just long-standing constitutional practice but is critical in ensuring that the United Kingdom can speak with a single voice in our international relations, providing certainty for our negotiating partners and the strongest negotiating position for all the regions and nations of the UK. The amendment would undermine this unity and could lead our negotiating partners to try to play different Administrations off against one another. This is surely one of the reasons why the UK Parliament decided that international relations should remain a reserved matter and enshrined this in the devolution settlements.

The UK Government have worked hard with the devolved Administrations to ensure that the Bill is already drafted in a way that respects the devolution settlements. The Minister of State for Trade Policy has undertaken a significant programme of engagement to achieve this, including regular meetings with devolved Ministers, bilateral calls and attending the devolved legislature committees to discuss their views.

As noble Lords will know, the Scottish Government withheld consent from the previous Bill—the Trade Bill 2017-19. For this Bill, we therefore made additional amendments to address their concerns, such as removing restrictions on Scottish Ministers’ use of the Bill’s delegated powers. As a result, the Scottish Government and the Scottish Parliament’s Finance and Constitution Committee changed their position and recommended that the Scottish Parliament consent to the Bill. On 8 October, a legislative consent motion—an LCM—was formally granted.

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[Lord Bassam of Brighton (Lab) [V]]

My Lords, now that the Brexit transition period has ended, the creation of the Trade Remedies Authority is obviously both necessary and very welcome. It should allow the UK to protect domestic industries, investigate allegations of unfair practices by overseas competitors and seek their resolution via the WTO’s dispute settlement mechanism. We must have a Trade Remedies Authority that has a broad membership from sectors and regions across the UK, conducts meaningful stakeholder engagement and, of course, is independent from the Government.

I do not buy the argument from the noble Baroness, Lady Noakes, that it is not the business of Parliament to give some guidance or ideas as to who those meaningful stakeholders might be in ensuring that we get this right. Only then, I argue, will it be transparent and fair when investigating and challenging practices that distort competition against UK producers. But the Bill appears not to secure this, as reflected by my Amendment 47 and the other amendments in this group, which are in their own way entirely benign. It is worth reminding ourselves that the Lords Constitution Committee said that it was not clear why the functions and powers of the Trade Remedies Authority could not be set out in more detail in this Bill. We cannot have an unbalanced TRA that simply supports the priorities and approach of this Government, or indeed any Government. We need a functioning TRA and a functioning trade remedies system, but its functioning will be undermined if there is no independence.

Amendment 47 is simple. It allows the Secretary of State to ensure that members of the TRA should have the

“skills, knowledge or experience relating to producers, trade unions, consumers and devolved administrations in different parts of the United Kingdom.”

The amendment clearly seeks to guarantee an appropriate balance of views at the TRA, not in favour of any party or sector but for the benefit of all regions, nations and businesses. In particular, I argue that we need trade union representation in the TRA. The TUC has said that, without it, there will be

“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.”

I hope that the Minister can explain in some detail how this balance can be achieved without the necessity of this and other amendments being in the Bill.

[Viscount Younger of Leckie (Con)]

My Lords, there have been some succinct speeches in this debate and I shall keep my remarks relatively brief, but bearing in mind that there are six amendments to address.

Amendment 27 in the name of the noble Baroness, Lady Kramer, and the noble Lord, Lord Purvis, seeks to require the TRA to publish a strategy of its engagement with certain stakeholders within six months of its establishment. I am afraid that I agree with my noble friend Lady Noakes that we do not see merit in this, and I shall briefly explain why. The TRA’s processes are set out in legislation and limited by the scope of WTO agreements, including much of the basis of how it will engage with stakeholders in its investigations. UK producers will be able to bring complaints directly to the TRA through an innovative digital service which will underpin the process and make it easier for businesses to engage. I hope that I can provide further reassurance to the noble Baroness by outlining that we have engaged extensively with various stakeholders on establishing the TRA and encouraged them to build constructive relationships with the TRA itself, once established. I shall say more, particularly in relation to questions raised by my noble friend Lord Lansley, about progress on setting up the TRA in a moment.

I will move swiftly on to Amendments 28 and 29, in the name of my noble friend Lady McIntosh of Pickering, in relation to the TRA. These amendments would seek to narrow the limits of a request that the Secretary of State may make to the TRA for advice, support or assistance. We are committed to creating a world-class organisation staffed by a team of highly skilled international trade experts. The Secretary of State may require assistance from the TRA’s knowledgeable experts in certain circumstances to assist work carried out by government departments. There are some situations where the Secretary of State may need to request assistance from the TRA outside of trade remedy disputes arising under the WTO dispute settlement mechanism, including assistance in respect of provisions relating to trade remedies in regional trade agreements. In seeking assistance, however, the Secretary of State must have regard to the TRA’s independence, impartiality and expertise.