Trade Bill

Angus Brendan MacNeil Excerpts

Tuesday 9th January 2018 Commons Chamber

[Hannah Bardell]

I thank my hon. Friend for that intervention, but I do not want to be uncharitable to the Secretary of State.

The trade White Paper was issued on 16 October, with a deadline of 6 November. That is not exactly a long period for the consultation and it did not give anyone much time to respond. When the Trade Bill was published the very next day, there was concern at the speed with which the process was concluded. The Manufacturing Trade Remedies Alliance, which I met recently, voiced anger on behalf of its members, saying that officials would have no time to analyse reaction to the trade White Paper or to brief Ministers on the industry’s concerns. This goes back to the point about conducting a proper process in a timeous manner.

[Angus Brendan MacNeil]

It is an excellent suggestion that the Trade Remedies Authority should have an office and a commissioner in Scotland. The balance that feeds into the equation of what remedies are taken cannot be properly achieved by an authority based only in London that has a London-centric point of view.

[Hannah Bardell]

Absolutely. This was an opportunity to move away from that London-centric psychology.

In Scotland, Dave Tudor, the chairman of the Life Sciences Scotland Industry Leadership Group, published an open letter to the UK’s Brexit negotiators warning of the damage that uncertainty is already inflicting on the industry. These are his grim words, of which we should all take note:

“Widespread concern over regulation, movement of goods, access to talent and research and development and the negative impact this uncertainty is causing is set to intensify.”

I genuinely wonder when it will dawn on the UK Government and others across this House that our universities cannot staff their courses and are having to close departments, that they are dropping down the world rankings because they cannot attract talent and European funding and that we are becoming a union of diminished importance and influence. I for one have no intention of letting that happen to Scotland or, if I can help it, to the rest of the UK. As our First Minister, Nicola Sturgeon, said recently,

“no Brexit is preferable to no deal.”

We accept that the UK Government should make preparations for the UK’s withdrawal from the EU, particularly with regard to maintaining the important continuity of current trading arrangements. This is of vital importance to businesses across the UK and the EU. However, we are concerned about the direction of travel in the Bill.

Since 2007, Scottish exports to the EU have grown by more than 25%, which is a clear demonstration that the single market is Scotland’s real growth market. Being part of the EU means that our businesses are operating within the world’s largest trading area. With 500 million potential customers, it is eight times bigger than the UK alone and contains eight of our top 12 export destinations. The financial services sector alone employs 40,000 people in Edinburgh, and over £500 billion-worth of assets are under management in the city. We have already seen banks move from London due to fears of a hard Brexit when we lose our membership of the single market. Just a month ago, the European Banking Authority announced it will move from London to Paris.

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[Hannah Bardell]

I thank the hon. Gentleman for his intervention, but not all of them have said that. I am quoting directly from someone who has brought that information to me, but I appreciate that there are different views and different takes.

[Angus Brendan MacNeil]

Some in the airline industry think that they can go back to the agreements that existed from 1945 to 1955, but those bilateral aviation agreements stipulate London airports, so maybe Heathrow is okay, but the rest of us will be left in hock.

[Hannah Bardell]

I thank my hon. Friend for his intervention, and I remind the hon. Member for Milton Keynes South (Iain Stewart) that it was the Chancellor who said that flights being grounded is a concern.

Financial services of all kinds, from insurance to loans to derivatives, could be disrupted because UK firms are not able to continue servicing EU customers, or vice versa. EU banks that have derivatives cleared through UK central counterparty clearing houses might be in breach of regulations, as those central counterparties may not be authorised. I appreciate this is a technical point, but it is important. Contracts may have to be unwound, or may become unenforceable. According to reports from the Association for Financial Markets in Europe, €1.3 billion of bank assets, including loans, securities and derivatives, may need to be moved from the UK to the EU. I am sure the Secretary of State is familiar with those issues, but I wonder what he and his colleagues will do about it.

This Bill also gives the Government power to implement agreements with partner countries corresponding to the EU’s free trade agreements. We have serious concerns about that, and we hear that the UK Government are off negotiating deals in the US—top-secret deals that the Secretary of State has said should remain classified for four years after a deal is struck, which beggars belief.

This Trade Bill also provides measures for HMRC to collect data on behalf of the Government—the hon. Member for Ribble Valley (Mr Evans) asked whether I did not agree that should happen, and I have no problem with it. It is important that it happens, but it is about how it happens. It is vital that data is collected in an appropriate fashion, and the Law Society of Scotland has expressed concerns:

“We are concerned that clause 7(1) grants a very wide discretion to HMRC to require information. The scope of this provision should be more clearly defined to give greater certainty as to the extent of information and the anticipated frequency and method of data collection.”

The focus of the Scottish Government, and of the Scottish National party in power in Scotland, has always been to preserve our place in Europe for the benefit of business, the economy and families everywhere. The only way a hard Tory Brexit can be avoided is if Labour joins the SNP in supporting our continued membership of the single market and the customs union in these Brexit negotiations. I know these Benches are not very comfy, but some of the bums opposite must be pretty sore from sitting on the fence. We really need to get together on this issue.

Liberty has expressed deep concerns:

“The plans are the latest attempt by ministers to undermine democracy and bypass parliamentary scrutiny of the Brexit process, after the EU (Withdrawal) Bill and Data Protection Bill contained similar ‘Henry VIII’ powers.”

The EU (Withdrawal) Bill defines “retained EU law” as including primary legislation that gives effect to EU mandates, such as the Equality Act 2010 and the Modern Slavery Act 2015.

The concerns continue to be wide ranging not just on the Opposition Benches but across society.

I close by sharing a little lyric I wrote that sums up the current situation:

“B-R-E-X-I-T

Fed up with Brexit, me three,

Trading relations headed down the ‘swanee’

If it doesn’t fit on the side of a bus,

Then let’s not say it, don’t make a fuss

Phase one was a floundering mess

The Prime Minister said she did her best

The Irish border was the sticking point, and the DUP

Cross-border trade we’re told it’s possible, it’s about wording, you see

A fudge not a dodge

Or has the right hon. Lady for Maidenhead, really lost the thread?

The Brexit spool unravels

Our economy headed south and what about travel?

Blue passports we’re told

Ah, perfect, imported they’ll be, that’s me, I’m sold

Choose Brexit, choose a new queue,

At the airport, we’ll be going through

It’s for the next generation of children I fear

Erasmus, international trade, travel will be lost, I shed a tear.

LGBT rights, workers’ rights, equal pay,

All important things, the EU has paved the way,

On the night of the referendum, and then the next day

Promises made were dead straightaway

How will history judge, our politicians of today

All of us here, not well, I’d say

Not all of us want to be facing this mess,

In Scotland we voted to stay in, we think it’s for the best

So let’s get together and stop this guddle,

For the sake of our future, we need out of this Brexit muddle.”

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[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It is a great pleasure to speak in this debate as the Chair of the International Trade Committee. My Committee took evidence on the Bill in November to aid the House in its scrutiny, but as yet we have not taken a position on the legislation, as often happens with Select Committees. The views I express today are my own, not those of my Committee colleagues.

This is a significant day for the current UK’s future as a trading entity. The Bill is one of a suite of legislation promised by the Government to establish the framework for an independent UK trade policy. It must be noted that the current UK has not operated an independent trade policy since 1973, when I was three years old. To create a new trade policy after a 40-year hiatus is an immeasurable challenge. It is paramount that we get it right and have in place the right legislation.

According to the background briefing to the Queen’s Speech, the Trade Bill was intended to create the

“necessary legislative framework to allow the UK to operate its own independent trade policy”

after Brexit. The Government said that the legislative framework would include two key features: first, a power to strike new trade deals with third countries, and secondly, the establishment of a UK trade remedies system. On reflection, it is interesting and striking to see how little of the original stated purpose the Trade Bill achieves. There is nothing in it about striking new trade deals with third countries, and the establishment of a UK trade remedies regime is largely left to the Treasury to achieve in the Taxation (Cross-border Trade) Bill. The point made by my hon. Friend the Member for Livingston (Hannah Bardell) was also striking: we need the Bill not to have a London-centric point of view.

I have three observations that concern the breadth of the powers conferred by the Bill; the lack of parliamentary scrutiny offered in the Bill; and the relationship between the Trade Remedies Authority and the Secretary of State—sadly, just the Secretary of State. On the breadth of the powers, the Government are seeking to maintain their trade arrangements with third countries with which the EU has trade agreements.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The UK Government are seeking to strike a deal with South Korea. Has my hon. Friend noted, as I have, that that might not be as straightforward as was hoped by the UK Government?

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[Angus Brendan MacNeil]

Absolutely; a number of deals with third countries will not be straightforward, and I will address the one with South Korea in particular —my hon. Friend pre-empts my speech very well.

It is striking that the UK, finding itself leaving the EU, now wants to ape exactly what the EU has been doing. It is as though the UK is tipping its hat to the EU and thanking it for leading the way—the EU has been doing such a good job that the UK wants to do exactly the same after we leave.

[David Linden (Glasgow East) (SNP)]

As we take back control.

[Angus Brendan MacNeil]

Indeed.

This is to be done by the UK establishing partner agreements with third countries that correspond as closely as possible to the agreements the EU has with those countries. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) pointed out, South Korea is a particularly striking example because the 55% provision on rules of origin in the automotive sector cannot be replicated by the UK because the UK cannot produce the 55%. That would give South Korea licence to export to the UK automotive sector and disadvantage UK manufacturers. If we want to change that percentage, any Korean trade negotiator who hopes to keep his job for a further week is not going to just nod his head. He is going to look for some sort of quid pro quo. The question then becomes whether that is the ceramics of Stoke-on-Trent, Harris tweed or Stornoway black pudding. What could it be? Is it the whole of agriculture? We just do not know. That is the reality of how trade works. If I give something, I want something back in return. I do not just give something for nothing in a trade agreement.

The trade agreements to which the Bill applies include free trade agreements and international agreements that relate mainly to trade, other than free trade agreements where the other signatory and the European Union are signatories to the agreement immediately before exit day. Furthermore, all but five countries around the world are involved in regional trade agreements. Therefore, the UK would be joining company with East Timor, Somalia, South Sudan, Mauritania, and São Tomé and Príncipe in the gulf of Guinea. More strikingly, the UK will find itself with higher trade barriers with 27 countries in Europe, plus another 67 that are covered under another 40 agreements with the EU, making a total of 94 countries. When I asked the Prime Minister about that in the Liaison Committee, she seemed unaware that the UK could be disadvantaged in its trade with up to 94 countries.

Much could be said about the breadth of the powers that the Government are taking, but I think that the point should come from the Department for International Trade, whose second permanent secretary told my Committee that replication

“will depend as much on whether the party at the other end is prepared themselves or will seek to have some agreement that will allow common content. Until we have that detailed discussion on the replication, neither we nor they will be 100% sure of exactly how you will define what is as close as possible to what we have had with the EU.”

Time is against me, as I had hoped to have 10 minutes but have only two and a half remaining. One of the major issues that we have to consider is parliamentary scrutiny. Many countries allow parliamentary scrutiny of their trade Bills, including the United States, Australia, New Zealand and Canada—even the European Union allows that—so we are not asking for anything new. In the United Kingdom, whether it is Henry VIII powers or James II powers, which the Williamite revolution got rid of, this is the situation we might be left in. In trade negotiations there is give and take, with winners and losers within the negotiating countries.

[Drew Hendry]

My hon. Friend makes a powerful point about the need for proper and effective scrutiny. Does he agree that it is reckless to embark upon this course without first ensuring that Parliament has proper powers of scrutiny?

[Angus Brendan MacNeil]

My colleague is again absolutely correct.

In here, there are Members representing many constituencies—today they are on the Government Benches—who think that they will be okay. Governments change over time. Who makes the decisions and according to what criteria? Will decisions be made such as the bilateral aid agreements run from 1945 to 1985, in which the UK Government had a deliberate policy to support only London airports, for example? When Iceland wanted flights to Scotland, the UK Government tried to get them to fly first to London and then north to Scotland. It was Iceland that broke that. That was a deliberate policy of the UK Government. London is not the place it is today because of anything magical about London; it is the result of UK Government policy over many years. Other areas of the UK could be sacrificed in future, just as they have been sacrificed in the past, for the benefit of London or elsewhere. If there is no parliamentary scrutiny, on what basis will that be done? Will it be on the basis of the Secretary of State having a meeting in an airport departure lounge? It is not at all clear.

[Hannah Bardell]

rose—

[Angus Brendan MacNeil]

I am running out of time and cannot give way.

Surely the devolved Administrations must be involved. My hon. Friend the Member for Livingston (Hannah Bardell) mentioned the 111 powers coming back from Brussels. I am tempted to say that we must free the 111 powers from the grasp of the Westminster super-state, because that is what is happening at the moment. Those 111 powers should be going to Scotland.

Polls show that the EU has 68% support in Scotland and that the UK has 51% support. If Members were wise, they would not treat Scotland in the highhanded way the UK super-state is trying to do, because that will lead—I want it to—to an independent Scotland. If they were sensible, they would be more measured in what they are doing. The new Trade Remedies Authority should exactly mirror that point. [Interruption.] The Minister chunters from a sedentary position, “What does this have to do with the Bill?” It has everything to do with the Bill, because if you continue with your London- centric point of view, you will regret it in future—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I cannot let the hon. Gentleman say that. I will not regret anything; it is the Minister who will regret it. I will give the hon. Gentleman an extra 30 seconds to make his point properly.

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[Angus Brendan MacNeil]

I am very grateful, Madam Deputy Speaker—you are indeed a great Madam Deputy Speaker—for the extra 30 seconds.

The Trade Remedies Authority needs to be current UK-wide, otherwise it will face the real temptation of being only a London-centric body. As things are given, things are taken. Some people are going to win and some are unfortunately going to lose. We have to ensure that that happens on the basis of thought-through decision making involving this place. I urge the House to be a champion for democracy and accountability in trade policy. This Bill needs to be amended accordingly, as my Committee more than knows. I think on that we can agree.