US Steel and Aluminium Tariffs

Barry Gardiner Excerpts

Monday 4th June 2018 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I am grateful to the Secretary of State for advance sight of his statement and for his telephone call yesterday afternoon. He is a very courteous man, but no amount of courtesy can hide the fact that he and his party have a record of failure when it comes to defending our steel industry.

When China began dumping its over-production into the European market back in 2015, it was the Secretary of State’s Government who opposed the European Union taking stronger defence measures and who precipitated a crisis for producers in the UK that led to the loss of companies such as SSI and of 1,700 jobs at Redcar. That was not some civil service mistake, but ministerial ideology. That ideology has been confirmed by the Government’s refusal to accept the amendments that Labour tabled to both the customs Bill and the Trade Bill precisely to strengthen the trade defence measures that we could take against such illegal action.

Last week, the Secretary of State’s initial response was to say that he did “not rule out” countervailing measures with our European partners. Did “not rule out” such measures? He should have been demanding them. On the departmental website it says begrudgingly that while we are members of the EU we

“must abide by EU trade decisions”.

That hardly sounds like a full-throated and co-ordinated position with our EU trade partners—and no wonder: when the EU recently voted to modernise the trade defence measures available to protect our industries, our Government were one of only two to vote against them. It is no use the Secretary of State saying that the Opposition voted against the Trade Bill and the customs Bill and that that would have left us with no Trade Remedies Authority. We voted against those Bills precisely because they were so weak and ineffective on this matter, and he knows it.

Some 34,000 UK jobs in our steel industry and 3,500 more in the aluminium industry are at risk because President Trump is imposing protectionist tariffs that the rest of the world believes are illegal under WTO rules. We saw him use the same protectionist policies to attack Bombardier in Northern Ireland. This time, he has based the policy on a fundamental lie. He is pretending that the tariffs fall under section 232 of the Trade Expansion Act 1962 and are necessary for the national security of the United States. They are not. The lie is to try to avoid the perfectly correct response that the EU is now making in taking this as a dispute to the WTO, because the WTO is naturally reluctant to rule on what is and what is not member states’ national security.

All our steel producers want is a fair and level playing field on which to compete. They and we acknowledge that there is a real issue of global overcapacity, which brought our industry to crisis point three years ago and threatens to do so again now. That is why there are three issues on which we need absolute clarity from the Secretary of State. First, will the UK give the consent required to trigger the countervailing measures and enable them to come into effect on 20 June? The implication of the statement is that the Secretary of State will, but I ask him to leave no doubt. Secondly, the greatest threat to jobs is perhaps not directly from the loss of trade into the USA as a result of tariffs—the USA only accounts for 7% of our steel and 3% of our aluminium exports. The real danger is from the products diverted from other countries which can no longer export into the US being dumped here. When I first read the statement, I believed that the Secretary of State had made a commitment to agree to strong safeguarding measures to protect against such an influx surge. On careful reading, however, it appears that he may have given himself a get-out clause. He talks of supporting

“any safeguard measures required to deal with steel diversion”.

Can he confirm that he will support maximal measures to defend the immediate interests of our steel industry as well as any future trade defence measures that go beyond the lesser duty rule?

Thirdly, the Secretary of State mentioned that the EU filed a dispute at the World Trade Organisation on Friday. Strangely, he did not say that he welcomed that move. He knows that President Trump wishes to undermine the WTO and would prefer to do his trade deals on a bilateral basis using America’s economic might to obtain concessions. Can he confirm that, once outside of the EU, it would be his intention for the UK to continue with a WTO dispute against the US and that he is not minded to succumb to bully-boy tactics for fear of offending the President before a future trade agreement?

We do not want a trade war; most rational people believe that there are no winners in such a war. Only President Trump has said that he believes that he can win one. The UK and the EU must stand up to this behaviour and restore the integrity of the rules-based system. I therefore welcome the upcoming G7 summit and the opportunity that it provides the Prime Minister to press the case with President Trump. Will the Secretary of State assure the House that, however diplomatically embarrassing it may be for Canada as the host country, the UK will insist that this matter be given a high priority on the formal agenda and not relegated to the sidelines? The Prime Minister must persuade other leaders to respond to the fundamental problem of global oversupply as well as the unjustified action of the United States. The 37,500 workers in the UK whose jobs depend on these industries will expect her not to fail them.

[Dr Fox]

I am grateful to the hon. Gentleman. He is right that there is an issue of global overcapacity and that, as I have said, that must be tackled on a multilateral basis because it cannot be effectively tackled on a bilateral basis with the use of tariffs. That will not be a successful way of dealing with it. What it has resulted in is a great deal of energy being spent on blue on blue activity, rather than on dealing with the issue at source. However, he is wrong about the support to the steel industry. As of 8 November 2017, the Government have, for example, paid more than £207 million in compensation to the steel sector as an energy-intensive manufacturer.

The hon. Gentleman is also wrong about the Opposition’s vote against the Trade Bill. They voted against not the provisions of a Trade Remedies Authority, but the setting up of a Trade Remedies Authority, which would have meant that we had no defence whatsoever. He is wrong about another matter, too. The American President was not involved in the Bombardier dispute. That was a commercial dispute brought by Boeing and nothing to do with the US Administration. However, the hon. Gentleman is right on the precedent of national security. The problem with using national security, as has been done in this case through the section 232 mechanism, is twofold: first, if the United States were successful, it would set a precedent for others to do the same and to use national security as a pretext for protectionism; and, secondly, it leads the WTO into the realms of having to determine what is, and what is not, acceptable as a definition of national security. That is something that the WTO has always shied away from.

When it comes to the countermeasures, we will still want to see what the measures themselves are. Specifically, we have been talking to the Irish Government about the issue of bourbon being on the list because of the potential implications for the Scotch whisky industry and the Irish whiskey industry. We will want to continue those discussions with the Commission.

I made it very clear that we will have whatever safeguards are required. I do welcome the WTO dispute. If we are talking about the need for an international rules-based system, it is the appropriate mechanism for us to show our displeasure and that is the correct route for us to go down. Once we have left the European Union, I hope that we will have no problems with a UK exemption.

Oral Answers to Questions

Barry Gardiner Excerpts

Thursday 17th May 2018 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

The US President seems intent on undermining the World Trade Organisation’s multilateral rules-based system. He is delaying the settlement of disputes by vetoing the appointment of judges to the appellate body and is using national security as a cover, in this case, for naked protectionism against foreign steel and aluminium. Does the Secretary of State still think that Donald Trump is a man we can do business with?

[Dr Fox]

We do business with the United States Administration because the United States is our closest strategic partner. Where we disagree on issues such as steel, we make our voice very clear. We do not support the use of section 232 as a mechanism for dealing with the overproduction of steel. That actually hits the United States’ allies and not the designed target, which was China. Citing national security, particularly in Britain’s case, makes no sense at all given that some of the steel that we send to the United States goes into its military programmes.

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[Greg Hands]

My hon. Friend makes a very important point. That is why we have these 14 trade working groups with major markets around the world. We are in active discussions with those counterparts and we have the benefit, from March next year, of the ability to negotiate, sign and ratify trade agreements with them.

[Barry Gardiner (Brent North) (Lab)]

First, the Government said that they were simply rolling over these agreements on precisely the same terms. Then they admitted that they would have to amend the agreements with Norway, Turkey and Switzerland to avoid rolling over such things as the customs union or the four freedoms that they would rather avoid, but the Minister has still not explained what process this sovereign Parliament will undertake to ensure that these important new agreements are subjected to proper democratic scrutiny. When will he?

[Greg Hands]

We had significant exchanges on this during the Trade Bill Committee and the scrutiny arrangements are enshrined in that Bill, which I note again that the hon. Gentleman voted against. He will also know that these agreements have already been scrutinised in this House under existing EU scrutiny procedures, and there are precise arrangements set out in the Bill for how we go forward from here.

United States Tariffs: Steel and Aluminium

Barry Gardiner Excerpts

Report stage: House of Commons
Monday 12th March 2018 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I thank the Secretary of State for advance sight of his statement and for his telephone call over the weekend.

The world steel industry is on the verge of a crisis. In our domestic industry, 32,000 workers in the steel industry are facing an existential threat to their jobs. Many of those men and women are angry that it has taken the Secretary of State more than 10 days since President Trump’s initial announcement to come to this House and make a statement about the impact that this might have on their communities and what measures the Government are taking to protect their livelihoods. They expected better, and they had a right to do so, but I assure the Secretary of State that, for our part, the official Opposition will not seek to make this issue one of party political point scoring. Everyone in this House must work together. We will be constructively critical where we consider the Government can do better, but our fundamental position will be to work with the Government to achieve the best outcome for our steel communities, for our aluminium industry and for our wider economy.

The Secretary of State is correct that the fundamental cause of this crisis is overcapacity in the global market and a long-standing failure by Governments around the world to tackle dumping and unfair practices, but he should have acknowledged that this included his own Government. We have not forgotten that it was the Conservative Government in 2016 who sought to block EU plans to impose tougher tariffs on aggressive Chinese steel imports. Global over-supply has seen other countries dump their surplus—a surplus often created by actionable subsidies and lax enforcement of labour standards and workers’ rights—at less than market value.

Although the global situation has not been created by President Trump, the manner in which he has gone about trying to resolve its impact on US producers is fundamentally wrong and threatens to tip a very bad situation into a full-scale global trade crisis. The application of 25% tariffs on steel and 10% on aluminium imports into the United States is unjust and unjustifiable. The suggestion that such tariffs are necessary under section 232 to mitigate a threat to American national security is patently false. The US Secretary of Defence himself has publicly stated that US military requirements represent no more than 3% of US steel production and that the Department of Defence is able to acquire the steel and aluminium it needs for US national defence requirements. The UK steel industry has made it clear that the amount of UK steel exports to the United States military industrial complex is “very small indeed”.

The Secretary of State says that Trump’s tariffs have weak foundations in international law. In fact they have none. The truth is that the President is seeking to bully and threaten his trading partners to bring them weakened to the negotiating table. The temporary exemption for Canada and Mexico, making their position subject to a renegotiation of NAFTA that is favourable to the USA, is just one example. He is doing the same with the UK and Europe, where he wishes to reverse the US trade deficit.

Given that the Secretary of State accepts that the tariffs are unjustified, I ask him to consider that the two routes he outlined for petitioning for exemptions from them is to act as if they have a spurious legitimacy. This is precisely the trap that President Trump has set: “Negotiate with us and we will not bully you further.” In the part of Glasgow where I grew up, that was called a protection racket. If the Secretary of State does go down this route of trying to secure an exemption, will he give a commitment now to be totally transparent about any price that he has to pay and any assurances that he has to give to the US Administration in order to get it? It is reported that, following the Australian Foreign Minister's meeting with Rex Tillerson, these tariffs may not be applied to Australia. However, it has also been reported that Australia has had to concede to American demands for a bilateral security agreement, which would see Australia forced to commit to greater military spending. Will the Secretary of State also be clear about how any such attempt by the UK to secure an exemption sits with the duty of sincere co-operation, to which he rightly referred in his statement?

President Trump is imposing these tariffs on national security grounds precisely because, under WTO rules, this means that article 21 of the General Agreement on Tariffs and Trade would not apply. This specifically prevents member states of the WTO from demanding clarity on the grounds of such pronouncements and prevents them from commencing dispute proceedings or taking retaliatory action. The President is seeking to undermine the multilateral rules-based system of the WTO, to which he has long been opposed. He has said that he would welcome a trade war and thinks that America could win it. He cares nothing for the viability of UK producers who have respected the rules. He is treating them no differently from their competitors who have not. As the US market closes to our exports, countries that would otherwise export into the US will seek to divert their production to the UK, which will tend to undercut domestic producers here even further.

What action is the Secretary of State taking to defend against this trade divergence? He must recognise that our industry is particularly vulnerable because we have a Government who pride themselves on taking the weakest possible approach to remedying unfair practices by their adherence to the lesser duty rule. Both the Trade Bill and the Taxation (Cross-Border Trade) Bill currently going through Parliament were opposed by the Labour party precisely because they proposed to create what the Manufacturing Trade Remedies Alliance described as

“one of the weakest trade remedy regimes in the world.”

Will the Secretary of State say whether he will consider tabling Government amendments to strengthen both the statutory representation function of the Trade Remedies Authority and the powers available to it, in line with the amendments proposed by the Opposition in Committee?

The Secretary of State spoke of the retaliatory measures that the EU Commission is preparing. What assessment has his Department made of the legal rights to recourse under article 8 of the WTO agreement on safeguards and what representation has he made to the European Commission’s Directorate-General for Trade in relation to these measures? Is he persuaded that they would be lawful? Is he persuaded that they would be effective?

The Secretary of State is fond of painting international trade as a balance of consumer and producer interests. The fear of thousands of steel and aluminium workers in the UK is that he naturally leans too far in favour of lower prices for the consumer. He needs to prove to them that he will stand up for British industry, for their jobs and for their communities. They need confidence that he will tackle unfair practices that distort the market. If he does, he will have the Opposition’s full support.

Oral Answers to Questions

Barry Gardiner Excerpts

Thursday 22nd February 2018 Commons Chamber

[Dr Fox]

I pay tribute to all those people. We are seeing a big rise in our manufacturing order books, not least on the back of our strong export performance. In recent times, we have seen the biggest growth in consistent monthly manufacturing numbers for some 30 years. The figures produced by the Office for National Statistics suggest that our exports now represent 30.3% of our exported GDP—the second highest figure on record.

[Barry Gardiner (Brent North) (Lab)]

Given the Government Front-Bench team’s uncharacteristic failure to welcome my hon. Friend the Member for Bradford South (Judith Cummins) to the Opposition Front Bench, I know that you would want me to do so, Mr Speaker.

Is the Secretary of State aware that the Food Standards Agency recently detained large quantities of out-of-date meat in a company called Norish Cold Storage? The meat is believed to have come from Ireland and South America. Given that Norish is the parent company of Town View Foods, one of the directors of which, Plunkett Matthews, was also a director of Freeza Meats, a company implicated in the Irish horsemeat scandal in 2013 and found guilty of meat-labelling fraud, will the Secretary of State urgently liaise with Ministers in the Republic of Ireland, the FSA here and the Food Safety Authority of Ireland to ensure the supply chain for this illegal meat is identified, that our sanitary and phytosanitary regulations are properly enforced and that those behind the illegal trade—

[Mr Speaker]

Order. I say to the hon. Gentleman that if the meat was previously hot, it would certainly be freezing cold by now.

Trade Bill (Eighth sitting)

Barry Gardiner Excerpts

Committee Debate: 8th sitting: House of Commons
Thursday 1st February 2018 Public Bill Committees

[Bill Esterson]

Absolutely. We made that point earlier in our proceedings and my hon. Friend makes it extremely well.

Coming back to what the hon. Member for Kilmarnock and Loudoun said, HMRC has suggested to the Public Accounts Committee that it will need 3,000 to 5,000 extra staff to perform effectively post-Brexit, but that will depend on the level of risk that Ministers are willing to take. The Public Accounts Committee received written evidence suggesting:

“There are very few International Trade businesses, both importers and exporters, who take Customs compliance seriously”

and that businesses need more support from HMRC to deal with post-Brexit requirements.

If that is the case, clearly a voluntary information disclosure, which the Minister has assured us the Trade Bill makes provision for, would be entirely futile as a means of gathering the information his Department requires. I note, as I did on an earlier occasion, that the Bill does not suggest that it is voluntary, and we are not aware of any business that would ever consider a request from HMRC to be voluntary in nature. The second point—that businesses require more support from HMRC to deal with post-Brexit requirements—is more telling; it further suggests that there will be a significant strain on HMRC’s resources if it is to carry out its existing functions, let alone carry out new ones.

If those new functions are subject to voluntary application, will they also be subject to voluntary roll-out from HMRC? In that case, perhaps there will be nothing to report in 12 months’ time. The additional burdens being placed on civil servants to prepare for Brexit are significant, and with limited resources being made available to support those endeavours, we are right to be concerned about the ongoing operability of HMRC, and indeed other public bodies. That is why we shall support the new clause.

[Barry Gardiner (Brent North) (Lab)]

Very briefly, I commend the hon. Member for Kilmarnock and Loudoun for tabling the new clause.

We have seen in recent days that the Government are usually reluctant to release any impact assessments or reports of any substance, for fear that they will prejudice negotiations and put the Government in the most awkward position. However, I am sure that the hon. Gentleman will take heart from the fact that it is now usual for the Government, 24 hours after saying that they will not publish a report, to decide that they will do so anyway. I confidently expect the Minister to stand up and say that those on the Government Benches cannot support the new clause—we will support it, as my hon. Friend the Member for Sefton Central said—but the hon. Member for Kilmarnock and Loudoun should not worry or be discouraged, because I have no doubt that within 24 hours, the Government will see sense.

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Brought up, and read the First time.

[Barry Gardiner]

I beg to move, That the clause be read a Second time.

I made brief reference to this new clause during our discussion of new clause 3, but let me set out in a little more detail why we believe it is required. We have heard from the Minister about the Government’s intention to engage with the devolved authorities in respect of matters that may fall within devolved competences. However, if the Government are to demonstrate that they are serious in this regard, they must ensure that such a consultation framework is established in the Bill.

Modern trade agreements are increasingly broad and comprehensive, and extend into all aspects of governance, public policy and commerce. Inevitably and invariably, trade agreements will impact on matters that have long been, and rightly are, considered to be matters of devolved competence, albeit that our obligations to date have been determined at European level. The Government need to give clarity in the Bill about when an obligation ceases to be a trade matter that is within the exclusive competence of the UK and becomes a matter that is within the competence of the respective devolved Administrations.

We have heard that this matter is not unique to the United Kingdom. It is an emerging issue around the world, so we must consider it from an international perspective and ask ourselves not just what satisfies immediate domestic policy objectives but what we would demand from would-be trade partners who face similar issues and, perhaps more importantly, what they would expect from us.

I again refer the Committee to Nick Ashton-Hart’s evidence:

“the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that. They can watch your processes of consent and agreement and evaluate where your weaknesses are—where there are buttons they can push, but also where you are likely to need support.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 10, Q12.]

We would be nothing short of foolish to allow our trade negotiators to commence talks without first having consulted and engaged with our constituent interests, which absolutely must include the devolved authorities. Trade negotiations can be brutal. The Americans have no qualms in telling us that they refer to counterparties to such talks not as “partners” but as “adversaries”. Any weakness in position or failure to come prepared can be extremely costly and damaging—especially so if complications are presented later when the Government seek to ensure implementation and compliance with the obligations stemming from the concluded trade agreement. A whole-of-Government approach is required, not only to avoid later difficulties but to ensure the democratic will is represented fully in the determination of our international outlook and the relationships we will form with other states.

Other countries have sought to create a consultation framework to mitigate any such complications at the earliest possible stage of the process. The US has its Trade Promotion Authority, born of the fast-track scheme. There are problems and complications with it, but it is there. The Government of Canada have given a much greater role to the country’s provinces in setting mandates and consulting in negotiations, as a result of the EU’s refusal even to begin trade talks unless it had confidence that the provincial governments would ultimately agree to implementation. Will the Minister tell us whether any of the trade working groups and dialogues that the Government have established with would-be trade partners have yet covered that issue, or whether the issue has been raised in the provisional soundings taken of the third countries with which we seek a trade agreement that corresponds with one they might have with the EU?

It is rumoured that the Government’s preference is to mirror as much as possible the Australian trade policy model. In Australia, no such formal consultation exists with state governments. They have the same rights as any other lobbyist: they can submit responses to open consultation in advance of the conclusion of trade agreements. Of course, that approach presents entirely different problems, and it would be foolhardy to believe otherwise. We have seen the Queensland state government implement policy that ignores obligations under Australia’s trade agreement with New Zealand in order to deliver on Queensland’s public interest and economic performance duties.

Will the Minister tell us what discussions his Department has had with each of those countries in this respect? Have concerns been raised about consultation with our devolved authorities? Conversely, have we asked about theirs? Perhaps the Government have given assurances that they intend not to consult with the devolved authorities and will use the powers in the Bill to override devolved competence. Perhaps it is a case of “put up and shut up”.

[Faisal Rashid]

On that point, is my hon. Friend aware that the Institute for Government found that in other countries, such as Canada, buy-in from provinces is crucial to make trade agreements such as the comprehensive economic and trade agreement work? The institute states that, otherwise, it is “political hell”. Does he agree that, similarly, the political buy-in of the devolved Administrations in the UK is necessary to implement trade agreements, and that early consultation and involvement is necessary to avoid political hell?

[Barry Gardiner]

Absolutely. My hon. Friend uses language that I would not wish to use in the Committee, but it is certainly a political mess. I think we can see that other countries have taken their responsibilities to their trading partners seriously, as well as their responsibilities to their constituent states, provinces and members. That is what we are seeking to do through the new clause.

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[Matt Western]

It is a privilege to serve under your chairmanship, Mr Davies. I was particularly struck by what Elspeth Macdonald, the deputy chief executive of Food Standards Scotland, said. Perhaps my hon. Friend agrees with her. In giving evidence, she said:

“The principal issue with the Bill that causes us great difficulties is the way in which it constrains the ability of the Scottish Parliament and Scottish Ministers, and consequently our ability, to act and regulate in ways that are considered appropriate for businesses and the public in Scotland.”—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 95, Q172.]

[Barry Gardiner]

I thank my hon. Friend, because that evidence is absolutely apposite to the new clause. All we are seeking to do is assist the Government in any future negotiations they may have as they seek to roll over agreements to corresponding agreements. We want to make it easier for them to persuade a trading partner that there will be no problems in implementing the agreements.

The Joint Ministerial Committee has already been the vehicle for similar engagement in respect of EU negotiations on the withdrawal deal, by way of sub-committee, establishing a clear precedent for a similar sub-committee in respect of trade agreements. That would be extremely helpful. It is therefore entirely appropriate that the Bill ensures that a similar forum is legislated for to ensure that the democratic will of the entire population of the country is represented fully throughout the trade agreement process and without threatening the devolved competencies.

I take this opportunity to remind the Government that they must not allow the Bill to afford Ministers of the Crown powers that would undermine the competence of the devolved authorities and the devolution settlements. While instituting a formal consultation framework through the JMC would go some way to protecting the rights of the devolved Administrations, it would not and cannot be considered as addressing the other concerns presented by the Bill, which I have previously adverted to in our proceedings. If the Government fail to address those concerns, the Labour party will return with further amendments.

[Anna McMorrin (Cardiff North) (Lab)]

The Trade Bill fails to set out a suitable framework for future trade agreements. The arrangements included in the Bill are insufficient and leave a lot to be desired on several important issues that I and many MPs raised in the debates on the European Union (Withdrawal) Bill. Just like that Bill, the Trade Bill puts restrictions on the Executive capacity of the Scottish and Welsh Governments, while placing no restrictions on the capacity of the UK Government. Essentially, under the Bill, Ministers of the UK Government will be able to legislate in devolved areas.

Wales is an outward-facing, globally trading nation and remains open for business.

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[Alan Brown]

I welcome the spirit of the new clause, but from my perspective, we should have something stronger than just consultation; we would be looking for the consent of the devolved Administrations. That is in line with some of our amendments that have been defeated. I certainly welcome the hon. Member for Brent North’s saying that the official Opposition will revisit some of the amendments on Report. We will certainly look to co-operate on this matter.

[Barry Gardiner]

I hope that that will all be unnecessary, because I trust that the Government will see the error of their ways and introduce those amendments themselves. If they do not, I reiterate my assurance to the hon. Gentleman that the Opposition will.

[Alan Brown]

Far be it from me to suggest that the hon. Gentleman may be a tad naive, but he is certainly optimistic if he thinks the Government have seen the light on this. I have made this point several times, but the devolved Administrations have said that they will withhold legislative consent motions if the Bill is not amended, so realistically, the Government will need to consider further amendments.

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[Greg Hands]

I do not think the hon. Gentleman needs me to confirm that. He has said himself what the position of the devolved Administrations is, including on the legislative consent motion. We have listened to them and will continue to listen to them very closely. He has put his point of view on the record as to the perspective of the Scottish Government.

I will come back to some of the points raised in the debate. The hon. Member for Brent North wanted to put devolved Administration engagement on the face of the Bill. I stress again that these agreements are about continuity, not future trade agreements. We have been clear in the White Paper that we will engage. We therefore do not require statutory engagement structures in the Bill.

[Barry Gardiner]

One of the trade agreements that we have repeatedly come back to, which makes it quite clear that this is not the simple roll-over of the existing trading arrangements that the Minister is talking about, is the treaty we currently have with Norway. Fisheries are an important part of Norway’s economy. It is almost inconceivable that in the roll-over of that agreement, there will not need to be some provision in that regard. Surely the Minister must address those points, because they are pertinent to the Bill and to the Government’s capacity to do what they seek to do, which in large measure the Opposition believe to be right and proper: to try to make the transition as seamless as possible. However, there will be areas where it is not, and Norway is one of them. We must address that and not simply gloss over it by saying, “Well, we’ll have to deal with that once we know what we’re doing with the EU final deal.”

[Greg Hands]

Of course we value our trade relations with Norway very strongly and closely. By geography alone, let alone the amount of oil and gas coming from Norway, we have incredibly strong trade relations. For the record, I met the Norwegian Trade Minister last autumn. I am perhaps going to sound like déjà vu all over again, but I repeat that the future trading relations with Norway will be very dependent on the future UK negotiations with the European Union. That is not a matter for this Bill; it is a matter that is being scrutinised on frequent occasions in this House and elsewhere.

The hon. Member for Brent North said that we need an engagement structure for future trade agreements. The Government agree that we need to engage the devolved Administrations in our future trade agreements for the benefit of the whole of the UK, as was made clear in the White Paper. We are talking to the devolved Administrations about what that will look like. The new clause would pre-decide that discussion.

The hon. Gentleman talked about international examples for consultation models with the devolved Administrations and gave us a quite interesting exposition of the position in Australia and other parts of the world. It was fascinating stuff, but our constitutional arrangement is very different from any of the international examples raised. As was made clear in our White Paper, we therefore need to design our own engagement structures, in consultation, that work for the benefit of the whole of the UK.

The hon. Members for Warwick and Leamington and for Cardiff North claimed that we were putting a constraint on the devolved legislatures. To be clear, the Bill will allow the devolved Administrations to make regulations that they consider appropriate for the purpose of implementing trade agreements in devolved areas, including in areas of retained EU law.

The hon. Member for Cardiff North said that devolution is being undermined. That is not at all the case. The Bill introduces new powers for the devolved Administrations to work collaboratively with the UK Government to secure continuity in our current trading relationships. Under the Bill, the devolved Administrations will be able to make every decision after exit that they can make before exit. We therefore do not need to commit to such a review or role for the Joint Ministerial Committee in legislation.

The official Opposition’s tabling at a late stage of this emergency extra new clause, which emerged earlier this week, seems to be more about Labour members of the Committee messing it up last week by controversially not supporting the Welsh Labour Government’s amendments, when everyone expected them to do so. When the hon. Member for Warrington South talked about a “political hell”, he might have been referring to the political hell we see all day, every day in the official Opposition in this House and elsewhere. On that basis, I urge the hon. Member for Brent North not to press the new clause.

[Barry Gardiner]

Had I been disposed not to press the new clause, the Minister’s final remarks would have made me all the more determined to do so. However, I was not so disposed, and we will press the new clause to a vote.

Question put, That the clause be read a Second time.

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Brought up, and read the First time.

[Barry Gardiner]

I beg to move, That the clause be read a Second time.

This is the last new clause we will deal with in Committee, and it is our last attempt in Committee to introduce a high-level principle into the Bill. We have tried to establish the legal framework for an ethical trading policy that respects human rights, labour standards, environmental integrity and the needs of countries and communities poorer than our own. The Government turned down every single amendment and new clause that tried to enshrine those principles in law. None the less, we will have one final push. We are trying to establish the principle of animal welfare and sentience at the heart of our trade policy. Perhaps the Government will agree to stand up for those species that share our planet with us, but that have no representatives of their own to speak for them.

My hon. Friend the Member for Bradford South spoke persuasively—though not persuasively enough to get Government Members to agree—about the importance of maintaining high food standards in all our trade agreements. She referred to the connection between high food standards and the call for animal welfare, whether in respect of the general requirement for food hygiene or the specific target set by the Veterinary Medicines Directorate for a reduction of antibiotic use in agriculture. We also argued for animal welfare to be included in any impact assessment of the UK’s trade agreements, whether it is carried out ex ante or ex post. That call stands, and we will continue to press the point until we are satisfied.

I am pleased that the Minister saw fit to agree with us about the importance of this issue. I quote from the Hansard report of our sitting a couple of days ago:

“The Government have always been clear that we will maintain our very high standards on food and animal welfare, and for protection in that space. There will be no race to the bottom. Nothing in free trade agreements precludes a Government from regulating in the domestic environment. I hope that that is enough reassurance for the hon. Gentleman.”––[Official Report, Trade Public Bill Committee, 30 January 2018; c. 196.]

[Greg Hands]

The hon. Gentleman was a Minister in the Department for Environment, Food and Rural Affairs under Tony Blair. Can he point to specific occasions when he raised concerns about animal sentience with respect to trade agreements that were going through at that time?

[Barry Gardiner]

That is one on which I will probably write to the right hon. Gentleman. I am convinced that there were a number of occasions when I did exactly that. I will try to dig them out from my records and send them to him. I am delighted that he did not stand up to repudiate the remarks recorded in Hansard, as he did the other day. Given that, I take it that he stands by them.

Sadly, the Minister’s reassurance on this matter is not enough. The right of parties to regulate in favour of animal life and animal health is regularly mentioned in the text of international trade agreements, yet that same right is typically circumscribed by requirements that any measures to protect animal health must be undertaken while facilitating trade. Governments may take any measure they like to protect animal health so long as it does not create an “unjustified barrier to trade”. It is left to a tribunal of trade lawyers, who examine the justification of the measure in relation to international trade law, to decide whether it is justified or unjustified.

There is sometimes a clause in the general exceptions chapter of a free trade agreement that affirms that a state may introduce whatever measures are necessary to protect animal life or health, but the meaning of “necessary” is left up to another tribunal of trade lawyers to decide. They may rule that an alternative measure is available that would be less burdensome on trade and therefore conclude, even if the alternative would be less effective, that the measure that was taken does not qualify as necessary after all.

This is familiar territory to anyone who has looked into the history of international trade disputes, both before and since the founding of the World Trade Organisation. There is an entire sub-discipline of trade lawyers and academics who have written about what they call the “necessity test” that is employed to ascertain whether a measure is necessary and thus allowed under international trade law, or unnecessary and thus prohibited.

Let me take as a specific example a free trade agreement that was mentioned in written evidence by the RSPCA, because it contains a fleeting reference to animal welfare. The Government are keen to replace the EU-Korea free trade agreement with a new UK-Korea agreement, which would be implemented using the powers afforded to the Government by the Bill. The chapter of the EU-Korea agreement devoted to sanitary and phytosanitary measures includes specific clauses about enhanced co-operation between EU and Korean authorities on animal welfare issues—anyone who wishes to look them up will find them in article 5.9—yet those fine sentiments are thoroughly undermined by the clause at the outset of the chapter, which states that the objective of the chapter as a whole is

“to minimise the…effects of sanitary and phytosanitary measures on trade”.

The health and welfare of animals—and of humans, for that matter—is already subordinated to commercial interests. That is precisely the problem.

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[Greg Hands]

The Government have made clear that we intend not only to retain our existing standards of animal welfare once we have left the European Union but, indeed, to enhance them. We are proud to have some of the highest animal welfare standards anywhere in the world, and they will not be watered down when we leave the EU.

Our food is held in high repute thanks to our animal welfare standards. The withdrawal Bill will transfer on to the UK statute book all EU animal welfare standards— it is very important to understand that in the context of the withdrawal Bill, which was raised by the hon. Member for Cardiff North. Our current high standards, including import requirements, will apply when we leave the EU.

Similarly, the Government are committed to retaining the EU’s recognition of animal sentience. That is why, as has been referred to quite a few times in this helpful debate, at the end of last year the Government published the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill, which sets out how we can go even further and better enshrine in domestic law the recognition of animals as sentient beings. That point was capably made by my hon. Friend the Member for Saffron Walden and others.

[Barry Gardiner]

Does the Minister understand that the new clause’s intention is not to run counter to or prevent what we hope the Government will bring forward in that Bill? It seeks to establish the hierarchy of principles in international trade so that a necessity test or any other precursor in the clauses and paragraphs that deal with such issues cannot mean that animal welfare is of a lower order in that hierarchy.

[Greg Hands]

Let us try to separate out those two issues. We will deal with animal sentience in the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill. What we are talking about here is transitioning existing trade agreements. I will return to the intervention I made on the hon. Gentleman in relation to existing trade agreements, but let me first point out a few more things in the draft animal welfare Bill. It proposes a new obligation on Ministers of the Crown to have regard to the welfare needs of animals as sentient beings when formulating and implementing Government policy. A public consultation on the draft Bill has recently closed and DEFRA is considering all the responses received.

We are absolutely clear that all existing commitments relating to animal welfare will remain when these agreements are transitioned—I cannot be any more definitive than that. That is in line with our clearly articulated principle that it is our intent to transition solely the existing effects of the current agreements.

On current agreements, Mr Davies, you and I were elected in 2005, and in a couple of those early years we shared in Parliament I distinctly remember the hon. Gentleman being a DEFRA Minister. I was intrigued when he was seemingly unable to offer any single occasion when, as a Minister in DEFRA—the Department with primary responsibility in this area—he had raised any objection to EU trade agreements going through the House in relation to animal welfare or animal sentience.

I look forward to receiving the hon. Gentleman’s letter, in which he will explain in detail those occasions he was unable to remember today—he may have time to dig through his filing cabinet from 12 or 13 years ago to find them. I remember well that it was very rare for any Government Minister in Tony Blair’s regime to go against the word of Mr Blair, and very rare for any Government Minister to go against the word of the European Union, so I am interested to see if the hon. Member for Brent North managed to do both at the same time. I very much look forward to getting this letter. May I suggest that he shares it with the whole Committee, because I do not think that it is something I should abuse by keeping it private to myself? I look forward to that letter.

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[Barry Gardiner]

Will the Minister give way?

[Greg Hands]

Of course—maybe he has remembered.

[Barry Gardiner]

May I just point out to the Minister that I voted for the ban on hunting mammals with dogs? I believe that most of the Conservative party voted to retain hunting mammals with dogs. I also voted to secure an end to cosmetic testing on animals, to ban fur farming and to introduce the Animal Welfare Act 2006. So there were a number of occasions on which my voting record on animal welfare and animal sentience stands up very strongly. I suspect that it would it be in marked contrast to many Members on the Government side of the House.

[Greg Hands]

I thank the hon. Gentleman for that intervention, because I now find it even more illuminating. He has now been able to remember all these other occasions when he stuck up for animal welfare, but he still cannot remember a single occasion when, in relation to EU trade agreements, which is what the Bill is all about—

[Barry Gardiner]

rose—

[Greg Hands]

Perhaps the hon. Gentleman has now remembered the single occasion. I will give him another opportunity to tell us all about this disagreement he had with Tony Blair or the European Union.

[Barry Gardiner]

It is not about a disagreement with Tony Blair or the European Union, because actually we did vote to ban the export of animals on the hoof in that Government. That was precisely about trade—it was banning live exports. The Minister has to accept that I have a very clear record on animal welfare in terms of not only domestic legislation in this country but international trade.

[Greg Hands]

I am still looking forward to the letter. The hon. Gentleman has still not remembered a single occasion when he raised this in relation to a European Union trade agreement. He has an opportunity. I am sure he will take a little bit of time to prepare the letter, and I am sure that all members of the Committee will look forward to receiving it.

The hon. Gentleman did mention live animal exports, which is an interesting subject. He says that he was concerned about live animal exports, but you and I know, Mr Davies, that while we remain an EU member we are unable to ban live animal exports. I do not know whether, at that point, he was taking an early Eurosceptic turn. Perhaps he mentioned to Tony Blair that he had this fundamental problem with the European Union. It was just after Tony Blair had promised a vote on the EU constitution, which was not delivered, so it may have been an interesting time to have made these Eurosceptic points that he now says that he has.

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[Barry Gardiner]

The Minister can ask, but he will not be successful. We will press it to a vote.

Question put, That the clause be read a Second time.

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[Greg Hands]

Mr Davies, I thank you and everybody concerned with this Bill. I am delighted that we have so thoroughly scrutinised this short yet important Bill over the last five Committee sessions. I thank Committee members for the constructive way in which they have engaged in the debate. I am pleased that we have completed proceedings within the allotted time. In fact, we have a little time to spare.

This has been an unusual Bill Committee. The Bill, in my view, is relatively uncontroversial and certainly quite short. Indeed, on Second Reading, I think a little unfairly, the hon. Member for Brent North called it a

“hollowed out little embarrassment of a Bill, which extends to just six pages and four schedules.”—[Official Report, 9 January 2018; Vol. 634, c. 223.]

I think he was calling it small and unimportant; I am interpreting the words “hollowed out little embarrassment” in that way. Therefore, I find it all the more remarkable that the Opposition have called some 37 votes on the Bill so far. I am not trying to make a wider political point—or maybe I am—but it was clear on Second Reading and now that they are against the UK having its own trade remedies, against the UK being able to benefit from the more than 40-plus EU trade agreements, and against UK companies participating in the £1.3 trillion global procurement market. I hope they will change their minds on Third Reading.

I also thank the Government Whip and the Opposition Whip, who have ensured that the Committee has run smoothly and effectively. We have had a helpful and constructive consideration of the Bill, and the debate has been superbly conducted by you, Mr Davies, and by Mrs Ryan and Mr Gray, in the Chair. I am very grateful for your and their guidance during our deliberations.

Further, I would like to pay tribute to the usual channels, who I know quite well from previous experiences in this House, for their help and guidance throughout. I also recognise in particular the hard work of Hansard in recording everything. I thank the Clerk for his advice, the Doorkeepers for keeping good order, and my excellent team of officials for their support. This is the Department for International Trade’s first ever piece of legislation, and the officials have done the Department very proud indeed.

[Barry Gardiner]

I, too, would like to express, on behalf of all my team, my thanks to you, Mr Davies, to Ms Ryan and Mr Gray, and to all the officials who so ably supported the Minister. We tried to throw as many difficult questions at him as possible, and they tried to field them and provide him with answers as quickly as possible. I have to say we were not always convinced by the answers he came up with, but we recognise the work that went into them and hope that we did not cause the officials too much trouble.

I pay particular tribute to Kenneth Fox, the Clerk of the Committee. He is an exemplary Clerk, and he aided us in ensuring that our amendments were substantive and all in good order. It was extremely helpful to us to be assisted by someone of his experience and wisdom—and calm. I say that because, as you know, Mr Davies, amendments are worked on until the last moment to ensure that they are tabled in good time, and Mr Fox did so with the greatest humour.

I am grateful to all my team: my hon. Friends the Members for Bradford South, for Sefton Central, for Cardiff North, for Warrington South, for Blaenau Gwent and for Warwick and Leamington. It has been an excellent team effort. I am delighted that they were all able to contribute to debate in a most positive way. I also thank the Government Members. I thank the Minister, who I think took every intervention he was offered, for his courtesy. I know that serving on such Committees is often a thankless task for Government Back Benchers, who are told by the Government Whip to sit quietly and not to take up too much of the proceedings, but when they did intervene, they did so with courtesy.

We have scrutinised the Bill in great detail. We have not come to an agreement—that much is clear. There are lacunae in the Bill that need to be remedied, and we will return to it on Report and subsequently. I thank everyone associated with the Committee and in particular you, Mr Davies, for conducting proceedings with absolute fairness and impeccable order.

[The Chair]

I am very grateful to the Minister and the shadow Minister for their kind words. I thank the House authorities, including the Doorkeepers, who have been very busy with Divisions, and the Clerks. I reiterate the thanks to Kenneth Fox, the principal Clerk, who has guided me throughout these proceedings with his normal efficiency and courtesy. I thank all Members for making it so easy to chair the Committee. You have all been a credit to your respective parties.

Question put and agreed to.

Bill accordingly to be reported, without amendment.

Trade Bill (Sixth sitting)

Barry Gardiner Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Greg Hands]

The Government have always been clear that we will maintain our very high standards on food and animal welfare, and for protection in that space. There will be no race to the bottom. Nothing in free trade agreements precludes a Government from regulating in the domestic environment. I hope that that is enough reassurance for the hon. Gentleman. On protecting the environment, high standards and high quality are what our domestic and global consumers demand, and that is what we should provide.

To be clear, nothing in the Bill would allow us to do a free trade agreement with the United States because, as we know, the United States does not have a free trade agreement with the European Union. While the hon. Member for Bradford South gave an interesting speech of some length about what may or may not happen in any future trade agreement with the United States, it is worth mentioning that the Bill does not cover free trade agreements with the United States. Any future free trade agreement with the United States must work for UK farmers, businesses and consumers, and uphold food safety and animal welfare standards. However, that is a matter for a future day; it is not relevant to the Bill before us.

[Barry Gardiner (Brent North) (Lab)]

Surely the Minister appreciates that the examples of the USA were given in order to clearly illustrate the principles. At no point was it suggested that those examples were a necessary follow on. However, they illustrated the principles, and the Minister must appreciate that and take it seriously, in terms of the amendment.

[Greg Hands]

We take incredibly seriously food safety standards, animal welfare and so on. If the hon. Gentleman is suggesting that he has serious concerns in those spaces in respect of any of the 40-plus current EU trade agreements that we are seeking to move into UK law, perhaps he could let me know.

[Barry Gardiner]

I am very happy to adumbrate on that. The particular concerns relating to growth hormones in beef are, of course, of equal importance in the context of any future UK-Canada trade agreement, given that Canadian beef farmers are permitted to use growth hormones in a way that our farmers are not. The EU granted a higher quota to hormone-free Canadian beef exports in the EU-Canada comprehensive economic and trade agreement negotiations. It was only popular pressure that prevented the European Commission from relaxing the ban on imports of hormone beef. We simply want to ensure that Parliament is the place where this country takes decisions on whether to relax or tighten our food standards. We do not want those decisions taken in secret trade negotiations and then imposed on us through the excessive powers in the Bill.

[Greg Hands]

I am certain that CETA is consistent with our food safety and animal welfare standards. What is more, I think the majority of Labour MPs agree with me. Last February, Labour MPs split 86 in favour of CETA and 68 against, so whatever concerns the hon. Member for Brent North has, I gently suggest that he tries to persuade his own party before coming to see the Government.

[Barry Gardiner]

Again, I am happy to take on the Minister on that. He is talking about something that happened before the previous election, and as personnel change, so perhaps does the wish of the members of the parliamentary Labour party. However, that is not really the point. He will also find that those people on the Labour Benches who wanted to support CETA on that occasion seem now to have changed their views about whether CETA—the Canadian model—is a good model for us to pursue in the trade negotiations. Most of them seem to have turned tail and run to the other side.

[Greg Hands]

The hon. Gentleman is trying to mix up the transitional and existing trade agreements with our future trading relationship with the European Union—which, I remind the Committee, is also not a subject of the Bill. I think he said that his vote against CETA was before the previous election, and if he is suggesting that he might have changed his mind on CETA, I am all ears. When we come to ratification of the treaty, I would personally welcome him as a sinner that repenteth, were he to come into the Lobby with Conservative Members to support the Canadian free trade agreement.

[Barry Gardiner]

rose—

[Greg Hands]

I will not give way. We are getting a little off the point.

We are absolutely clear that all existing commitments on standards and regulations will remain when those agreements are transitioned. That is in line with our clearly articulated principle that our intent is to transition solely the existing effect of the agreements. The amendment is therefore unnecessary and I ask the hon. Member for Bradford South to withdraw it.

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Division 7

Ayes: 9

---

Labour: 7
Scottish National Party: 2

Noes: 10

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Conservative: 9

[Barry Gardiner]

I beg to move amendment 11, in clause 2, page 2, line 41, leave out subsections (8) and (9) and insert—

“(8) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of the period of five years beginning with exit day.”

This would make the sunset clause governing section 2(1) non-renewable.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 12, in clause 2, page 2, line 41, leave out subsections (8) and (9) and insert—

“(8) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—

(a) the period of five years beginning with exit day (“the initial five year period”), or

(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (9).

(9) Regulations under subsection (8)(b) may not extend the initial five year period beyond the day which falls ten years after exit day.”

This would make the sunset clause governing section 2(1) renewable once only.

Amendment 35, in clause 2, page 3, line 3, at end insert—

“(10) No regulations may be made under subsection (8)(b) unless the Secretary of State has consulted with the Scottish Ministers and the Welsh Ministers.”

This amendment would ensure that there must be consultation with the Scottish Ministers or Welsh Ministers before any extension of the powers in Clause 2.

[Barry Gardiner]

I, too, am pleased to welcome you back to the Chair, Mr Davies. How do you know when a Minister feels guilty? It is when he or she introduces a sunset clause. The Government know they are pulling a fast one in the Bill and clause 2 includes the Henry VIII power for Government to amend primary legislation by fiat. The provisions in the rest of clause 2 and its accompanying schedules reduce hon. Members of this House to little more than bystanders at a royal pageant.

The Government try to mitigate their power grab by making the offending powers in clause 2(1) subject to a five-year sunset clause. The Secretary of State is on record as saying:

“I hear people saying, ‘Oh, we won’t have any before we leave’. Well, believe me, we’ll have up to 40 ready for one second after midnight in March 2019. All these faint hearts saying we cannot do it—it’s absolute rubbish”.

Let us for a moment take the Secretary of State at his word and believe him when he tells us that we will have all these shiny new agreements ready and waiting by the end of March 2019. The five-year sunset clause that the Bill gives the Government is surely, therefore, the sort of defeatist nonsense that the faint-hearted would say they need. According to the Secretary of State, a half-hour sunset clause would be more than enough—perhaps half a day to pick up the stragglers or half a week to pick up the rank outsiders, the real laggards in the case. What is this nonsense?

There is a serious issue, because these agreements are supposed to provide British businesses with the certainty they desperately need so as to plan their operations and their investments in respect of trade with those countries with which we already have agreements by virtue of our membership of the EU.

Yes, the Secretary of State for Exiting the European Union has confirmed that the UK will be unable to implement any of the new trade agreements until the end of a two-year transition period that we will negotiate with the EU, but that only buys the Government until the end of 2020 to come up with the 40 new trade agreements the Secretary of State promised would be ready by March 2019. The end of 2020 is the terminus proposed by the EU for our transition period, as was confirmed in the negotiating directives that it adopted yesterday.

--- Later in debate ---

[Faisal Rashid]

Does my hon. Friend agree that, without limits on the renewability of the sunset clause and against the backdrop of a Government failure to commit to a second trade Bill, this Bill will certainly be seen by many as a potential Trojan horse for the Government to introduce future deals with minimum levels of scrutiny?

[Barry Gardiner]

My hon. Friend is absolutely right to be sceptical. The Minister has made much of the arguments that, first, there is a need for speed and, secondly, this is only a temporary Bill that puts in place temporary provisions to roll over the existing agreements. In fact, the powers—certainly the ones relating to the agreement on government procurement—are not temporary; they last longer.

Here, in the provisions of the sunset clause, we have not just one sunset period but the possibility of indefinite roll-overs of the sunset clause itself: five years, followed by five years, followed by five years. If the Minister is absolutely confident that the Bill is a temporary necessity, one must wonder why he wants the sunset clause to continue indefinitely into the future at the Government’s will, when it enables the Government to take on a Henry VIII power.

When I say that there should be a proper process of consultation and scrutiny by which to debate the negotiations, I am only replicating what Anastassia Beliakova of the British Chambers of Commerce demanded in her oral evidence during our final witness session last Tuesday, when she said that provision needs to be made not only for “appropriate scrutiny in Parliament” but for a proper process of “stakeholder engagement for business” and “civil society” in order to scrutinise any changes that might arise as a result of the negotiations.

If the Government are adamant that such a process is to be denied us, rejecting the advice of business and the demands of trade unions and other civil society bodies, it should be denied us for an absolute maximum of five years, with no renewal of the sunset clause, as provided for in clause 2(8) and (9). Every day longer that the Government have those powers is another day for which parliamentary democracy is put on hold. The first of our amendments says that five years is enough. We believe that it is five years too many, given the unmerited powers that the Bill grants to the Government and the rights that it strips away from Parliament, but certainly five years should be enough. If the Government still have not managed to roll over their agreements by March 2024, that power should disappear along with the expiry date.

I really wonder whether Government Members themselves believe that an indefinite use of a roll-over to give an unending Henry VIII power to the Government is a sensible power that this Committee should grant.

Let us say that the Government persist in getting rid of amendment 11. Amendment 12 would allow the Government one renewal only. That is, the Government would be allowed to ask Parliament for permission to renew the sunset clause for one extension, but no more. That would allow the Government the unmerited powers in the Bill right up to the end of March 2029. Can the Minister really demand, with any sense of integrity, that this Committee afford him and the Government greater power than that?

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship again, Mr Davies.

First, I reiterate that Opposition Members do not see the Bill as fit for purpose. We accept the need for clause 2: the Government will need to manage the handover of trade deals that are currently accessed through the EU. However, clause 2 is deficient and we are still to hear what the Government will to do to improve it and to improve the Bill. They have voted down every amendment that has been proposed so far, so it would be good to hear the Minister’s plan. Again, that is particularly important regarding the Government’s attitude to the devolved Administrations.

Just this morning, BBC Radio Scotland led its headline news with a report on the European Union (Withdrawal) Bill, which is now moving to the House of Lords, and the fact that the House of Lords will have to make amendments to clause 11—amendments that were originally promised by the UK Government but were not brought forward. It did not paint the UK Government in a good light, especially when the UK Government could not even put up any spokesperson; it is plain why that was the case.

I say to the Minister that, given that the Scottish and Welsh Governments have both said that they will withhold a legislative consent motion unless there are amendments to this Bill, it would be prudent for him not to fall into that trap. Failing to make amendments once looks incompetent, but if proper amendments are not made to this Bill that satisfy the devolved Administrations, it will look a bit more sinister than mere incompetence.

I remind the Committee that it is not just politicians from the Scottish National party who are saying this; clearly, the Welsh Government are in agreement with the SNP. In the evidence sessions, which the Minister was at, we heard from different witnesses. Chris Southworth from the International Chamber of Commerce UK said:

“Overall...I would be concerned if I were in the devolved Administrations. There is specifically no opportunity for the devolved Administrations…to feed into decisions on trade. I would be very concerned about that, particularly in the devolved Administrations”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 35, Q80.]

Michael Clancy from the Law Society of Scotland said:

“There is clearly an issue about how the Sewel convention or legislative consent convention is interpreted in respect of that…any proposals in UK Parliament legislation that seek to alter the legislative competence of the Parliament or of Scottish Ministers require the consent of the Parliament.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 56, Q107.]

Professor Winters from the UK Trade Policy Observatory said:

“Parliament and the devolved Administrations need to have an important role in setting mandates, and there need to be consultation and information during the process.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 58, Q111.]

In written evidence, the Fairtrade Foundation, Trade Justice Movement, Global Justice Now and Traidcraft all clearly expressed the need for the devolved Administrations and Chambers to be given a role in the UK’s future trade policy.

Unfortunately, despite all that evidence the position of the hon. Member for Brent North appears to be that if the devolved nations do not have the powers at present, they should not look at getting them in the future. His phrase earlier was that they “shouldn’t be looking upwards”. To me, that sounds a wee bit like, “Don’t get ideas above your station”.

We have not tabled any amendments to schedule 1, which imposes limitations on the devolved Administrations. I would argue that that in itself shows that the Scottish Government and the Welsh Government have taken a rational approach to the Bill in respect of the various amendments that have been tabled. We are not trying to create some form of awkward veto, as has been suggested elsewhere. Our simple intention is to make sure that the devolved Administrations are not ridden over roughshod. That means that there needs to be co-operation, consultation and consent.

[Barry Gardiner]

I want to reassure the hon. Gentleman that we are absolutely at one with him in wanting to ensure that the Bill does not make provision for Westminster Ministers to overreach themselves into devolved competences in any of the devolved Assemblies of the nations of our United Kingdom. We are equally concerned about that.

I have tried to present amendments in as open a way as possible, so that we can get the best wisdom from the Government and from the devolved Administrations, to ensure that nothing is done that would make it difficult, or indeed impossible, for a UK Government to honour any aspects of their international obligations under an international trade treaty. That is my only concern, and I am sure we can get to the right place with good will all round. It is a constitutional question, because these powers have not previously been possessed by the UK Government; they were held at EU level. It is therefore important that we give the matter the scrutiny that it deserves.

On amendment 35, which we are about to move on to, we are probably at one.

--- Later in debate ---

[Greg Hands]

Because I like to keep legislation as brief as possible and, as I shall explain, I do not think it necessary for us to write that obligation into the Bill. Of course, we would continue to engage should we need to extend the clause beyond its sunset five years after exit day.

I was intrigued by the exchange between the hon. Members for Kilmarnock and Loudoun and for Brent North. I am still trying to find out why, on Thursday, the Labour Front-Bench team did not support the amendment promoted by the Welsh Government. I am not sure that the hon. Gentleman properly explained, but perhaps when he responds he can throw a little more light on why he has seemingly jettisoned his colleagues from Wales, one of whom is on this very Committee.

On the requirement for a legislative consent motion, we have been clear that we are seeking such a motion for the Bill. I heard what the hon. Member for Kilmarnock and Loudoun said about that, and I am sure that we will engage further. We are obviously talking to the devolved Administrations so that we can work towards delivering a Bill that will benefit the whole UK. Given that, we do not think that the formal commitments on consultation and engagement in amendment 35 would add substantively to the Bill. I therefore ask hon. Members not to press the amendments.

[Barry Gardiner]

We have no intention of withdrawing amendment 11, so we need to press it to a vote.

Question put, That the amendment be made.

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[The Chair]

Do you also wish to press amendment 12 to a Division, Mr Gardiner?

[Barry Gardiner]

On amendment 12, to respond to what the Minister said, we heard oral evidence from Mr Howarth, who was in fact an adviser to Conservative MPs, that the Henry VIII powers were needed only for minor changes, potentially around the EU agreements—

[The Chair]

Order. May I interrupt the hon. Gentleman? His opportunity to respond to the debate was before the previous Division. I was really just asking whether he wanted to move amendment 12 formally.

[Barry Gardiner]

I was simply explaining that, in the light of the Minister’s remarks, we do wish to move the amendment, because it conforms with the suggestions of one of the Government’s own witnesses.

Amendment proposed: 12, in clause 2, page 2, line 41, leave out subsections (8) and (9) and insert—

“(8) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—

(a) the period of five years beginning with exit day (‘the initial five year period’), or

(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (9).

(9) Regulations under subsection (8)(b) may not extend the initial five year period beyond the day which falls ten years after exit day.”—(Barry Gardiner.)

This would make the sunset clause governing section 2(1) renewable once only.

Question put, That the amendment be made.

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Regulations under Part 1

[Barry Gardiner]

I beg to move amendment 13, in schedule 2, page 12, line 5, leave out from “section 1(1)” to the end of line 6 and insert

“may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This would require regulations implementing the Agreement on Government Procurement to be subject to the affirmative resolution procedure.

This amendment is a simple but vital first attempt to restore democracy to the Trade Bill. It is simple because it replaces the negative resolution procedure the Government wish to use for future regulations under paragraph 2(1) of schedule 2 with an affirmative resolution procedure. It is vital because, without that, the Government have carte blanche to introduce regulations to implement the obligations arising from our independent membership of the GPA without the slightest hint of anything resembling parliamentary scrutiny. While the UK is a member of the World Trade Organisation in its own right and will continue to be so after Brexit, we are a member of the WTO’s plurilateral government procurement agreement only by virtue of our EU membership. We know that the Government will have to initiate a separate parliamentary procedure under the Constitutional Reform and Governance Act 2010 to prepare for the UK to rejoin the GPA in its own right. I am pleased the Minister made the commitment in our first line-by-line session last Thursday that there will be a vote in Parliament to decide on the terms under which we rejoin the GPA.

[Greg Hands]

I thank the hon. Gentleman for giving way. That is not a correct assessment of what I said on Thursday. I said we would allow the power for Parliament to bring forward a vote under the Act. It is clearly stated in Hansard.

[Barry Gardiner]

Good Lord, Mr Davies, it’s a jolly good job I have an extract from the Hansard here. I will press on and then quote from it.

CRAGA does not require there to be a debate or a vote on any treaty laid before Parliament under its terms, as has been repeatedly confirmed by the House of Commons Library via an expert witness from the Hansard Society and by everybody else who has read the Act or knows what it says. Yet, it certainly leaves the possibility open for Government to hold that vote if they are prepared to do so. Again, I am pleased the Minister reaffirmed last week not only that it is possible under CRAGA for the Government to bring forward a vote on the UK’s terms of entry into the GPA, but that

“the terms on which the UK enters the GPA in our own right will be subject to a separate vote in Parliament.”—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 131.]

Those are the words the Minister actually used. I am surprised he wants to cavil about them now. As he knows, our dissatisfaction with CRAGA is that it includes no requirement for a debate or a vote on a treaty laid before Parliament under its provisions. We are dependent on the good will of the Government as to whether Parliament is granted or denied the opportunity for a vote.

In this instance, I thought the Government had confirmed that there will be a vote, not that there might be, depending on the Labour party, so we look forward to the Government introducing that debate in Government time. However, that in no way deals with the broader issue of why Parliament should be dependent on the Government’s good will to have the opportunity to exercise its rights to due democratic process.

[Faisal Rashid]

It has been widely documented that the use of the negative resolution procedure the Bill proposes affords Members less opportunity for scrutiny in the House than is currently enjoyed by Members of the European Parliament. Indeed, Jude Kirton-Darling MEP told the Committee in no uncertain terms that the Bill is

“an enormous step back in democratic oversight of trade agreements.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 43, Q86.]

Does my hon. Friend therefore agree that, for the Government to meet their commitment that the Bill will replicate existing arrangements as closely as possible, they must support the amendment to ensure the opportunity for scrutiny enjoyed by Members is closer to that currently enjoyed by MEPs?

[Barry Gardiner]

Indeed—my hon. Friend is right. Many Members on both sides of the House think it a travesty that we are afforded less opportunity to scrutinise things and less transparency than is afforded to our colleagues in the European Parliament.

On the agreement on government procurement, once we have had our opportunity to debate and vote on the terms under which we will rejoin it, the Government will then lodge our annexes with the WTO. The next stage is to issue the regulations that will implement the terms of our accession to the GPA, and then, in the years thereafter, to make changes to our domestic legislation that reflect the accession of new parties to the GPA or the withdrawal of any countries that decide to leave it.

It is important to note that that is not a temporary power covered by a sunset clause, as with the international trade agreements in clause 2. This is a permanent power for the Government to issue regulations implementing the UK’s obligations under the GPA into the indeterminate future—for as long as the WTO remains and the GPA is one of its constituent agreements. When we look at the fine detail of the Bill, we yet again discover that it is not a temporary little Bill about rolling over existing agreements; it actually has permanent, lasting effect. The roll-over powers could give Ministers the powers in perpetuity, under the Henry VIII provision.

We hear that the Bill is small, necessary, timely and time-limited, but in actual fact it is not. Our amendment 13 seeks to replace the negative resolution procedure, which the Government wish to apply to clause 1(1), with the affirmative procedure. I will remind the Committee of what that means so that we have a proper understanding of what we are talking about in this context, because it will also be essential to several later amendments that we will bring forward to other parts of the Bill.

The scrutiny procedure for delegated legislation in the House of Commons has come in for intense criticism in the context of the European Union (Withdrawal) Bill. That criticism is well merited. The Hansard Society’s expert report, “Taking Back Control for Brexit and Beyond”, lifted the veil on just how badly the system is failing to deliver the necessary scrutiny of secondary legislation at precisely the moment we need full confidence in it as we rebuild our system of checks and balances for the post-Brexit future. That report does not make pleasant reading.

The negative resolution procedure the Government propose for regulations under clause 1(1) is the least rigorous of all parliamentary procedures available. Secondary legislation subject to the negative resolution becomes law automatically once it has been laid before Parliament and has remained unchallenged for the requisite number of days—no need for a debate, no call for a vote. MPs may pray against any regulation by means of an early-day motion, but there is no obligation for the Government to schedule parliamentary time to debate that prayer.

The convention is that prayers made by Her Majesty’s official Opposition should receive parliamentary time for a debate, yet even then there is no guarantee that the convention will be respected. In the 2015-16 parliamentary Session, the Leader of the Opposition tabled a dozen prayer motions for debate—five were granted. Of the 585 negative instruments laid before Parliament in that session, only 3% were even debated. In the following parliamentary Session, fewer than one in 100 statutory instruments subject to the negative resolution procedure were debated at all.

The main point of the negative resolution procedure is to allow the Government to have their way without any need to bother parliamentary democracy, and it has been spectacularly successful. The last time a negative instrument was successfully annulled in the House of Commons was the Paraffin (Maximum Retail Prices) (Revocation) Order in 1979. I think that tells the story about what is intended by making these provisions subject to the negative resolution procedure.

[Faisal Rashid]

Almost every individual who has appeared before this Committee over the past week, from business leaders to academics, civil activists and lawyers, has told us that more needs to be done by way of parliamentary scrutiny in this Bill. If the Government will not support these amendments, what good reason do they have to ignore the recommendations of these individuals?

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[Barry Gardiner]

Again, my hon. Friend puts it very succinctly and very well.

The delegated powers memorandum argues that the negative resolution procedure is appropriate to implement the UK’s obligations as an independent member of the GPA. It argues that it would be inappropriate to demand primary legislation to bring in the legislative changes necessary to reflect our new status as an independent GPA member, as this could introduce a significant delay in the proceedings.

Labour Members agree; we are not opposing the Government on that point. Primary legislation would be inappropriate to implement our obligations under the GPA once we had fully debated the terms on which we were joining the agreement, as the Minister promised us last Thursday that we will. Yet the issue here is not primary versus secondary legislation; it is negative versus affirmative in respect of the resolution procedure that governs the secondary legislation.

We simply do not believe that the negative procedure can be appropriate, precisely because of the lasting damage that could be done to contractors currently providing councils with goods and services if the regulations about Government procurement are made wrongly. Nor do we accept the Government’s contention that they must be allowed to use the negative resolution procedure because of time pressures inherent in the GPA itself. It is entirely spurious to suggest that the 30-day period between depositing the UK’s instrument of accession to the GPA and the accession coming into force is in any way coterminous with the drafting of a statutory instrument and its passage through Parliament.

The guidance on drafting statutory instruments issued by the Government Legal Service recommends allowing an absolute minimum of 22 weeks for the very simplest of negative instruments, with more complex ones requiring anything up to 61 weeks from their inception to the time they come into force—that is, well over year. Affirmative resolution instruments require only marginally longer, depending again on how complex they are—the Government Legal Service suggests allowing 26 to 67 weeks. In both cases, the process requires many months of planning beyond the 30-day period stipulated in the GPA. Government officials will have had to start work on the secondary legislation months in advance of depositing the UK’s accession instruments with the WTO, and they can just as easily factor in an affirmative resolution procedure as they can a negative one.

When it comes to the future accession of other WTO members to the GPA, which may well happen, the situation is even more acute. Here, Members of Parliament will have had no opportunity to consider any of the ramifications of opening up our public procurement contracts to new countries. So the only chance we will have of subjecting those new regulations to any scrutiny will come through the procedure that we enshrine in this Bill.

The WTO lists 10 countries that are in the process of acceding to the GPA: Albania, Australia, China, Georgia, Jordan, the Kyrgyz Republic, Oman, Russia, Tajikistan and the former Yugoslav Republic of Macedonia. Five other WTO members have undertaken commitments in their WTO accession protocols to initiate accession to the GPA: Afghanistan, Kazakhstan, Mongolia, Saudi Arabia and the Seychelles. If and when they do accede, the UK will need to open up its Government procurement contracts to suppliers from every one of those countries. Once again, we agree with the Government that it would be overly burdensome to require new primary legislation every time another country accedes to the GPA. We are not asking for that. But we disagree that new Government regulations to implement our obligations should just be passed through on the nod. That is why we are arguing for the affirmative procedure in this case too.

Once again, the Government’s argument that we are constrained by the 30-day period between a country’s accession and our having to grant that country access to the UK’s public procurement market is entirely spurious. We will have been party to the negotiations surrounding their accession for months beforehand, giving Government officials ample time to prepare the requisite instrument for either negative or affirmative resolution.

This is a blunder. Even where a statutory instrument is subject to the affirmative resolution procedure, the scrutiny that it undergoes is still remarkably light. MPs who have previously been assigned to Delegated Legislation Committees—and there will be many in this House—know they are not encouraged by the Whips to engage and speak. The affirmative resolution procedure has been called farcical and a waste of time. The Hansard Society notes, not surprisingly, that this system is “not fit for purpose”. It concludes with the stinging rebuke to all of us who are responsible for the proper functioning of Parliament that

“MPs can no longer be indifferent to the inadequacies in the system. They must now finally take seriously their democratic responsibility for delegated legislation.”

That is why the Labour party has tabled amendments to the Bill calling for an upgrading of the process for parliamentary scrutiny in respect of regulations stemming from our new trade obligations. As we have noted repeatedly, those obligations are serious. They are binding commitments made in international treaties that cannot easily be repealed. Domestic legislation can be repealed much more easily. If there was ever an example of secondary legislation crying out for proper parliamentary scrutiny and oversight, this is it. For the regulations necessary to implement obligations arising from the UK’s independent membership of the GPA, we consider the affirmative resolution procedure to be appropriate and proportionate. However imperfect the system is, at least the affirmative procedure provides Members of Parliament with the possibility of a debate and a vote. It is then up to us to make proper use of that opportunity.

Having heard the objections of such an independent body as the Hansard Society, I hope Government Members will agree with us—on this amendment at least—and support it.

[Greg Hands]

The UK currently participates in the government procurement agreement, known as the GPA, through our EU membership. The GPA offers UK businesses guaranteed access to approximately £1.3 trillion per annum of global public contract opportunities. We intend to remain in the GPA with the same rights and obligations that we currently enjoy as part of the European Union. Those were negotiated by the EU on behalf of member states for the 1994 GPA. The 2012 revised GPA was negotiated by the EU and scrutinised by the European scrutiny Committees in Parliament.

The power in clause 1 is a narrow one designed to allow us to implement the GPA as an independent member, as well as to reflect new parties joining and crucially—the hon. Member for Brent North rather overlooked this—to allow existing parties to withdraw from it. It will be a case of the UK using clause 1 to reflect having a new status within an existing, established agreement on procurement.

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That is not guaranteeing a vote; that is saying that it is possible to have a vote.

[Barry Gardiner]

I agree with the Minister’s interpretation of what he has just read out. Does he accept that he also said the following:

“the terms on which the UK enters the GPA in our own right will be subject to a separate vote in Parliament”?—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 131.]

[Greg Hands]

Hence, the clarification, twice over, to be absolutely precise how that vote would work. I know the hon. Gentleman has attacked the negative resolution procedure, but I do not remember any such exhortation when he was a Minister under Tony Blair—I did not listen to every single thing he said in those years, but I do not recall that. I think he would have troubled the scorers if he had attacked such a procedure at the time under CRAG, which as we know is an Act of Parliament introduced by the last Labour Government.

The hon. Member for Brent North confirmed last week that he did indeed vote for CRAG. He said it was important in the days when the treaties in question had already been scrutinised by the EU and scrutiny was also passed down to

“this Parliament, where the European Scrutiny Committee…would examine forensically the contents passed from Europe”.—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 149.]

I can reassure the hon. Gentleman that the revised GPA in 2012 went through the very process he described to the Committee and the very process that he voted for in 2010.

The hon. Gentleman asked why the GPA power is not time-limited. The answer is that new accessions to the GPA are covered by the clause to ensure that the UK does not breach its own GPA commitments. It is also essential to have the power to reflect withdrawals to ensure that withdrawing parties do not continue to enjoy guaranteed access to UK procurement markets. I will speak in more detail about withdrawals from the GPA.

The hon. Gentleman asserted that the GPA power continues into perpetuity, including the Henry VIII power. There is no Henry VIII power in clause 1, which allows for the implementation of the GPA. The powers in clause 1 are narrow in scope. They are designed to allow the UK to make legislative changes that reflect its new status as an independent member but, none the less, as a member of an existing and settled agreement.

The UK needs to use the power in clause 1 quickly to prevent UK businesses from losing guaranteed access to valuable procurement markets. The revised GPA has already been scrutinised by the EU and the European Scrutiny Committee, using the powerful microscope the hon. Gentleman described last week and for which he voted not so long ago.

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[Greg Hands]

I thank the hon. Gentleman for his intervention. We might be going too far down this road. I do not want to sound in any way condescending to a new Member, and my only advice to him, having been a Member in this House for 12 years, would be that the receipt of 5,000 emails from 650 constituencies is an average of nine emails per constituency. If he is suggesting that we make public policy, and that each of us makes our policy decisions, based on the opinions of nine constituents, I do not believe that would be a helpful road for us to go down.

Returning to the GPA, the UK’s independent membership will be considered under the CRAG process, meaning Parliament will be able to scrutinise the terms of the UK joining the GPA before the GPA can join, as I referred to in the debate on Thursday. The Government therefore believe that the negative resolution procedure provides an appropriate level of parliamentary scrutiny for the power to implement the GPA in clause 1.

Furthermore, the Opposition amendment would also apply the affirmative resolution procedure when the UK uses clause 1 to make regulations to reflect new parties joining the GPA or—this is a very important point—existing parties withdrawing from it. In the case of new and withdrawing parties, it is important that the UK is able to respond quickly and flexibly. Once a new party deposits its instrument of accession, there is a period of only 30 days before that accession comes into force. The UK will then be under an immediate obligation to provide that new party with guaranteed access to UK procurement opportunities covered by the GPA. If the UK failed to offer the new party this guaranteed access, it would be in breach of its GPA commitment. On the other hand, a party to the GPA can decide to withdraw unilaterally, and where a party notifies the GPA committee that they intend to withdraw, they will cease to be a GPA member just 60 days later. Therefore, it is vital we are able to react quickly to such a notification.

If the power to amend UK legislation to reflect parties withdrawing from the GPA were subject to any affirmative procedure, the UK might not be able to legislate in time to remove the party by the 60-day time limit, which, of course, could result in the UK contracting authorities continuing to give guaranteed access to UK markets to a party that is leaving or had already left the GPA, and was therefore no longer entitled to access.

[Barry Gardiner]

I am listening carefully to the Minister. Does that 60-day timescale for countries seceding from the GPA mean that in those cases the Minister will not be able to fulfil the guidelines for statutory instruments that I referred to? If that is the case, it suggests that at an absolute minimum a statutory instrument, even on the negative procedure that he proposes, would only be for 22 weeks and at the outside for 60 weeks. Is he confirming to the Committee that in those circumstances, the guidelines laid down by the Government and Parliament in this area, even for the negative procedure, would not apply?

[Greg Hands]

I want to make sure of the answer to the hon. Gentleman’s question. Perhaps I can pledge to write to him, copying in other members of the Committee and you, Mr Davies, on precisely how this fits in with our statutory instrument procedures.

[Barry Gardiner]

Absolutely.

[Greg Hands]

To conclude, the withdrawing party would have no obligation to give UK businesses reciprocal access to its procurement markets, and it is of course vital that Parliament has the opportunity to scrutinise new accessions to the GPA.

I reassured the Committee last week and earlier today that we want to ensure a clear and significant role for Parliament in scrutinising future trade agreements. The provisions will enable those agreements to be completed effectively and efficiently, while respecting due process in Parliament. New accessions to the GPA will be included within that scrutiny process. That will ensure that Parliament can scrutinise new accessions during accession negotiations. The power that we are discussing will be used after that scrutiny, and approval of the accession, so I invite the hon. Member for Brent North to withdraw the amendment.

[Barry Gardiner]

I am grateful to the Minister for his assurance that he will write to the Committee, but I will press the amendment to a vote, because it makes an important point.

Question put, That the amendment be made.

Division 13

Ayes: 9

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Labour: 7
Scottish National Party: 2

Noes: 10

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Conservative: 9

[Barry Gardiner]

I beg to move amendment 16, in schedule 2, page 12, line 5, leave out “or 2(1)”.

This is linked to amendments 14, 15, 17, 19 and 20.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 14, in schedule 2, page 12, line 6, at end insert—

“(1A) A statutory instrument containing regulations of a Minister of the Crown under section 2(1) in respect of a free trade agreement which meets the criteria under section 2(3) may not be made unless all provisions of paragraph 2A have been satisfied.”

This amendment is linked to amendments 15 and 16, which would require the United Kingdom’s free trade agreements with third countries which already have a corresponding agreement with the European Union to be subject to a super-affirmative resolution procedure prior to ratification.

Amendment 15, in schedule 2, page 12, line 17, at end insert—

“Scrutiny of corresponding agreements: super-affirmative procedure

2A (1) Before a free trade agreement which meets the criteria under section 2(3) and to which the United Kingdom is a signatory may be ratified, the Secretary of State must lay before Parliament—

(a) a draft order to the effect that the agreement be ratified, and

(b) a document which explains why the Secretary of State believes that the agreement should be ratified.

(2) The Secretary of State may make an order in the terms of the draft order laid under subparagraph (1) if—

(a) after the expiry of a period of 21 sitting days after the draft order is laid, no committee of either House of Parliament has recommended that the order should not be made, and

(b) after the expiry of a period of 40 sitting days after the draft order is laid, a motion in the terms of the draft order is approved by a resolution of each House of Parliament.

(3) If a committee of either House of Parliament recommends that an order should not be made under subparagraph (2), the Secretary of State may, after the expiry of a period of 60 sitting days after the draft order is laid, make a motion for a resolution in each House of Parliament in the terms of the draft order.

(4) If a motion in the terms of the draft order is approved by a resolution of each House of Parliament under subparagraph (2)(b) or (3), the Secretary of State may make an order in the terms of the draft order.

(5) A free trade agreement to which this paragraph applies shall not be deemed to be a treaty for the purposes of Part 2 of the Constitutional Reform and Governance Act 2010.

(6) In section 25 of the Constitutional Reform and Governance Act 2010, after subsection (1)(b), at end insert—

‘but does not include a free trade agreement to which paragraph 2A of Schedule 2 to the Trade Act 2018 applies.’”

This would require the United Kingdom’s free trade agreements with third countries which already have a corresponding agreement with the European Union to be subject to a super-affirmative resolution procedure prior to ratification.

[Barry Gardiner]

Let me state for the record that I am grateful to you, Mr Davies, and to the Clerks for agreeing to the reordering that we requested, so that amendments 14 and 15 could be selected with amendment 16, and debated ahead of amendments 17 and 19. I will try to make it clear why that is necessary.

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[Faisal Rashid]

The super-affirmative procedure closely replicates the powers that MEPs enjoy in the European Union, so does my hon. Friend agree that if the Government are to meet their commitment that the Bill will replicate existing arrangements as closely as possible, they must support the amendment?

[Barry Gardiner]

Again, my hon. Friend makes the point about the discrepancy between the scrutiny available to us here in this sovereign Parliament and the scrutiny available to members of the European Parliament. It would seem entirely at odds with the Government’s stated purpose for the European Union (Withdrawal) Bill if we ended up having fewer scrutiny powers than Members of the European Parliament. That would seem to be a travesty.

I look forward with perhaps slightly more than the usual expectation to the Minister’s response to the amendment, given that this is the issue on which not only the right hon. and learned Member for Beaconsfield spoke on Second Reading, but on which several other hon. Members from across the House registered their profound concern. This is the moment when we discover whether the Government are prepared to heed the calls of right hon. and hon. Members alike and look at the Bill in a much more sensible way.

[Greg Hands]

Let me reassure hon. Members that I listened very carefully to what the hon. Member for Brent North said. First, let me repeat that the majority of free trade agreements within the scope of the Bill have already been ratified, and Parliament had the opportunity to scrutinise them during ratification. Parliament’s European Scrutiny Committee also scrutinised these agreements when they were negotiated, included, signed and provisionally applied. They had, of course, already gone through the European Parliament process as well, to which the hon. Member for Warrington South helpfully drew our attention.

The Government have made clear their intention to ratify by exit date all the EU free trade agreements that currently provisionally apply, including the EU-Canada comprehensive economic and trade agreement, and the economic partnership agreement with the Southern African Development Community, or SADC.

The hon. Member for Brent North drew attention to the comments of a South African Minister. To be honest, I cannot remember precisely whom he referred to, but for clarity I refer him to the memorandum of understanding signed by the Secretary of State for International Trade in South Africa in either August or September. Both parties specifically agreed to transition the agreement and maintain continuity, without substantive change. Whatever the hon. Gentleman’s South African said, the memorandum of understanding is absolutely clear in that regard. As I said to the International Trade Committee last week, 70-plus countries have agreed in principle to maintain continuity in trading arrangements. For example, we signed a similar memorandum with the CARIFORUM group to do precisely that.

Parliament’s scrutiny of these agreements, which have already been scrutinised, will be guaranteed by the process under the Constitutional Reform and Governance Act 2010. As we have made clear, this is a technical exercise to secure continuity in our existing trading arrangements, not an opportunity to renegotiate the terms of existing agreements. That means that further scrutiny of those agreements, the benefits of which are already felt by businesses and consumers, is unnecessary. As we have made clear, we want Parliament to play a vital role in the scrutiny of future trade agreements that are not covered by the Bill, but that is for a separate occasion. We made clear in the trade White Paper and in this Committee on Thursday that our future trade policy must be transparent and inclusive.

[Greg Hands]

I thank the hon. Gentleman for his intervention. I very much appreciate the way, as a new Member, he is getting stuck into the Bill, but I remind him that, in terms of securing the continuity of agreements, more than 70 countries have now agreed that there will not be substantive change. I mentioned South Africa, with which we have a memorandum of understanding saying that. There is no need to re-scrutinise agreements that are substantively the same and have already been through the proper scrutiny processes of both Houses. That is why we made clear in the trade White Paper and in this Committee on Thursday that our future trade policy must be transparent and inclusive, and that Parliament will be engaged throughout the process. I therefore ask the hon. Member for Brent North to withdraw amendment 16.

[Barry Gardiner]

We intend to press amendment 16 to a vote.

Question put, That the amendment be made.

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Division 14

Ayes: 7

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Labour: 7

Noes: 10

---

Conservative: 9

[Barry Gardiner]

I beg to move amendment 17, in schedule 2, page 12, line 6, at end insert—

“(1A) A statutory instrument containing regulations of a Minister of the Crown under section 2(1) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This would require regulations implementing international trade agreements to be subject to the affirmative resolution procedure.

[The Chair]

With this it will be convenient to discuss amendment 19, in schedule 2, page 12, line 6, at end insert—

“(1A) A statutory instrument containing regulations of a Minister of the Crown under section 2(1) may not be made except in accordance with the steps in subparagraphs (1B) to (1E).

(1B) The Minister shall lay before Parliament—

(a) a draft of the regulations, and

(b) a document which explains why the Secretary of State believes that regulations should be made in terms of the draft regulations.

(1C) The Minister may make an order in the terms of the draft regulations laid under subparagraph (1B) if—

(a) after the expiry of a period of 21 sitting days after the draft regulations are laid, no committee of either House of Parliament has recommended that the regulations should not be made, and

(b) after the expiry of a period of 60 sitting days after the draft regulations are laid, the draft regulations are approved by a resolution of each House of Parliament.

(1D) If a committee of either House of Parliament recommends that the regulations should not be made, the Secretary of State may—

(a) lay before Parliament revised draft regulations, or

(b) after the expiry of a period of 40 sitting days after the revised draft regulations are laid, make a motion for a resolution in each House of Parliament for approval of the draft regulations.

(1E) If a motion under subparagraph (1D)(b) is approved by a resolution of each House of Parliament, the Secretary of State may make the regulations.”

This would require regulations implementing international trade agreements to be subject to the super-affirmative resolution procedure.

[Barry Gardiner]

Amendment 19 would require any regulations implementing new UK trade agreements to be subject to a super-affirmative procedure. If the Government are not willing to allow us the super-affirmative procedure prior to ratification, as they have just shown they are not, we will be compelled to argue for it afterwards. Clearly, we would prefer to keep the stable door shut rather than having to retrieve the horse after it has bolted, but if we could at least provide for some parliamentary process subjecting implementing regulations to scrutiny, that would be better than nothing. As it is presently constituted, nothing is precisely what the Bill offers.

The procedure mirrors that which we seek to introduce with amendment 15: namely, in this case, a proper process granting Parliament the power to subject implementing regulations to scrutiny. The provisions are drawn from existing primary legislation that provides for enhanced scrutiny in other contexts. Once again, the key elements of them are that a Committee of either House can object to the regulations, and that both Houses must give their approval before the Secretary of State can proceed with making the regulations.

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[Greg Hands]

I think we are potentially about to have quite a similar debate to the one that we just had, but let me be as succinct as I can. I remind Members that this power will be used only to introduce regulations that reflect current obligations in our EU trade agreements. That means that we are not seeking to change the effects of our existing trade agreements through the power. The agreements have already been examined by Parliament as part of its regular scrutiny of EU business. Ratified free trade agreements have already been through the normal parliamentary scrutiny process for treaty ratification.

[Barry Gardiner]

The Minister said that the Government are not proposing to change the provisions in any of the treaties. I think he said earlier in our debate that 71 countries had already agreed. Could he just clarify for the Committee once and for all, because he has failed to do so thus far, whether that includes Norway, Switzerland and Turkey?

[Greg Hands]

I thank the hon. Gentleman, but we have already covered that ground as well. The agreements with Norway, Turkey and Switzerland will inevitably be dependent on our future trading relationship with the European Union, because of the unique way that each of those countries operates in conjunction with the European Union.

The hon. Gentleman says that we are not proposing changes. It is just as important to recognise that more than 70 of our partners do not want substantive changes to the agreements either. Perhaps we need to put aside for a moment some of the ways in which the Bill operates, and think about what is in the interests of our trading partners. It is as much in their interests as ours to have continuity of the existing agreements. It is therefore not a surprise to me that more than 70 countries have said that they are not seeking substantive changes to the agreements.

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[Greg Hands]

I refer the hon. Gentleman to the comments I made earlier: none of the 70-plus countries that we have spoken to has said that it wants to do that. It would not be in their interests for them to do so, for reasons of maintaining continuity in our trade relations. That is very much in our and their interests.

Let me finally remind the Committee that Parliament still has oversight of statutory instruments introduced under the negative resolution procedure, using well-established processes as outlined in CRAG. I therefore ask the hon. Member for Brent North to withdraw the amendment.

[Barry Gardiner]

We will press amendment 17 to a vote.

Question put, That the amendment be made.

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Division 16

Ayes: 9

---

Labour: 7
Scottish National Party: 2

Noes: 10

---

Conservative: 9

[Barry Gardiner]

I beg to move amendment 20, in schedule 2, page 12, line 6, at end insert—

“(1A) A statutory instrument containing regulations of a Minister of the Crown under section 2(1) relating to an international trade agreement other than a free trade agreement which does not meet the criteria under section 2(4) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This would require regulations implementing an international trade agreement which is not a free trade agreement and which does not correspond to a prior or existing EU agreement to be subject to the affirmative resolution procedure.

This is the final amendment in our series trying to introduce just a modicum of parliamentary scrutiny into the Bill. It refers to the last category of trade agreements that have not yet been covered in the previous amendments.

If hon. Members cast their minds back to amendment 3, which we presented in the first line-by-line sitting last Thursday, that amendment sought to expand the remit of the Bill to include not just agreements that correspond to existing EU agreements but those with countries where there is no prior EU agreement in place. The major set of amendments that I presented at that sitting sought to introduce a full process of preparation, debate and scrutiny up to the point of signature of free trade agreements within the category of comprehensive agreements that need to be notified under GATT article XXIV or GATS article V. Amendment 20 picks up on trade agreements that are not free trade agreements for the purposes of GATT article XXIV or GATS article V, and that do not correspond to an existing EU agreement. Without the amendment, they would not be covered anywhere in the expanded Bill as we envisage it.

We do not believe that it would be an appropriate use of parliamentary time to subject every new mutual recognition agreement to the full rigour of impact assessment and mandate-setting parliamentary scrutiny. We believe it would be enough to have the minimum scrutiny of the affirmative resolution procedure, which allows for a debate and vote where it is thought necessary, but which also allows for the swift passage of regulations through Parliament where they are clearly non-controversial.

I will point out here that some mutual recognition agreements and other agreements are potentially very controversial. In the case of mutual recognition agreements with countries whose regulatory systems are radically different from our own, such as the United States, there could be huge pitfalls in allowing for mutual recognition where it could lead to products entering the UK market that have not been subjected to the rigorous tests that we demand in our jurisdiction. If anything, we are erring on the side of being too pragmatic in suggesting that those agreements be subjected to the affirmative resolution procedure only, seeing as the affirmative procedure can be open to the abuse I described earlier in my reference to the Hansard Society’s report. At least we can take comfort in the fact that a Delegated Legislation Committee would have the power to hold the most controversial regulations up to scrutiny and subject them to a vote in Parliament, which would be a quantum leap from what the Bill currently offers.

[Greg Hands]

Clause 2 would limit the scope of agreements on which the power can be used to those where the other party had a free trade agreement signed with the EU before exiting. Amendment 20 would establish a procedure whereby the power is used in relation to agreements falling outside those parameters. As we do not wish to extend the scope of clause 2 to allow the power to be used in relation to more agreements, it follows that we do not need to apply a procedure to the implementation of such agreements. The amendment, therefore, is unnecessary in every way.

However, if the spirit of the amendment is to explore what constraints we have drafted into the clause 2 power, I am happy to provide reassurance to the Committee. As I have said before, the power can be used only in relation to free trade agreements with countries that have signed EU free trade agreements before exit day. A free trade agreement covers substantially all trade notifiable to the World Trade Organisation. To be clear, the power cannot be used to amend primary legislation except when that primary legislation is retained EU law. It cannot be used to implement a trade agreement between the United Kingdom and the European Union itself. Nor can it be used to extend or create new criminal offences or create new fees or charges.

The power has a five-year sunset clause from exit day. If the Government wish to extend this period, they may do so only with the permission of both Houses. We and our trading partners are clear that this will be a technical exercise to ensure continuity in trading relationships. It is not an opportunity to change or renegotiate the terms of these EU agreements. Therefore, I ask the hon. Member for Brent North to withdraw the amendment.

[Barry Gardiner]

I do not wish to shock the Committee, but we will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Bill Esterson]

That is not what I was suggesting. I am saying that we have to recognise that countries such as the US, as demonstrated by this case, are prepared to act. We have to be realistic about that. We have to make sure that we have the right representation on the TRA so that we are making the right case. I do not think 300% tariffs is a good idea at all, but we certainly need to be able to make the right judgments when such things apply. There is a balance between protectionism and the approach in the Bombardier case.

[Barry Gardiner]

Does my hon. Friend agree that it would be foolish to look at one specific example of an outrageous situation, as we have had with Bombardier in the US? Thank goodness that the ITC came to the correct conclusion there. Just because it is possible to arrive at the wrong conclusion should not mean that one judges the lesser duty rule simply on that.

[Bill Esterson]

Of course that is right. My hon. Friend deserves credit for taking the time and effort to go and meet the ITC and to make the case with the trade unions and others from this country. The lobbying that he and others were involved in played no small part in delivering for workers and business in the UK. He deserves a lot of credit for that. I will return to my speech—

--- Later in debate ---

[Greg Hands]

Yes, and the authority is very transparent in its operation. A lot of how the authority operates is outlined in the Taxation (Cross-border Trade) Bill, which is being debated down the corridor. I strongly feel that there is really good transparency in the arrangements we have made regarding the authority’s independence, arm’s length nature and specialist and independent evidence-gathering. We are also ensuring that it is accountable to the Government and that, at the end of the day, a political decision is still taken about whether to impose trade remedies.

[Barry Gardiner]

I think we would all welcome a sense that this body was independent, so can it be right that one person with a particular view of trade should be empowered under the Bill to appoint every single member of the TRA, including the chair? Depending on the order in which they make the appointments, that is entirely possible under the Bill.

[Greg Hands]

No, it is not.

[Barry Gardiner]

The Minister is shaking his head, but under the Bill, so long as the Secretary of State appoints the chair last—there is nothing to prevent him doing that—he is empowered, absolutely on his own, to put his friends, cronies and the people who have his view of trade in every single position. He would then appoint the chair. If he appoints the chair first, he has to do the rest in conjunction with others.

[Greg Hands]

Let me be of assistance to the hon. Gentleman. It is quite clearly laid out in the appointments procedure that the Secretary of State appoints the chair, and the other non-executives in consultation with the chair. In exceptional circumstances, the Secretary of State can appoint the chief executive, but only if the chair has not yet been appointed. That is laid out in the legislation. The executive members are not appointed by the Secretary of State. It is important to understand that the Secretary of State does not appoint the whole body.

On top of that, the appointments process of course follows good governance principles and rules on public appointments. For the benefit of the Committee, I will outline those rules. First, the Government are responsible for setting out the processes and principles that underpin the management of public bodies. Secondly, there are explicit rules on the roles of Ministers and Departments in the public appointments process. The rules outline the role of the Commissioner for Public Appointments, who is the independent regulator of public appointments. I am sure they would take more than a casual interest in the TRA, were the case that the hon. Member for Brent North outlined to transpire.

The rules also include the governance code for public appointments. We have worked with governance experts in the Cabinet Office and HM Treasury to ensure that the TRA complies with those governance rules and others. The rules include guidance on managing public money and all the usual protections we would expect to see in an appointments process.

[Barry Gardiner]

Will the Minister, in the light of his remarks, comment on schedule 4(2)(1)? It states:

“The TRA is to consist of…a Chair appointed by the Secretary of State…other non-executive members appointed by the Secretary of State…a chief executive appointed by the Chair with the approval of the Secretary of State or, if the first Chair has not been appointed, by the Secretary of State, and…other executive members appointed by the Chair.”

In other words, the majority of the Committee—all the non-executive members, the chair and the chief executive—can be appointed by one individual: the Secretary of State.

[Greg Hands]

I refer the hon. Gentleman to later in the schedule. If he would care to turn over the page, it states:

“The Secretary of State must consult the Chair before appointing the other non-executive members.”

He is being highly selective in choosing elements of the Bill that appear to suit his argument.

Most importantly, these are public appointments, so we will of course have a standard competitive process following good governance principles and rules on public appointments. The successful candidates will be selected based on whether they have the right skills and experience to deliver this new UK-wide function effectively. The arrangements are broadly consistent with those of equivalent arm’s length bodies.

On the role of Parliament and amendments 21 and 22, it is important to ensure that the TRA’s senior leadership, and particularly its chairman, are in place as early as possible to enable the TRA to be operational by the time the UK leaves the EU. That will ensure continuity for UK industry. Giving the International Trade Committee a role in the appointment of members to the TRA, including its chair, would add additional stages to the appointment of non-executive members, thereby delaying the process. More significantly, referring back to the point made by my hon. Friend the Member for Hertford and Stortford, it would risk politicising the appointment process, thereby undermining the TRA’s status as an independent and impartial body.

--- Later in debate ---

[Barry Gardiner]

The Minister is being extremely generous in giving way. Before he finishes his peroration, would he agree with me that there is a sensible distinction to be made between the executive members and the non-executive members of the TRA? Executive members are expected to be specialists. They are expected to have specialist trade knowledge or specialist knowledge that could determine whether dumping has taken place and so on. The non-executive members have more of a representative function. In that context, would he not see that that distinction in the amendments and others we support has some purchase?

[Greg Hands]

I thank the hon. Gentleman for that intervention because it allows me to say that I do not agree. The non-executive members are not intended to be representatives of particular interests or particular parts of the United Kingdom, or particular sectors or producers or consumers or trade unions. The idea is that all members of the board have the ability to think right across the question of what is happening in terms of the injury that has been created or reported to have been created. What is the best way of assessing all the evidence? What is the best way of doing, for example, the economic interest test? I entirely disagree with him. These people are not representatives. They are able to take a dispassionate, evidence-based and informed decision, looking at all of the available evidence.

The TRA will consider the wider impact of trade remedy measures as part of the economic interest test. As part of that process, the TRA will consider the impact of measures on different groups across the UK, including any regional or distributional consideration. It is important to understand that its members do not have to be, and in fact should not be, representatives of those regional distributional considerations or producer or consumer and so on. They are designed to look at the evidence and come to a recommendation based on the overall evidence in front of them. It will also consider the likely impact on affected industries and consumers. We would expect the TRA to gather information where relevant to inform the economic interest test. For those reasons, I ask the hon. Gentleman to withdraw the amendment.

Trade Bill (Fifth sitting)

Barry Gardiner Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

Implementation of international trade agreements

[Barry Gardiner (Brent North) (Lab)]

I beg to move amendment 5, in clause 2, page 2, line 13, leave out subsections (3) and (4) and insert—

“(3) Regulations under subsection (1) may make provision for the purpose of implementing a free trade agreement only if—

(a) the other signatory (or each other signatory) and the European Union had ratified a free trade agreement with each other immediately before exit day, or

(b) where the regulations are made before exit day, the other signatory (or each other signatory) and the European Union have ratified a free trade agreement with each other on the day the regulations are made.

(4) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement other than a free trade agreement only if—

(a) the other signatory (or each other signatory) and the European Union had ratified an international trade agreement with each other immediately before exit day, or

(b) where the regulations are made before exit day, the other signatory (or each other signatory) and the European Union have ratified an international trade agreement with each other on the day the regulations are made.”

This excludes from the scope of section 2(1) those international trade agreements agreed between the UK and a third country where the corresponding agreement between the European Union and that third country has been signed but not ratified.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 9, in clause 2, page 2, leave out line 33.

This would remove the Henry VIII power allowing for the modification of primary legislation that is retained EU law.

Amendment 10, in clause 2, page 2, line 40, at end insert—

“(7A) An ‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement as defined in subsection (7).”.

This would define international trade agreements that do not fall within the category of a “free trade agreement” as defined under subsection (7).

[Barry Gardiner]

I am delighted to see you in the Chair, Ms Ryan. I look forward to the Committee proceeding at a rapid pace under your guidance. I am tabling amendments 5, 9 and 10, in my and my colleagues’ names, as on the amendment paper.

We are now talking about the implementation of the new international trade agreements to be negotiated between the UK and those third countries that already have an agreement with the European Union. The Government are seeking to appropriate to themselves the power to make regulations to implement those new agreements without any scrutiny by Parliament. I cannot state it better than the House of Commons Library briefing paper, which states that the Bill

“seeks to minimise Parliament’s role”

in this regard, in that it will make all secondary legislation under clause 2(1) subject to a negative resolution procedure only.

The rationale behind this attempt to sidestep due democratic process is that the trade agreements that the EU had previously negotiated with the third country in question had already undergone scrutiny when they were prepared for ratification—that is the argument the Minister used last week when we debated this. By the Government’s sleight of hand, he would say there needs to be no parliamentary scrutiny of any new UK trade agreement because that job will already have been done on the earlier agreement negotiated by the EU.

The Minister was particularly keen to point out that we were suggesting that all the levels of scrutiny that took place at the EU would be done away with. I think he thought he was trapping us when he asked us to agree that a good level of scrutiny had taken place, and that we should allow these measures to go through on the nod because that scrutiny had already happened. We reject that argument, and we were pleased to register that business representatives who gave oral evidence to the Committee agreed with us. The Committee will recall that.

The new trade agreements are not only legally distinct, as the Government have admitted, but may well include substantial new obligations, which will have been through no process of scrutiny whatever. That is why we demand a new approach to these agreements in subsequent amendments to schedule 2, where scrutiny is addressed. However, the provisions of clause 2(3) and (4) go even further, in that they allow the Government to sidestep scrutiny of not only those new UK agreements that are set to replace existing ones, which have been through the full scrutiny process prior to ratification, but UK trade deals that replace EU agreements, which have not even been through the process of ratification. Our amendment speaks to that extraordinary attempt to undermine democracy still further, the significance of which might be demonstrated if I give the Committee an example.

The economic partnership agreement between the EU and Japan was finalised last month. Negotiations were concluded on 7 December last year, and the text of the agreement is currently undergoing the double process of what is called legal scrubbing and translation into the official languages of the EU, so that it can proceed to signing in 2018. The agreement will subsequently undergo the due process of ratification by Japan and within the EU, including parliamentary scrutiny by the European Parliament. However, that process will not be completed until later in 2019, if experience is any guide, and therefore after the point at which the UK is no longer a member of the EU.

Japan is also one of the countries with which the Government have established a trade and investment working group. That working group held its first meeting in Tokyo during November of last year, and is tasked with advancing the trade and investment relationship of the two countries, with the eventual aim of signing a UK-Japan trade agreement at some point in the coming years.

According to the Bill, any future UK trade deal with Japan will be counted as a roll-over agreement, and will therefore escape parliamentary scrutiny altogether, because the EU and Japan will have signed a trade agreement during 2018—that is, before the UK leaves the EU. Note that that will be the case even if the future UK-Japan deal bears no resemblance to the EU-Japan economic partnership agreement. As stated earlier, the Bill makes no requirement for the future UK deal to match the EU’s agreement in any way, shape or form; the Bill requires only that the other country and the European Union were signatories to a free trade agreement before Brexit takes effect. The regulations to implement those new obligations will be subject to a negative resolution procedure, which is the effective negation of parliamentary scrutiny, as the Government would have us consider the new UK-Japan deal simply to be a roll-over or a grandfathered agreement.

I would like to draw attention to the oral evidence provided last Tuesday by Dr Lorand Bartels of the University of Cambridge, who spoke to exactly that issue. Dr Bartels drew particular attention to the forthcoming trade agreement with Japan, and pointed out that

“there is a fundamental difference in international law between a signed and provisionally applied agreement and a ratified agreement.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 42.]

The Government would do well to heed that distinction. I hope that the Minister might accept our amendment and that he will see it, in a friendly spirit, as one that might improve the Bill.

Without the amendment, we are in danger of effectively granting the Government carte blanche to do what they like to secure a new UK-Japan deal. That would be a major concern to businesses and workers up and down the UK. Japan is a major player on the world stage, and Japanese companies are important investors in our economy, so the obligations that we, as a nation, undertake in relation to those companies are critical to the future of some of our most dynamic industries. Are the Government really telling us that we, as parliamentarians, should have no right to scrutinise those obligations?

[Faisal Rashid (Warrington South) (Lab)]

Despite the fact that the Government have continued to argue that there is no need for parliamentary scrutiny in the Bill because existing deals have been subject to sufficient scrutiny in the European Union, does my hon. Friend agree that that is not the case here and therefore that it is vital in the interests of the British people that we secure such an amendment?

[Barry Gardiner]

I am grateful to my hon. Friend for his intervention because he reinforces the very point that I am trying to establish. Despite the processes that are currently in place for scrutiny of trade deals as they proceed through Europe, and ultimately through the European Scrutiny Committee and through the House under the Constitutional Reform and Governance Act 2010 procedure, we have here a situation in which a deal that was going to be concluded between the EU and another country can proceed to be signed, but not implemented. Then, in the lacuna—that is, the space between that signature and our leaving the EU—we could be confronted by the Government with a completely different set of trade relations. The trade agreement could be totally different, yet, under the Bill, the Government would have the power to sign and implement it simply because they had already signed a previous agreement before we had left the EU. That cannot be the right procedure for what could be completely new issues under that future agreement.

In one sense, the amendment is a modest one, given the seriousness of the issue it addresses. It merely seeks to exclude from the antidemocratic provisions of the Bill any regulations stemming from treaties such as a future UK-Japan trade agreement, where the correspondent EU agreement will have been signed but not yet ratified, along with all the scrutiny that ratification requires.

Other EU trade agreements could fall into this same category: the EU-Vietnam free trade agreement, the text of which is also being prepared for signing at some point this year; the EU-Singapore free trade agreement which has been initialled but held up by internal EU discussions as to whether it is a mixed agreement or exclusive EU competence, leading to the European Court of Justice ruling on this issue in May last year; and, potentially, some of the economic partnership agreements still to be finalised between the EU and different groupings of African, Caribbean and Pacific states, which were criticised so trenchantly by Professor Alan Winters of the UK Trade Policy Observatory in his oral evidence to the Committee last week. Also in this category is CETA, the comprehensive economic and trade agreement between the EU and Canada, which has been signed but not yet fully ratified, as it is a mixed agreement requiring ratification in each of the EU member states, in addition to the centralised EU institutions of the Council of Ministers and the European Parliament.

Finally, the amendment tightens up the language of subsections (3) and (4) by requiring not just that the EU and the other signatory or signatories should have ratified trade agreements, prior to Brexit, but that they should have done so with each other. The Bill as it stands simply says that they must have signed “a” trade agreement; it does not say that they have to have signed it with Japan—with the corresponding party. This is ridiculous. The Minister is looking confused. If he wants to intervene, I would be happy to give way to him on this point because it is material.

[The Minister for Trade Policy (Greg Hands)]

I thank the hon. Gentleman for allowing me to intervene. I am a little confused about his position on CETA. If CETA is not yet ratified by all the EU28 countries, the amendment, if it became law, would effectively prevent the UK from transitioning CETA to be a UK-only agreement. I know that the hon. Gentleman is opposed to CETA, and he represents a minority view within his party. However, the great majority of Labour MPs welcome CETA and voted in favour of it. It is also something that has already taken effect, so the effect of his amendment would be to take us out of the provisions of CETA that have already been in place and been provisionally adopted since September.

--- Later in debate ---

[Barry Gardiner]

The Minister, of course, chose not to respond to the point I allowed him to intervene on because of his confusion.

[Greg Hands]

The hon. Gentleman asked me to explain my confusion.

[Barry Gardiner]

I am happy to address the Minister’s point and have set out the Labour Front-Bench position very clearly. He should know that the provisions of the amendment do not do what he has claimed they do. What it says is that there must be proper parliamentary scrutiny. He is denying precisely the opportunity for that to happen when a treaty has been signed but not yet ratified. The point of the amendment is to ensure that proper scrutiny can take place and that ratification can have taken place to ensure that.

[Faisal Rashid]

On the point about CETA, does my hon. Friend share my concerns about the implications of bringing in certain provisions of the deal and not ratifying—for example, the investor-state dispute settlement provisions? The key point is that there will not be sufficient scrutiny or consultation or an impact assessment carried out.

[Barry Gardiner]

My hon. Friend pre-vents me—I think that is the sort of Latin term: he goes before me. He picks up a theme I was about to come to. The ISDS procedures have been a major concern of not just parliamentarians but many other people in this country and across Europe. Any hon. Member who says that his postbag and email have not reflected that has simply not been examining them carefully enough.

On my point about the requirement to sign “a” trade agreement, clause 2(3) states:

“Regulations under subsection (1) may make provision for the purpose of implementing a free trade agreement only if—

the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day”.

It does not specify that it must be the same agreement, and stating the need for a treaty “with each other” would clarify that, which is what the amendment seeks to do. There is no great confusion, but there might be some because the clause is ambiguous.

Amendment 9 speaks to the first of two Henry VIII powers. Those powers are the most egregious example of the power grab that characterises the Bill, despite the extraordinary spectacle of the Secretary of State using the letters page of The Guardian to claim the opposite—a travesty I detailed on Second Reading and which, for reasons of time, I do not wish to reprise here. For the record, though, I draw attention to paragraph 2 on the very first page of the delegated powers memorandum that accompanies the Bill, which states, in plain English:

“The Bill contains 6 individual provisions containing delegated powers. Two of these, clauses 2(1) and 7(3), include a Henry VIII power.”

I am still waiting for the Secretary of State to correct the record that he so carefully muddied previously. Amendment 9 simply seeks to remove the first of those two Henry VIII powers.

Ms Ryan, I am glad that your grouping of amendment 9 with amendment 5 has enabled me to speak to it now, because it follows nicely on from my comments on the UK-Japan trade agreement. It is bad enough that talks towards a trade agreement should have been initiated behind closed doors by a secret working group—no agendas, no minutes, no access to any documentation, no website to keep Parliament or the public abreast of what was being decided in our name—but at the end of that charade, a set of formal negotiations, still in secret, determined what obligations we as a country might or might not be saddled with for a long time.

[Faisal Rashid]

Does my hon. Friend agree that if the Government are certain of their ability to roll over existing agreements, there is surely no need for the Henry VIII powers?

[Barry Gardiner]

My hon. Friend is entirely right. The Henry VIII powers show that the Government also realise that it is not simply replica provisions that are being rolled over but, in fact, new agreements that may contain substantially different clauses. Because of that, they need powers to be able to progress those agreements. The Committee tried to address that during its sitting last Thursday afternoon but the Minister has been reluctant to take the matter on board, even when pressed on how he thought, given the Government’s red lines, he would be able to roll over our current agreement with Norway on the free movement of people, and that with Turkey on the relationships we have through that country’s agreement with the EU customs union. The Minister has failed comprehensively to address those points. It would be interesting if he were to do so when he responds to this group of amendments, but I fear my hon. Friend might languish in hope rather than expectation of the privilege of hearing such a response.

--- Later in debate ---

[Barry Gardiner]

If it is the Minister’s intention, as he says, to do what the amendment asks him to do, namely to apply these clauses only to agreements that have been ratified—and he says that they will all have been ratified—what problem does he have with accepting the amendment?

[Greg Hands]

The answer to that is straightforward. Although it is our intention to have ratified the agreements, that does not necessarily mean that they will have been ratified by the other EU27 countries. That is the important thing. I will come on to why the hon. Gentleman’s amendment would put at risk agreements that the UK is already party to and that UK businesses are already benefiting from.

We must remember that EU free trade agreements that contain areas of shared or member state competence must be ratified by all 28 member states before they come into force. As we know, that process can take considerable time. We drafted the clause 2 power so that signed EU free trade agreements fall within its scope. That will ensure that it can be used to implement agreements to replace those that have been signed, and which may have been provisionally applied but are yet to be ratified by the EU or the partner country.

Many such agreements are benefiting businesses and consumers as we speak. In other words, they have already taken effect. I know that the hon. Gentleman is opposed to CETA, for example, but we believe that it has benefited UK businesses considerably since it was provisionally applied and took effect in September. I know that he wants to throw away those benefits, so I remind him that most of his party sensibly sees the merits that CETA provides this country. Under his amendment, we would be unable to implement a free trade agreement that falls within this category, which would risk a cliff edge in any trading relationships covered by such an agreement.

To take another example, the UK ratified the EU’s Andean FTA with Colombia and Peru in 2014. In 2016, UK trade with those countries had a value of more than £2 billion. However, that FTA is still awaiting ratification by both the European Union and a number of EU countries. If that is still the case by exit day, the amendment would prevent the clause 2 power from being used to implement a transitioned FTA with Colombia and Peru, resulting in a likely reduction in trade flows between the UK and the Andean countries.

Let me turn to a few points that the hon. Gentleman raised elsewhere. He asserted that the agreement has to be signed by both parties. Clause 2(3), which relates to free trade agreements, states that in order for the Government to be able to use the power when implementing an agreement with a partner country, both the EU and that country must have signed a free trade agreement before exit day. In other words, both must have signed the same agreement.

[Barry Gardiner]

It does not say “the same”.

[Greg Hands]

I think the hon. Gentleman said it was ambiguous, but the Government’s intention is clear. We have all laid it out frequently: to transition the effects of the 40-plus EU FTAs, not to renegotiate new agreements. He mentioned the cases of Norway and Turkey. As I laid out at considerable length at the Select Committee on International Trade last week—I know two of his colleagues are members of the Committee—the situation will depend largely on the UK’s future relationship with the European Union, which is a matter for the current negotiations, as Norway, Turkey and Switzerland’s relationships are very much linked to whatever our future relationship with the EU might be.

[Barry Gardiner]

Of course, the Minister is entirely right to say that the nature of the agreements that we conclude with those countries would depend on our future relationship as we negotiate our withdrawal from the EU, but the point is that this Bill is supposed to be simply rolling over the existing agreements. The Minister has made a great deal of the fact that we want no change and are simply rolling over what exists into what comes afterwards. That is the trap that he has set for himself, and he must extricate himself.

[Greg Hands]

I will just repeat what the Secretary of State said on Second Reading: the Bill is designed to be robust to the different cases of where the future UK-EU relationship might lead us following the negotiations.

The hon. Gentleman mentioned Japan. In the small number of cases where the EU seeks to establish an FTA, it might be too late to go through conventional EU scrutiny here, and there are also our agreements that will now be sole EU competence. Also, they might not necessarily happen through the current EU scrutiny process. We will consider this in due course, but we are committed to Parliament having its say. Earlier this month we published a response to the trade White Paper, and the Government will consider views as we develop proposals regarding the role of Parliament in future trade agreements.

If we are to avoid trade disruption, we need to make sure that signed EU agreements that are not yet ratified by the EU, including the examples I have given, such as CETA, the Andean agreement and the partner country agreements, fall within the scope of the Bill, otherwise we will jeopardise a considerable part of the current trading relations that benefit this country so much. Contrary to what the hon. Gentleman says, the amendment would not improve the Bill. It would actually threaten a great number of our existing trading arrangements.

It is worth remembering that a delay in ratification by another EU member state has no real relevance to the content of an agreement, or indeed to UK scrutiny of it. It is merely a reflection of that country’s domestic situation. To allow such a state of affairs as that suggested in the amendment, and to cause disruption to UK businesses, would be profoundly unsatisfactory.

--- Later in debate ---

[Greg Hands]

I am absolutely clear that this Bill relates to the transition of our existing trade agreements. How we approach future trade agreements will be a matter for future consideration. I mentioned earlier that we will look carefully at the responses to the consultation. Of course, if the hon. Gentleman has views, we are keen to hear them. Indeed, we will be seeking views from across this House on what Parliament’s views on these matters might be, but that is entirely a matter for the future.

Amendment 10 would clearly create an unacceptable risk that agreements essential to trade could not be effectively provisioned. If the members of the Committee are concerned about the scope of this power, please let me reassure them that, as I referred to earlier, we have already set out in clause 2 restrictions on the scope of the power.

Given these constraints, the existing drafting of the power, and our clear and firm assurances that this power is not intended to be used for the implementation of future trade agreements, it would be strange to include this amendment, which sets out the required procedure for future trade agreements. I therefore ask the hon. Gentleman to withdraw amendment 5.

[Barry Gardiner]

I am not prepared to withdraw and I propose that we move to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Judith Cummins]

I thank the hon. Lady for that intervention. Fair trade should absolutely be a key element of any Bill that deals with trade.

[Barry Gardiner]

My hon. Friend quite properly reminds the Committee that the amendment is in scope—otherwise it would not have been selected; the Chair would have ruled it out of scope—because of the words at the front of the Bill. The amendment would of course have an impact on the roll-over agreements, as the Government call them, which are legally distinct, new agreements. If these provisions were put into law, they would apply to all new agreements that we completed in the future. I do not doubt that many Government Members would be happy to see included these provisions about human rights, equality and the rights of children—things that David Cameron, when he was Prime Minister, was keen to negotiate as one of the leaders on the SDGs. Would Government Members accept that the amendment is not only in scope, but could have a positive effect on future conclusions of trade agreements?

[Judith Cummins]

I thank my hon. Friend for his intervention.

--- Later in debate ---

[Barry Gardiner]

Perhaps the hon. Gentleman will allow me to clarify. I believe that the contention is not that we cannot have a nationalised industry as a member of the single market; it is that once the sector has been liberalised, it then becomes very difficult to take it back under national control. That is the point my party’s leader was making, not the one he suggests.

[Alan Brown]

I thank the hon. Gentleman for that clarification. I would still contend that there is a confused viewpoint regarding the single market and how it aligns with membership or otherwise of the EU. Again, where the rail franchising system in the United Kingdom has been liberalised, clearly there is no impediment to the Scottish Government making a public sector bid. That proves that it can happen within the EU single market.

In conclusion, I welcome any commitment to strengthen the public sector ethos and public sector ownership, and I will be interested to hear what the Government have to say.

--- Later in debate ---

[Greg Hands]

We have been clear that many EU trade agreements presently provide those protections and we have been clear that this exercise of transitioning existing EU free trade agreements will not be used for any back-door attempt to do anything to the NHS that would prevent our right to regulate domestically for the NHS. This party has a proud record of defending and protecting the national health service, and that will continue.

[Barry Gardiner]

Does the Minister recall that during the drafting of CETA, while Germany put a clear exemption into the agreement’s text that it would not allow any privatisation of its health service in that way, the UK failed to do so? One reason the ancillary document—the interpretative document—was necessary was to make that clear, but that document was not binding in law. As such, the Government do not have a good record on this, do they?

[Greg Hands]

The hon. Gentleman and I had an extensive debate on this matter in February. We are satisfied that the protections in CETA are adequate for protecting our national health service and our right to regulate in the domestic market.

It has long been an aspect of UK Government policy under successive Governments to make sure that trade agreements work for services. That is actually in the UK national interest—80% of our country’s GDP comes from services and 79% of our employment comes from services—and has been an objective of successive Governments.

I remember when the hon. Gentleman was a Minister under Tony Blair. The Blair Government rightly ensured, in particular within the European Union, that services were part of the trade agenda. Although the hon. Gentleman has changed his opinion on many matters in the intervening 10 years since Mr Blair left office, I am a little surprised that he and his colleague now seem to be arguing against the UK doing more to ensure that services are a key part of future trade deals.

[Barry Gardiner]

Will the hon. Gentleman give way?

[Greg Hands]

Of course I will allow the hon. Gentleman to intervene, to clarify where he is with Tony Blair.

[Barry Gardiner]

My relationship with our former Prime Minister is probably not in scope for the Committee. However, I assure the hon. Gentleman that the Labour party and the Opposition in Committee do not in any way want to stop the very valuable exports that our service industries make to the rest of the world. We want to see them flourish, but we want them to do so within a framework that does not prejudice the protections that should properly—as the Minister has acknowledged—be in place for public services and the public sector in this country, and the right to protect our national health service and to ensure that public procurement can be done properly.

[Greg Hands]

I think we shall leave it at that. I thank the hon. Gentleman for his clarification of where he stands in relation to Tony Blair.

Protecting the UK’s right to regulate public services is, of course, of the utmost importance. UK public services are protected by specific exceptions and reservations in EU trade agreements where relevant. As we leave the EU, the UK will continue to ensure that rigorous protections are included in all trade agreements that it is party to. On that basis, I ask the Opposition to withdraw the amendment.

--- Later in debate ---

[Barry Gardiner]

On the point made earlier by the hon. Member for Kilmarnock and Loudoun, proposed new sub-paragraph (iii) of the amendment refers to

“any other public authority specified in regulations made by the Secretary of State”.

Does my hon. Friend agree that that therefore makes provision for the other Administrations’ bodies to be included in the scope of the amendment, although I entirely take the hon. Gentleman’s point that Food Standards Scotland was not specifically mentioned, and it might well have been?

[Judith Cummins]

I thank my hon. Friend and the hon. Member for Kilmarnock and Loudoun for their interventions, in which they both made valid points.

In the USA, the requirement is reversed. Those who wish to introduce products or processes to the market are free to do so unless the authorities can prove that they are unsafe. What they have tried to call the “scientific” approach to food safety, as opposed to the risk-based approach that we enjoy in this country and throughout Europe, has meant that the USA has ended up with lower standards of food hygiene and food safety. That is why the processes behind meat production on either side of the Atlantic are so radically different.

More than 90% of US beef is produced with the use of bovine growth hormones that have been linked to cancers in humans. We have food safety regulations in place across Europe that have banned any imports of hormone-grown beef from the USA and other countries for 30 years. US poultry producers are permitted to douse chicken and turkey carcasses with chlorine washes before selling them on to consumers. Again, that practice has been banned in Europe for more than 20 years, and the USA has challenged the ban at the WTO as being a barrier to its ability to penetrate the EU market.

The connection with animal welfare is paramount in this respect, in that the European regulations seek to introduce at least some consideration for the welfare of the animals that are farmed for human consumption. The USA has no comparable regulations on animal welfare, and the conditions in which its industrial farming takes place do not bear thinking about. Let me make the central point clear: the issue before us in this Bill is not whether we like the idea of eating hormone-grown beef, or whether we care about animal welfare in the raising of poultry for slaughter—those are debates we can have another time; the issue before us here is that we must be the ones to decide on food safety and animal welfare issues, and we must do so in an open forum as the elected representatives of the people of the United Kingdom.

Trade Bill (Seventh sitting)

Barry Gardiner Excerpts

Committee Debate: 7th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Barry Gardiner (Brent North) (Lab)]

Does that explain why the Government were so backward in making representations to the US International Trade Commission with respect to Bombardier? The Minister said that it would be inappropriate to lobby such an organisation. Is it the Government’s position that it is inappropriate for lobbying to take place when a trade remedies authority is considering whether dumping has taken place or what remedies might be appropriate? Is that his approach to defending British industry when it faces trade defence measures abroad?

[Greg Hands]

The hon. Gentleman is confusing different processes. The British Government made extensive representations to the parties and the ITC during the investigation process in the United States. That is the key difference. Of course people will be expected to make representations during the investigation process in the UK, but my point was about publication of the TRA’s recommendations between the investigation process and the Secretary of State’s pronouncement.

In any case, I dispute the hon. Gentleman’s point. The UK Government have put in enormous efforts: my boss, the Secretary of State for International Trade, spoke at length with Wilbur Ross, and the Business Secretary also made representations. Very extensive and successful representations were made to US authorities, to Boeing and other companies, and to the US Administration.

Amendment 25 could lead to unnecessary disruption of the market in the key period between the TRA’s recommendations and the Secretary of State’s decision.

[Barry Gardiner]

Will the Minister give way?

[Greg Hands]

Let me make a little more progress.

Amendment 25 could delay the Secretary of State’s decision. The evidence base for the TRA’s recommendations should be made available to the public after, not before, the Secretary of State accepts or rejects them, as required by World Trade Organisation agreement. That is the right time for the evidence base to be put in the public domain.

[Barry Gardiner]

rose—

[Greg Hands]

I will take a late intervention from the hon. Gentleman.

[Barry Gardiner]

It is only the one he deferred a few moments ago. I am grateful to the Minister, because he has engaged in debate and the Committee has been the better for it. However, he mentions the appropriate point for intervention. The American situation involved two decisions: the US Department of Commerce made an initial determination and then the US International Trade Commission had to look at whether any damage had been caused and recommend any appropriate charges. The situation was somewhat akin to a recommendation being made to the Secretary of State and the Secretary of State deciding what to do about it. There is a real parallel here that the Minister is denying. As I am sure he acknowledges, amendment 24 would not set an arbitrary deadline; it would ensure that the Secretary of State laid the report before Parliament in a timely fashion.

--- Later in debate ---

[Greg Hands]

I accept the hon. Lady’s intervention, and she makes a case, but my point is that it is not necessary to have the review. These are existing agreements that, in a huge number of cases, are already in place. Some have been in place for a long time. The hon. Member for Kilmarnock and Loudoun says that an additional review process will be simple and effective, but I am not quite so sure. For example, the amendment makes neither reference to the intended product of such a review—how the review process would work—nor to the continued role of the devolved Administrations in the review after it has been reported.

I think it is much better that we stick with our position of consulting frequently and engaging with the devolved Administrations, without an extra review of agreements that are already in place. We have been clear that we will continue to engage with the devolved Administrations as we transition these agreements, therefore we do not need to commit this kind of review to legislation. I therefore ask the hon. Gentleman to withdraw the clause.

[Barry Gardiner]

It is appropriate to once again read out the long title of the Bill:

“To make provision about the implementation of international trade agreements”.

Everything that the Minister is saying ignores that the scope of the Bill precisely admits that we should be able to put into statute the procedure that the hon. Members for Livingston and for Kilmarnock and Loudoun have suggested.

The Minister has told the Committee that the Government

“will continue to engage with the devolved Administrations as we transition our current agreements”

and that:

“The Department for International Trade engages regularly with the devolved Administrations”.––[Official Report, Trade Public Bill Committee, 25 January 2018; c. 128.]

It is therefore surprising that the Government have not proposed any formal engagement procedure to ensure a statutory footing for consultation on the issues presented by the Bill—particularly given the Government’s approach to consultation thus far, which has been little more than lip service and press releases. An example of that was when the consultation for the Bill closed on 6 November and the Bill was published a few hours later on the morning of 7 November.

Modern trade agreements have extensive coverage, with chapters setting out substantial provisions in a range of areas, many of which might well be considered to touch upon matters that otherwise would be within the competence of the devolved authorities. We have gone over this ground in previous sittings, when we considered how trade agreements impact on our fishing industry, food standards, services regulation, agriculture, public services, procurement and so on. The day-to-day oversight and administration thereof may be wholly within aspects of devolved competence; however, the obligations that arise from a trade agreement might require changes to the way that those matters are managed. A question might then arise regarding when such a matter ceases to be a trade matter within the exclusive competence of the UK and becomes a matter within the competence of the respective devolved Administration.

That is why many other countries have set out formal consultation frameworks with their own constituent administrations, which may also have a degree of devolved competence. Indeed, the United States has such an engagement process to ensure that state-level representations can be fed into the negotiating process—albeit it is a process that is subject to controversy in various states that have sought to implement a much more robust consultation process, and have derailed the extension of the fast-track trade negotiating authority.

Canada has a similar process in order to ensure that, once an agreement has been concluded using the federal Government’s exclusive competence, it does not come unstuck at implementation stage. In his response to questions about the need for stakeholder engagement as early as possible in trade negotiations, our witness, Nick Ashton-Hart, noted that

“the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that…People know that you have to get to a sustainable deal also, and sometimes you have to do a concession at the right time to solve a problem in a domestic constituency for your counterparty”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 10, Q12.]

The hon. Member for Kilmarnock and Loudoun touched on the concerns raised by another of our witnesses, Professor Winters of the UK Trade Policy Observatory, who noted that we cannot have a situation in which a trade agreement might be unpicked once it had been concluded. Therefore, he said,

“Parliament and the devolved Administrations need to have an important role in setting mandates, and there need to be consultation and information during the process.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 58, Q111.]

The United Kingdom is clearly not unique in facing this matter; that is also the experience of other countries, many of which the Secretary of State is alleged to have identified as prospective gold trading partners. Those very countries may well wish to see a similar framework formally constituted in the UK before we come to the negotiating table. The European Union levelled that request at Canada prior to commencing negotiations on the comprehensive economic and trade agreement. The JMC appears to be an entirely appropriate forum for such consultation in the UK’s case. It would provide us with an off-the-shelf committee with the express purpose of seeking to avoid such complications.

The memorandum of understanding between the UK and the devolved Administrations notes that the four respective Administrations agreed

“to alert each other as soon as practicable to relevant developments within their areas of responsibility, wherever possible, prior to publication”—

of course, the GPA, which the Minister did not refer to, is one such case that is quite specifically about implementation within the devolved Administrations’ competence—

“to give appropriate consideration to the views of the other administrations; and…to establish where appropriate arrangements that allow for policies for which responsibility is shared to be drawn up and developed jointly between the administrations.”

Furthermore, in recognition that a commitment to engage may not be sufficient in certain cases, the memorandum of understanding sets out provisions for a formal consultation framework to ensure that engagement on such matters is more than just lip service.

Acknowledging that there will, of course, be matters relating to international issues that will touch on devolved matters, the memorandum of understanding requires the fullest possible engagement on such matters and sets out the framework for the Joint Ministerial Committee. Its terms of reference are

“to consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities…where the UK Government and the devolved administrations so agree, to consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom…to keep the arrangements for liaison between the UK Government and the devolved administrations under review; and…to consider disputes between the administrations.”

The Government could have considered their own appropriate framework or forum for a proper consultation process with the devolved authorities and other key stakeholders in advance of beginning trade negotiations. The Secretary of State has, for example, reconvened the Board of Trade, of which he has appointed himself the president. Of course, for the Board of Trade to be effective, it would likely require significant expansion of its membership. Currently, I believe it has the sum total of one person—namely, the Secretary of State himself.

The creation of a formal consultation forum is essential before and during the negotiating process. In that respect, we will support the new clause. Of course, I wish to draw the Committee’s attention to our new clause 11—I hope it will be considered in a later sitting—which seeks to ensure that the JMC is convened for all trade agreements, including new trade agreements that correspond to existing EU agreements.

I hope that Government Members recognise from the Committee’s deliberations that this Bill contains a serious threat to the powers of the devolved Administrations, and that the installation of an appropriate consultation procedure to address such matters will assist Ministers in concluding agreements. Although this amendment seeks to mitigate any complications that might present at implementation stage after an agreement has been concluded, the Bill still fails to address the very serious concerns about the dilution of the devolved authorities’ powers in matters that may be considered within their devolved competence. In that respect, I ask the Government to address this matter either by supporting the new clause or by way of their own amendments to the Bill before it proceeds, with such amendments making clear that powers afforded to Ministers of the Crown under the Bill will not, and cannot, be used to undermine the rights and powers of the devolved Governments. If the Government do not seek to do that before the Bill progresses to its next stage, I assure the Minister that the Opposition will.

[Greg Hands]

Very briefly, in response to that long speech I have only three points to make. First, there is no serious threat to the devolved Administrations. What we are talking about is the transition of existing free trade agreements. The hon. Gentleman’s points—his parallels with the United States and so on—seemed to relate entirely to future trade agreements and not to the continuity of existing trade agreements. I also point out to him that the Secretary of State for International Trade has not appointed himself President of the Board of Trade. The Prime Minister has appointed him President of the Board of Trade.

Most importantly, the Bill is all about continuity and the technical transition of existing free trade agreements. The hon. Gentleman’s points seem to relate to future trade agreements, which will be a matter for another day.

--- Later in debate ---

[Greg Hands]

I am surprised that the official Opposition do not have anything to say to this clause. I thought that they took quite an interest in the application of the implementation period, but it appears not.

In any case, new clause 9 would require the Government to report to Parliament on how the Bill will be applied during the implementation period. I recognise the desire for clarity on how an implementation period will work and, specifically, how the powers in the Bill will be used in that period.

Irrespective of the exact terms of the implementation period, which need to be negotiated with the EU, as it stands the UK will no longer be part of existing EU FTAs or the government procurement agreement on leaving the EU. We will need the powers in the Bill to ensure continuity in our trading arrangements.

I also recognise the desire for clarity specifically on how trade remedies will work during an implementation period. We want to provide continuity to British industries, including retaining meaningful access to trade remedies.

Parliament will have plenty of opportunity to scrutinise an agreement between the UK and the EU, including on an implementation period. We have already committed to a vote on the final deal, and major policies in the withdrawal agreement will be enacted through primary legislation in the form of the withdrawal agreement and implementation Bill. I therefore ask the hon. Member for Kilmarnock and Loudoun to withdraw his new clause.

[Barry Gardiner]

The idea that the official Opposition have nothing to say on the matter is entirely wrong, but we have little to say because we agree with the new clause that is being proposed. We believe that it is eminently sensible. We are entering into a transition period, and it is right that Parliament should be brought up to date with what the Government’s intentions are. The new clause would do that. It is perfectly sensible.

Trade Bill (Fourth sitting)

Barry Gardiner Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Davies. I will make a few remarks on the principle of devolution and the amendment that has been tabled.

During one of the evidence sessions the hon. Member for Corby threw out the proposition that Opposition Members should not have voted against Second Reading of the Bill, even though we believed it to be flawed. He suggested that we should have voted for it and tabled amendments in Committee. Well, the proof will be in the pudding now. How many amendments will the Government back? Will we be back at square one and left with a flawed Bill?

The blunt reality is that both the Welsh and Scottish Governments have said they will withhold their legislative consent motions if the Bill remains as it stands, so it certainly needs amending if it is to get buy-in from the Scottish and Welsh Governments. Our amendments were drafted in agreement with the two devolved Administrations. That is why, as my hon. Friend the Member for Livingston said, it is slightly disappointing that Labour MPs have not backed an amendment that was drafted by the Welsh Government.

We also heard in the evidence sessions a number of witnesses agree that the Bill in its current format excludes input from the devolved Administrations. As a result, agreements could be forced on devolved Administrations. The UK Government can legislate and make regulations that affect devolved competences. During the witness sessions we heard about tariff rates and quotas, which could be an issue; the subdivision of quotas within the UK will need to be considered, as will rules on origin. That is why it is critical, in the spirit of co-operation, that the devolved Administrations have to give consent to agreements or regulations that the UK Government put forward.

We are constantly told that the Scottish Parliament is the most powerful devolved Parliament in the world, but that is incorrect. We heard during our evidence sessions about the devolved Government of Wallonia in Belgium, which was able to veto the entire comprehensive economic and trade agreement with Canada. That is a devolved Parliament with real power. It is vital that we hold on to and do not allow any erosion of the powers of the Scottish Parliament and the Welsh Assembly.

We were promised that clause 11 of the European Union (Withdrawal) Bill would be amended to protect the devolved nations. That did not happen. That is why we need to amend this Bill and to get agreement from the UK Government that they are willing to work with the Scottish Parliament and the Welsh Assembly. It is essential that their competences are protected.

I think that is all I need to say in support of the amendments. I am interested to hear what the Minister has to say.

[Barry Gardiner (Brent North) (Lab)]

It is good to have you back in the Chair, Mr Davies. I look forward to the Committee making progress under your guidance.

The Labour party brought forward and delivered the devolution settlements when it was in government, so we absolutely support the rights and powers that are conferred on the devolved Administrations by their respective devolution settlements. Matters of devolved competence must not be subject to overreach by Ministers of the Crown who seek to amend or overrule the will of the people, as expressed through their devolved Governments. For Labour, that is absolutely the starting point of this debate. We believe that the powers of those devolved Governments must be enforced and, indeed, reinforced where appropriate.

That said, we have real concerns about some of the implications of this group of amendments in the context of implementing our legally binding obligations under international law. The amendments might, in effect, create a veto power, which in turn might result in the UK failing to deliver on its binding obligations under a treaty. We have a conundrum. Often in Committees like this we have what are, in effect, set-piece debates, but this is a real debate about a profoundly complex constitutional issue, which I do not think will be easily resolved. Let me try to set out what I think is at the heart of it.

I pay tribute to the hon. Member for Hertford and Stortford, whose question went to the heart of the matter. Interestingly, the spokesperson for the SNP, the hon. Member for Livingston, used the words consult and consent in the same sentence as if they were interchangeable. The difficulty is that, in law and in effect, they are not.

[Hannah Bardell]

Will the hon. Gentleman give way on that point?

[Barry Gardiner]

I will happily give way after I have made a little more progress. I do not seek a point-scoring debate, because we have to get to the heart of some extremely technical and complicated issues, but I will of course give way in due course if the hon. Lady wishes me to.

In respect of the devolution settlements, trade agreements and the negotiation thereof remain exclusively reserved to the UK Government. International treaties are also the exclusive reserve of the UK Government. I have no doubt that the devolved Governments recognise that and supported that approach when the relevant devolution Acts were passed. Our membership of the European Union has meant that the competence for trade has been exercised by the EU under the common commercial policy—in effect, it has been taken up a level from the UK Government to the EU. That relationship has meant that no devolved Government—nor, indeed, the national UK Government—has been able to legislate in any way that contravenes EU law. In respect of trade agreements, that has meant that we have amended our domestic legislation where required to align it with the terms of agreements concluded on our behalf by the European Union. No devolved Government therefore has any effective veto on the implementation of those agreements, nor have they ever had such a veto.

Of course, the Bill prepares us for life outside the European Union, when that common commercial policy will no longer apply and the competence for trade will be returned to the United Kingdom. Similarly, the obligation on the devolved authorities to ensure compliance with EU law may also no longer apply. That, in effect is the crux of the issue.

The amendments would, in some respects, extend upwards powers of devolved Governments that they might not currently have in respect of international trade agreements. It was telling to hear from the gentleman from Business for Scotland this morning—I am delighted that you managed to squeeze me in to ask my question at the last minute, Mr Davies. In his response to whether the Scottish Government or a devolved Assembly should, in effect, have the right to consent regarding the content of the trade agreement, with reference to his chlorine-washed chicken example, he said that, yes, he thought there should be a consent power at that level.

Whether the Bill is about an agreement with America is completely by the bye. That was a thought experiment to show the sort of situation that could arise. If we want to bring it slightly closer to home, we could talk specifically about one of the agreements the Minister proposes to have a corresponding agreement with through the good offices of the Bill: CETA. Of course, one of Canada’s main objectives when negotiating with the European Union was to be able to get chlorine-washed beef and chicken into the European market. It failed in that endeavour, because that was not agreed to by the European Union in the eventual treaty. However, it is not beyond the wit of any of us—we heard this on many occasions from our witnesses—to construct a situation in which Canada might do what other countries at such a juncture might do, which is seek to reopen the negotiations in a particular way to its advantage, to try specifically to achieve with the European Union that which previously it had not been able to.

That brings the example much closer to home, and to the Bill in particular. The key point is that, as was said by Business for Scotland’s witness, the Scottish Government’s view is that they should have the power of consent to the substantive measures of the international treaty. We recognise that there are clear implications for what might be set out in the international trade agreements on matters of devolved competence. Agricultural policy, food safety, fisheries, the environment and so on are all areas that are touched upon by modern trade agreements. They are all areas where trade agreements will of course have an impact.

--- Later in debate ---

[Hannah Bardell]

I take on board the hon. Gentleman’s point. The notion of consent is an interesting one. Let me just expand a little on my take on it. The idea of consent—not just consultation—for us is that we cannot have certain aspects of our regulatory framework, or deals done, that go against the principle of devolution.

The memorandum of understanding concordat from devolution was binding

“in law, but promises cooperation on exchanging information, formulating UK foreign policy, negotiating treaties and implementing treaty obligations.”

In our view, the Bill goes across that.

For the sake of argument, say that Scotland or Wales could not give consent to a trade agreement. That would force the UK Government to go back and look at why consent could not be given, and hopefully bring something forward. If we only have the power of consultation—we could argue that consultation is not really a power—we are at the mercy of whatever the UK Government of the day do. It could be argued that the power of consent is absolutely vital in negotiating trade deals.

[Barry Gardiner]

It is not that I do not understand the force of the position the hon. Lady is taking and the way in which she is trying to express it, but of course those powers are powers that the devolved Administrations do not currently possess vis-à-vis the European Union. That is why, as I said, the levels at which we consider this, and the change in those levels, are absolutely material to the discussion we have today.

The hon. Lady is absolutely right to say that if the substance of a trade agreement or any of the corresponding agreements that the Minister is seeking to roll over from our existing EU trade agreement is substantively changed, it may well have an impact on areas that are devolved competences. But that is the substance of what is agreed at the international level. Trade is a reserved matter. Treaties are a reserved matter. Therefore, the question of the implementation comes in two ways. I do not want to depart from my notes too much, but I am seeking to respond to the hon. Lady’s intervention in the spirit in which she made it.

The difficulty is that our legislative language is poor. We talk about implementing an international agreement in UK law and we also talk about implementing the terms of the agreement within the devolved competence. It is very easy to have a confusion about which implementation we are talking about. I will progress the argument, because it seems to me that it is not cut and dried. There are serious issues here that we need to consider as a Committee.

I cannot say that I normally say this, but I very much look forward to listening to what the Minister says on this occasion, because I trust he has had the benefit not only of parliamentary counsel, but of constitutional legislators, who will have looked at the matter very carefully when they saw the amendments. I look to what the Minister is going to say in the Committee to guide us on these matters.

Picking up from where I left off talking about the substantive changes, new institutions may be required—institutions that might otherwise be within the devolved competence of the Scottish and Welsh Governments. That simply arises from the changes that will be made to the free trade agreements, because they might specify the European Food Safety Authority and that would need to be changed. New institutions may have to be established to fulfil the competences that the European Food Safety Authority or any other such agency had, and they would have to be designated in the roll-over Bill.

Of course, it may be that the Minister specifies the Food Standards Agency in England as the body that will now make the specifications. It might be better to use Food Standards Scotland, which we heard from earlier today. It is absolutely right that there is a process of consultation between the devolved Administrations and the Minister at that point to say, “You’re proposing to specify that body, but actually there are far more relevant skills in this other body.” Consultation is absolutely essential to try to ensure that they get this right.

[Hannah Bardell]

Will the hon. Gentleman give way?

[Barry Gardiner]

In one moment. I hope the hon. Lady will intervene in a moment, because this is the question I think she may wish to respond to. Imagine a situation where Wales said, “We believe our agency should be the certification body,” Scotland said, “No, it should be our agency,” and because both had the power of consent and not simply the right to consultation, the Minister and the UK were unable to fulfil our international obligations under an international treaty.

The hon. Lady may say, “Surely no devolved Ministers would be so pig-headed as to say, ‘It’s got to be ours.’” The Westminster Minister may well be the one who is being pig-headed—who knows? However, I cannot imagine that it is right for the Committee to pass an amendment that could give rise to a situation in which we were unable to fulfil our international treaty obligations.

[Hannah Bardell]

I guess the simple answer is that they would have to consult each other. I argue that what is proposed drives a coach and horses through many aspects of devolution, and others also have serious concerns. If the hon. Gentleman believes that there is an overreach in the amendments, what answers does he propose? Given the supposed “consultation” that was part of the European Union (Withdrawal) Bill process, does he really have faith in that aspect of today’s legislation? I know that I do not.

[Barry Gardiner]

I said at the beginning that I was not going to engage in point scoring, so I will not take up the hon. Lady’s invitation to beat the Minister over the head about the lack of consultation. The witnesses have amply displayed their dissatisfaction with the consultation process, but she has, in effect, made my point for me. She said, “Well, they would have to consult.” Of course they would; that is why I believe that it is vital that consultation with the devolved Administrations is statutorily required, in a way that is not transparent on the face of the Bill. Consent, however, which could bring about the sort of impasse I referred to, should not be built into the legislation.

It is one thing to imagine legislation working in a benign, perfect scenario where people have good will, are engaging with each other and want to come to an agreement. Sadly, that is not always the case, and we must make our legislation such that it survives not only when things go right, but when things go wrong and a way through an impasse is necessary. The danger in the amendments is the reaching upwards into what would currently be seen as the competence and the rights of the European Union to negotiate the substance of those trade agreements. That is why I am fearful of the route down which the amendments would take us.

[Alan Brown]

Has the hon. Gentleman discussed this with the Welsh Government, and explained that his concerns about the devolved Administrations “reaching upwards”, in his description, outweigh his concerns about the UK Government being able to impose regulations on them?

[Barry Gardiner]

Yes, of course I have. I went down to Cardiff just last Friday to meet the Minister there and some political advisers. We talked through precisely these issues, and I have done the same with Welsh colleagues here. On Monday, I even met the special adviser from the Scottish National party group here. I have also spoken with my own Scots colleagues. I think that there is a recognition that we are dealing with genuinely difficult constitutional matters. That is why we have a difficult job as a Committee.

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[Hannah Bardell]

Will the hon. Gentleman give way on that scenario?

[Barry Gardiner]

I will give both scenarios, and then the hon. Lady can choose.

Our fictional country, Xanadu, has very relaxed laws about the rearing and sale of chicken for consumption. In Xanadu, chickens may be hormone-fed, genetically modified or chlorine-washed prior to slaughter for consumption. In the UK, one of the devolved Governments may have a particularly robust animal framework code, coupled with robust agriculture and food standards regulations, which would not allow for the production or consumption of such chickens. What happens if the UK agrees terms with this country that ultimately liberalise trade in chickens between our nations, such that hormone-fed, genetically modified, chlorine-washed chicken is allowed to be imported into the UK and sold on the shelves of our supermarkets for consumption by British citizens?

The devolved Government would argue, “These are matters of devolved competence, and we have right of consent regarding the implementation of the agreement, especially as it conflicts greatly with our standards.” They might also think, “There is no way we are allowing these products on to our shelves, and we will not give our consent.” In that example, I would probably be cheering and saying, “Good for them. We don’t want those chickens on our supermarket shelves.” However, the point is that if the agreement had been made, we would be bound by the obligations under it, whichever way they went—whichever example we use.

Failure to implement would result in remedial action being pursued by Xanadu. Indeed, many such countries might not even come to the negotiating table if they had significant concerns about potential consent reserve functions distorting their access to the market on terms that had been agreed at state-to-state level. When we heard from the witnesses this morning, the example of Canada was used. We have already seen that the provinces in Canada are brought in at the beginning of the process precisely to get round countries’ reluctance to engage in trade agreement negotiations without certainty that devolved Administrations cannot veto what is agreed.

The hon. Member for Livingston asked me whether I had spoken to my Welsh counterparts and I explained that I had, as well as to two of my Scottish counterparts. We have also spoken with the House of Commons constitutional law experts. They explained to us that they cannot answer the question. They do not know. They have recognised that this is a problem, and that neither the Bill nor the amendment address the issue in a way that would prevent our reaching the situation that I have tried to articulate.

We have spoken with House of Commons trade experts, and have similarly drawn a blank. They advised us that the matter has not been considered because it was not an issue before. They said they had just not come across it. What everyone has recognised is that there must absolutely be consultation in advance, to ensure that no trade agreements come unstuck if a veto is exercisable at a later stage. Also, how will the UK Government ensure that the provisions of a concluded trade agreement are implemented across the United Kingdom, as they are bound to by their obligations under international treaties?

The Bill fails to set out how the Government intend to resolve the issues. It does not define what implementation frameworks will be constructed to mitigate the extent of conflicts between the powers of the UK Government and the devolved competence of the devolved authorities. It does not differentiate between the incorporation of the terms of the agreement into UK law and how that might be considered to be separate from implementation at a devolved level. It does not set out what consultation processes will be instituted to address those issues early on, and to ensure that the interests and experience of the devolved Administrations are represented at the negotiation stage to avoid any conflict at implementation stage.

Of course the devolved Governments must have a say in the process. They must have the capacity to scrutinise it to ensure that it is compatible. The Government’s approach to consultation has not been what it should. Ad-hoc meetings between the Secretary of State and representatives of the devolved Governments cannot be considered a formal consultation process, even if the Secretary of State donned his President of the Board of Trade hat for them.

It is our view that a formal consultation role must be established for each of the devolved authorities and, indeed, for a much wider group of stakeholders with an interest in the outcomes of any trade agreement. Their views are essential in ensuring not only that any future implementation issues are addressed up front, but that their constituent interests, be they commercial or public, are properly considered before negotiations begin and as negotiations progress. It is our view that the Government must be obliged formally to consider and respond to representations made through that stakeholder engagement process, whatever those might look like.

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[Greg Hands]

I know that the hon. Lady takes up issues for her constituents—she and I have meetings about particular issues in her constituency. I repeat that we would not normally use these powers, and we would never do so without consultation. I will refer to some of the other reasons, which have been alluded to by my hon. Friend the Member for Hertford and Stortford, and by the hon. Member for Brent North, why we will not go down the road of requiring consent. We would not normally use the powers, but it is very important that we do not require consent to use them. That is a very serious commitment, which should offer the hon. Lady reassurance.

Amendment 36 seeks to remove the restriction on devolved Administrations amending direct retained EU law. Some EU law applies directly and uniformly across all EU member states without needing to be implemented in domestic legislation. On the day that we exit the EU, that type of EU law will be converted into what will be called retained direct EU law.

As the Government’s guiding principle is that no new barriers to living and doing business in our own Union should be created on exiting the EU, it is right that there should be only a co-ordinated set of changes made to that type of law, in order to maximise continuity and certainty for businesses and consumers. We are committed to consulting the devolved Administrations on the most appropriate way to legislate in areas of retained direct EU law that have effect in otherwise devolved areas.

Regarding amendment 37, we also consider it right that where measures affect the whole UK, such as quota arrangements or the use of powers in clauses 1 and 2, before we exit the EU, decisions are taken at UK level before the devolved Administration can take the measures.

Let me turn to some of the individual points raised. The hon. Member for Livingston asked whether a proper consultation could not be sought in Northern Ireland. It is important to recognise that, for reasons of arithmetic, there is not a Northern Irish Member on the Committee, but I will try to answer her point. We are working hard, as she will know—I think she will agree—to restore devolved Government in Northern Ireland as soon as possible. We are committed to working to ensure that Northern Ireland’s interests are represented in the meantime. The Department for International Trade engages with officials in Northern Ireland on a regular basis.

The hon. Lady also asked whether the GPA allows Governments to nationalise or privatise anything, whether for procurement or any other purposes. The UK Government will be bound to open up procurement markets only to the extent they have committed to do so in the new schedule to the government procurement agreement as lodged with the WTO. That will preserve the present position in relation to procurement in areas such as the NHS.

I think the hon. Lady asserted that procurement is devolved. This is a complicated area. The UK Government accept that some procurement is devolved, and the Scottish Government have made some regulations about procurement. However, the UK Government’s position is that procurement is an activity for devolution purposes rather than a subject matter. In other words, whether a procurement is devolved or reserved depends on the functions of the public body carrying it out. I think the saying is that if the public body answers to part of the Scottish Government, it might be devolved, but if it is a UK body of Her Majesty’s Government that operates in Scotland, it is likely not to be devolved.

The hon. Member for Kilmarnock and Loudoun referenced the power that Wallonia has. I am familiar with such arguments: I think the hon. Member for Brent North debated that at some length in relation to CETA in February last year. To be clear, I expect he knows that the UK and Belgium have very different constitutional arrangements. Foreign relations are the responsibility of the UK Government under each of the devolution settlements.

The hon. Member for Brent North made some interesting points. For the first third or so of his speech, I thought I was coming close to being in complete agreement with him—at least in his thrust that the proposal in the amendment to have in effect a veto power for the devolved Administrations would make the whole endeavour unworkable. He is right. He made reference, as I will, to the short, succinct intervention by my hon. Friend the Member for Hertford and Stortford about the potential for a Welsh Government veto over something that was felt to be particularly important in Scotland. That, or vice versa, is a very real example. Our approach is best: not normally to use the powers to amend legislation in devolved areas without consent, and never without consultation with the devolved Administration.

I was surprised by the approach taken by the hon. Member for Brent North. It was my impression that the amendments were drafted by the Scottish and Welsh Governments together. Therefore, much as I welcome him saying that he will not vote for the amendment, it surprised me a little that he seems to be at odds with the Welsh Government viewpoint. Anyway, I am glad that he may be joining us on this occasion.

In terms of the GPA and rolling over the existing schedule, yes, that is the intention, but—I repeat—the terms on which the UK enters the GPA in our own right will be subject to a separate vote in Parliament. The Constitutional Reform and Governance Act 2010 applies to the terms of the UK’s new membership of the GPA —in other words, it is possible to bring a vote in Parliament on the terms under which the UK will join the GPA.

[Barry Gardiner]

The Minister just assured the Committee that there will be a vote on accession to the GPA. I am surprised that he says he can assure the Committee of that, because the procedure of the Constitutional Reform and Governance Act 2010 does not ensure that there will be a vote at all. CRAGA procedure is precisely the statutory instantiation of the Ponsonby rule of 1924, which means that all the Government need to do is lay the text of the agreement before Parliament for 21 days. Unless Her Majesty’s official Opposition, or any of the Opposition parties, raise that as an objection in an Opposition day debate, it goes through—that is if they are granted an Opposition day motion within that 21 sitting days, which is by no means guaranteed. You will recall, Mr Davies, that between 27 January and September 2017, the Government did not grant the Opposition a single Opposition day debate. Even if they were to object through an Opposition day, the Minister would simply have to acknowledge it, re-table the text, and it would lie on the Table for another 21 days. Unless we went through the same process, there is no process for the Opposition to amend or vote unless we are given an Opposition day debate.

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[Greg Hands]

I know the hon. Gentleman has a particular fascination with the Ponsonby rule of 1924, but I remind him that that rule was made otiose by his own party’s legislation—the Constitutional Reform and Governance Act. I went back and checked. Mr Davies, you and I were in Parliament at that time as Members of the Opposition—

[Barry Gardiner]

In 1924?

[Greg Hands]

In 2010. The hon. Gentleman supported that Act. That is why I was careful to clarify that it is possible to bring forward a vote on the UK’s terms of entry into the GPA. For all those reasons, I ask the hon. Member for Livingston to withdraw her amendment.

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Implementation of international trade agreements

[Barry Gardiner]

I beg to move amendment 4, in clause 2, page 2, line 7, leave out “subsections (3) to (5)” and insert “subsections (2A) and (5).”

This is consequential upon Amendment 3.

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[Barry Gardiner]

Earlier today, Members of the Committee may have tapped into their emails. If they are like me, they would have received 1,700 emails in less than 24 hours, because we are members of this Bill Committee.

The email was clearly a standard email. The subject heading was, “Amend the Trade Bill to protect democracy”, and it began, “Dear Trade Bill Committee Member…”, which is why I assume that most hon. Members in the Committee have received it. It has probably taken us all a great deal of time to sift through, perhaps from some of the child protection cases that have been brought before us and need urgent attention. That in itself is a concern. However, the fact that 1,700 people have emailed each one of us about this Bill shows the level of public concern that exists about its failings.

The Member’s explanatory statements make clear that these two amendments together have the effect of expanding the remit of clause 2, to include those international trade agreements that do not correspond to a prior or existing EU trade agreement. That means that they would have the effect of expanding the remit of the Bill itself, to include all the trade agreements that the UK will negotiate with its trading partners or, as we would see it, they would have the effect of restoring the Bill to its proper proportions.

On Second Reading, I mentioned that we believe the Bill to be highly negligent in restricting its focus only to those future UK international trade agreements where a corresponding EU trade agreement already exists. The Government repeatedly told us that the Bill would provide the basis for this country’s future trade policy once we had left the EU. The background notes to the Queen’s Speech of last June were unequivocal in stating:

“The Bill will put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”

[Matt Western (Warwick and Leamington) (Lab)]

Does my hon. Friend agree that this is a key piece of legislation? As he has been articulating, the amount of public interest in it—not just simply through the democratic process—shows that the public are seeking far greater scrutiny and visibility of the trading negotiations and legislation to be formulated and widened through the Bill. There is an expectation that it should be, and there is a void in the Bill. As was mentioned by the witness from the CBI, this is such an important opportunity and there is an expectation that scrutiny and consultation should be included.

[Barry Gardiner]

Yes, I absolutely concur with my hon. Friend. That is precisely what those of our constituents who wrote to us earlier today were getting at. The gentleman from the CBI who gave evidence only two days ago posed a very pertinent question to the Minister on two occasions—at the beginning and the very end of his remarks. He pointed out that the Minister and the Government have said repeatedly that they will bring forward legislation in the future to put in place what we now think should be here. They give no assurances of that though. What the CBI, supported by the International Chambers of Commerce, said was: if not now, then when?

The Minister is keen to suggest the importance of passing this Bill is that we are pressed for time, and we are. But if we are pressed for time on the need to have trade agreements that correspond to existing agreements in place by the time we leave the European Union, surely we are also pressed for time if we are to have, as the Government have suggested they could have on day one, new trade agreements in place ready to go. Where is the legislation to facilitate that? This should be that legislation and it is not.

By choosing to focus solely on providing continuity with pre-existing EU trade agreements, the Bill has gone back on the promise that the Government made in the Queen’s Speech, and in other places on other occasions. The opening words of the Bill identify its scope perfectly clearly:

“A Bill to make provision about the implementation of international trade agreements”.

My hon. Friend the Member for Sefton Central tried to elicit comment on that point from the witnesses this morning. The Bill bears no qualification to suggest that we should be focusing only on a subset of the broader whole. The issue before us is explicitly the implementation of the UK’s future international trade agreements, which is why we consider the two amendments to be essential to restoring the Bill to its correct proportions right from the outset.

It was highly revealing that several witnesses from the business community voiced their concern at the failure of the Bill to address so many essential aspects of our future trade policy, which are precisely the aspects on which their members desperately want clarity, so that they can start making the necessary investments and operational decisions on how to take on board the new realities. Was it not depressing to hear business leader after business leader in our witness sessions saying that, because there is not that clarity, businesses are now having to execute their plan B? They are being precipitated into taking decisions to make investments abroad in order to safeguard their trading future. That is not good for this country, yet in this Bill we could set out clearly how we will achieve that.

I was concerned and taken aback to hear how angry some businesses are about the Government’s mishandling of the whole process of informing them what the Bill is about and the Government’s abject failure to take on board any of the business community’s input into the official consultation. It came up time and again. It is hardly surprising when we consider that the Bill was already printed before the consultation on the White Paper informing it had run its course. The consultation closed on 6 November, and when we went into the Table Office on the morning of 7 November, copies of the Bill were available.

[Hannah Bardell]

I absolutely agree with what the hon. Gentleman is saying. Does he share my concern that when it comes to involving businesses, trade bodies and organisations in trade agreements, the Government have huge lessons to learn from the mishandling of the process and the anger? The British Retail Consortium was absolutely infuriated by how the process had been done. Businesses, individuals and trade bodies had been asked to spend staff time, effort and money feeding into a consultation, but there was no space. As he said, the Bill was printed before the consultation had even finished. That is an appalling way to treat businesses and trade bodies, and an appalling way to govern.

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[Barry Gardiner]

I absolutely agree. It was shameful. The Cabinet Office circulates principles of Government consultation that make it clear that, when they consult, they should take notice of the responses. Nobody can persuade me that between 12 midnight on 6 November last year and 8 o’clock the following morning, all the consultation responses had been sifted, considered, documented and incorporated into the ministerial view that emerged in the Bill as printed. That is not consultation.

In that regard, we should all commend the representative of the CBI who spoke to us and gave the understatement of the year in his answer to my question during the second witness session on the Government’s mishandling of the consultation process. When he ventured his verdict, he said after much thought and deliberation that

“the optics were not ideal.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 34, Q79.]

They really were not.

I confess that I was not prepared for the level of anger from business in our oral evidence sessions, as industry representatives lined up alongside trade unions, civil society, legislators and academics to announce—to denounce, actually—the Government’s failure on every aspect of this Bill.

[Matt Western]

Does my hon. Friend agree that it is not simply the failure to consult that has frustrated and angered so many in the business community? As we heard earlier, many businesses are so worried and uncertain about the future that they are having to take out extensive warehousing facilities. We have seen that across the southern part of the UK, where warehousing is now at a super-premium because they do not know what is happening, what is going on or what is around the corner. That is coming at a great cost to UK businesses.

[Barry Gardiner]

Of course, my hon. Friend is absolutely right. As was stressed this morning in our latest evidence session, in what I think were the witness’s words, businesses say, “We want clarity.” At every turn, that is what the Government have denied them. We see the reports that businesses, industry and sectoral organisations are producing. We have read of the disconnect between the Administration and the business community. Many individuals have made the same point to me in private meetings, but it was quite remarkable to hear in this public forum just how deeply business feels betrayed as a result of the Government’s determination to do it their way and go it alone.

Government Ministers have promised, in the least convincing way, that the UK’s future trade agreements will remain to be talked about at some unspecified point in the future. I think the Scotch Whisky Association said that the “missing piece of the puzzle” was when that would happen. It was instructive to hear the evidence from the representative of the International Chamber of Commerce UK, who pointed out just how inadequate the Government’s commitments in that regard have been. He noted that the Government have given no indication of whether this mythical debate over our future trade policy will be a random chat, a formal consultation or a second piece of legislation. We do not know what it will be, and we do not know when—or if—it will be.

Given the Government’s record leading up to the publication of this Bill, it is small wonder that no one is prepared to give Ministers the benefit of the doubt. Since the consultation here was so bad, why should people trust that the Minister will do what he has suggested—I would not say promised—he will do? That is why we need to talk about the implementation of all the UK’s international trade agreements now, when we have the Trade Bill in front of us, not in some future world that the Secretary of State might imagine—

[Greg Hands]

Will the hon. Gentleman give way?

[Barry Gardiner]

I will give way to the Minister if he can give a promise or commitment from the Government to this Committee, and a date by which such legislation will be introduced.

[Greg Hands]

I understand the thrust of the hon. Gentleman’s argument, but does he not agree that if we were to agree to these amendments and new clauses today, we would be effectively pre-empting the ongoing consultation on what Britain will do on future trade agreements? That is the key thing to understand. On future trade agreements, we would wish to consult further; passing these new clauses and amendments today would be cutting that process short.

[Barry Gardiner]

Mr Davies, I have long admired this Minister’s chutzpah. The chutzpah of somebody to say, “Although I, as the Government, have completely abrogated my responsibility to get this Bill right, and you the Opposition have decided to fulfil my role for me, to try to put it right and get the stuff in place, if we passed your amendments we would not have consulted on them”! What complete, spurious nonsense. Let us have a grown-up debate, because that is not one; it really is not. It trivialises the work of this Committee and the important work that Government must do in scrutinising our future framework for trade negotiations. Mr Davies, I will calm down and try to get back to the essence of what we are doing here.

[Mr Prisk]

Will the hon. Gentleman give way?

[Barry Gardiner]

I am grateful to the hon. Gentleman for giving me the opportunity to lower my blood pressure after the Minister’s intervention.

[Mr Prisk]

I will do my best, but he may not take that view when he calms down and the blood pressure starts to ebb. My understanding on Second Reading and in earlier debates was that the crux of Labour Members’ worries—on this Committee and in the House generally—was that the Bill’s problem is that it reaches far too wide. Why, then, propose amendments that extend its remit even further? Do the Opposition want a narrow or a wide Bill, and if it is too wide, why extend it?

[Barry Gardiner]

A plausible case. Elements of the Bill go far too wide, including the Henry VIII powers, which we will come on to later. We believe that the way in which the Government have sought to use Henry VIII powers in this legislation is too wide and unacceptable. The hon. Gentleman is right: that was one of the subjects of debate in our Second Reading deliberations. One other key criticism made by many Labour Members in that debate was that the Bill not only did the few things that it did badly, but failed entirely to do the one thing that it should have done properly. That is, to quote the Queen’s Speech policy paper, to

“put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”

There are many deficiencies in the Bill. Some relate to the widening of powers that it gives to Government, whereas others relate to the narrowness of the Bill.

[Matt Western]

Are we not simply taking the opportunity to ensure that this important legislation is comprehensive? It is about widening the remit of the Bill as regards the coverage of trade agreements without widening the powers of a select few.

[Barry Gardiner]

I am very grateful to my hon. Friend for saying incisively what I was trying to convey to the hon. Member for Hertford and Stortford. My hon. Friend is entirely right. We want a comprehensive Bill that is fit for purpose and does the job that business expects it to do. This Bill does not do that. We want it to do what the Queen’s Speech promised it would, but we do not want the Government to use the Bill to abuse their powers and widen the powers available to them.

Let me speak first to amendment 3, so that what we seek to achieve through it is clear. The amendment expands the Bill through paragraphs (a) to (d) to include new trade agreements that do not correspond to any prior or existing EU agreement. Paragraph (a) relates to free trade agreements as defined in the Bill under clause 2(7): namely, agreements that are notifiable under the relevant articles of the principal WTO goods and services agreements—that is, article XXIV of the general agreement on tariffs and trade and article V of the general agreement on trade in services. Paragraph (d) relates to international trade agreements that the Bill leaves undefined as being

“other than a free trade agreement.”

Dr Lorand Bartels, a witness on the first day of the Committee, noted in his oral evidence the Bill’s failure to define that second category. We will certainly endeavour to address that failure through a subsequent amendment to the Bill. For both categories of trade agreement, our amendments point ahead to the requirements of parliamentary scrutiny that will pertain to them. Let me say at this juncture that we consider the two types of trade agreement to be materially different in that regard.

As we heard from numerous witnesses, the modern generation of free trade agreements are comprehensive in scope. They range far beyond the narrow focus on mutual tariff reduction that characterised the multilateral trade agreements negotiated under the auspices of GATT in the 40 years after the second world war. They reach behind the border to address regulatory issues at the heart of our society, including issues of public health, social standards, labour rights and environmental standards, among many others. Those were precisely the reasons why we had such a comprehensive debate on the amendments proposed by the hon. Member for Livingston.

These are international treaties that introduce binding obligations on future generations and thus cannot be repealed as domestic legislation can be repealed. That is why in all our interventions we have proceeded according to the principle that there must be maximum parliamentary scrutiny and democratic oversight of free trade agreements to ensure that we get them right, rather than storing up the prospect of irreparable harm at a later date.

The other international trade agreements covered by the Bill, to use its phrase—that is, the ones that are not free trade agreements—include such ancillary agreements as mutual recognition agreements, according to the explanatory notes. There are many more such agreements, and they tend to be far more narrowly focused than free trade agreements, so we have proceeded on the assumption that they will not require the same level of parliamentary scrutiny. That is a deliberately pragmatic approach I have adopted to ensure that future Administrations can make progress in agreeing such deals where necessary, but we will ensure that there is sufficient potential for scrutiny in all cases to guard against any potential harm from those other agreements.

As well as drawing in the new UK trade agreements that do not correspond to a prior or existing EU trade agreement, amendment 3 speaks to the new UK trade agreements that correspond to a prior or existing EU trade agreement—that is, the ones that the Government would like to restrict us to in this Bill. Again, let us agree from the outset that they will be new trade agreements, even if they correspond to agreements that the EU had previously negotiated with the third country in question. Ministers have done their level best to suggest that the new UK agreements will just be rolled over or grandfathered from the pre-existing EU deals. The delegated powers memorandum issued alongside the Bill by the Department for International Trade is unequivocal: these will be new agreements, on two counts. First, the agreements will be legally distinct from any pre-existing trade deals the EU may have negotiated—that was underlined by witnesses to the Committee, such as Dr Holger Hestermeyer—and secondly, and even more important, these new trade agreements may include

“substantial amendments, including new obligations.”

It is vital to read the Bill on this point. To qualify for the waiving of scrutiny foreseen in the Bill, a UK trade agreement need bear no resemblance whatever to the EU agreement it seeks to replace. Do I think the Government are likely to waive that scrutiny? No. Is the legislation effective in allowing the Government to do that? Yes. Under clause 2(3) and (4), there is no requirement for the UK agreement to match or mirror the EU’s existing agreement in any way, shape or form. It can be a wholly new departure with wholly new obligations, since all the Bill requires is that the other signatory and the European Union were signatories to a free trade agreement—not a corresponding one or a similar one, but “a free trade agreement”—before Brexit takes effect.

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[Barry Gardiner]

Again, my hon. Friend makes a very important point. We heard from our witnesses about the importance of understanding what we are doing before we rush out and do it. My remarks on this afternoon’s legislation have been extremely cautious in many respects, because I think that legislation is important. It is particularly important in this area, because we are talking about internationally binding obligations that are extremely difficult for us, as a country, to reverse. That is precisely why my hon. Friend’s point is so essential. We need proper impact assessments before we have our mandates established and before negotiations are concluded.

We heard in the first evidence session that there is every likelihood that the UK’s trading partners will regard the negotiation of new trade agreements as an opportunity to re-open the provisions that they had previously negotiated with the EU. Those agreements were designed to meet the interests of all 28 member states of the European Union, and the relative weight of the EU in the negotiations that informed them means that the third country in question would have been pressed into making sacrifices that it might not choose to make when acting alone in forming a bilateral relationship with the UK.

Discussions on those countries’ new agreements with the UK are taking place now. I know that the Government are respectful of the EU treaties and are not trying to negotiate at the moment, but they are having fairly detailed discussions. The Minister, in his sedentary position, remains immobile but a smirk is creeping across his face. Those discussions are taking place behind closed doors, so we do not know what the Government have already said, and what they have said they would be prepared to trade away. Make no mistake: the Government are keen to ensure that they get deals done. This whole endeavour is a different way of approaching our trading future, and the credibility of the Government’s position politically relies on being able to conclude deals swiftly. We must be very wary of negotiations done in secret in order to achieve quick results for political convenience to save the Government’s blushes.

We know that we are talking about new agreements, which could well include substantial new obligations on the part of the UK. That is why the Government’s suggestion that they should be granted the powers to smuggle the implementing regulations past Parliament with no provision for scrutiny is so outrageous. The need for a proper parliamentary oversight process for such agreements was alluded to by our witnesses, Jude Kirton-Darling, the rapporteur on the EU Trade Committee, and Dr Brigid Fowler from the Hansard Society. They stressed that point repeatedly in their oral evidence to the Committee, as did so many other witnesses. To that end, paragraph (b) in amendment 3 looks ahead to the enhanced scrutiny procedures that we will propose under schedule 2 to replace the negative resolution procedure envisaged by the Bill as it currently stands.

Amendment 4 is consequential on amendment 3 and would require any regulations made under clause 2(1) of the Bill to be subject to the provisions not of subsections (3) to (5), as at present, but of subsection (2A), which would be introduced via amendment 3, and subsection (5), which speaks across to the Treasury’s powers to set tariffs under the Taxation (Cross-border Trade) Bill currently going through Committee in parallel with this Bill.

Together with amendments 3 and 4, I would like to speak to the four new clauses that they bring into play, namely new clauses 4 to 7. New clause 4 is the top-line clause, because it outlines the stages of what we consider to be a proper parliamentary procedure for scrutiny and oversight of free trade agreements before signature. Once again, let me underline that the procedure is designed to apply to free trade agreements, not to other international trade agreements referred to in the Bill under clause 2(2)(b).

Equally, let me emphasise the importance of the words “before signature” in the title of the new clause. We have deliberately designed a procedure so that Parliament has the opportunity to debate and direct trade negotiations in the early stages, rather than protesting once it is too late. We will surely be supported by the Government in that, given how publicly the Secretary of State has rued the loss of legitimacy that led to the failure of the TTIP negotiations between the EU and the USA. Nick Dearden from Global Justice Now touched on exactly that point in our first evidence session.

Our aim in bringing forward the maximum possible scrutiny and oversight before signing is to ensure that Parliament can amend and improve free trade agreements where they are found to be wanting. That is infinitely preferable to a system whereby Members are presented with negotiated agreements on a “take it or leave it” basis, thus risking the loss of an entire agreement and all the vital export opportunities that go with it simply because there was no possibility of excising or amending one or two of the offending provisions.

In oral evidence, Dr Hestermeyer referred to the system in Germany, where Parliament is involved early on in the proceedings precisely so that it can direct the federal Government in respect of trade negotiations, even though their negotiations are carried out by the European Commission. We want a constructive procedure that focuses on the best possible outcomes for our future trade agreements, not one where the whole ship is spoiled for a ha’p’orth of tar.

I will run through, in plain English, the six stages we have set out and then expand on them as necessary as they have been placed in the amendments, as subsequent new clauses hang off the overview clause. The first is the need for a sustainability impact assessment before the launch of negotiations towards a free trade agreement. The second is the need for Parliament to be involved in setting the mandate for the objectives of the negotiations. The third is the need for transparency—and, in particular, access to negotiating texts—while the negotiations are being conducted. The fourth is the need for regular progress reports to Parliament after each round of negotiations. The fifth is the submission to Parliament of the full text of the agreement as negotiated before its signing. The sixth is a resolution from the House of Commons to give the Secretary of State the green light to sign the agreement.

The first step in any proper procedure towards negotiating a free trade agreement is to undertake a sustainability impact assessment to identify the opportunities and risks that the agreement might present. Nick Ashton-Hart spoke of the importance of that in his oral evidence to the Committee. Carrying out a sustainability impact assessment is already a standard requirement for every new set of EU trade negotiations, and the methodology for conducting such assessments has been developed considerably over the years. Our new clause 5 provides basic instructions as to what a sustainability impact assessment should include at a minimum. For those who want to take the methodological issue further, the European Commission published in 2016 the second edition of its “Handbook for trade sustainability impact assessment”, which I refer the Minister to and is freely available online.

Crucially, our blueprint for what a sustainability impact assessment should include relates not only to the content of the assessment, but to the process that lies behind it. Any impact assessment must incorporate consultation with the devolved Administrations and with representatives of all those businesses and trade unions that are likely to be affected, as well as offering the opportunity for all other bodies to contribute to it.

We have also written into the new clause that the consultation must be in line with the existing code of practice for Whitehall consultations—something that we might usually consider unnecessary to include in legislation. Given the extraordinary mishandling of the consultation prior to this Bill, there obviously needs to be a reminder that every consultation should follow the rules.

The assessment needs to cover the economic impacts of any trade agreement, and importantly those impacts need to be disaggregated both geographically and by sector. The consequences for jobs, small and medium-sized enterprises and vulnerable economic groups are particularly significant, as free trade agreements have sometimes been to the disadvantage of all but the most powerful economic actors.

[Alan Brown]

Apologies, but I just want to take the hon. Gentleman back slightly. I agree with his suggestion that sustainability impact assessments should be carried out and should seek the views of the devolved Governments. What does he suggest happens if a sustainability impact assessment shows a negative impact on one of the devolved Administrations? Given that there is no requirement for consent, how would that be resolved?

[Barry Gardiner]

I am very happy to take that comment on board, but I do not want to get sucked back into our previous debate—I know that you would not let me anyway, Mr Davies.

That is precisely what an economic impact assessment is there to do: to show up those areas of the economy that might benefit and those that might be losers from an international trade agreement. It is then a matter for the Government, and a responsible Government should be trying to balance the interests around all of the United Kingdom to spread wealth and prosperity throughout all of the parts of these islands.

The other day, I was deeply affected to see a graph that I had not seen before and is specifically relevant to the hon. Gentleman’s point. In the top right-hand quadrant were those countries where both GDP and average income are growing. In the bottom left-hand quadrant were those countries where both GDP and average income are declining. In the top left-hand quadrant were those countries where GDP is declining but average income is growing. In the bottom right-hand quadrant were those countries where GDP is increasing but average income is declining. There was only one country in that bottom right-hand quadrant: the United Kingdom. That is a disgrace. That is a shame. It shows precisely why we need economic impact assessments. As many trade agreements have shown over the years, it is possible to increase the GDP of a country through a trade agreement while the people of the country become poorer. That is why we must take these deliberations so seriously. That is why putting these strictures in place is a vital part of what a responsible Government must do in relation to our future trade policy.

--- Later in debate ---

[Greg Hands]

I think that the hon. Gentleman is saying that he is very satisfied with the current system of EU scrutiny in relation to EU trade agreements.

[Barry Gardiner]

I am pointing out to the Minister, in response to his earlier remarks, the reason I voted for CRAGA then. I think I am right in saying that while his party voted against CRAGA, which it is now relying upon so heavily—there is an irony there—he did not turn up for the vote. I turned up for the vote and I voted for it, but because it was subject to all the scrutiny procedures that were already in place from the EU. The situation has changed.

[Mr Prisk]

I have listened very carefully to the six stages of assessment. I do not have a problem with the principle that there should be a thorough process, but the amendments and new clauses ignore one tiny detail: next March, we leave the European Union. All business representatives, particularly of businesses in my constituency, have said that they need to know what happens on 1 April. How will it be possible for any of these existing trade agreements, which is what the Bill is about, to be transferred across under his proposal? How many years will businesses have to wait?

[Barry Gardiner]

In fact, they would not have to wait. I have great respect for the hon. Gentleman and I know he speaks with real experience in these matters, having been a trade Minister. I ask him to look at what we have proposed: we have tried to introduce the bifurcation at a high level in the legislation. We have put the proposals in at that point. Of course, they would have an impact on all the new free trade agreements. We are trying to ensure that for new free trade agreements, this is the proper process of scrutiny that will come into place. On the corresponding agreements—where the EU already has an agreement—there will be a streamlined procedure, but one that is still subject to appropriate parliamentary scrutiny, particularly where those agreements have been substantially amended.

Let me conclude this section of my remarks by repeating that we have tabled the amendments and new clauses to establish a procedure for new free trade agreements that do not correspond to any prior EU agreement—that is the point I just made to the hon. Member for Hertford and Stortford. I was struck by how forcefully the representatives of business made the case to the Committee in our final oral evidence session on 23 January that there needs to be substantially greater consultation on the new trade agreements that the Government are negotiating, which correspond to prior EU agreements. Wherever those EU agreements are modified to incorporate new obligations, those obligations must be highlighted and presented to Parliament, to business and to the country as a whole, for proper debate, proper scrutiny and proper accountability. We will precisely return to the issue of scrutiny for these new replacement UK agreements as we go through the rest of the Bill.

--- Later in debate ---

[Greg Hands]

As I have stressed, consultation on future trade policy is ongoing. It is not dependent solely on the trade White Paper. We are consulting by speaking with partners, businesses, the devolved Administrations and other stakeholders constantly as we seek to bring forward proposals on our future trade policy. However, as I have explained, we consciously decided to make this Bill about our current trading arrangements and ensuring that they can be transitioned properly into UK law.

Therefore, these amendments pre-empt the full consideration of the 7,429 responses received during that consultation and of the views expressed inside and outside the House. It is right that we take the appropriate amount of time to develop a range of proposals that ensures that Parliament, the devolved Administrations, devolved legislatures and a wide range of stakeholders, including business and civil society, are engaged throughout the negotiating process.

The hon. Member for Brent North made a fascinating speech on what the UK’s future trade policy might look like, but that is not what we are deciding today. He said that Government can smuggle new trade agreements through Parliament without a vote. No. The implementation powers in clause 2 are exercisable by negative procedure statutory instruments. These are subject to a vote in either House of Parliament, if the regulations are objected to by parliamentarians. Parliament has the right to vote on the implementation of transitionally adopted trade agreements, if it so desires.

[Barry Gardiner]

The Minister must be more straight- forward with the Committee. We have already been over this ground. He knows that the negative procedure does not make provision for anything but the grace and favour of the Government in giving Her Majesty’s Opposition an opportunity to object. There is no necessity at all for a debate or vote on the Floor of the House. He must be straightforward about that.

[Greg Hands]

Again, I stress that Parliament has the right to vote on the implementation, but we also must remember that these will be agreements that are substantively the same as the current agreements. The reason I intervened on the hon. Gentleman—when I think he confirmed he was quite content with the existing EU scrutiny procedures—is that of course all of those agreements have been through the existing EU scrutiny procedures. I was not necessarily with him in the Chamber or upstairs each time one of those EU trade agreements went through, I think he was satisfied with those procedures at the time.

[Greg Hands]

I refer the hon. Gentleman to the evidence of the International Trade Committee, if that is in order. We had a good round about this at the Select Committee yesterday—some of the members of the Select Committee are here or are at least members of the Bill Committee—and we are quite clear that 70-plus partners have been engaged in this process. All 70-plus have agreed in principle; none has raised objections in principle to doing this. There is no reason that they necessarily would want to change the substance. They need continuity in their trading arrangements in the same way that we do.

The hon. Member for Brent North claimed that a wide range of stakeholders provided oral evidence calling for greater scrutiny mechanisms for future approved trade agreements. I think that was a fair comment. There were a number of views on how our future scrutiny arrangements might be, but I think the evidence session showed just how varied and complex the views on this matter are. It is right that we take the time to think through our options carefully. Let us not rush ahead and put in place arrangements that may not be fit for purpose. That is why we will be returning to future trade agreements in the future.

We will return to Parliament with proposals on future free trade agreements, on which we will seek views in due course. Accepting these amendments and new clauses would frustrate our ability to fully consider all of the issues and options in the round. I therefore ask the hon. Member for Brent North to withdraw the amendment.

[Barry Gardiner]

I will try to extract the crumbs of comfort from the Minister’s remarks. He has said that he recognises that there is a role for greater parliamentary scrutiny of our trade arrangements and that these are matters to which we should return in due course. He has also suggested that we should be able to have a proper consultation on the future trading arrangements. Those are things that I take as good will on the part of the Minister.

I propose not to press these amendments, but I make it clear to the Minister that, at a later stage in the passage of this legislation, he should table his own amendments to do what the Bill says it is about and what Her Majesty in the Gracious Speech to Parliament said it was going to be about. If he does that, I will be very happy. I will see him as a man of his word, and will be looking forward to going through what I assume will be a very similar text to the one I have tried to present to the Committee today.

I will not press these amendments today, but I put the Government on notice that it is time for them to act and to come forward with their own proposals. If they do not, these Opposition measures will return at a later stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Craig Whittaker.)

Oral Answers to Questions

Barry Gardiner Excerpts

Thursday 11th January 2018 Commons Chamber

[Dr Fox]

As usual, I do not accept the premise of any part of the hon. Gentleman’s question. I do not believe that we will necessarily lose our share of the market. We want to maintain an open agreement with the European Union, and it will want to maintain an open agreement with us, because we are the fifth biggest economy in the world and a major trading partner for it. Of course, this morning’s report was anything but cataclysmic. In fact, its worst assessment was less than half the assessment that was given to us before the European referendum on what our loss of market share might be if there were no deal whatsoever.

[Barry Gardiner (Brent North) (Lab)]

I, too, welcome the new arrival to the Government Front Bench. I also welcome yesterday’s trade statistics. The Secretary of State and I may disagree over how much that owes to the depreciation of sterling, but we both agree that the narrowing of the trade deficit is a very good thing.

With regard to the TPP, the Secretary of State says, “These are not mutually exclusive”, but he must account for regulatory alignment, which is part of the impact that joining the TPP would have. Indeed, the former permanent secretary at the Department for Business, Energy and Industrial Strategy declared that joining the TPP would be “cloud cuckoo land”. Does the Secretary of State consider that that regulatory alignment to a trade agreement negotiated in secret to suit the economies of the Pacific Rim, which constitute under 8% of our export market, is a viable proposition for our country?

[Dr Fox]

I am in favour of trade liberalisation, whether it is bilateral, plurilateral or multilateral. If we can achieve openness in the global trading environment so that we can get global trading volumes up, that is of benefit not just to the United Kingdom but particularly to developing countries that should be able to trade their way out of poverty and not depend on aid.

--- Later in debate ---

[The Minister for Trade Policy (Greg Hands)]

Assisting trade capability in the developing world is one of the key parts of our official development assistance strategy, launched by the Department for International Development last year. In Buenos Aires last month the Secretary of State and I announced a big increase in funding for the WTO’s enhanced integrated framework, which does precisely that, making the UK the largest donor to that WTO fund.

[Barry Gardiner (Brent North) (Lab)]

The steel industry has repeatedly complained that the Government are not prepared to impose penalties on exports from countries with significant market distortions. America is clear, having imposed penalties on China under section 232, and the EU is clear, having recently voted to pass new anti-dumping rules, but the Secretary of State has constantly ducked the issue and refused to say what his Department will do after we leave the EU. When will he give the steel industry a straight answer?

[Dr Fox]

What a cheek, in the very week that Labour voted against our ability to impose any penalties whatsoever in future. The steel industry and steelworkers in this country were betrayed this week by Labour Members, who would leave them as sitting ducks for dumping and subsidy, such is their love for their new hard-left, anti-trade ideology.