Trade Bill

Baroness Hooper Excerpts

Monday 21st January 2019 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I want to raise what probably feels like a niche issue from a slightly different angle; it seems relevant when we are talking about amendments dealing with the regulation of performance and the environment. If I may, I will do so through an example, although I think that the example probably applies in many other areas.

When I was a Minister at the Department for Transport, I dealt briefly with a niche industry in the UK: specialist car manufacturers, sometimes known as small and ultra-small volume manufacturers. Noble Lords will know their names: Lotus, Williams, Aston Martin and so on. The industry is almost uniquely British; a few Italians may play in the same arena, but globally the industry is essentially British. It has managed to thrive because the EU has recognised the significance of the industry through its turnover of around £3.5 billion per year. That is not insignificant, although it is not on the same scale as agriculture.

The EU has been willing to carve out special provisions for this group of manufacturers, which often cannot meet performance and environmental standards in the way that mass automobile manufacturers can and should. It has managed to open up global markets for those cars by incorporating those niche provisions in its trade agreements: 65% of these cars are exported. The largest market is the United States, where environmental and performance standards are never really an issue; it starts from a very low base. The manufacturers get permission to sell these cars in the EU, which is the next-biggest market, followed by South Korea and Japan. It is only because of the EU’s size that it has been able to create those niche opportunities for this industry. I am interested to know whether the UK believes that it can continue, in its rollover arrangements, to provide that ongoing protection to what one might describe as a somewhat resented industry, even though it is rather successful.

The other achievement of the EU because of its power, breadth and size is its vigorous and strict standards for mass-market cars, despite its significant exception to deal with this essentially British industry. The EU will have no interest in continuing that arrangement post Brexit; as I said, some cars are made in Italy, but no Government anywhere else in the EU will be concerned about this issue. The industry is already very concerned that, following no deal, it may find the EU quick to eliminate the carve-out. That is possible and it is a serious question, but another question concerns whether the carve-out can be preserved in these rollovers and continued in future arrangements when the UK will be negotiating from a much weaker position.

Can the Minister help us work our way through this? I suspect that this industry is not the only niche one. As the Minister will know, the EU has been very good about providing opportunities for highly specialist and select industries that are specific to one of its member countries. I suspect that my experience with the automotive sector is repeated elsewhere. The EU uses its large heft to protect the relatively small. Can the Minister give us some clarity, since these deals are being negotiated as we speak?

[Baroness Hooper (Con)]

My Lords, I fully accept the Government’s assurances in relation to this group of amendments that there is absolutely no intention to lower standards and that the existing protections for consumers will be preserved. However, as has been shown in the discussions so far, there is a cause for concern. While the British Government intend to roll over the agreements without making any change, there is some uncertainty about whether the other parties with which we will be negotiating have the same point of view. The issues have been discussed sufficiently for me not to repeat what has been said, but I suggest that there are a couple of safeguards which have not been mentioned.

The global demand for British goods is based on our high standards. People buy British goods not because they are cheap but because of their high quality. Therefore, to disregard food standards would undermine any possibilities in that area. I understand that the EU withdrawal Act ensures that all existing EU environmental law will continue to operate in UK law. That again provides businesses and stakeholders with certainty.

[Baroness Young of Old Scone]

I am grateful to the noble Baroness for giving way. We have stressed throughout the debates about Brexit how important European law has been in driving UK environmental law. However, there are still whole swathes of environmental law in the UK which were actually invented by us. They are not yet safeguarded and could be undermined by trade deals.

[Baroness Hooper]

I bow to the superior knowledge of the noble Baroness in this area and I hope that my noble friend the Minister will be able to reply.

[Lord Fox (LD)]

My Lords, I agree with much of what has been said in the debate and your Lordships will be pleased to know that I will not repeat the arguments. I shall also try not to be one of the dreamers referred to by the noble Lord, Lord Judd. In speaking to Amendment 10, the noble Baroness, Lady Neville-Rolfe, talked about services and I agree with much of what she said. She stressed the need to ensure that the Government retain the right to decide where services are delivered from. Unfortunately it turned into a double-edged sword when she then conflated that with the removal of much of the substance of the amendments proposed by my noble friend. Having heard the debate, I hope she feels that perhaps it would be as well to leave it in.

The Prime Minister has today singled out two elements of what we find in the general thrust of the amendments before us. She has said,

“we will embed the strongest possible protections on workers’ rights and the environment”.

That concedes a weakness in that area where there was a perception that the Government were perhaps seeking to water down those standards and presumably that is what the Prime Minister is seeking to avoid. But only those two areas have been chosen although there are many other important elements which have been considered in this debate. That puts the areas which are not on the Prime Minister’s list at a disadvantage. That is why it is important to ignore the advice of the noble Baroness, Lady Neville-Rolfe, and seek to put the elements set out in these amendments into the Bill. They would add food quality, animal health, hygiene and welfare, ethical standards and so on.

The noble Baronesses, Lady McIntosh of Pickering and Lady Hooper, were quite right to point out that our food is sold on the back of our high-quality agriculture. It is special, but you cannot be special if you are producing food to a lower standard. I think that we should be a little worried and suspicious if these standards are not included in the Bill.

We have heard some warm words from Defra which have been quoted by other noble Lords, but we have also heard some disquieting words coming from other departments, particularly that of the Minister herself, the Department for International Trade. However, I exonerate her from being one of the people saying these things.

When it comes to negotiating other standards— I know we are on a continuity kick here—what we say on continuity counts for what comes later. That is absolutely central and is why this debate has been really important. There have been noises off around deals with the United States and other things, and standards will be a key part of that negotiation. Unless we draw firm lines here in this Bill and beyond, those standards will be in play. I do not think we want them to be in play.

Finally, I come back to Amendments 8 and 53 in the name of my noble friend Lord Purvis. Proposed paragraph (c) of Amendment 53 states that,

“the Secretary of State has laid before Parliament an assessment of the potential economic, social, human rights and environmental impacts of the international trade agreement on the contracting parties”.

This, and nothing else, is the single most important part of this debate. We need to ensure that the DIT has the competence and people who can do that work, and we need to support these amendments.