Trade Bill

Baroness Blower Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

[Lord Hain (Lab) [V]]

My Lords, the Covid-19 pandemic has shone a spotlight on unacceptable working conditions, especially those endured by many key workers, and on some of the downsides of globalisation—job insecurity, zero-hours contracts, unfairly poor pay, discrimination and lack of recognition—and it is a pleasure to follow my noble friend Lord Hendy’s very able and expert moving of Amendment 17.

The Covid-19 pandemic has emphasised the significance of employment laws and of gaps in international trade agreements, notably the inadequate protection of labour standards and the woeful lack of requirements that contractors for public sector work should abide by ILO conventions ratified by the UK. Ministers have been keen to distinguish between trade deals rolled over from pre-existing EU trade agreements and new deals yet to be struck independently of the UK. The focus of the Trade Bill is on the former, but if these are to be the foundations for future UK trading relationships in the post-Brexit period, they hardly look secure: far from it. Instead, the Bill is full of holes.

This amendment seeks to fill in some of those holes. It guards against regulations implementing any trade deal that permits investor-state dispute settlement arrangements that expose democratically decided laws to potential threat from foreign companies claiming billions in compensation for supposed losses. My noble friend Lord Hendy spelled out examples and I will add two others. These are not hypothetical threats. Canada has been sued for a moratorium on fracking in Quebec, and Mexico for attacks on sugary drinks to fight diabetes. The amendment will also prevent trade deals that contravene international standards of labour law, such as ILO conventions to which the UK is committed and articles of the European Social Charter, ratified by the UK.

Succeeding in global markets today demands more than matching your competitors’ prices. It means setting fresh standards of product quality and providing unparalleled levels of customer service. That can be done only by adopting world-class ways of working and by treating your workforce with respect for the standards set by ILO conventions. For the life of me —I mentioned this when I last spoke in this Committee—I do not understand why the Government are not accepting these amendments, unless they have an entirely different deregulated, low-labour-standards, low-tax, Singapore-on-Thames agenda for Britain. So I hope that the Minister will reassure us on that point when he replies.

[Baroness Blower (Lab) [V]]

My Lords, I am pleased to speak on Amendment 17, to which I have added my name.

While the history of trade negotiations may not be completely littered with the fragments of failed attempts, it is certainly the case that the Transatlantic Trade and Investment Partnership, TTIP, failed, after several years of negotiations, to come to any conclusion. In Britain, much of the opposition was on the basis of the perceived—and I believe very real—threat to our NHS: the threat that the NHS would not survive as a public service and that the writ of privatisation would run ever more unchecked. I was pleased to hear a most eloquent speech from the noble Lord, Lord Patel, offering a catalogue of already privatised and outsourced elements from our NHS, and, significantly, pointing out the dangers that this posed.

Equally, the opposition to TTIP, not just in Britain but across Europe, focused, as my noble friend Lord Hendy said, on the investor-state dispute settlement mechanism—ISDS. My noble friend gave chapter and verse on the reasons for opposing ISDS. I concur with his remarks and associate myself with those of my noble friend Lord Hain.

Let me add a perspective from the United Nations, specifically from the United Nations Conference on Trade and Development. As the Committee might expect, ISDS features in UNCTAD reports. In May of this year, we find the following in one of its reports:

“Foreign investors have used ISDS claims to challenge measures adopted by States in the public interest (for example … to promote social equity, foster environmental protection or protect public health)”—


all issues close, I am sure, to the hearts of many in this House. The report goes on:

“Broad ISDS mechanisms typically used in old-generation”


international investment agreements

“provide for the contracting parties’ advance consent to international arbitration and are characterized by broad scope, few conditions for investors’ access to ISDS and a lack of procedural improvements. As ISDS is at the heart of the IIA reform process, in recent IIAs countries have carefully regulated ISDS and at times omitted it”

completely.

UNCTAD goes on to make a number of recommendations, but I shall confine myself to this one:

“Replacing ISDS by settling disputes in domestic courts and/or through State-State dispute settlement”.


In July, UNCTAD returned to the question and said:

“Policy responses taken by governments to address the COVID-19 pandemic and its economic fallout could create friction with existing IIA obligations. This highlights the need to safeguard sufficient regulatory space … to protect public health and to minimize the risk of”


ISDS proceedings.

There are huge problems with the ISDS mechanism, from Philip Morris to the Portuguese metro and so many more. It would therefore be wise for the Government to heed the words of the United Nations—but, more so, to heed those of my noble friend Lord Hendy. ISDS should have no place in our future trade arrangements. I will listen extremely carefully and with great interest to the response from the Minister.

[Baroness Kramer (LD) [V]]

My Lords, I will speak to Amendments 43 and 44, which again deal with dispute resolution. In a way, these amendments need to be seen together, because Amendment 44 is perhaps a patch on the current system, while Amendment 43 takes us forward towards a resolution so that we can structure a suitable mechanism for dispute resolution under trade agreements.

Amendment 44 requires that legal proceedings against the UK under an ISDS would be heard in the UK courts. Essentially, it picks up the point made by the noble Baroness, Lady Blower, that one of the recommendations of dealing with the most egregious aspects of ISDS is to throw the issues back into the domestic courts. It provides a patch that would help us get through this immediate set of problems, because suddenly transparency, fairness and respect for domestic law come into the picture.

I am not going to repeat all the arguments already made very powerfully by the noble Lords, Lord Hendy and Lord Hain, and the noble Baroness, Lady Blower, about the flaws in ISDS. I think we can all accept that it is generally regarded as unfit for purpose in a modern, complex economy, with trade agreements that now cover so many issues. We probably all share the concern that rolling over existing ISDS in continuity agreements is generally very undesirable because it sets such a clear precedent for using ISDS again in future trade agreements. I think we all have a particular eye on the US FTA negotiations and are very concerned about ISDS provisions appearing in that.