Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Department Debates - View all Bill Esterson's debates with the Department for International Trade
Trade Bill
Bill Esterson ExcerptsWednesday 20th May 2020
(4 years, 6 months ago)
Commons ChamberRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts
Bill Esterson (Sefton Central) (Lab) [V]
Labour believes in free and fair trade. International trade will play a vital role in how we recover from the biggest economic shock since the second world war, but we cannot return to a system of unscrutinised trade deals that open the door to lower living standards and higher carbon emissions. The Bill should provide a framework for trade policy, create a trade remedies regime that works for the whole country and give people the confidence that trade deals will be properly scrutinised by MPs and civil society, but it does very few, if any, of those things.
International trade agreements have the potential to undermine our public services, favouring foreign multinationals eyeing up our NHS, for example. They can be used to undermine workers’ rights here and abroad, and to damage food safety and animal welfare. They can prevent action to tackle the climate emergency. That is why there is so much concern about the Bill and why the lack of scrutiny envisaged under it is wrong—wrong for the agreements covered by the Bill and wrong because of the precedent it sets for future trade agreements, such as that with the United States. My hon. Friend the Member for Wirral West (Margaret Greenwood) was one of a number of Members who expressed similar concerns. My hon. Friend the Member for Bradford East (Imran Hussain) called for human rights to be strengthened, and not ignored, as part of trade negotiations.
My hon. Friend the Member for Bristol North West (Darren Jones) gave an excellent analysis of the case for investment in our manufacturing base, which of course requires a trade remedy system that acts in the long-term interest of manufacturers and does not give equivalent importance to temporary consumer gains from unfairly subsidised imports. In fact, the hon. Members for Dudley North (Marco Longhi) and for Stoke-on-Trent Central (Jo Gideon) gave perfect examples of what can go wrong when low prices for consumers are put first, only to see workers in domestic manufacturing lose their jobs.
The hon. Member for Dundee East (Stewart Hosie) was right when he said that trade agreements are about much more than trade. He also highlighted the lack of engagement with the devolved Administrations.
My hon. Friend the Member for Brent North (Barry Gardiner) did an excellent job of scrutinising the Bill last time around, as the then shadow Secretary of State. His description today of the weakness of the trade remedies system and what he called the Government’s view of Parliament as “an inconvenience” was again an excellent analysis of all that is wrong with what he called “this disastrous Bill”.
In last week’s Agriculture Bill, the Government blocked attempts to lock in food standards, and environmental and animal welfare protections. In a framework for international trade, rights and standards should include those proposed last week—not just food safety standards, but standards that do not deliver an unfair advantage from the cheaper production that results from insanitary conditions for livestock and often the use of GM foods to boost yields. The hon. Member for Tiverton and Honiton (Neil Parish) said that he was told last week that those were matters for the Trade Bill—perhaps the Minister will tell us whether that is true.
On continuity agreements, we told the Government what would happen when they tabled a similar Trade Bill to that in the last Parliament. We said then, and we say again now, that the new agreements need to be properly scrutinised by Parliament, by the devolved nations and by civil society. Twenty of the existing deals remain to be signed. Why? Because the third countries want better deals—deals that need proper scrutiny, the scrutiny so far absent from the 20 deals that have been signed already.
What is proposed is undemocratic. While we were part of the EU, the European Parliament carried out scrutiny and voted on new trade agreements. That scrutiny process has been deleted with nothing in its place. I hope that the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), will take note that his hon. Friend the hon. Member for Huntingdon (Mr Djanogly) quoted promises of a new scrutiny regime made by this Government. He called for more scrutiny, not less.
My hon. Friend the Member for Preston (Sir Mark Hendrick) made similar comments, and my hon. Friend the Member for Belfast South (Claire Hanna) made the same point in the context of the way in which trade is a reserved matter with the potential to cut across delegated powers in the nations of the UK.
Labour believes that MPs should have unrestricted access to negotiating texts as they are formulated, with the power to analyse those texts with the technical experts of their choice. As the House of Lords European Union Committee has warned mere “accountability after the fact” for Government negotiators does not represent “a sufficient basis for” meaningful “parliamentary scrutiny”. The devolved Governments, employers and unions should also be fully engaged.
When the Minister responds in a moment, will he tell me whether he has considered how the proposed parliamentary scrutiny and approval of trade deals in the UK compares with that in Australia, which the Secretary of State in her speech said was a model of free trade? While he is about it, will he tell us about the systems in the United States, in New Zealand and in other similar democracies? Finally, I ask him what the Government have to fear about emulating the level of consultation, evaluation and affirmation of trade deals that we see in those countries.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the Minister, whom I ask to take no more than seven minutes, please.
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Trade Bill (Second sitting)
Bill Esterson ExcerptsTuesday 16th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 June 2020 - (16 Jun 2020)
The Chair
Professor Winters, I am Graham Brady, and I am chairing the Committee. I know that you cannot see me and we cannot see you, so I am going to make sure everybody lets you know who is speaking to you when they are asking questions and making points.
I thank Professor Winters and Mr Riddell for joining us and helping the deliberations of the Committee. As Chairman, I am entirely independent. I will not be involved in the questioning, but I will be calling others to put their questions to you. I first call Bill Esterson, who is the shadow Minister. Could you introduce yourself before you start?
Bill Esterson (Sefton Central) (Lab)
Q
Professor Winters: I can if I concentrate hard.
Bill Esterson
Q
Professor Winters: In general, the Bill is trying to do sensible things in a basically sensible way. The issues that arise are about whether or not it is drafted in a way that would allow it to be used for things beyond these intentions.
For instance, it says that the Government do not expect to make major changes with this Bill, yet the procedures that it will set up might allow a Government that wished to do so to make really quite dramatic changes through secondary legislation. As we know, and you know better than me, secondary legislation is not typically challenged. For instance, under the GPA—the agreement on government procurement—if I understand it correctly, the Government have the power to make changes in the coverage of the agreement. A lot of that is about new members, which seems sensible, but if I understand it correctly, it also seems to be about the coverage of sectors within the UK.
When we deal with non-tariff provisions in the trade continuity agreements, for instance, the mutual recognition agreements are very serious bits of trade policy, particularly for services sectors. I think a non-tariff provision would include things like sanitary and phytosanitary regulations and technical barriers to trade. These are mostly governed by EU law at the moment, and in implementing a trade agreement, the Government could change a number of them. Rather than having to bring them back to the legislature as primary legislation, they would actually be able to move through a secondary legislation process, so I think there needs to be a little more attention on the potential spread of the use of this. The Bill can also be extended indefinitely in five-year periods. That seems to me to be not in the spirit of the Bill, which is about cleaning up.
Let me make one last point. The Bill is obviously designed, in terms of trade agreements, to deal with the continuity trade agreements, but there are at least two cases that, so far as I can see, will fall under the Bill and will really go further than just tidying up the details so that trade can continue. The first is UK-Korea. Korea and the UK have signed a continuity trade agreement, but with a commitment to renegotiate a fuller and more ambitious free trade agreement within two years. So far as I can tell, any of that would essentially be covered under this Trade Bill. Similarly with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific. Essentially, it reads as if it is going to be basically a new agreement; in a sense, the table is blank, and stuff will be put on or taken off. However, so far as I can tell, because Japan had an agreement with the EU on 31 January, it will be covered by the Trade Bill. Korea and Japan are two major trading partners, and this might not get very much scrutiny, essentially because you can undertake quite major changes under the heading of the Bill, which I interpreted largely as a tidying-up Bill.
Bill Esterson
Q
Professor Winters: The WTO’s government procurement agreement is restricted to the set of countries that have signed it, so quite a lot of this Bill is about what we do when that set of countries changes: what concessions do we expect from them and offer them? That seems, in a sense, to be fairly uncontentious. The other element of coverage is that the Government lists in the annexes to the government procurement agreement the sectors, and the thresholds for procurement in those sectors, that will be open, subject to the GPA’s requirements. I think that the powers in the Bill permit the Government to change that as they will, rather than, given that who you allow to bid for different bits of procurement is a fairly major piece of public policy, having a process that is open to more scrutiny.
Bill Esterson
Q
Professor Winters: Yes. The traditional way that we have handled trade agreements and, as far as one can tell, the Government’s intention going forward, is to say that the Government negotiate these treaties under the royal prerogative but that, to the extent that they require changes in regulation in domestic law, these will come to Parliament. In cases where that would normally be primary legislation, those changes will have to be made by Parliament through the processes for primary legislation.
What this Bill does—and it is the same in the European Union (Withdrawal) Act 2018—is say that a number of things can be changed by secondary legislation, even though they were originally set out under EU procedures through routes for primary legislation. It potentially brings to Ministers a number of issues one would generally expect to have the full scrutiny of Parliament. It would be a process that allows a little bit of scrutiny, the affirmative process, which, de facto, does not seem to result in very much. Again, in a sense, the worry is not that one might need these powers to tidy up a clause here or there, but that, in fact, quite serious issues would suddenly fall to the discretion of the Minister.
One of my colleagues, Emily Lydgate, has investigated this on environmental regulations under the European Union (Withdrawal) Act, and it is fairly alarming. As far as I can see, one could fall into that situation through the Trade Bill in the sense that the Japanese or Korean trade agreement could agree something that would normally be subject to primary legislation within the UK but that can now be handled with secondary legislation under the cover of the Trade Bill.
Bill Esterson
Q
George Riddell: Thank you; it is a pleasure to be here. I would characterise the Bill as creating the baseline of the UK’s trade policy. It tries to continue the basic trading conditions for rest-of-world trade that UK business currently enjoys.
That includes the continuity agreements. A lot of people, when commenting on those agreements, go straight to the tariffs: “If you don’t have a continuity agreement, you’ll face tariffs; if you do, it will continue as it currently is.” For the services sector, which I represent, there are also important establishment provisions within the services trade chapters of those agreements and mobility provisions that allow business travellers to travel between the UK and those third countries to supply services. The discussion about the continuity agreements and ensuring that the UK is able to continue to trade past 31 December this year is therefore wider.
The same goes for the government procurement agreement. The UK has enjoyed the status of the government procurement agreement at the WTO since its creation in 1995, although its membership of that particular agreement came through the European Union.
I will pick up two points that Professor Winters talked about. First, yes, new members join the GPA on a fairly regular basis. There are a number of ongoing accessions to the agreement, some with shorter timeframes than others. It is right that there is provision for the agreement to expand, as it naturally does, at the WTO. The other point is about the coverage and the entities. The UK list of covered entities is rather out of date. Many current Government Departments are not listed as part of coverage under the GPA, so the list is very outdated. Therefore, even if the thresholds the UK has signed up to as part of the GPA are not changed, there is a need for a technical update of the UK’s commitment to reflect the current machinery of government.
We are also establishing the TRA and bringing back powers from the Commission in Brussels to establish a trade remedies regime here in the UK. On the statistics front, which is very important in making trade policy, I would flag the interest in improving the trade in services statistics for the UK. Trade in services statistics are notoriously unreliable, and powers in the Bill could be used to make the UK a leader in how we measure services trade in this country and globally.
Bill Esterson
Q
George Riddell: If I understood correctly, Professor Winters’ point was about the potential for including new entities on the list and going further than the UK’s current commitments with regard to the GPA, leaving the continuity agreements question to one side. There are two aspects here. From my understanding of discussions in Geneva, they have been very focused on understanding what the UK’s current machinery of government looks like and how that could be represented as part of its GPA commitments. Certainly, the Government have said, from my understanding, that they do not intend to change the scope of the commitments, even if technical updates are necessary. I would not want to go further than that.
Katherine Fletcher (South Ribble) (Con)
Q
George Riddell: Two initiatives have been undertaken recently. One is that the Office for National Statistics has launched its experimental trade in services datasets, which it is looking to continually improve. Anything that supported that initiative would certainly look good. For the past Trade Bill, in the previous Parliament, a number of organisations, such as TheCityUK, put forward written evidence with more concrete suggestions. I do not have that with me, unfortunately, but I am happy to share it.
Coming to the point on the data being notoriously unreliable, both the US and the UK claim that they have a trade surplus in services with each other. There have been a number of attempts by statisticians on both sides to try to bottom out why that might be the case. It goes to show that, often, trade in services statistics are indicative and a good rule of thumb, but putting too much faith in them is not necessarily a wise move.
The Chair
Thank you very much. I should have introduced myself. I am Graham Brady, and I am chairing the session. I will call other Members to speak but will not ask questions myself. We will start with the shadow Minister.
Bill Esterson
Q
Nick von Westenholz: As I mentioned, one of the key issues that we have raised about the Bill and, indeed, the Government’s broader trade policy is to do with the way in which food imports are dealt with, in particular the standards of production of those food imports. I am sure that members of the Committee are well aware of many of the concerns that have been expressed for a number of months—even a number of years now—about the implications of future trade agreements for the standards of food imports.
The Trade Bill deals only with our existing agreements by merit of our former membership of the EU, and not with future trade agreements. It is really future trade agreements where many of the issues lie. Nevertheless, we think that this is an issue for this Bill because of something that has been communicated to us on a number of occasions in recent months. We had lobbied on the Agriculture Bill—[Interruption.]
The Chair
Mr von Westenholz, we have a bell ringing at the moment, for a three-minute suspension of the sitting in the Chamber. It will stop shortly, but will ring again when the sitting starts. It is probably worth pausing while the bell rings.
Apologies for the interruption—do continue.
Nick von Westenholz: Not at all. I was just referring to the passage of the Agriculture Bill, to which a number of amendments were tabled attempting to address this issue of trade and food standards. It was often stated in our conversations with MPs about that Bill that it was not the correct vehicle for dealing with the matter, because it was a matter for the Trade Bill. We listened to that advice and we are looking at the Trade Bill as a legitimate and suitable piece of legislation to address the issue.
It is a complicated issue; there is no doubt about that. It is not necessarily straightforward to legislate in a way that manages the broader issue of ensuring that food imports meet standards of production equivalent to those that UK farmers are required to meet, but there are ways of doing it; some of the amendments tabled to the Agriculture Bill were well drafted to meet that aim. We certainly think that it is a shortcoming of this Bill that there is no provision for that sort of legislative approach.
Bill Esterson
Q
Nick von Westenholz: The Bill as it stands does not go beyond continuity agreements. The provisions in clause 2, for example, seem clearly to deal with those continuity agreements that we are currently party to, or were party to as a member of the EU. Going further would require new clauses, certainly; the reason why, as you imply, we want to explore whether that is appropriate is that the point has been made on numerous occasions in recent weeks that the Trade Bill is the appropriate vehicle for that.
Gareth Thomas
Q
Nick von Westenholz: Sorry, the sound is not great, but I think that that question was about our potential concerns with the EU’s CETA deal and whether we have concerns about a UK-Canada deal.
Maybe the best answer is that all trade deals, whether they are continuity or future trade agreements, present opportunities for UK farmers. We are very keen to make that clear: we are certainly not opposed to the notion of free trade agreements, and we hope that they might present opportunities to increase our exports of our fantastic food.
At the same time, however, all trade agreements will also look to increase access to UK markets for overseas producers, which will increase competition for UK farmers. Again, that in itself is fine, but we want to ensure that that competition is fair—whether it is Canadian farmers, US farmers or anybody else. The reason why we talk about overseas farmers meeting equivalent standards to UK farmers’ is simply on the basis of fairness; we are certainly not opposed to trade liberalisation, as long as that liberalisation is fair.
Matt Western
Q
Nick von Westenholz: In principle, the idea of mutual recognition agreements can work. There is nothing that we would object to in an MRA in principle. An important aspect of this is that, if we simply try to hold overseas producers to precisely the same standards as UK producers, that might create as many problems as it solves. We need to develop a mechanism for comparing standards as easily as possible to certify, accredit or whatever it might be a degree or level of production standards that we accept as equivalent to our own.
A lot of the things I have mentioned already demonstrate the complexity and difficulty with some of these issues. That is one of the reasons why we have suggested the establishment of a trade and food and farming standards commission to get under the skin of all these pretty tricky policy areas and set out a road map for Government of the sort of policies and legislation needed to tackle the issues properly. We would like that to be established in law, under the Trade Bill or any other legislation, so that it reports to Parliament and contributes to some of the shortfalls in parliamentary accountability and scrutiny that have already been flagged to the Committee. We think that that is a very good and sensible idea. That commission would absolutely look at such things as MRAs and broader issues of how you manage and measure equivalence.
On the Trade Remedies Authority, we have not flagged any specific concerns other than to acknowledge that the constitution of the committee is very broad, and quite a lot of leeway is provided to the Secretary of State in the formation of that committee. We would like to explore further the possibility of ensuring specific representation for specific sectors if necessary. Having said that, we would hope that the TRA, even in its current format as set out by the Bill, would consult fully and take into account all parts of the economy when advising on trade remedies.
Bill Esterson
Q
Nick von Westenholz: There is the prospect of including those sorts of provisions in any of the deals that the UK Government are either currently negotiating or imminently going to negotiate. I am not sure that that is an issue specific to the continuity agreements. Countries all around the world are increasingly considering how such issues can be better accommodated in trade deals. Traditionally, they have not been part of trade agreements, although we have seen in the draft text between the EU and Mercosur, for example, provisions for preferential access to Mercosur for eggs where the production standards have been equivalent to animal welfare requirements in the EU, which is interesting.
This is a really important point: the UK Government should be seizing this moment to be a global leader in negotiating trade agreements that accommodate some of these sorts of policy areas, such as animal welfare, environmental impacts and climate change, and being creative and imaginative in how future trade agreements ought to look—not looking backwards and seeing how trade agreements have been done in the past, and merely looking to replicate those.
The Chair
We will move to questions now, Mr Cranshaw, but that is very helpful. Thank you. We will start with Bill Esterson, who is the shadow Minister.
Bill Esterson
Q
Richard Warren: Certainly. We have a very good relationship with the organisation, as it currently exists within the DIT. There is only one live case—a case on welded tubes that are produced in Corby by Tata Steel, which I believe has been live for three months now—and we have had very good engagement with the organisation.
One critical issue is our ability as a sector to participate in trade remedies investigations, and particularly to finance them. I do not think it will be any surprise to people in the room that those cases cost an awful lot of money, particularly at this stage, when, frankly, industry in the UK does not have the same level of expertise that our European counterparts do. Bringing in external legal support and external consultancy has been critical, and our ability to do that as a sector has been severely disrupted by coronavirus. To put it bluntly, discretionary spend within many manufacturing companies, including in the steel industry, has effectively been halted. I say that to point out that we have asked for an extension with the TRA, and it has been as flexible as possible in providing us with an additional three months. I provide that case as an example to show that we have a very good working relationship with it .
In terms of how well, practically, those investigations will operate on an ongoing basis, and whether we feel that we are getting a fair hearing, I cannot comment on that yet, in the sense that we really are at the very first stages of the first investigation. We have another two or three investigations to go through this year. If I was to comment again at the beginning of 2021, I would probably have a more informed opinion.
To touch on the second question, about the membership of the Trade Remedies Authority, that is an important point. I would say that it is probably the only outstanding issue specifically within the trade remedies element of the Bill that we would still be pushing for reform of. In terms of the non-executive membership selected by the Secretary of State and appointed by them and the chair, there is no stipulation about how, or where from within industry and wider society, those members will be chosen.
That is an important point, because nowhere does the Trade Bill, the customs Bill or the secondary legislation actually define the role of the non-executive membership of the Trade Remedies Authority. All reference to decisions by the Trade Remedies Authority— recommendations to the Secretary of State—are referred to as, “The Trade Remedies Authority will do x or y.” Precisely what the role of those non-executive members is is still somewhat vague.
I understand that the Government will have left it that way to provide maximum flexibility and to allow for the organisation to grow into its role and to find its feet. But, from our perspective as industry, while it remains vague, we can have anything, from the board or the non-executive membership merely providing an admin task—looking over the funding of the organisation, the remuneration of staff and so on—right through to it having influence on the recommendations that the organisation ultimately makes on anti-dumping and anti-subsidy measures.
Therefore, while we have that ambiguity, industry is keen to see representation from a cross-sector of business. Everything from unions through to manufacturing interests and people who may be classified as trade remedies experts, who may have a slightly different view on trade remedies to industry, should be represented on that organisation to show there is a spectrum of views.
Bill Esterson
Q
Richard Warren: To a certain extent, it depends, ultimately, on the role of the non-executive membership. If the non-executive membership functions as a board providing steering for how the organisation operates on an admin basis, you could say it was less important. If the membership has a high level of influence over the outcomes of those investigations and the recommendations that are made, we would say it is extremely important.
On the same token, if the board membership was made up exclusively of trade lawyers from firms that have exclusively represented exporting producers, one would say that the outcome of those investigations may be biased. On the opposite end of the spectrum, if you had the entire membership made up of people who had a more protectionist bent, again, that may result in a biased outcome. While we have ambiguity around the role of the non-executive membership, industry will err on the side of caution and say it should represent a range of views so that it can come to a balanced decision on whether those measures are in the interests of industry and the wider UK economy and its workers.
Bill Esterson
Q
Ian Cranshaw: We started this journey back in January 2017. Previously, I would have said that policy has moved quite quickly—that was before coronavirus, where, obviously, policy has been delivered in a matter of weeks or months. However, I think some credit goes to the Department for International Trade, which has gone from a standing start, with a handful of 30 or so trade policy experts on trade defence instruments within the EU. Now, we have a significant and very capable resource in the Department. At the same time, when the Trade Bill passes, they will establish the authority, which will have 100, growing to 130, staff whose level of expertise has grown significantly over the last three years. We have seen many of them, and we have had good exposure to many of the employees of the Trade Remedies Investigations Directorate.
But the point I would make, and what that highlights, is that when they were developing that knowledge, who did they turn to for expertise and the nuance of how to carry out an investigation, how to assess the injury margin and how to build a case to prove that there had been inappropriate trade behaviour by a competing company or nation? That was really about turning to the manufacturers. One of our member companies has welcomed a continuous stream of TRID or TRA officials into their facilities, explaining how to build the case, because that case has to satisfy WTO criteria. It is a significant piece of work. Mr Warren mentioned the cost of building the case, and companies do not go into this lightly.
The second part of your question was about the make-up of the TRA board and how to achieve the balance. The Minister, Mr Hands, said that you do not necessarily invite people with a specific ideological position to the board—we really want trade experts. All that I would say is that trade experts are not necessarily trade remedy experts, and often that representation from the manufacturers or trade unions—some labour point of view; labour with a small “l”—generates and delivers real balance for any non-departmental public body that has to look at the entire scenario, certainly in a period when we are looking to build back better.
I am not going to keep stealing other’s summaries of how we are trying to work, but the Government have already said that they want to rebalance the economy and put more investment in certain areas. The chemical sector is focused in the north-west of England and the north-east, along the Humber—areas that require significant investment, and they need to know that they are competing on a level playing field. All of that, with a balanced view and a balanced board, would really help to ensure that all views and positions were reflected appropriately in policy development.
Bill Esterson
Q
Ian Cranshaw: Sorry, I heard that the question was about chemical regulation. Was it about whether chemical regulation is covered in the Bill?
Bill Esterson
Do you think that it should be covered in the Bill? It is not, as it stands. Do you think that it should be, and why?
Ian Cranshaw: There is an awful lot of work going on in chemicals, and the Government are keen to deliver a chemical strategy. That is something that DEFRA has covered over the past couple of years, and it is right that we have one. We have no issue with the amount of regulation on the chemical industry. We are dealing with sensitive products, and they ought to be regulated in the way that they are. Again, we have had a good hearing from the Government, but it is about the criticality of making sure that any deal with the EU—this is key for us—can include access to data sharing, because we do not need to replicate the testing of individual chemicals to build up a UK database when a perfectly functional database exists at the European Chemicals Agency. There is plenty of provision elsewhere for chemicals and chemicals regulations, and I do not necessarily think that it needs to be in the Trade Bill.
Katherine Fletcher
Q
Ian Cranshaw: That is probably me for me, because Richard is focused on steel. It is really important. We want a Trade Remedies Authority to be established, fully functioning and delivering support for UK industry from 1 January next year. Chemicals go into every other manufactured good. There are chemicals in the automotive sector; there are chemicals in chlorination of water; there are chemicals in putting the aroma into the natural gas that we all use in our stoves every evening. Chemicals does have downstream industries that will all be impacted, so we need a strong chemicals sector.
If I am honest, looking at remedies and chemicals, there are not a huge number of current remedies in place in the EU, so when the Department transitioned those remedies that were relevant to the UK, did a call for evidence and assessed exactly which remedies should be brought into the UK, of the 23 remedies that existed in the chemicals sector, only two were transitioned into UK law. I am not suggesting that it is a huge area, but it is a very significant area, and those two remedies that are in place are very important to those companies, and to downstream industries in the UK. One of them is producing fertilizer, and it is the major supplier of that fertilizer in the UK, so you can appreciate that its availability to UK farmers is absolutely crucial to their operations. If they were exposed to unfair trade from external operators, that really would be a significant loss to UK capability, especially when we are looking at supply chains and ensuring that our really critical production is safely onshored at the moment.
The Chair
We have until 10 past 4 for questions, so perhaps we will see whether they are drawn out by questioning.
Bill Esterson
Q
Rosa Crawford: The TUC is in contact, and works very closely, with trade unions around the world, in advocacy for trade deals that promote good jobs and strong protection for workers’ rights and public services. We find that in other parts of the world, there is much more meaningful engagement between Government and trade unions, as well as with employers in trade negotiations. In our partners in Europe—in countries such as Austria and Sweden—there is routine consultation with the Government on the negotiation offers in trade negotiations.
Outside the EU, in countries such as the US, there is systematic and ongoing consultation by Government of the unions on the text that they propose. In the UK-US negotiations that have just been launched, we know that our US counterparts have seen a number of proposals that the US negotiators are putting to the UK Government. On the UK side, we have not seen any part of that negotiation so far. There is a much more meaningful engagement and a process whereby unions can comment on the text of the negotiations and have that input taken on board, which is very important, so there is a process whereby texts can improve to reflect what workers need in them.
As an example, the US unions were able to comment on the USMCA labour chapter and add significant improvements that prevented, for example, restrictions on freedom of association in Mexico. We would want that process in the UK trade negotiations and so we would want the Trade Bill to outline and affirm that trade unions would be engaged in the process of trade negotiations and would be consulted on the text, and that that would be the process going forward, not just for the continuity agreements but for all agreements. We would obviously also want that for the UK-EU negotiations, which we have not had that engagement on.
I would flag that there has been some movement in terms of Government consultation with members of the expert trade advisory groups that the unions sit on roughly half of. It has been indicated that we may get to see confidential material associated with trade negotiations on the condition of signing a non-disclosure agreement, but it is important to flag that the non-disclosure agreement is currently drafted so broadly that unions are concerned that it would limit what we are able to say in terms of our public advocacy. A balance needs to be struck between the legal restrictions placed on organisations and their ability to comment on the text of negotiations.
We welcome the fact that it looks like the Government are taking some steps forward in consultation, but it is currently not in the shape that we think is adequate and we have concerns about the restrictions they might place on us. We seek engagement with the Government on that, as the TUC and unions going forward. In the Bill specifically, a reference and an affirmation that unions will be consulted on the process of trade negotiations—as well as Parliament, which is crucial for democratic scrutiny—is key for us.
Bill Esterson
Q
Rosa Crawford: Yes. The TUC and unions were concerned about the fact that we were not consulted on any of those 19 continuity agreements before they were ratified and the fact that they were negotiated with countries where there are significant concerns about workers’ rights expressed to us by the unions in those countries.
To give two examples, the UK has now signed continuity agreements with South Korea and Colombia. In South Korea, for many years we have been expressing concern, with trade unions in South Korea, that freedom of association has been routinely overridden, with trade unionists thrown in prison for peaceful protest for workers’ rights, including two union leaders imprisoned last year who were only freed after a concerted global campaign. Trade union offices are raided and exploitative conditions are prevalent in large Korean multinationals such as Samsung. The UK signed an agreement with them that has no enforceable commitment on workers’ rights within it. Although there is a mention of International Labour Organisation standards, there is no enforcement mechanism for that, and therefore there can be no reprisal through the agreement and no penalty for abuse of workers’ rights.
We also have significant concerns about Colombia, which is one of the parties to the UK-Andean agreement. Colombia is listed by the International Trade Union Confederation as the world’s most dangerous country to be a trade unionist, with routine murders of trade union leaders, widespread repression of freedom of association and a real rolling back of rights, in contrast with the commitments made in the peace process by the Government. The fact that the agreement was signed, again without an effective enforcement mechanism on workers’ rights, is very concerning to us and indicates that these agreements will not be used to increase respect for workers’ rights, but will actually make it easier for companies to go to places where it is easier to exploit workers because human and trade union rights are not respected.
Bill Esterson
Q
Rosa Crawford: Trade unions have expressed concern that there was no enforcement mechanism in the EU agreements with South Korea or Colombia either. However, the EU is now engaged in a process of reviewing the enforcement mechanisms in its trade agreements—[Inaudible.]
Bill Esterson
Q
Rosa Crawford: The TUC has confirmed that the Bill does not give assurance that the UK’s public procurement rules will promote respect for workers’ rights or environmental standards in its accession to the World Trade Organisation’s government procurement agreement. The GPA as it stands has no requirement for members to promote social standards in their tendering process.
The UK’s Public Contract Regulations 2015, which you mentioned, transpose provisions in the EU procurement directive of 2014, which states that Governments must ensure that public contracts uphold international, environmental, social and labour standards. Importantly, those regulations also include provisions about a price-quality ratio, which is intended to ensure that public authorities select tenders on the basis of quality and positive social impact, rather than price alone. We are worried that once we leave any kind of relationship with the EU and we just have to rely on the UK’s public contract regulations, the UK Government may roll back on those commitments to promote social standards through the tendering process.
We know the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights around working time, agency workers directives and other important protections for workers’ rights. We are worried that that may be the direction of travel with procurement as well, which is why we seek an addition to the Trade Bill that states that the GPA schedule that the UK files will make sure that it at least replicates article 18(2) of the EU’s 2014 public procurement provisions, which makes it clear that social standards must be part of the criteria used for settling public contracts, and that contractors must uphold those international labour and environmental standards. We would want the UK to go further than that and actually make it a compulsory criterion that the highest standards are used by contractors who receive public money, because that is the way to ensure that we get the best quality public services and provisions through our procurement arrangements.
We are concerned at the moment that we do not have a rigorous enough process of selecting tenders that always have the highest social standards, and that has had a terrible impact on the quality of services that we get, so it has had real public health implications. With the pandemic that we are facing now, we have had cases such as the Government choosing to import 40,000 protective gowns from Turkey on the basis that they were presumably lower priced than gowns they could get from a country that has higher standards. As we all know, all those gowns had to be impounded, as they did not reach NHS standards for safety. It is worth remarking that, in Turkey, there is extreme repression of workers’ rights.
By choosing the contractor with the lower price and the lower protection for workers’ rights, it leads to a much worse result for the public, and obviously there is a cost as a result. If there were concerted Government support for domestic manufacturing and domestic producers, and a preference was provided through the provisions in the GPA and through domestic legislation for providers who upheld workers’ rights and promoted the higher standards of workers’ rights, we would see more contracts going to UK manufacturers where there are strong trade union agreements, good protection for workers, decent pay and generally better conditions that promote a much more sustainable approach to business. Ultimately, there will be a better product for the public, which meets a public health need.
We think it is very important to send a signal with the Trade Bill that the Government’s accession to the GPA will be linked with making sure that the highest social standards are embedded in our public procurement criteria, and that that will be used as a key component for selecting tenders—not just price, but quality and the overall investment in sustainable development, good jobs and strong protection for workers’ rights.
David Johnston
Q
Rosa Crawford: As I outlined at the start, the crucial trade relationship that we believe the Government need to secure is that with the EU, which is our closest and most integrated trading partner and where the majority of our exports go. We are crucially reliant on—[Inaudible.] The trade agreements that the UK Government have secured through the continuity agreements do not represent anywhere near the importance to our trade. Although there will be some gains for certain sectors, it is not anywhere near as important for the EU. For us, the crucial thing about the continuity agreements is the lack of engagement with unions on them. They have been agreed on terms that we do not believe are advantageous to workers—for example, they do not have enforceable commitments around workers’ rights in them, which facilitates capital and UK businesses to go to countries such as Colombia, where the respect for worker’s rights is much lower.
For us, the crucial trading focus of the UK Government must be on securing a good deal with the EU. We do not believe that continuity agreements can substitute for those or, indeed, for agreements with the US or Japan, or Australia and New Zealand, which have launched in the last few weeks. We agree that there is a place for agreements—
The Chair
Thank you very much. Do you have any initial observations on the Bill, or would you like to move straight to questions?
George Peretz: It is a short Bill and the Members are familiar with it, so while there are a number of issues that I am sure people will want to discuss, I do not have any opening observations.
Bill Esterson
Q
George Peretz: Did you say the scrutiny provisions?
Bill Esterson
The scrutiny provisions.
George Peretz: I am sorry, I am having slight difficulty hearing you.
Bill Esterson
The scrutiny elements of the Bill.
George Peretz: Yes, I thought I had heard it correctly. The first point to make is that the scope of the Bill, as set out in clause 1, is clearly confined to agreements with countries that had either a free trade agreement or an international package agreement with a free trade agreement with the EU before exit day. In that sense, it is limited, but none the less it is not quite right to portray it as simply a roll-over Bill, because the Bill does not prevent the Government from entering into an agreement, with a country that had such agreements with the EU—such as Japan or Canada—that is significantly different from the agreement that that country had with the EU before the United Kingdom left the EU. The absence of scrutiny provisions in the Bill needs to be seen in that light: that the agreement that the Government negotiate with Canada or Japan, for example, might look somewhat different—in fact, there is every reason to think that they probably will look somewhat different—from that which both countries entered into with the EU, most obviously because for those countries, an agreement with the United Kingdom is not the same as an agreement with the EU—it is a different market. Both countries will have different objectives and concerns in relation to the United Kingdom from those they had when negotiating with the much larger EU.
When one looks at the provisions of the Bill, which essentially do not provide much scrutiny at all, it is important to have that background in mind. There is the debate, with which Members are probably familiar, about the extent to which it is appropriate for there to be parliamentary scrutiny of free trade agreements. I can give you some thoughts on that, if you like. It is important with this Bill, however, to make that preliminary point.
Bill Esterson
Q
George Peretz: In this country, or elsewhere?
Bill Esterson
Either would be good.
George Peretz: I am just trying to think of an example. I suppose a case that ran into trouble, at least in part because it was accepted that there was not adequate scrutiny at an early stage, was negotiations between the EU and the United States on the transatlantic partnership agreement. Essentially—you would have to ask someone else for the precise detail—the EU side ran at what the European Parliament and member states were prepared to accept. That is one potential difficulty.
The issue with free trade agreements now, compared with what they looked like in the 19th century, when Richard Cobden could trot off to Paris to negotiate a free trade agreement with Napoleon III in a week or so, which involved a few tariff reductions, is that they are a lot more complicated than that now. Particularly once you move away from tariffs into other areas, agreements now require a lot of potentially important decisions on questions such as how matters of food safety are regulated, or the terms on which professional and other types of services are regulated, like auditing. Those are very sensitive indeed; they can profoundly affect both the public generally and particular interests.
So there is always the risk that, if an agreement has not been scrutinised properly at an early stage, a Government will go too far and then not be able to get the necessary legislation through Parliament. That is less of a risk inherent in our system, particularly in the present Parliament, given that the Government have a healthy majority, so it is not politically that likely. Also, the Government can quite often control agreements by secondary legislation anyway. But that can be a bit of a problem, and the TTIP negotiations turned out to be one.
Another issue with lack of scrutiny is much more difficult to find examples of, because it is not something from the textbook of finding examples. None the less, it is a fact, which people involved in trade negotiations fairly freely acknowledge, that it can be quite helpful to a Government to be able to say, “We are under scrutiny from our Parliament. We simply cannot make concession X, because we have discussed this with our own Parliament and know very well that it’s going to be very controversial; it’s going to be very difficult for us. We simply can’t do it.” That can be quite a useful negotiating tactic. As a lawyer, one is quite familiar with a situation where one is in negotiations with the other side and it is actually quite helpful sometimes to be able to say, “I’m afraid my client is very unreasonable; I simply can’t accept that.” That is quite a useful way of resisting certain types of pressure, and I think the same is true in trade negotiations, so it is another advantage of scrutiny.
Bill Esterson
Q
George Peretz: On the first question, plainly an unsatisfactory situation would have happened, had the United Kingdom left the EU with no deal last year. It is plainly an unsatisfactory situation if you have a whole set of powers in one Act of Parliament that are conferred on an authority that does not actually legally exist, because the legislation that sets it up has not at that stage been passed. That is what happened with the Trade Bill in the last Parliament. It is a bizarre situation, which is bound to create legal problems of one sort or another. There would have been challenges, no doubt, to the validity of the decisions taken by the Secretary of State, given that the mechanism by which he took them had no satisfactory statutory basis. The Department for International Trade told the world that the mechanism that it had adopted to get round that problem would have been sufficient to deal with it. We will never know whether it was right about that, but I think it would have created a set of legal issues that probably everyone could have done without if trying to—[Inaudible]—effective trade remedies. It will certainly be better if, at the end of transition, when all this comes into play, there is a strong remedies authority in existence, doing the job that the 2018 Act gives it.
The structure of the 2018 Act did seem to me sensible. I wrote an article that laid out the—[Inaudible.] It is the largely technical task of looking at the potentially legal point—[Inaudible]—a factual question about whether the various tests of dumping, subsidy domestically and so on have been met, through an independent authority that would be able to assess those reasonably objectively. It is charged with those functions. And there is the essentially political job of assessing the public interest, which is carried out by the politicians, who are directly accountable to you in the House of Commons. That seemed to me to be a sensible divide, and that is what the Government have done. That division of competence seemed to me to be broadly right.
A final point about the composition of the Trade Remedies Authority, going back to what I just said, is that the TRA’s job is in large part a technical one. It has to make a series of quite difficult legal and economic judgments that are essentially technical ones, but it does have a job of assessing the economic interests of the United Kingdom, which involve somewhat wider criteria. There is a case for the non-executive directors having to fit a number of those criteria; it is always desirable for there to be a diverse group of people on bodies such as this, because diversity brings strengths of its own. To focus on the particular task of this body, it is almost certainly helpful to have people who have experience of industry, because they will understand a lot of the issues and concerns that the TRA will have to grapple with. It would be helpful for some of the board to have backgrounds in law and in economics, because those are essential aspects of the TRA’s work, and it helps to have people right at the top who are familiar with such things.
The Chair
Mr Peretz, thank you very much. I am keen to get one more question in in the time we have available, if possible.
The Chair
Q
Simon Walker: I am Simon Walker. I have been the chair of the Trade Remedies Authority for three months—a fairly recent appointment. From my limited exposure, given that I only made two visits to the office before the lockdown, I can report that the authority to be, which is still part of the Department for International Trade, is in good shape and raring to go.
Bill Esterson
Q
Simon Walker: I am not sure that falls within the purview of the Trade Remedies Authority to be. It seems a broader question than that. The TRA’s decisions will be subject to parliamentary scrutiny, because the final decision maker on our recommendations is the Secretary of State. If she rejects our recommendation, she must table her reasoning before Parliament.
Bill Esterson
Q
Simon Walker: I do not think I do, to be honest.
Bill Esterson
Q
Simon Walker: There are two underway at the moment, which are both transition agreements. One is about welded steel and tubes, and the other is about rainbow trout. Those two transition arrangements are in process at the moment. I cannot pretend that it will always be cheap to lodge a claim with the TRA, because it will require quite a lot of legal and technical expertise, so I would not want to over-sell that. It is a very substantial meta-seeking recommendation from us on the base of anti-dumping and fair subsidies or the need for an economic safeguard. It is a major intervention in economic process that I think justifies significant resource going into it.
David Johnston
Q
Simon Walker: I suppose the big worry about anti-dumping in general is that an overseas producer will seek to eliminate domestic competition in a predatory way and then force up prices as soon it has put its UK competitors out of business. That is at the heart of the issue, but there are infinitely more subtle variations of that, particularly if the exports come from countries where there are hidden or perhaps unfair subsidies of different sorts or where there is a disguise. The absolutely crucial thing is that there have to be UK producers of that product. If a product which happens to be massively available in another country is dumped cheaply in the United Kingdom and there are no UK producers, there is no domestic interest in that. That kind of unfairness aspect is fundamental to everything that we are going to be doing.
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Trade Bill (Third sitting)
Bill Esterson ExcerptsThursday 18th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Bill Esterson (Sefton Central) (Lab)
Q
Tom West: Sure. I will focus on the continuity trade agreements and what is being done there. It is worth saying at the outset that it is sensible to try to roll over and maintain where we are, as a starting point. It is also important to see that as a starting point as to where we are and where we want to go. The process gone through there demonstrates the need for, first, a better approach to scrutiny and oversight for how we conduct and design our trade policy. Secondly, there is the point about saying, “Let’s review and refresh.” With the continuity agreements in particular, there is a need to put in place mechanisms to review those in due course and to check up on them and say, “Are these delivering the economic things we need from the trade agreements but also, importantly, the environmental issues that we need to deliver on?” If we want to become a global leader in environmental issues, we need to think about what that means for all areas of policy. We cannot simply rely on directly environmental ways to deliver those. Let’s look at those and see: are these the sorts of trade agreements that are working from an environmental point of view? Are they encouraging the right sort of trade and the right sorts of goods and services? And are they allowing us to take the actions we will need to take to fight climate change and reverse biodiversity decline?
Bill Esterson
Q
David Lawrence: Could very quickly remind me what the question was?
Bill Esterson
What is your view of the Trade Bill as it is? Do you have concerns about it, and are there any additions you would like to see made to it?
David Lawrence: As I said earlier, parliamentary scrutiny is a big concern for us. When the Trade Bill was first introduced, which was a while ago now, it was billed as an open conversation on scrutiny and a new framework for how trade could be done, but in fact we see nothing new on parliamentary scrutiny, and so far the Government have not seemed to be very open to having that conversation or to listening to proposals for how scrutiny should operate. That is not just our concern; it is shared by a lot of other NGOs and businesses, and indeed by many MPs. The UK currently uses a pretty archaic form of treaty scrutiny that dates back to the first world war. It was designed to deal with secret defence treaties between European powers. Today’s trade agreements are a million miles from that. They cover a huge range of policy areas—from food standards and environmental regulations, to NHS prices and digital services. We think it is completely inappropriate to expect that MPs should have no say in how those deals are made.
It is also worth noting that that is an issue that many members of the general public are concerned about. If you think back to the Transatlantic Trade and Investment Partnership, or TTIP—the proposed EU-US trade deal—you will see that one of the reasons it collapsed was that people were not happy about the idea that these important talks were happening behind closed doors and that their own elected representatives did not have much of a say over them. In Westminster, MPs have less of a say over trade deals than MEPs in Brussels or, indeed, Members of Congress in Washington DC.
If I am honest, I think lots of people would be quite surprised and shocked to learn that their own elected MPs do not have a say over these trade agreements, the new deals we are doing with the EU, the US, Australia and Japan, or the new ones announced yesterday. It is not clear who people are meant to write to or who represents them and their interests when they are concerned about how these deals might affect their livelihoods, the food they buy or, as Tom mentioned, environmental standards and principles.
For us, scrutiny is an absolute priority. We also want to use trade to maintain high standards. We have concerns about the GPA and the way that public procurement works, but scrutiny is absolutely the priority. If we do not have that, there is no way Parliament can make sure that trade in the future meets with those high standards, and there is no democratic representation or transparency.
Bill Esterson
Q
David Lawrence: There is a scrutiny concern that is specific to public procurement as well—making sure that Parliament has a role, that there are democratic processes involved—and there is a standards concern to ensure that procurement can be used in a way that maintains standards. The Government have this levelling up agenda and the idea that post-Brexit Britain will support parts of the country that are not doing so well economically. Procurement is an opportunity to support those areas as well. As we have seen with covid, all sorts of big questions are raised around global supply chains. One of the immediate effects of covid was countries putting in place things like export controls and wanting to localise their supply chains. Procurement is one of the many tools that Governments can use to support local industries in that way and to maintain standards. The more that Parliament has a say over that process, the better.
Bill Esterson
Q
David Lawrence: From our perspective, there are four elements to an ideal scrutiny procedure. First, before negotiations begin, we think there ought to be a full debate, with a vote on the negotiation objectives, and that ought to be written into law. At the moment, the Government can grant a debate, if they want to—and they have done so, at very short notice, as some of you will remember, I am sure, on the US objectives and the EU objectives—but we want a guaranteed debate and vote on the objectives. Secondly, during negotiations, there should be regular reports back to Parliament on the progress of those negotiations, and, ideally, publication of texts from each negotiation round. That is a practice that is done elsewhere: the EU has updates during negotiations. As I am sure all of you are aware, MPs are very much left in the dark. At the moment, US and EU negotiations are going on, but we rely on leaks, essentially, and reports from Brussels or from DC because there is no formal process for reporting back.
Thirdly, after negotiations there should be a debate and a vote on the final deal to approve it. Again, that is something that happens in the US Congress and in the European Parliament. We do not have that guaranteed. The only way we can get a debate and a vote on a trade agreement is if the Opposition force a debate on it during an Opposition day within a 21-day sitting period. As you all know, it is not guaranteed that there will be an Opposition day that falls in that period, and if there is, the Opposition may decide to use it for other things. The Government are proposing a lot of new trade agreements, so the current system is not reliable in terms of ensuring that debate and vote on the deal.
Fourthly, throughout this whole process we would like to see public consultation and independent impact assessment. There have been some half-hearted attempts at that. I sit on one of the expert trade advisory groups at the Department for International Trade, but there is not a well-established, formal process of consultation with actual trade agreements where businesses and NGOs are brought in to comment on and critique the trade agreements themselves. We have not seen that happen yet. Again, that is something that happens in other countries, but the UK is very much behind on this.
Bill Esterson
Q
David Lawrence: It is about public trust. We saw in the TTIP negotiations a lot of distrust that ultimately led to the deal falling apart. If you wanted TTIP to happen—if you want these trade agreements to work—you need the public behind you. If there is not transparency, there will be conspiracy, leaks, theories about what is being discussed, accusations and a lot of uncertainty. That is why it is something that businesses and NGOs are united on: regardless of your view on whether the specific trade deals are good or bad for the economy or society, at least if you have transparency, you know what is being discussed and what is on the table. That is why we are pushing for it, and we have joined the British Chambers of Commerce, the International Chamber of Commerce and the CBI in pushing for that level of transparency. It has been a source of frustration, not just among civil society but also among businesses, that these important deals are supposedly on the way but we do not know what is being discussed at the moment.
Bill Esterson
Q
Tom West: We are supportive of the asks and processes David outlined. Greener UK, which is a coalition of environmental organisations, is also a signatory to the document David mentioned. I will just add some extra things around the side.
First, once a trade deal is in place and up and running, there is a need for ongoing scrutiny and involvement of civil society in making sure it is being implemented in the right way. That is crucial looking forward. Secondly, to give a bit more clarity as to the value of this, within the environmental sphere, the value—in fact, the necessity —of public participation is long recognised. The Aarhus convention 1998 enshrines in law that the public must be engaged in the design of policies related to the environment. It is true here as much as in other areas: by involving the people affected by the policies, you get better policies and better buy in.
There is another interesting point on the value of this. Last year the US negotiators said, “Look, we can’t refer to climate in our negotiations”. They were able to point to an Act of Congress and say, “Our hands are bound here. It’s impossible for us to do this”. In that way, a steer and an instruction from Parliament can strengthen our negotiating arm. As I have said, our vision is that the UK uses its blank sheet of paper on trade policy to align its trade policy with its global environmental ambition. Let us get that clear and written down so that our negotiators can point to it and say, “The conversation that we want to have—and, in fact, that we need to have—is around robust implementation of the Paris agreement, meeting our environmental goals”.
Lastly, David mentioned the need for public support: this matters to the public and they care. For me, this goes to the question—and annunciating—what are we going to get from these trade deals? What is the benefit and value to people? That is very much part of the question and review of what our trade policy is for. We have seen various estimates of what a US trade deal might get us, for example, from an economic point of view. The figures sometimes are relatively small. I have seen some say that the benefit in reduction in tariffs might amount to £8 per household per year. If that is the case, we need to understand what that will do for us and what other benefits we might be able to get from a trade policy that is more closely aligned with our environmental ambitions.
David Johnston (Wantage) (Con)
Q
First, given that this is about continuing agreements that we already have, if we sought to change them, they would not really be continuity agreements anymore. Secondly, could you both talk about the counterfactual? If we did not have this Bill or the continuity agreements, what would be the consequences for this country and for those countries in the developing world with which we are seeking these agreements?
Tom West: I think it is right to say that the Bill itself is focused on those continuation agreements, but in some ways that is symptomatic of the wider problem I am talking about in terms of the lack of an approach that says, “Let’s review and revisit what our trade policy is for and how it should be designed,” with an eye, in particular from our perspective, on what that means in terms of delivering our climate and environmental goals. As a first step, yes, we need to take those sorts of measures and it is sensible to do so, but that is just a first step. That, in and of itself, cannot be the full range of what we should be seeking to achieve when it comes to our approach to trade. However, taking that more ambitious approach requires putting in place certain mechanisms and frameworks. We are talking about scrutiny processes as a key part of that and, in addition, frameworks that seek to guarantee that, through our trade deals, we will be protecting and supporting our delivery of environmental goals by making sure that we retain our right to regulate in environmental matters and doing that thoroughly; that we have non-regression in environmental standards and a meaningful and enforceable commitment to non-regression; and that our import standards match up to our environmental goals.
Bill Esterson
Q
Sam Lowe: The first thing that I should say is that I think the Bill is necessary; there is a need for continuity when it comes to the UK’s trade relationships with third countries. Looking at the provisions for the government procurement agreement, I can see why there might be some concerns about the powers given to the Executive to alter things in future, but I also understand why the provisions are there, in that the government procurement agreement will evolve over time, new members will accede to it and there will be a need to update it.
Specifically on the continuity agreements, there are a few points that I would like to make. First, I am not sure that the scope is fully understood, in that it maybe covers more agreements than people think. As well as the ones that we all know about, for example Chile, Jordan and the like, it also covers Singapore and, to my reading, Vietnam, which was signed by the EU in June 2019. That is something that should be considered.
When it comes to the broad categorisation of continuity, I have a few questions. I would probably recategorise the agreements. I would start with category 1, which is the pure continuity agreements where there are just minor changes to be made. I am thinking of Chile, Israel, Jordan, Lebanon, Faroe Islands and the like. I would also include South Korea stage 1 in that box.
My second box would be the agreements that are continuity agreements but will be substantially different from what exists within the EU. Those are the agreements with Norway, Iceland, Switzerland and Turkey, and I would probably add Ukraine to that box as well. Because the existing relationship is so contingent on our EU membership, there is no doubt that the future agreement we have with them will be substantially different from today.
The third category are just new agreements, because we have decided that they cannot be rolled over and we are set to renegotiate them. That would be Japan and Canada. I would also put South Korea stage 2 in that box, in that the South Korean roll-over agreement contains a commitment to consider renegotiating after three years, but it also contains a poison pill that means that we will inevitably have to, because the rules of origin provisions that allow for EU inputs into UK goods to continue to qualify for the agreement’s local content provisions expire after three years. In that case, it will be a renegotiated new agreement.
As to whether I think the Bill is appropriate in its coverage, I think for box 1—pure continuity with minor changes—it is fine. For box 2—continuity but with big changes—I would say that it is probably still fine. There are obviously some concerns that they will change substantially, but those agreements are ones where we probably need to prioritise continuity over all else. In box 3, to my mind, they are new agreements, so I am not sure why they will be covered by a Bill that is focused on continuity—particularly in the case of Japan, where we have seen new objectives and even statements that we want to go beyond the EU’s existing agreement.
I would conclude with the need to consider the counter- factual. What we are discussing here is not necessarily the whole trade agreement; we are discussing how we deal with the implementing legislation accompanying the trade agreement. If we think about what that covers in practice, we are largely just talking about procurement and perhaps some issues on technical barriers to trade—that is it. In practice, we are probably talking about fairly minor changes in this space.
In the grand scheme of things, I suppose the question we are asking ourselves is: would slowing this down for everyone in order to do this via primary legislation add sufficiently extra scrutiny on the whole? I am not convinced it would, considering that it is ultimately still a yes/no decision either way. Parliament is not going to change; it just has to decide whether it wants it. Here is where I think it speaks to the bigger issue, which the Bill does not address but is hard to ignore. I listened to some of the first panel, and they touched on it. Parliament’s role vis-à-vis trade policy is incredibly limited; it is largely an Executive competence. Parliament has very little influence over what trade agreements look like, and very little ability to object to them if it comes to it.
Bill Esterson
Q
Sam Lowe: The question of whether it is needed is a very good one. I am not sure I can actually answer it. You have just acknowledged that some of the agreements have passed. I suppose it is required, in that there might be a need to get some legislation through very quickly at the last minute if some of these negotiations drag on, so there is an issue there. Your first point was about what is in the agreements.
Bill Esterson
Q
Sam Lowe: I cannot confess to have looked at the text of every single one, but one of the concerns that had been raised was that there was an issue about whether the tariff rate quotas will have been changed in a specific agreement. When I looked at Chile in this case, the changes that had been made did, to my mind, make sense. For me, the most interesting point about some of the continuity agreements is the approach to rules of origin, which I mentioned earlier. It is the process by which a product qualifies for tariff-free trade under a trade agreement, dependent on the amount of local value added. As the UK has an issue, which is that in many sectors we do not create enough local value added to qualify for free trade agreements under normal rules of origin-type provisions, we have inserted conditions that allow for EU inputs to continue to be accounted for—either indefinitely in the case with Chile, or temporarily with South Korea. That is not necessarily a concern, but it is interesting. It is actually quite a new approach to rules of origin, and the jury is out on whether it is WTO-compliant. I probably lean towards it being compliant, but I have certainly heard counterarguments.
The Chair
Q
Nick Ashton-Hart: Thank you. I will try to be brief, because it is important for you to have time to ask me things. I am Nick Ashton-Hart, the Geneva representative of the Digital Trade Network, which is a coalition of industry groups throughout the world. I am the focal point for industry on digital economic policy in Geneva. I have been involved in the trade community for more than a decade and participated for about 20 years in multilateral telecommunications and trade policy as it relates to use of the internet.
I am frequently on national delegations and an adviser to countries or groups of countries that are negotiating economic policy. I am also the special adviser on international internet policy for the International Chamber of Commerce in the United Kingdom, although I am speaking to you today in my personal capacity as a trade expert in the field.
Bill Esterson
Q
Nick Ashton-Hart: Thank you very much for the question. Thank you all for asking me here. It is a great privilege and honour, as an immigrant who arrived here in 1986 with £900 in my pocket, to be heard by Parliament.
With respect to the Bill, many of the comments I made about the Bill in the last Parliament remain true. There are some changes in this Bill, but the core of the issue is the road it sets out in terms of consultation on trade policy with not only Parliament, but industry as a whole. In my work, I see how Trade Ministries worldwide relate to stakeholders and how they choose to involve stakeholders in trade policy-making and negotiating.
I understand the argument that the continuity agreements are intended to be as close as possible to and a simple replication of the provisions of the agreements that you benefited from via membership of the EU, and that consultation is not necessary because of that fact. As I said in 2018—and this remains true—these are not the same agreements. At that time, we did not have any of the agreements rolled over, if you will, so we assumed that they would not be the same agreements. Based on my experience in trade policy, nobody makes exactly the same deal with a smaller party that they did with the larger party, because it is not in their interest to do that. In this case, we have even more reasons.
As an example of how these agreements are not the same, I offer up the Swiss agreement. There are 20 mutual recognition chapters of the Swiss-EU agreement. The UK-Swiss agreement has only three, because Switzerland cannot agree that our regime is equivalent unless we continue to apply the EU regime, as the Swiss-EU agreement requires that. So, 24% of the UK’s exports and 16% of imports in that deal are not covered currently. That is also true in the agreement on customs, so UK goods will not be expedited through the Swiss border in many cases as a result.
Therefore, these are fundamentally not the same agreements, yet they are treated, in terms of consultation with industry and Parliament, as if they are, when they are materially different. It is like anything else—if you start out on a road, you want to make sure that the destination you are heading towards is the destination you want to reach. I think that, as a country, the destination we should want to reach is that the country as a whole buys into the arrangements for trade policy that the country proposes to make.
While I accept that in February 2019 the Government’s roadmap for consultation with Parliament and with civil society and the like began to approach what we would consider a more standard relationship, I offer this comment to Committee members to consider. If you are negotiating with another party about economic affairs, the reason why you want industry to have a close relationship with you when you are doing that is because industry has relationships with industry on the other side—in the country that you are negotiating with. Industry can then help you to gain support from industry in your negotiating partner for the provisions that you are recommending, which are also in the interests of industry in that other country, or negotiating partner. If industry is not a close collaborator with you throughout the negotiating process—not just in setting up the terms that you are looking for before you negotiate, but throughout the negotiation and ratification process—you are robbing yourself of a key element that will help you to negotiate a successful outcome.
That is just as true when you are dealing with issues such as the GPA as it is when you are dealing with regular free trade agreements, or regulatory co-operation agreements, which are not really discussed that often but are fundamentally important—financial technology bridges, or FinTech bridges, and the like.
That is the key thing that I have heard from industry, and the key thing that I have seen is that the continuity agreements are taking longer to reach than had been thought. I wish I had been wrong about some of my predictions back in 2018; unfortunately, pretty much all of them have turned out to be taking place. These agreements have been more difficult, they have been more different and there are gaps in coverage. Of course, all of that is not terribly surprising, but despite the knowledge that industry and other stakeholders were right when they said that more consultation was needed, the Bill still does not provide for that consultation to take place, which is a real lack, and an opportunity that should be seized.
The consultation should not be seen as a negative; it should be seen as a positive. These agreements will last longer than they are expected to, and the successor agreements to them will take longer to negotiate than is estimated, because there is one thing that you can guarantee about a trade agreement negotiation process and it is that the target date for finishing it is not the date you will finish. You will definitely finish at some later point than you predict. That has proven true for us with these continuity agreements, which is not a surprise to anyone in the trade community.
Hopefully, that is not too long an answer.
Bill Esterson
Q
Nick Ashton-Hart: First, I should say that you will have testimony from other witnesses who will have more knowledge of all the continuity agreements than I do. As you know from our conversations, I am a services guy, so I tend to focus on services and digital services.
As is the case in the Norwegian agreement, we will find that in any third-country agreement we try to make, the EU will quite naturally have made conditions on that country’s negotiations with additional third countries—the regulatory choices that the third country has with other parties with which they negotiate, other than the EU, are constrained by the agreement with the EU.
When it comes to regulatory chapters in trade agreements, there are really three major powers: the US, the EU and China. We do not have the regulatory freedom to determine, on our own sovereign nature, exactly what we do. Ultimately, we will adopt one of these three—we are smaller, and that is how it works. Big blocs carry the weight and tend to get more of what they want than do smaller parties. That is true of negotiating for anything in life. Anyone who has bought a car or a house will realise that those things stay the same. We will find that the choices that other countries are allowed to make in terms of their agreements with us are constrained by their deals with the great powers.
David Johnston
Q
Nick Ashton-Hart: The GPA is its own special animal. You will already have had descriptions of it, so I will not describe it. The GPA is a pretty loose agreement, and you can decide what you want to include within it and what you want to exclude. In theory—actually, in reality—it offers access to large amounts of potential supplies to Governments around the world, because Governments are major purchasers of everything. There are many conditionalities on that, and we will get less out of it than is suggested by the headline numbers, because of the flexibility of the arrangements and the scheduling. Countries, naturally, often like to sound more open than they are in this area.
I know of a certain European example: a major trading partner of ours in the EU that speaks a language that is not in the world’s top 50 most spoken languages has the same commitments on government procurement as does the EU, in terms of market access to third countries. What is not stated, however, is that you must do all of your bidding, contractual work and work with that party in that language that is not in the world’s top 50 languages, which quite naturally rules out the vast majority of people and companies in the UK, especially small companies. I am sure that a vanishingly small number of people in the UK speak that language.
So yes, the GPA is important, and yes, it does allow our firms access to many other markets but, looking at the fine print, access is not as simple and straightforward as is suggested. The GPA allows you to say to another country, “You—service provider X—can bid on services with my country.” It does not say, “And we will treat you as if you are one of us for regulatory issues.” You still need to be able to meet the regulatory requirements as a service provider that a domestic service provider has to meet. That is understandable and reasonable, but if your regulatory system in the UK is not seen as equivalent by that country, you will have to go through the additional step—if it is a regulated service, and many of them are—of being found to be regulatorily compliant with the regime of the country you are selling into. As we know, services are all heavily sensitive to regulation and to regulatory compatibility in third countries that you are selling into. That is why the single market is such a massive enabler of services trade throughout the European Union and its member states.
Trade Bill (Fourth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Bill Esterson
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Trade Bill (Fourth sitting)
Bill Esterson ExcerptsThursday 18th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Stewart Hosie (Dundee East) (SNP)
I beg to move amendment 29, in clause 1, page 1, line 4, leave out “may” and insert “must”.
It is a pleasure to serve under your chairmanship on this important Bill, Sir Graham. If I may, I will crave your indulgence for a few minutes to make some introductory remarks about the Bill before I move on to amendment 29. First, I recognise the difficulty the Minister has in the absence of officials. A number of the amendments I have tabled are technical, so it is not my intention—I hope this is helpful to you, Sir Graham—to press to a Division any amendments or new clauses until we hear detailed responses from the Government, probably towards the end of these Committee proceedings next week. Of course, I reserve the right to come back to these themes on Report, if and when we reach that stage.
Right now, there are three main threats to trade, as I have said before. The first is self-evidently the covid crisis. The World Trade Organisation has suggested there will be a fall in global trade of between 13% and 32%, which is larger than the collapse in trade during the financial crisis. The second threat is the impact of Brexit. We have all seen many of the assessments, which suggest a significant fall in UK global trade. The third threat is a more systemic problem, from the continued implementation of new, and the continuation of existing, trade restriction measures, mainly tariffs—about $1.5 trillion or $1.6 trillion-worth around the world. I am not confident that any of those problems will be resolved any time soon, not least because there is no cure or vaccine for covid; because of the well-publicised difficulties with the Brexit negotiations; and because of the failure to appoint a functioning appellate body in the WTO.
However, the Bill does address a number of other matters. It implements procurement obligations arising from membership of the GPA—the agreement on government procurement, it creates the Trade Remedies Authority and it gives Her Majesty’s Revenue and Customs and others powers to collect and share data. It also allows the Government to modify retained direct principal EU legislation, and it appears to me that, other than a few minor restrictions, those modifications are almost without limit.
The Bill also includes descriptions of what an international trade agreement is and says that it may be
“an international agreement that mainly relates to trade, other than a free trade agreement”.
But, as we know, modern agreements are little to do with quotas and tariffs, and as much to do with standards, conformity, dispute resolution and food safety, for example. Many people are therefore uncomfortable that the Government may be able to modify existing legislation, even in roll-over agreements, in the way proposed. I am sure we will come to all those matters over the next few days.
Amendment 29 does not appear to be particularly important, but it is, because it would require the relevant authority to make the regulations referred to. The reason is as follows. The UK is already party to the GPA, and requiring the relevant authority to make regulations to implement the GPA would ensure continuity upon withdrawal from the EU. Under clause 1(1), the Bill grants an appropriate authority the power to make regulations that it “considers appropriate” to implement the GPA. If the intention is to ensure implementation of the GPA 1994, the authority should be required to make such provisions. While it could be helpful to allow the relevant authority discretion—that is facilitated by the current wording—to make regulations that it considers appropriate to implement the GPA to ensure continued alignment with EU requirements, if the intention is actually to implement the GPA in order to ensure continued alignment, the relevant authority must make the necessary regulations. I commend the amendment to the Committee.
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. The hon. Member for Dundee East has made some important observations about our proceedings, which I agree with. We may take a slightly different view on pressing our amendments, and we will come to that in due course. I make no promise; it will depend on the nature of the Minister’s answers, his ability to garner information and what he says.
The hon. Member rightly drew attention to the impact of the covid-19 crisis on trade. He also drew attention to the importance of discussing trade, and indeed legislating for international trade, at this time in recovering our economy and the prosperity of our people. He referred to the estimated fall in the economy of between 13% and 32%. He is right that that fall is far larger than in the global financial crisis—it is the largest in history, over all the time in which such figures have been recorded. It is therefore essential that, where we can, we get what we are doing as accurate as possible.
Following the hon. Member’s speech, I now have a much better understanding of the intention behind the amendment. I am confident that he is trying to do what he has set out. The Labour party, as we made clear on Second Reading, fully support the accession to the GPA. If that is the Government’s intention, it seems entirely right that they should make sure they do so, and it is odd that they have not already committed to that in the Bill.
Gareth Thomas (Harrow West) (Lab/Co-op)
Might one of the other potential benefits of the amendment be that it helps to create a voluntary pressure on the implementing authority to support businesses to take advantage of the procurement opportunities that Ministers have said the GPA offers? If there is a slightly more lackadaisical approach, as the hon. Member for Dundee East appears to suggest, the incentive for Ministers to actually find ways to support businesses to take advantage of those opportunities may not be there in quite the same form.
Bill Esterson
My hon. Friend makes a good point. We want businesses to take advantage of the opportunities available in procurement. Having the Government make the strength of that case through how they legislate is an important way of achieving that goal. It should be clearly set out that the procurement obligations that we currently have through our EU membership have passed into UK law via EU retained legislation, and the Government should make clear commitments to their implementation. The hon. Member for Dundee East said that, if the Government intend to implement the GPA, they should say so, to ensure the continuity that my hon. Friend the Member for Harrow West rightly referred to and to make sure that alignment in the regulations is in place straightaway.
Gareth Thomas
Perhaps I can be a little clearer. My concern is that, under successive Governments the opportunity, the opportunity for local organisations to take advantage of public procurement opportunities has not been given as much assistance or priority as it might have been by both central Government and—on occasion, sadly—local government. Perhaps the amendment might help to create the pressure for central Government, in particular, to take a bit more seriously their responsibility to make that happen.
Bill Esterson
My hon. Friend is quite right: we need to make more of the opportunities available in procurement, and this kind of amendment is a way of delivering on that agenda.
I am pleased that the hon. Member for Dundee East has tabled the amendment. I note his comments about waiting, to ensure that the Minister is able to respond in full and in the event that he needs additional advice. I am happy to support the hon. Member in principle, on the basis of waiting to hear what the Minister’s reply might be.
The Minister for Trade Policy (Greg Hands)
Sir Graham, first of all, it is a pleasure to serve under your chairmanship, and I welcome everyone to the Committee. I think the previous Bill Committee I served on was for the previous gestation of this Bill, in early 2018, so I know from past experience that we have interesting discussions ahead in the coming days on this important legislation.
As the Secretary of State and I made clear on Second Reading, the Bill is about ensuring continuity and providing certainty for businesses and consumers as the UK strikes out once more as an independent trading nation. We will use the freedom that we have gained through our departure from the EU to negotiate trade agreements with new partners, but we also remain committed to seeking continuity in our trade relationships.
I will turn to the amendment in just a moment, but let me be absolutely clear. I have not spoken about the Bill since Second Reading, and I was genuinely surprised that the Opposition parties opposed the principle of it. The Bill consists entirely of wholly sensible proposals to secure the continuity of more than 40 trade agreements and our continued membership of the World Trade Organisation’s government procurement agreement, and to allow UK trade defences.
I hope that the Opposition parties will reconsider their principled opposition to the Bill after all the scrutiny that we are about to have and on Report, and will consider voting for it on Third Reading.
Stewart Hosie
I make a number of observations. The Minister said that the Bill was about continuity. If I take that at face value, as I do, it strengthens the case for the relevant authority being required to make the necessary regulatory changes. He also said that the flexibility allows the relevant authority to respond to specific circumstances, but if those change, there are lots of reasons why it should—absolutely must—make the necessary regulations to respond to those changes. The final argument the Minister made does not hold water:
“An appropriate authority”—
must—
“by regulations make such provision as the authority considers appropriate”.
So if a circumstance stands changed where the relevant authority did not deem it appropriate to make a change, it would not be required to do so.
The hon. Member for Harrow West said that the amendment might encourage more businesses to take advantage of procurement opportunity. It would not do so directly, but, certainly, if the relevant authorities were required to do something, it might act as a nudge measure to encourage businesses to look at those procurement opportunities.
I will do what I said at the beginning: I will not seek to press these matters to a Division now, but I will ponder on the Minister’s answer. I am sure he will consult others and ponder further, and we may have a similar debate on Third Reading. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 24, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
The Chair
With this it will be convenient to discuss the following:
Amendment 25, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater environmental exceptions and carbon considerations in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 26, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater scope for UK small and medium-sized enterprises in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 27, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing improvements to public health as a consequence of any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Bill Esterson
In the debate we have just concluded, the Minister referred to matters that fall under the set of amendments we are now considering and the reciprocal nature of the benefits of the GPA. These amendments relate to the impacts on those companies tendering for UK procurement contracts and the way they might be addressed through the annexes to the GPA that we might seek once we have acceded to that body. The amendments relate to the desire for procurement to look beyond short-term pricing—a problem that has bedevilled procurement—and I will give some examples a little later. All four amendments pick up elements of the points made to us by Rosa Crawford in her oral evidence on Tuesday about the desirability of price value or life cycle costing in procurement.
In his remarks just now, the Minister said that we should have the same arrangement we have with the EU, and we agree with the accession to the GPA for that reason. But if we are to have the same arrangement that we have as members of the EU, there is also the significant matter of retained EU law, which needs to continue if that statement is to hold. In this case, it is the Public Contracts Regulations 2015, which will run out on 31 December 2020. As my hon. Friend the Member for Harrow West has said, it is extremely important that we maintain the strongest possible procurement system for companies in this country, and there are other reasons referred to here to do with international and domestic labour rights.
Gareth Thomas
The House of Commons Library brief is very helpful in this regard, because it makes clear that
“the GPA will limit the ability of UK public sector buyers to choose to buy only from”
British or local companies, for example. It is surely an extraordinary situation for Ministers not to want to do more to help British companies or, indeed, to help local councils support local businesses to get access to procurement contracts.
Bill Esterson
Yes, and that is why it is important that we maintain as a minimum not just the GPA regulations but the Public Contract Regulations 2015, that they are renewed and that we look to build on them, which is the reason for the amendments. Ministers—including, on occasion, the Minister present—have indicated their support for British business, and the Prime Minister on numerous occasions has encouraged us to buy British. I imagine that the logical extension of that statement is that he wants Government procurement departments to buy British as well, and I will come to other examples of what Ministers have said.
This is about having the strongest possible procurement system. That is why our amendments call for the Government to pursue with GPA partners the potential for the inclusion of labour standards, environmental standards, support for small and medium-sized businesses and consideration of public health consequences in our annexes to the GPA. I will define what we mean by that.
In amendment 24, we refer to
“labour market interventions and compliance with ILO standards”.
That means we want to ensure that companies that fulfil their obligations to their workers, treat workers well and meet their commitments to working with trade unions in a productive manner are not undercut by companies that do not. This is about rewarding responsible businesses, as well as supporting workers.
Labour market interventions in procurement allow for minimum wages and living wages. They also allow for maximum wages, although that is rarely used. They allow for legislation to prevent discrimination on the grounds of age, sex and religion; legislation to support or regulate trade unions; a maximum working week; legislation on health and safety; behavioural nudges, which are making an appearance for a second time in our deliberations, to encourage workers to take up pensions, for example; and Government provision of education and training schemes to enhance skills and encourage the recruitment of apprentices.
Charlotte Nichols (Warrington North) (Lab)
I just want to come in on the point about labour market interventions. Local government procurement is a good example of where there is a need for something sectoral and robust. For example, there is a national agreement for the engineering construction industry, known as NAECI, for which the minimum rate of pay is £18.63 an hour. If a local council was to procure even on a real living wage, rather than the Government’s living wage, the minimum rate of pay would be about 60% of that. In local government and central Government procurement, companies that are trying to do the right thing and are abiding by sectoral agreements are being undercut. That is why it is very important that we get that right in this legislation.
Bill Esterson
I thank my hon. Friend for that excellent example of why ILO obligations matter. She is absolutely right that it is about paying decent wages, but of course one of the consequences of having such provisions in public procurement is that not only the workers and their families, but communities benefit due to greater spending power in local economics. This is an economic measure as well as a social measure. That is why it is right that progressive procurement considers it.
Gareth Thomas
I do not think my hon. Friend has the great benefit of being supported by the Co-op party. One of the ways in which I am unique is that I am from the co-operative tradition in the Labour movement, and therefore have had a lot of contact with social enterprises and co-operatives. A social enterprise that stands out is Hackney Community Transport, which has won contracts from a central Government organisation—in this case, Transport for London. It has done so while providing employment for offenders who are seeking to get back into the work environment, and offering discounted minibus hire to local community groups. The risk is that, if there is not proper support and flexibility in the procurement regulations, such initiatives will be stifled. Hackney Community Transport is a big social enterprise, but there are many similar community transport organisations that do not have its size and depth, and if this amendment is not passed, they risk not being able to access public procurement opportunities.
Bill Esterson
I am grateful to my hon. Friend. He said that smaller organisations find it difficult to win contracts, and that is why the Government have to use their authority and make sure the regulations are in place. Amendment 26 is about small and medium-sized enterprises, and it should absolutely cover social enterprises too, many of which are SMEs. It is essential that such things are in regulations to support the sorts of enterprises that my hon. Friend describes, and to pursue socially valuable activities. I will come to the Public Services (Social Value) Act 2012 a bit later, which was initiated by a former Conservative MP, Chris White, and passed with the support of the coalition Government. It gives more detail in this area.
Similar descriptions are applied in amendment 25, which mentions,
“environmental exceptions and carbon considerations”.
The current UK minimum standards take into account energy and water use, carbon footprint, resource efficiency, and life-cycle costs in order to set minimum standards of sustainability for Government purchases. Our standards need to be protected, both in terms of maintaining these procurement standards and of ensuring that our schedules at the GPA remain up to date with the action needed to address the climate crisis. If we allow the public procurement regulations to lapse, we will not include such provisions as those I have just described, which are picked up in amendment 25. I know that Ministers take this seriously because the point was made in oral questions just this morning. I cannot remember whether it was the Minister of State or the Secretary of State who quoted the Government’s attitude towards the climate crisis and the achievement of net zero, but it certainly was quoted by Ministers this morning.
Bill Esterson
It was you. I knew you wouldn’t sit there quietly.
I am glad that the Minister did mention it, because he is absolutely right, but without the support of the regulations, it is that much harder. The climate crisis will not be addressed unless there is intervention—and substantial intervention. Public procurement policy through the GPA is one very important tool in the toolbox in achieving those objectives.
Gareth Thomas
On the climate crisis, I wonder whether I can pray in aid the example of Baywind Energy, which is a comparatively famous wind energy co-operative in Cumbria. For a long period of time, the energy that it supplied and could have supplied to local authorities would have been more expensive than that from its nearby neighbour, the great Sellafield nuclear plant. Had the local authority wanted to source its energy needs from Baywind without the type of measure that my hon. Friend is suggesting be locked into law, Cumbria Council might be at risk, in a modern situation, of not feeling able to take advantage of the Baywind offer, and would, perhaps, have had to accept the lowest supplier of energy costs. That would have meant that a substantial local business helping to tackle the climate emergency did not benefit.
Bill Esterson
I thank my hon. Friend for providing an excellent example in the renewable energy sector of just how important it is that we do as we say and that we are strongly committed through Government action—at national, local and devolved level—to tackling the climate crisis.
Charlotte Nichols
Just to pick up on that point, it is important to consider employment multipliers in public procurement around renewables. I am concerned that as the balance of renewables in our energy mix has increased substantially over the past 10 years, which is fantastic news for the UK’s commitment to decarbonisation, the number of green jobs has actually significantly reduced. The Office for National Statistics estimates that about 40,000 green jobs have been lost during a period in which the renewable output in our energy mix trebled. A big part of that is procurement, because as we are investing more in wind technology, a lot of this is coming in from Korea, Denmark and Holland. Meanwhile, companies such as Appledore and BiFab, whose shipyards manufacture things such as jackets for wind turbines, are lying empty because the Government are not procuring them from these places. I just really want to pick up on my hon. Friend’s point about the need to lock in this legislation going forward to ensure that, as we meet our climate change objectives, we are also meeting our economic and jobs objectives, too.
Bill Esterson
I thank my hon. Friend. That is absolutely right, and there are a number of good examples. Unfortunately, the evidence is there that we did not adopt a life cycle-costing approach or a price-value ratio for procurement decisions, instead basing them on narrow, short-term pricing. My hon. Friend the Member for Harrow West made a similar point but, fortunately, life-cycle costing was chosen in his example from Cumbria. This is one of the changes. Yes, the amendments are about ensuring the continuity of existing arrangements, but in the end they are about improving our procurement and improving the social, environmental and labour outcomes of these matters, to the benefit of society as a whole.
Gareth Thomas
The Soil Association gives another example that perhaps supports my hon. Friend’s point. It notes the considerable amount of processed food that we eat in the UK, and how that has contributed to our obesity crisis. It says that one way to tackle that obesity crisis is to try to stimulate demand for British, locally produced fresh fruit and vegetables, particularly by trying to get public bodies such as hospitals and schools to source more of the fruit and veg that they need from domestic producers. Would that not be at risk if our amendments were not to succeed?
Bill Esterson
Again, I am grateful. We should take my hon. Friend’s question seriously, because if we have a procurement system that encourages a greater carbon footprint in our food supplies, the consequences will be damaging to our attempts to meet our climate obligations and to tackle the climate crisis. He also mentions the public health elements of this; in fact, he picked up on at least two of the amendments just in that example.
In the end, we want to address the problems of obesity, which has been one of the most serious public health challenges in our society for some time, but we also want to address the carbon footprint. There are some wider questions, which may well be raised as we discuss the next set of amendments, about where we source food from and the need to consider not only the carbon footprint and transport, but some of the impact of intensive farming more widely and the way that our society eats a lot of meat, which is a real concern not only for health, but for the climate, because of the natural resources used up in feeding animals. We have so far addressed the descriptions of ILO standards, environmental exceptions and carbon considerations in the amendments—
Matt Western
It is a pleasure to serve under your chairmanship, Sir Graham. On the environmental amendment, so many authorities have shown leadership in recent months on adopting a zero carbon objective. At a simplistic level, it is perhaps easy perhaps to look at what that might translate to, but it is actually a proper audit of every facet of the services they provide to the community, and is about how they show leadership to the public, but also to businesses, on how far-reaching that should be. We in this place said that we want to be zero carbon and carbon-neutral by whatever date it was, and likewise our county and district councils—Warwick District Council is in my constituency—have really sought to show leadership, but are they actually going to be able to without the amendment?
Bill Esterson
That is a good question: what is possible if restrictions are in place because of international obligations in this area? I imagine the Minister will pick up on that in his response, but there are a number of important points in my hon. Friend’s comments. Yes, we must show leadership, but we should do that at a local and national level for businesses in this country. We should also show leadership elsewhere in the world, by setting our sights high regarding our obligations on the environment, labour, public health and support for SMEs. Through our procurement policy there are other areas of regulation and law where such things also apply.
Gareth Thomas
Another reason to endorse my hon. Friend’s suggestion is the productivity challenge our country faces. As I understand it, we are the worst country in the G7 for productivity performance. We have even fallen behind France. We know from the evidence of business analysts that the response of medium-sized businesses and co-operatives often is often more productive because of the closeness of management to staff. Moreover, co-operatives have joint collective management and a sense that everyone benefits from the collective endeavours of the business. My hon. Friend’s suggestion of including a carve-out in the UK’s GPA arrangements would be an eminently sensible way to tackle the productivity crisis that the Government have not even begun to get to grips with.
Bill Esterson
I am pleased that my hon. Friend has mentioned the innovation and entrepreneurial ability of our SMEs. The Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), said this morning that small businesses are the “backbone of the economy”—I think I have remembered that correctly—and he is right. However, we need to encourage them more. They are innovators and entrepreneurs. That entrepreneurial spirit is often where the best ideas come from, and my hon. Friend is right that that drives productivity.
Businesses running start-ups and scale-ups with new ideas and often enthusiastic members of staff are in a stronger position to deliver the kinds of new ideas, changes and technological advances that make such a difference. Indeed, that is generally where effective research and development in technology is derived from. Lately, large firms without their own research and development departments have simply taken over small firms that do. That is because of the kind of the situation under discussion.
If we want to succeed, it is essential that we put our investment, including public investment through procurement, into those small businesses. I intended to speak later about some of the procurement problems, but I will mention one or two now. I am about to move on to public health improvements, which is the subject of the fourth amendment in this group, and in which context contracts have been awarded.
SMEs that have come to me since the start of the crisis have expressed concerns about their inability to contract directly through the Department for Business, Energy and Industrial Strategy or the Cabinet Office, or to get support for exports—this point is often made—through the Department for International Trade. They have been unable get such support because everything goes to the big firms. The big firms have their own procurement departments and they win all the contracts.
That has happened yet again with Serco, which only a few months ago was fined for failing to complete a contract successfully. Serco was the cause of so much of the problem in the failed probation privatisation. Thankfully, last week’s statement by the Justice Secretary put a final nail in its coffin. However, Serco has now won the contract for the test and trace system. It has no experience whatever in test and trace. There are companies and small firms out there that have the expertise and have been saying for months that they can do it. They have been trying to help, but they have hit a brick wall.
Once we join the GPA, I do not see why we could not negotiate along those line with our partners. Ideally, that would be part of our procurement regulations. That is possible. In the interim we need to retain the best possible arrangements and then build on them. The danger is that the public contracts regulations will expire at the end of December and we will go backwards when we need to go forwards. The Government spend nearly £6.5 billion—a very large figure—on procuring with UK SMEs. That is great, but it is not always going to the SMEs that it should.
There are other examples from the public health crisis. Companies in my own constituency have come to me wanting to either import or manufacture personal protective equipment, but they have been completely unable to do so because of the barriers to entry in our procurement system.
Stewart Hosie
May I seek some clarity? When it comes to general SME bidding for Government contracts, the proportion of Scottish Government contracts that go to SMEs is substantially higher than the UK Government figure. It is all done through the public procurement quota. Likewise, the manufacture and supply of PPE has been done through a specific portal, but I know there was a dedicated Minister—a Trade Minister was actually involved directly in this—and the situation in Scotland is not the same as that in the UK, as described by the hon. Gentleman. I just want to make sure that, if the regulations are changed in the way he describes, we do not end up throwing out good bits of local SME procurement from around the country—the nations and regions—and lumping it all into a Westminster system that he is right to say has not so far covered itself in glory.
Bill Esterson
I am grateful to the hon. Gentleman for raising that issue. I have seen from the figures that Scottish procurement has been significantly better, by an order of magnitude. I do not know the balance between direct and indirect procurement, but if indirect procurement is handled appropriately and margins are still maintained and the quality and innovation is still available in the contracts, then that works.
The hon. Gentleman asked me a question. My intention is to make things easier to do, not harder. Our request is to improve the regulations, negotiate with our partners in the GPA, and to retain and enhance what is in retained EU law. This applies not only to Scotland but to local government, Northern Ireland and Wales. There are different systems and they do a much better job. For example, Manchester City Council—I want to ensure a good political balance in the examples given by Labour Members—has delivered according to an environmentally sustainable local agenda. It has delivered support for workers—the agenda set out by my hon. Friend the Member for Warrington North—and it has delivered on public health agendas, too.
Charlotte Nichols
The Government’s professed commitment to levelling up is really important and relates to points made by other hon. Members. My constituency of Warrington North is considered to be the second-best place in the country for start-ups and the best place in the north-west. It is important to get public procurement right. As my hon. Friend the Member for Sefton Central has said, there have been examples during this public health crisis of it going disastrously wrong. In my own constituency, a certified medical devices manufacturer put itself forward to make ventilators, which it was already in a position to do. I was told that the Government turned down the contract because of its geographic distance from London. Given that this is a national public health crisis, it is alarming that a north-west manufacturer with experience in the sector was told, basically, that it was too northern to be procured by the Government. It is very important to underline even further the point that we must get this right for all the regions and nations of the UK.
Bill Esterson
That is an excellent local example. As I said, constituents have made similar points to me. I have a constituent who can manufacture 40,000 reusable medical robes a month. They are reusable up to 100 times. In comparison, the winner of the contract—whichever very large conglomerate it is that keeps winning them—is delivering medical gowns from overseas. We saw the fiasco with the Turkish consignment, where most, if not all, were unusable. There have been earlier examples of where what was taken out of the packaging fell apart. Yet here was somebody in my constituency making that offer, but they were completely unable to make progress or to win the contract. They had demonstrated their capability, having gone through all the accreditations. Yes, of course, there are questions about ensuring that quality standards are in place—I understand that and they understand that—but they had done all that work because they have a long-established business. Yet they were unable to break through the procurement system.
I will give another example of a company that contacted me. It was set up by a British man in California, so it operates in America. He has the scientific specialism to design tests that identify whether people have the virus. He worked out how to do it with a saliva-only test. He had proven to the Food and Drug Administration, the US accrediting organisation, that he could do it and won a sizeable contract, including with the US military. He then approached the UK. This was at a time when we had a real problem with a shortage of tests. I will not go into how many tests we are doing, whether they are actually being done, how much double-counting is going on or any of that. He had a solution, which was better because it did not involve the invasiveness of nasal swabbing—it was saliva only. I have raised this with the Minister’s colleagues and tried to break through. I am not just using these as examples; I have done my best to get through to Government procurement, because they can really make a difference in this crisis. To this day, he still has not managed to get UK approval for those tests, which are easier to administer and easier to analyse. He could have set all that up and we could have been here two months ago, given when he first developed the technology to do it. I think that is a real shame. That is a piece of international trade we could have benefited from, which should add to the value of the story. I am afraid that we have not done this well.
Gareth Thomas
My hon. Friend the Member for Warrington North gave a great example, sadly, of bias by the Government against northern firms.
Gareth Thomas
One of the more encouraging stories of northern procurement in recent times comes from Preston, where the council has sought to use its limited procurement tools to try to counteract the gradual moving away of businesses and good jobs out of Preston to other areas. If our amendment were to be passed, and the carve-out for small and medium-sized enterprises in the US, as described by my hon. Friend the Member for Sefton Central, were adopted by the UK, would that not provide additional tools to councils such as Preston to counteract that northern bias in Government procurement?
Bill Esterson
That is my understanding. I heard a reaction from one Member on the Government Benches that suggested that they did not agree with the assertion that there was a bias against the north. I represent a constituency very near to that of my hon. Friend the Member for Warrington North. I am glad that our mutual hon. Friend the Member for Harrow West raised that point, because one of the reasons given to firms in my constituency was that they were too far from London. I am afraid that that is what has been said by procurement officials in Government, and that cannot be right. My hon. Friend is right to raise the matter, and he is right that it has to be one of the answers. It covers the environmental aspects of amendment 25 and the small business and economic requirements of amendment 26, as well as those under amendment 27.
Lee Rowley (North East Derbyshire) (Con)
I hate to break up the party, but as a fellow northern MP I do not recognise anything that has been stated with regard to this issue, which is slightly broader than the scope of the discussion. However, given that we are on it, I would be very interested in getting more details from the hon. Members for Sefton Central and for Warrington North about why they think that their companies are being affected in that way. The companies in my constituency have not had the same experience.
Bill Esterson
I am very glad that the hon. Gentleman’s constituents’ companies have been successful in contracting with the Government, but the fact remains that in the experience of my hon. Friend for Warrington North, and in mine, that is what has happened.
Lee Rowley
May we have the documents? I would be very grateful to receive them separately, so that I can see the issues. I am sure that we are all extremely concerned about the things that are being asserted with regard to northern constituents and northern firms being unable to access those kinds of contracts. I would be very keen to see the written information.
Bill Esterson
The hon. Gentleman will know that commercial confidentiality would mean that I would have to ask first.
Bill Esterson
No, not yet, because I have not finished answering the hon. Gentleman’s first question. He really needs to wait, rather than intervene. We can certainly discuss the point further. I have raised it at length with officials and with the Ministers’ colleagues, and it needs to be addressed. It may well be that officials were speaking out of turn. I am prepared to believe that, and I have not made a big issue out of it previously. The bigger point is that we are losing out on expertise, and we have lost out on the potential during this crisis for better procurement and supply of PPE and, in the case of the firm in America, of testing capacity and capability. That is not sensible and it is not where we need to be. I am happy to discuss the matter with the hon. Gentleman later, but I suggest that we move on.
Greg Hands
I would not usually intervene on the shadow Minister, but perhaps I could bring this to a satisfactory resolution by inviting him and the hon. Member for Warrington North, who raised a similar issue, to write to me with the details of what has happened. I will get the Government to investigate what is alleged to have taken place, and will copy in members of the Committee. That is probably a reasonable way of seeking resolution. We would all be very concerned about companies in any part of the UK being discriminated against because of their geography.
Bill Esterson
I am grateful for that offer. It is something that we have already done with Ministers, but I am happy to revisit it. It may be that revisiting it would be helpful now that some time has elapsed since the response to my case—I do not know about that of my hon. Friend the Member for Warrington North—was received. It is important to recognise that we are trying to improve the situation so that we do not have such problems, whether they are authorised by Ministers or not. I am not going to stand here and say that the Minister and his friends authorised that kind of comment, but I am afraid that it happened, and I think the Minister’s offer is a good one. We need to find out why and ensure that it does not happen again, so I will take him up on that.
Matt Western
There is a broader point here. The geography may be one thing, but there may also be a cultural issue. I am not talking about the Government, but the machinery of government and the Departments. We recently found, through the crisis—this was a real revelation to me—that many businesses in my constituency and the region of the west midlands were being bypassed. They could have provided face masks, plastic visors and so much kit. Those were established manufacturing engineering businesses that had the capacity, the skills and the agility to do it, but for whatever reason—this is not a party political comment—cultural or otherwise, they were not looked at. It is almost as if we do not recognise the capacity of manufacturing in this country, but perhaps we should in the sense of procurement.
The Chair
I am grateful for the point of order. I have listened carefully to the exchanges. I thought that they were being used to illustrate a point about the amendment, so, in my view, they were entirely in order, but the point has been made.
Bill Esterson
Thank you, Sir Graham. Am I allowed to respond to the intervention before the point of order?
Bill Esterson
Thank you. There is a wider point about making sure that we get these things right.
On amendment 27, we have heard examples of why the annexes to the GPA need to improve the way in which public procurement operates. They should address, or attempt to address, public health. The timing, because of the covid crisis, makes that all the more important. What I mean by “addressing public health” is that the public health value of a provider should be considered in addition to the price, rather than simply going for the cheapest provider. Some of the examples demonstrate where there have been problems in that regard.
In a public health sense, that includes, but is not limited to, ensuring that air quality is protected as part of projects; that the UK diet is not harmed, as we have discussed; that the cost of healthy diets does not increase; and that projects do not adversely affect UK mental health. In terms of UK procurement, when we talk about public health, we mean the health of the public in a wider sense as a result of the way in which public and private organisations operate.
Public health medicine is part of the greater enterprise of preserving and improving the public’s health. That is why procurement matters in that respect. We took evidence about the social impact—I mentioned the Public Services (Social Value) Act, which I will come to later—which includes, but is not limited to, wages, including the gender pay gap and workers’ rights. It covers the climate impact of emissions, deforestation and biodiversity and the economic impact of the government procurement agreement on UK businesses, including on job creation and skills, and, as I have described, on public health. That is what the amendments seek to address.
I turn to some of the challenges and the evidence that we took mostly from the TUC and Rosa Crawford. In the TUC’s written evidence, it described the threats of the government procurement agreement.
The evidence says:
“Currently the UK is part of the World Trade Organisation’s Government Procurement Agreement (GPA) through the EU’s membership. The UK government plans to accede to the GPA as an independent country once the transition period ends at the end of December 2020.
The GPA aims to liberalise and increase access to member states’ public procurement markets.
The TUC has concerns that provisions in the GPA are more limited than current measures included within the EU Procurement Directive 2014, which was transposed into the UK domestic law through the Public Contract Regulations 2015. These limitations centre on two areas:
The definition of most advantageous tender set out in Article X paragraph 9 of the GPA does not include reference to a price/quality ratio that includes qualitative, environmental and/or social aspects as currently set out in Section 67(1) to (3) of the Public Contract Regulations 2015—this should be a minimum requirement.”
I think the debate we have just had makes that point, with many examples.
The Chair
Before I ask Mr Esterson to respond, I hope he is going to be very specific about which of the amendments relate to modern slavery, and not simply move on to that further aspect of policy.
Bill Esterson
Thank you, Sir Graham. My hon. Friend is right to raise this issue, because it is absolutely relevant to amendment 24, which deals with
“labour market interventions and compliance with ILO standards”.
The way that workers are treated in supply chains is an extremely important aspect of procurement, and a great deal can be learned from the Modern Slavery Act 2015, which was passed by this Government’s predecessor. The way that those at the top of supply chains are required to police those supply chains for evidence of modern slavery and exploitation more widely gives us a valuable lesson about how procurement might be used to achieve the goals set out in all these amendments, not least amendment 24, which deals with labour.
I mentioned defence security. Security is a carve-out of its own: Governments are allowed to procure domestically on the basis of security. However, we are all aware of the saga of the fleet solid support ship. Happily, it appears that the Government, having delayed taking decisions or making announcements, are heading to the point where there may be a domestic award of that or a similar contract. It is remarkable, and really quite scandalous, that we got to the point where there was a question mark over whether that contract would be awarded domestically. Security, and the way security contracts are let, gives us examples—in the same way my hon. Friend the Member for Harrow West did with modern slavery—of how the amendments might be applied by Government if we can negotiate them with our GPA partners.
Too many UK companies are not winning UK contracts—a point that was made by Nick Ashton-Hart earlier—and it would be a challenge for them to compete on price in other GPA markets with lower regulatory and labour standards, such as China, which I think my hon. Friend touched on earlier, other parts of south-east Asia, and even the United States. There is a massive question mark about whether that is desirable, which is one of the reasons I tabled amendment 24, which addresses labour market interventions and compliance with ILO standards.
I know that the Government are very keen on non-regression when it comes to labour rights and standards. That is one reason why amendment 24 matters—it gives the Government an opportunity to demonstrate, in the area of procurement, that they do what they say they believe in. Indeed, all these amendments give the Government an opportunity to support policies that were proposed in the manifesto that Conservative Members fought the December election on, or to support things like “buy British”. I am not advocating a similarity to Buy American, but that is the way the United States applies its GPA provisions and there is much we can learn from that, as I said earlier about support for smaller firms. Domestic procurement spending is an essential part of how we will recover from the economic crisis that has come alongside the covid crisis, and I hope the Government will act on that basis.
[Interruption.] It is always a good idea to come to a Bill Committee very well prepared. I could not help but enjoy the Minister’s description in this morning’s evidence session that he had not enjoyed a filibuster for a long time. I assure you that I have no intention of filibustering and I will not be reading out the entirety of what I have available, but in bringing my remarks to a close, I want to say this: the four amendments are tabled in the hope that we are supporting Government policy, as stated by the Prime Minister and Ministers and in the Conservative manifesto.
The four amendments are designed to support our domestic economy, and to balance the needs of our domestic economy with supporting the rules-based approach to international trade. They are designed to support the levelling-up agenda that the Government say they are keen to promote. I hope that the Minister and Conservative Members will take them in that context and consider the long-term economic, social, environmental and labour value to be had from this kind of approach to procurement. Unless we are prepared to use this moment to deliver the continuity that the Bill is about, it is hard to see how we will maintain the standards of procurement that we have at the moment, let alone enhance them.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. This is my first opportunity to speak in a Bill Committee as a new MP, and what an honour it is to speak in such an important debate—an important debate for not only my constituents in Putney, who are very interested in this Committee, having been told all about it, but people across the country and across the world.
In bringing forward the Trade Bill, there is an opportunity to take back control. It is as if we were all in a car and we decided we would like to start driving, so we said to the driver, “Can we start?”. There were a couple of years of intense negotiations about who would drive the car, and we have taken back control of the car, but instead of doing something with that—driving better, maybe moving from the middle to the fast lane of the motorway, having a better car, or going further and faster—we have decided to chunter along in the same way and to just decide journey by journey. The Bill could give us a better journey every single time. This is an opportunity to have a much more modern and ambitious Trade Bill, and the amendments we have tabled seek to do that. Standards and scrutiny will improve the Bill enormously.
Turning first to the International Labour Organisation and amendment 24, the UK was a founder member of the ILO in 1919 and has been an active member ever since. It has ratified 87 conventions, including the eight core fundamental ILO conventions contained in the 1998 declaration on fundamental principles and rights at work, as well as two protocols. Amendment 24 absolutely aligns with that.
The ILO makes it clear in no uncertain terms that member states must treat the conventions with the utmost seriousness, and agreeing the amendment would do just that. The declaration states:
“all Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions”.
Since the 1998 declaration, it has become commonplace for the ILO conventions and instruments to be implemented in free trade agreements, so the amendment is absolutely within the remit of the Bill. For example, only recently, the free trade agreement between the European Union and Vietnam has been praised by the ILO for its commitment to labour standards. We could endorse that approach and lock it into the continuity and future agreements by passing the amendment.
Greg Hands
The hon. Gentleman makes a good point about raising the quality of opportunities available, but that will not be done through the GPA.
Let me explain that. Overall, the effect of the amendments would be to place on the Secretary of State a statutory requirement to have entered into negotiations with the 20 parties to the GPA on each of the four areas before creating the ability to make the regulations, and then to report on the outcome of those negotiations to Parliament. It would be an unusual approach for the Secretary of State to enter into negotiations with each of the 20 before implementing the general regulations that could implement any changes to obligations that would result from acceding to the GPA.
I will deal with a few of the individual points raised. I was surprised when the hon. Member for Sefton Central mentioned something about a filibuster. He certainly made a comprehensive speech. When I was in opposition, I remember doing an actual filibuster; I spoke for one hour 49 minutes on beer duty.
Greg Hands
I certainly will not do that now, but I recall making an unlikely entry in the Manchester Evening News the next day. At the time—I think it was the Finance Act 2008 or 2009—the paper had something called the lads index; I am not sure that it would have that these days. As I recall, it took Hansard for the day and gave something like five points for every Member of Parliament who mentioned “Coronation Street”, three points for “Manchester United” and one point for “beer”. The next day, it reported a shock brand-new entry at No. 1 in the lads index, the Member for then Hammersmith and Fulham, Greg Hands, who with in excess of 300 mentions of the word “beer” had catapulted himself to the top of the lads index for that year.
Greg Hands
I accept that intervention, but I would say that my three hon. Friends have been here, I think, for six months, six months and about three years so far, and the commitment that they have shown in that time matches quite favourably with the commitment that the hon. Gentleman has shown over his 23 years of membership of this House.
I think the take-away was the hon. Gentleman’s praise for Margaret Thatcher’s share-owning democracy. I remember him as a Minister in the new Labour years, which he referred to; maybe he thinks it is now safe to return to those new Labour years and his view of those years before the right hon. Member for Islington North (Jeremy Corbyn) took over the party. We live in hope.
I hope I have persuaded the Committee that opening negotiations within the GPA will undermine our independent accession to the GPA and thus our ability to advance UK public procurement objectives. I therefore ask the hon. Member for Sefton Central to withdraw his amendments.
Bill Esterson
That was quite some debate. I was very impressed by the speech of my hon. Friend the Member for Putney, who made some formidable comments and demonstrated her knowledge of the subject matter in relation to environmental matters and the ILO. I certainly appreciated her reminding us all about the importance of ensuring that we follow the sustainable development goals in everything we do in this country. I look forward to more of her contributions in the remaining time this afternoon and in next week’s sittings.
My hon. Friend the Member for Harrow West spelled out in more detail some of what he said in interventions. He made a reference to my relationship with the co-op; I should tell him that, like him, I am a member of the Co-operative party—I think he knew that, but had temporarily forgotten—and come from a very proud family of co-operators. My mum, having been a director of the co-op for very many years, taught me well on that subject. I agree with everything he said in that respect, and he quite rightly referred to the sensible nature of our amendments.
I will give the Minister credit for one thing. Unlike some of his parliamentary colleagues, he did not try to name any footballers at Manchester United and get them wrong, so I suppose that is in his favour. However, I think he might have got confused between this set of amendments and the next set. Having double-checked what he said, I should tell him that the reviews that we are requesting are in the next set of amendments.
The amendments in this set call for negotiations with our partners, so there is no suggestion that we would require the Government to look at Government Departments that no longer exist. We can assure the Minister that that is not a concern that he needs to consider. He mentioned what, I think, all hon. Members on this side referred to regarding the public procurement regulations. The issue here is that under UK retained law they were implemented in 2015 for a five-year period and therefore expire at the end of December this year. If the Minister will tell us that they will be reinstated when they expire, that would be undoubtedly helpful, but that is not what he said in his response to the debate, so I am still concerned.
We entirely support our accession to the GPA; we made that clear in the reasoned amendment, and we make it clear again this afternoon. The amendments are about trying to ensure that we retain the provisions in the GPA to ensure continuity, but we also ensure continuity initially by ensuring that there is continuity of what is in the public contracts regulations. That is the issue, because without the public contracts regulations continuing alongside our annexes in the GPA, procurement policy in this country will be significantly weakened. A big part of why we tabled the amendments in the first place was to ensure continuity.
The amendments attempt to ensure that we do not see that as a standstill situation, and that we are pushing the Government to enhance the regulations as much as possible in order to achieve the sorts of policy objectives that Ministers have set out, and that the Opposition have referred to in our contributions this afternoon. I do not think the Minister addressed the points made in the debate we have had on these amendments; some of what he said was about the next group. He made decent points about the difficulties of those reviews, but that comes next. I ask the Committee to support these amendments, and we will push them to a vote.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
New clause 1—Regulations: review of social impact—
“(1) The Secretary of State must conduct reviews of the social impact of any regulations made under section 1(1).
(2) ‘Social impact’ shall include but not be limited to the impact upon—
(a) the exercise of any right for workers under the Employment Rights Act 1996,
(b) the exercise of any right for consumers under the Consumer Rights Act 2015,
(c) the exercise of any right under the Trade Union Act 2016, and
(d) the fulfilment of any obligation held by the United Kingdom by virtue of its membership of the International Labour Organisation.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 2—Regulations: review of climate and environmental impact—
“(1) The Secretary of State must conduct reviews of the environmental impact of any regulations made under section 1(1).
(2) ‘Environmental impact’ shall mean the impact upon—
(a) progress toward meeting the UK’s Net Zero targets,
(b) global emissions,
(c) producer responsibility,
(d) resource efficiency,
(e) management of waste,
(f) regulation and enforcement of waste management,
(g) air quality,
(h) the recall of motor vehicles for the purpose of protecting the environment,
(i) regulation of water and sewerage undertakers,
(j) water abstraction,
(k) water quality,
(l) land drainage,
(m) biodiversity gain in planning,
(n) biodiversity objectives and reporting,
(o) local nature recovery strategies,
(p) tree felling and planting,
(q) creation of conservation covenants, and
(r) the effect of conservation covenants.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 3—Regulations: review of impact on public health—
“(1) The Secretary of State must conduct reviews of the impact in England of any regulations made under section 1(1) upon—
(a) food safety,
(b) standards in food production, including the treatment of animals and impact on consumer choice, and
(c) any public health outcome within the definition used by Public Health England.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 4—Regulations: review of economic impact—
“(1) The Secretary of State must conduct reviews of the economic impact of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 10—Regulations: review of impact on SMEs—
“(1) The Secretary of State must conduct reviews of the impact upon small and medium-sized enterprises of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 14—Regulations: review of impact on equalities—
“(1) The Secretary of State must conduct reviews of the impact of any regulations under section 1(1) upon persons with a protected characteristic, as defined in Chapter 1 of Part 2 of the Equalities Act 2010.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
It has already been noted that I was generous in allowing latitude in the debate on the previous group of amendments. I gently say that there is a bit of trade-off here in the usual way; we should not have repetition of all the same arguments on clause stand part.
Bill Esterson
As it is a clause stand part, I had thought the Minister was going to propose this group of new clauses.
Bill Esterson
You will be pleased to learn, Sir Graham, that I have no intention of repeating exactly the same debate. I will just repeat what I said in response to the Minister—I think he was referring to this group when he mentioned the reviews. I take his point, and these are probing amendments partly for that reason.
Greg Hands
I thank the hon. Gentleman for that intervention. I do not know whether the Chair of the Committee was aware of that, but he is now and I think he will welcome the change. He is always somebody who likes to be consulted, as we well know, so I think he would agree with me that this is a welcome move for additional consultation.
I have set out that the powers in clause 1 can be useful, but I want to be clear with the Committee about what they cannot be used for. The clause 1 powers cannot be used to implement any wholesale renegotiation of the GPA, or of the UK’s market access offer. Any such changes would require further primary legislation.
I hope I have persuaded the Committee that there would be no benefit in carrying out extensive reviews after regulations under clause 1(1) have been made. I ask that hon. Members do not press their new clauses to a Division, and I commend clause 1 to the Committee.
Bill Esterson
I think this is the first time in the Minister’s parliamentary career that he has ever admitted he was wrong—[Laughter.] I give him credit for being gracious enough to do so. We may have seen history in the making.
The Minister does this a lot. He claims we are against something when we are not. We spelled out in our reasoned amendment last time, and we spelled it out in our reasoned amendment this time, that we support the accession of the GPA. We voted against the Bill as a whole because we oppose the Bill as a whole. That does not mean that we oppose everything in the Bill. He knows that, but he keeps saying it. I know he likes to have some fun.
I do not object to the suggestion of asking the International Trade Committee and the Lords treaties Sub-Committee to take on additional roles, although I share the slight surprise of the hon. Member for Dundee East about the fact that the Chair of the International Trade Committee was not consulted before the announcement was made. That is not the real issue, however. The issue is that the new clauses request a review of the regulations. They do not request a review of the membership or proposed new members, so that is a rather different point. I hope that the International Trade Committee would be asked to review any proposed changes to the regulations in discussions and negotiations with our partners. I do not object to the same thing for potential accessions, but that is a rather different point from the one we were making. Having said that, and as I said in my opening remarks, they are probing provisions and we will not be pressing them to a Division.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Implementation of international trade agreements
Stewart Hosie
I beg to move amendment 30, in clause 2, page 2, line 9, leave out “appropriate” and insert “necessary”.
I will be mercifully brief on amendment 30. The effect of the amendment would be to limit the scope of the powers to be delegated to an appropriate authority to what is actually necessary to achieve the implementation of international trade agreements. Clause 2(1) provides that:
“An appropriate authority may…make such provision as the authority considers appropriate”—
to implement a future agreement. However, the word “appropriate” is vague and subjective. A necessity test—I am sure I have heard the Minister make this argument in the past—is clearer and more objective. The power should be limited to making the regulations that are necessary to implement the agreement.
Gareth Thomas
I rise in sympathy with the spirit of the amendment moved by the hon. Member for Dundee East, but I wish to speak specifically to amendment 15, which seeks to insert at clause 4, page 3, line 26:
“‘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, or an investment agreement”.
I join the hon. Gentleman in wanting to see good law making and, therefore, proper definitions of what constitutes a trade agreement that would be covered under the Bill. The hon. Gentleman’s amendment refers just to an agreement on trade in goods and services. Our amendment includes the Government’s definition, but expands it to make it crystal clear that it includes a range of other trade related agreements, including investment agreements.
My hon. Friend the Member for Brent North (Barry Gardiner), speaking on an amendment similar to this one at the Committee stage of the Bill in January 2018, noted the lack of detail about what constitutes an international trade agreement and worried about whether trade agreements, or agreements that had substantial trade elements, would be brought to the House for even the limited scrutiny that the Minister proposes.
Mutual recognition agreements are crucial in terms of scrutiny; many of them help to minimise unnecessary regulatory non-tariff barriers. However, they potentially have implications for phytosanitary standards, food standards and environmental obligations. Strategic partnership agreements can add social and political conditionalities to accompany the more commercial aspects of trade agreements. For example, one wonders whether there might be strategic partnership agreements with some developing countries, perhaps to provide aid for trade support as they seek to implement new trade agreements with us.
Investment treaties are returning to being a UK competence, having left our responsibility in 2009. One of the most significant investment treaties that the European Union has been negotiating—the negotiations on it have not yet concluded—is with China, where there have been 28 rounds of negotiations. I suspect that there would be considerable interest in the UK, including within this House, if the Government sought an investment treaty with China. Surely, it is right to make sure that such an agreement would fall within scope, and it would also need to receive proper scrutiny.
Bill Esterson
I am glad that my hon. Friend has mentioned investment treaties; they absolutely should be part of the description given in clause 4. Does he agree that that is not least because of the fact that the 180 bilateral investment agreements that this country is party to have investor-state dispute settlement clauses, some of which are being used right now to prepare legal cases against our own Government?
Such clauses are a particular concern in areas such as construction. I suggest to my hon. Friend that in this crisis, given that they are being used along with construction contracts and procurement, we need to be very careful to ensure full scrutiny of everything of an international trade and investment nature.
Gareth Thomas
I was moving on to say where there might be concerns about an investment treaty that warranted the type of scrutiny that the Bill allows, and the Bill could allow even more of that type of scrutiny if the Government accepted later amendments. There are absolutely major concerns around the ISDS provisions in some investment treaties; I am sure that we will come to discuss those concerns when we debate other amendments.
The International Trade Committee has highlighted other aspects of investment treaties about which there are concerns, such as the question of sustainable development provisions in investment treaties so that developing countries can postpone investment liberalisation if they need to for various developmental reasons.
There have also been concerns in the past about performance requirements in investment treaties: conditions attached to foreign investors by host states, such as stipulating that a certain quantity of domestic inputs into goods that are being produced have to come from the host country.
For those reasons, therefore, we want to make sure that the Bill allows proper scrutiny in relation to any of those concerns that might or might not be raised by a future investment treaty. I look forward to hearing the Minister’s response.
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Trade Bill (Fifth sitting)
Bill Esterson ExcerptsTuesday 23rd June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
Gareth Thomas
It is a pleasure to see you back in the Chair once again, Mrs Cummins. We had an interesting sitting in your absence on Thursday afternoon, at which three Conservative Members of Parliament applied to join the Co-operative party, the Government Whip tried to shut down a debate on what we could do to tackle an anti-northern bias in procurement, and the Minister gave the first hint that he recognises the Bill is in need of improvement.
Let me say at the outset that I want Britain to be ambitious in trade, in the deals we look to achieve, and in our determination to help imaginative and innovative businesses access new markets. However, I do not want us to sell ourselves short. That is why the amendments are so important.
Trade agreements done well create new economic opportunities. They can help inspire the generation of thousands of new jobs and expand the horizons of the very best of British businesses. They can and have helped to lift thousands out of terrible poverty and hunger, and they have helped to generate substantial tax revenues for better public services.
Trade deals done badly, however, cause myriad problems. They can lead to the loss of markets for vital companies, and in turn create left-behind communities and a race to the bottom in wages and conditions. When done well, trade agreements can help to generate competition, giving more consumer choice and lowering prices for consumers, but there needs to be fair competition. When done badly, trade agreements can entrench unaccountable corporate power and miss vital opportunities to improve our environment. That is why it is essential that we have effective, detailed scrutiny, with a Trade Ministry that is determined to be open and transparent, if we are secure the trade deals that can fulfil the country’s potential and avoid creating the worst of all worlds.
As the Committee will know, Parliament has its legions of critics, but the structures it provides for scrutiny—if Ministers are willing to allow both Houses to do their job—can help to create the consensus behind trade policy that business organisations are desperate to see, as they set out in our first witness session. Ministers have told us repeatedly that the Bill will provide the basis for the country’s future trade policy once we have left the European Union. In the debate on the Queen’s Speech, it was said that the Trade Bill would
“put in place the essential legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”—[Official Report, House of Lords, 28 June 2017; Vol. 783, c. 437.]
If one potential trade deal serves to underline the failure of the Bill to meet that ambition and the need for proper parliamentary scrutiny, it is the deal that the Department seeks to negotiate with Donald Trump’s Administration. There are already a huge number of public concerns around food standards, the national health service, the use of investor-state dispute settlement mechanisms, the future of geographical indications and whether the Bill will help to cement action on climate change. Let me run through some of those concerns. The Soil Association has very helpfully charted a series of concerns that highlight the need for proper scrutiny—proper scrutiny that is not as yet locked into the Bill—of a future US trade deal. We know that US negotiators are pushing hard for the weakening of UK food and farming standards, describing EU farming—and therefore, implicitly, UK farming—as the “Museum of Agriculture”.
The UK Government have made repeated commitments, including at Trade questions last Thursday, to high environmental and animal welfare standards, but those standards could be undermined by a US trade deal, as a series of Members from across the House have noted. That underlines the need for proper parliamentary scrutiny of a UK-US trade deal, which the Bill does not currently allow for. That is why our amendments are so important.
The Soil Association has a list of the top 10 risks for the US trade deal. The first is anti-microbial resistance. Experts are warning that by 2050, as many as 10 million people could die annually from anti-microbial resistance. The use of antibiotics per annum in US farming is, on average, five times higher than in the UK. Investigations have shown that antibiotics crucial to human medicine are still being used in unacceptable quantities on US livestock farms, despite rules being brought in last year to try to curb their use and combat the spread of deadly superbugs. A US trade deal risks undermining the efforts that UK farmers have been making to reduce antibiotic use, fuelling further anti-microbial resistance, with potentially grave consequences for public health. Surely we, the House of Commons, and indeed the other place, should have the opportunity to scrutinise on the Floor of the House and in Committee whether there is adequate protection from such an eventuality.
Secondly, a number of farmers’ representatives in the unions, a number of Conservative Members of Parliament, as well as Opposition Members, and a former UK ambassador to the US have warned of the threat to the UK farming industry if British farmers are forced to compete against cheap low-quality food imports. If UK farming is forced to compete on price with countries such as the US that operate to different or lower standards, UK farming may become unprofitable. That could create a race to the bottom, putting pressure on Ministers to lower existing standards here in the UK, including standards of food quality, environmental protection and animal welfare.
Thirdly, a US trade deal could affect EU market access for our farmers. The UK currently holds a suite of significant and valuable agri-food trade relationships with the EU27. A weakening of UK food standards or a future lack of alignment with EU standards resulting from a US trade deal could result in barriers to UK farmers and food companies wishing to export their products to the EU single market. In turn, those barriers would pose significant risks for food businesses and farmers’ livelihoods. Why would we not want, as the House of Commons, to have the opportunity to scrutinise whether that fear about a potential UK-US deal merits rightful concern?
Then there is chlorine-washed chicken. The American poultry industry is more intensive, with lower animal welfare standards than in the UK. The chicken produced has high levels of bacteria, so the industry has resorted to acid and chlorine washes at the end of the meat production chain, producing chicken that may not be safe for consumers to eat. Recent comments from a senior representative of the US Government have suggested that the US is “sick and tired” of UK concerns over chlorine-washed chicken, but it remains an important issue for UK citizens, who, I suggest, have no desire to see welfare standards lowered after the UK leaves the European Union.
Bill Esterson (Sefton Central) (Lab)
My hon. Friend puts his finger on the point. For many people, quite rightly, this is about not lowering animal welfare standards. Has he seen reports from trade unions in the United States that, in order to speed up processes, there are now fewer inspections of the meat production process, particularly around chicken, which increases the likelihood that the acid or chlorine wash is less effective? There are not only animal welfare concerns, but concerns about the safety of food that we have been told we should not be concerned about because the chlorine wash removes the threat of food poisoning.
Gareth Thomas
My hon. Friend makes a good point. Not only is there a multitude of expert analysis that chlorine washing chicken is ineffective at getting rid of the risk of infection but, as he rightly points out, there are concerns that the inspection regime for the chlorine washing of chicken is not remotely as effective as we had been led to believe. That is all the more reason why it is so important that amendments 4 and 5, and the subsequent amendments, are added to the Bill.
The fifth concern that the Soil Association helpfully sets out concerns hormone-treated beef. The US Food and Drug Administration allows steroid hormone drugs for use in beef production, which we banned in the UK and the European Union in 1989. Cattle producers use hormones to induce faster, bigger animal growth, but there is a cost to that: an EU scientific review back in 2003 concluded that one of those commonly used hormones is carcinogenic. In the event of a UK-US trade deal, hormone-treated beef could be sold in the UK, posing potential public health risks. Surely it is the responsibility of the House to understand and scrutinise in detail a UK-US trade deal, to ensure that there are no such potential public health risks for UK consumers.
Gareth Thomas
My hon. Friend remakes my point for me. We need to have proper parliamentary scrutiny locked into the Bill. As we have been told, this the only trade legislation that is likely to come before this Parliament. There has been no hint of any other legislation to improve the parliamentary scrutiny of future trade agreements. That is why this group of amendments is so important.
Bill Esterson
Just for the benefit of the hon. Member for North East Derbyshire who intervened, if he looks at the explanatory note to amendment 5, he will see that the amendment would apply the provisions of the Bill to trade agreements other than the EU roll-over trade agreements, so it covers trade agreements that go beyond those that were originally in the scope of the Bill. As my hon. Friend said, this is relevant, not only because of what the Queen’s Speech—
Bill Esterson
I do not think the hon. Gentleman is allowed to intervene when I am already intervening on my hon. Friend. He will get his chance to make a speech later. The important point is that we have tabled amendments precisely because of the need for the Bill to cover more than the narrow scope that clause 2 originally envisaged. My hon. Friend is right to highlight what was in the Queen’s Speech, but I want to remind the hon. Member for North East Derbyshire that it is actually in our amendments. They have been allowed by the Clerks and must therefore be within the scope of our debate.
Gareth Thomas
My hon. Friend makes his point to the hon. Member for North East Derbyshire, who intervened on me very well. I do not know whether the long title of the Bill was as badly drafted as some other parts of the Bill, allowing as a result for our amendments to be in scope, but they are. The hon. Member for North East Derbyshire in his heckle suggested that I was making a series of hypotheses. I would not use his phrase, but I gently suggest that that is surely the purpose of parliamentary scrutiny—to test the concerns that the wider public and organisations outside the House have about particular pieces of legislation.
The Soil Association highlighted a further concern about nutritional labelling—so-called traffic light labelling—which has been a very important tool in supporting improvements in UK public health. The US is clear that it considers nutrition labelling a barrier to trade, and it has an ongoing dispute with the European Union over this. Imported US food already enjoys a voluntary concession to the UK labelling requirements. Any trade deal could weaken those consumer labelling efforts still further. A US trade deal could result in low-cost, ultra-processed foods flooding the UK market, placing a potential double health burden on UK citizens. That is one of the concerns of the Soil Association, and it is right that parliamentary scrutiny should give us the opportunity to test that.
There are serious concerns about the public health implications of genetically modified foods and pesticide regulations, which we will come on to under amendment 11. Incidents of food poisoning in the US affect 14% of the US population annually—10 times greater than in the UK, where just 1% is affected. Again, surely, it is the purpose of Parliament to allow our amendments to test whether or not a deal with the US or any other country in the world is likely to lead to an increase in food poisoning. Those are the Soil Association’s concerns around food standards.
There is a series of other concerns about a potential deal with Donald Trump’s Administration. Let us take the national health service, where Ministers have been desperate to try to reassure the public. If investor-state dispute settlement clauses were to be included in a UK-US trade deal, or any other post-Brexit trade agreement, there is a real chance that the corporate giants that had bought the right to run part of the national health service might be tempted to challenge a decision by a future Government about the provision of that part. If a future Government wanted to favour a public provider over the big private corporate provider, or renationalise parts of the health service that have been privatised, that could be challenged by the corporate giant using the investor-state dispute settlement system, potentially at huge cost to the British taxpayer and resulting in huge damage to the national health service.
Bill Esterson
My hon. Friend is right to highlight the challenge of ISDS. The debate about the Transatlantic Trade and Investment Partnership, which was dragged into the public domain when negotiating texts were eventually shared with the public, was the only way for the potential problems that he has highlighted to come into the public domain. The initial lack of scrutiny poses a great threat of the kind that he has set out.
May I add to the list the concerns about the negative list system, where every single service has to be named, and about ratchet clauses and standstill clauses? In addition to ISDS, they are a real threat to the ability of this country’s Government to have control over what is in the public sector and what services are delivered, whether the health service or other public services.
Gareth Thomas
Not surprisingly, my hon. Friend is ahead of me in making that concern clear. I underline the issues about negative listing that he sets out, which I will come to. To finish the point about medicine pricing, Donald Trump’s chief negotiator has made it clear that they wish to use a trade deal to challenge the NHS’s current purchasing model for NHS drugs. That could be done through them securing specific market access provisions or other clauses aimed at helping the US pharmaceutical industry. Again, surely it is the responsibility of the House, and indeed the other place, to have in place the scrutiny mechanisms to check whether that concern is justified.
My hon. Friend set out the concerns about standstill clauses and ratchet clauses in trade agreements, which can lock in levels of privatisation and other forms of liberalisation and accelerate them, which will limit the scope of future Governments to take sensible steps, when services are not being properly provided, to bring them back into the public sector. He rightly set out concerns about negative listing, which emerged in particular in the EU-Canada deal, which we will explore in more detail in the debate on amendment 9. There are concerns that NHS management data services could be opened up to US corporate giants as a result of a UK-US trade deal. Surely it is Parliament’s responsibility to explore those concerns.
If a UK-US deal were concluded by the Government, MPs would not be guaranteed a vote or a debate on the signed deal. The proposals in the Command Paper, which Ministers were forced to publish in February last year, allow a scrutiny Committee to recommend one, but leave it at the Government’s discretion whether to hold one.
The deal is being negotiated in secret, even though it could have huge implications for Britain’s post-Brexit future. Negotiations with the US are particularly controversial, yet after six rounds of preparatory talks and one round of formal negotiations, we still are in the dark, at least from a UK perspective, about the substance of what is being debated. It is true that the Secretary of State made a statement to the House. However, apart from listing the major areas of the talks, which were hardly revealing, and reassuring us all that the meetings were positive and constructive, again, no substance was offered on the real concerns that members of the public and organisations outside this House have set out on food, import standards and medicine prices. As Mr Lawrence from Trade Justice Movement reminded us all in last Thursday morning’s witness session, there will have been more scrutiny of the decision to proceed with High Speed 2 than there will be, as things stand, of a UK-US deal. Our amendments would help put that situation right.
Gareth Thomas
That is an extraordinary position, but sadly, it is becoming clear that that is how Members of Parliament are likely to find out about the substance of these trade negotiations. Let us again take the US as an example. We are finding out through evidence to Congress what many of the concerns of UK business organisations are in terms of the desire to secure access to UK markets, which is surely an entirely outrageous situation for the House of Commons. We were promised we would be taking back control after Brexit, yet the Houses of Parliament and the British public are being left in the dark.
There are real concerns from a UK-US deal about the potential for ISDS.
Bill Esterson
Before my hon. Friend moves on from the point about where evidence comes around what is a negotiating text, he will remember the evidence from Rosa Crawford from the TUC that the unions in this country are finding out what is in the negotiating texts for the US-UK talks from unions in the United States, which have access to those texts from the US Government. That is completely absent in this country. Is this not yet another example of how absurd it is that we have different approaches to scrutiny in this country compared with others? Surely those approaches need to be equivalent to ensure proper scrutiny and the right outcomes in the interests of the people of our country?
Gareth Thomas
We should thank the TUC for its work with American trade unions to help inform British workers and the British House of Commons, and for that little bit more of an insight into what is really going on in the UK-US negotiations. I hope Ministers will be sufficiently embarrassed by the British people’s reliance on what is being told to Congress to open up more scrutiny opportunities for this Parliament.
ISDS clauses have been favoured by the US in many of its existing trade deals. They potentially allow new investors, if included in a UK deal, to sue our Government over measures that harm their profits. We know that ISDS lawyers are already talking up the possibility of compensation for corporate giants whose profits have been hit by Governments taking lockdown measures to tackle the covid pandemic. In case Government Members think that is not a real threat, the American firm Cargill won more than $77 million from the Mexican Government after they introduced a tax to deter high-fructose syrup to tackle serious health issues in Mexico.
ISDS provisions create regulatory chill—the temptation for Governments not to introduce necessary public health or, indeed, other environmental measures, for fear of being taken to an ISDS tribunal by a big overseas investor. They create a two-tier system, since it is rarely small and medium-sized enterprises that are able to access these secret courts. There is normally no appeals system for the Government to access, and there is extraordinary secrecy around the nature of the settlements.
The irony is that there is little obvious benefit to businesses from those clauses being included in trade agreements. Indeed, the Government under David Cameron published an analysis of the pros and cons of ISDS clauses and could not find any great pros to champion. Business organisations tell us—although this tends to be in private—that ISDS clauses do not matter much to them; what they take serious notice of is the business environments.
There are real concerns about the labelling of geographical indicators, where products in the UK have a geographic indicator that prevents their being imitated: one thinks of Welsh lamb, Scottish salmon and Armagh Bramley apples, for example. The American negotiators do not like those types of food label and will seek to get rid of them. Surely it is the responsibility of this House of Commons to explore whether those concerns have merit and to push the Government to protect those labels.
The Chair
Going forward, I am happy for Members to remove their jackets if they feel the need to do so.
Bill Esterson
My hon. Friend the Member for Harrow West has given the Committee a tour de force that is worthy of parliamentary history. The Minister says it lasted an hour and a quarter. I hate to correct him on this occasion, because there are plenty of other opportunities to do so, but I made it one hour and 23 minutes, or possibly one hour and 24 minutes. It was slightly longer than an hour and a quarter but was very good anyway.
My hon. Friend made some incredibly important points about the amendments we have tabled, and about exactly why putting a proper set of parliamentary scrutiny procedures in place is so important. He described the 19 or 20 agreements that have gone through already, the lack of scrutiny of those procedures—some are more significant than others, such as the agreement with South Korea—the remaining 20 or so agreements that have to go through, and the prospect of having a scrutiny system for future international trade agreements. As he quite rightly pointed out, the framework of the Bill is to:
“Make provision about the implementation of international trade agreements”,
which provides the opportunity to get this right and to get it in place. That is why our amendments are so important.
In an intervention, my hon. Friend the Member for Putney absolutely nailed this as well. I do not want to play down in any way the importance of the one-hour-and-23-minute contribution from my hon. Friend the Member for Harrow West, and her single intervention did not go into the depth that he did, but she made a very good point about the scrutiny of trade policy in this country and the fact that it is going in the opposite direction to that taken by almost everybody else in the world, at a time when international trade agreements are so significant and so far reaching. They are about so much more than trade, which is the point my hon. Friend the Member for Harrow West made later in his speech, when he described the way that our current procedures are based on the 1924 Ponsonby rule.
In an intervention, the hon. Member for Arundel and South Downs, who is no longer in his place, made the Brexiteer point about taking back control, in all its lack of glory, yet I am afraid he was wrong. The European Union had full scrutiny arrangements. This is one of the points about our amendments. We are now left with a complete absence of those arrangements, and the fact is that we should be looking to replicate, at the very least, what we inherit from the EU.
I will read from the EU’s step-by-step guide to trade deals:
“After both sides sign, the Council examines the proposal for conclusion and sends the agreement to the Parliament for its consent (approval)…The Parliament receives the agreement. The Parliament and its trade committee (‘INTA’) consult with representatives of industry, trade unions, environmental groups and other outside experts about the agreement. The committee:
• writes up a report on the agreement
• votes on it
…The whole Parliament votes on whether to give its consent to the agreement. This is a ‘Yes/No’ vote.”
We have nothing on that scale of detailed scrutiny to replace such arrangements in order to look at the agreements to which the Government want to confine the Bill, or for future agreements. We are left with a process of rubber stamping, not scrutiny. In his analysis, my hon. Friend the Member for Harrow West set out the dangers of that lack of scrutiny when he described in detail the evidence presented to us that only three of 20 mutual recognition agreement chapters from the Swiss-EU deal are in place in the UK-Swiss deal; that only the goods element of the Norway deal has been rolled over; that the South Koreans want to renegotiate after two years; and that only two of 11 products from the equivalent EU-South Korea deal have been included at the same zero tariffs for export to South Korea.
My hon. Friend also made some good points about the lack of trade negotiating expertise, which he said has been raised by the Japanese and South Korean negotiators. It has also been raised by the US and Canadians as a reason that they are reluctant to engage with the UK. They feared that the quality of negotiations would be so weak as to affect the outcome of those negotiations so badly that it simply was not worth engaging. Things have moved on a bit on the American side since they raised those reservations last year, but we still await signs of progress with Canada. It must be the role of scrutiny, as my hon. Friend said, to try to avoid mistakes that we will regret for years to come.
My hon. Friend the Member for Warwick and Leamington made several good interventions, including on the need to avoid mistakes. He is quite right about that. If we do not get it right now, we will pay for years to come. However, this place is about not only governance, but representing constituents. We are the only 650 people in the United Kingdom with the ability to scrutinise and potentially vote on such matters in Parliament, which is why it is so important that we have access to that level of scrutiny and that Parliament is able to play its full part. That European system is a good place to start.
On Second Reading and on other occasions, the Minister described this as a continuity Bill, and he described my speech—I do not know whether kindly or unkindly—as a continuity speech on a continuity Bill. He is keen to play this as a continuity Bill, and of course, for many of those agreements, it is; where there have been only changes of wording to reflect that the agreement relates to the UK rather than EU, that is true and we have acknowledged it. However, for many other agreements, it is not true—it is far more than that.
That is also true of scrutiny, because we have not applied continuity to the system of scrutiny. If this was a continuity agreement, that EU system’s level of scrutiny would be replicated as far as possible, by having a Committee with those responsibilities, having that level of engagement and consultation on the content of the deal and having those kinds of vote. However, that is not what is being offered. That is why our amendments cover it as one option, because that is precisely what we should be doing.
The Library note is a good place to go to as it sets out what is going on elsewhere in the world. We have no formal role in scrutinising most treaties while they are being negotiated, but while they are being negotiated is the only point at which the terms of the proposed treaty could be amended. The Minister may well want to say this, but I will say it for him; I will anticipate what he might say. My hon. Friend the Member for Harrow West mentioned the statement on the mandate for the US deal. There was a statement on the mandate for the EU deal. There was a statement on the first round of negotiations—
Bill Esterson
It is appropriate to pause and reflect at this time to remember that terrible attack. The thoughts of all present in the Committee are with those affected—the victims, their families and the emergency services and civilians who intervened.
I was referring to the processes of scrutiny on trade agreements, as the Minister might describe them. The statements that we have had—statements in general—permit him to say what the Government are going to do. They allow for a five-minute response from the Opposition, a three-minute response from the SNP and individual questions from Back Benchers. That is not thorough scrutiny. It does not allow cross-examination. It does not allow scrutiny beyond the Chamber.
There is a limit to what a parliamentary statement can achieve and what it does achieve, and the idea that written parliamentary questions deliver very much other than a stonewall from Ministers—this Minister is very good at that—would be laughable, if that were to be used as an example of detailed scrutiny. Questions in the Chamber are invariably met with an ability by Ministers to avoid answering them, rather than shedding very much light. The Government control the timetable, so the ability to debate in detail is limited. Of course, we have Opposition day debates, but we are competing for time with so many other urgent and important topics, which limits our ability to scrutinise.
Committees are important and they can carry out scrutiny, but without access to negotiating texts and without detailed engagement in the development of mandates, all these processes are limited by definition. At this time, when other countries are looking to expand—whether that is Canada, Australia, New Zealand or the United States—in all those countries there is far greater access throughout the process of the development of mandates and in the scrutiny of negotiating texts, and greater engagement of industry, trade unions, civil society, environmental groups and elected representatives.
There is a lack of continuity in scrutiny from what we have now, but, as the Library note sets out, there are at least four possible ways for Parliaments to be involved in treaties: first, by setting the negotiating mandate; secondly, by scrutinising negotiations; thirdly, by approving or objecting to ratification; and fourthly, by passing implementing legislation for treaties that need changes to domestic law. All those are covered by amendments. All those are what my hon. Friend the Member for Harrow West has covered in great detail, so I shall not go into that same detail on the amendments. That is set out for us in the Library note and covered by these proposals.
International trade agreements cover so much now that they deserve that level of domestic scrutiny. I thought the example of HS2 and the way its development has been subjected to massive scrutiny, compared with the minimal scrutiny of international trade agreements, made a pretty good argument about what is wrong and why there is the need to put this right. If not in the Bill, when?
Gareth Thomas
There is perhaps an even better example to use in comparing the lack of parliamentary scrutiny of a potential UK-US deal, or any other free trade agreement deal, with existing legislation. The Minister, as a London Member of Parliament, will remember that Transport for London sought additional powers in a private Bill and there was substantial scrutiny of that private Bill on the Floor of the House of Commons. That is vastly more than Ministers are planning for a UK-US deal or, indeed, any other free trade agreement.
Bill Esterson
That is another good example. I thought for a minute my hon. Friend was going to mention Heathrow, because the Minister, last time he was in this job, had to resign from it to vote against the Government. However, I think we are in different territory and the current Prime Minister and he were in the same place there, although I do not know whether the Prime Minister is talking of lying down in front of bulldozers these days—[Interruption.] I do not know whether the Minister will want to respond to that.
The Library note also mentions the Constitutional Reform and Governance Act 2010, or CRAG, provisions. The point about CRAG is that it does not require Parliament’s approval for the Government to ratify treaties. That is the point my hon. Friend the Member for Harrow West made. There is such a democratic deficit here, which is why these matters need to be set straight. In the previous debate on this in Committee, the point was made that Labour introduced CRAG. Yes, we did, but we introduced CRAG in the context of being members of the European Union and in the context of the scrutiny system that I described a few minutes ago.
CRAG is no longer suitable precisely because we are no longer party to that European Union system of scrutiny—which, by the way, we were entirely able to contribute to and to access as much as any other nation, and which was far ahead of what is being offered now, albeit concerns were raised about the level of engagement over the Transatlantic Trade and Investment Partnership under that system. That is why we should be pushing for a better system than that of the European Union and the one we have just left. TTIP showed that we need to continue to improve the level of scrutiny and engagement, and the involvement of wider society.
There is no continuity in scrutiny, whatever the degree of continuity may be in the agreements being considered. The House of Lords amended the previous Bill to give Parliament a role in setting the mandate for trade negotiations and approving the final agreement, which goes to the point made in the Library note. The Command Paper that my hon. Friend referred to was produced in time for the Report stage in the House of Lords. Although the Lords felt that the Command Paper did not go far enough, it started to make progress, so I am keen to hear the Minister’s response to my hon. Friend’s question about what has happened to the recommendations in the Command Paper.
There is quite a lot of support on the question of what good scrutiny looks like, as set out in the House of Commons Library paper and as in the evidence from David Lawrence, who described broadly similar points. The written submissions from a number of organisations make the same point about debates and votes on objectives; reports back to Parliament on progress; ideally, the publication of texts from each round; a debate and vote on the deal after negotiations; a public consultation; and an independent impact assessment that looks at social and environmental factors, which is why we tabled new clause 6.
As my hon. Friend said, we have scrutiny measures from world war two that are completely inappropriate. There is no way, as David Lawrence told us on Thursday, that trade deals can meet high standards without more scrutiny. As to future trade agreements, he told us that unless we get this right now, there will not be an opportunity to revisit how we approach scrutiny.
David Lawrence said on Thursday that sequencing issues are not being addressed in the Bill and that there should be priorities in respect of when we legislate. That goes back to my hon. Friend’s point about the response from Japan, South Korea and Canada. They want to know what is in the EU deal before they reach an agreement with us. The EU deal, because of its impact on the agreements that we were party to through our EU membership, should come first before the US deal.
We need a level of scrutiny in place for those agreements and for the US deal, which will concern public services, digital services and regulations on health and food standards, which are the subject of a series of amendments that I imagine we will reach this afternoon. There are similar concerns about Canada, which is why greater scrutiny needs to be agreed to in the Bill. We should be able to consider the exact consequences of that deal. The scrutiny should be of the same degree and nature as that described by my hon. Friend earlier.
My hon. Friend mentioned Sam Lowe’s evidence and his three boxes. The problem deals are in box 3: Japan, Canada, Mexico and Ukraine. Those countries want the certainty of an EU-UK deal before they negotiate with us, for reasons related to future arrangements for mutual recognition or rules of origin. The examples that my hon. Friend gave of what has already been agreed in the deals with South Korea and Switzerland show what those concerns might be.
Gareth Thomas
My hon. Friend will remember that Professor Winters described the information he got back from negotiators about how the UK-Japan talks were going as “studiously” vague. Is that not a fair description of all the information we have had back from Ministers thus far about the progress on free trade agreements? That is all the more reason why this group of amendments needs to be in the Bill.
Bill Esterson
The arguments set out by my hon. Friend were extremely well made by our hon. Friend the Member for Brent North two years ago. My hon. Friend the Member for Harrow West has surpassed the formidable nature of the arguments made on that occasion.
Bill Esterson
Having sat and listened to both speeches—as did the Minister—my hon. Friend’s contribution has taken us to a whole new level, and the point he just made is exactly right.
George Peretz, QC made the point that scrutiny can help negotiators. Parliament just will not accept that point in this country, but the US uses that tactic. It is a strength to have the buy-in of Congress for the US trade negotiators, because they can say “I cannot agree that because Congress will not support it.” That is a standard negotiating tactic used across the world. It is used by trade unions that go back to their members. It is how good negotiators operate. They do it by having engagement, by building trust from their stakeholders and by using the strength of that engagement, trust and support as a negotiating tactic. There are many good examples around the world. We should be seeking to emulate them. These amendments give a good guiding light on how to do so, and I suggest to Members and to the Government that they seriously consider taking them on board in the same way as the House of Lords did last time.
Trade Bill (Sixth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Department Debates - View all Bill Esterson's debates with the Department for International Trade
Trade Bill (Sixth sitting)
Bill Esterson ExcerptsTuesday 23rd June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
The Chair
I was minded, given the forecast of a warm week, to allow Members to remove their jackets, but the way the argument has been advanced is making me wonder. I think, on balance, that Members may remove their jackets if that makes them more comfortable. I gather that we had this morning a thorough examination of the topics, so I anticipate that we may be poised to make progress at this point, but I also understand that Mr Thomas had just come to the conclusion of an intervention and has been eagerly anticipating in the intervening hours the response from Mr Esterson.
Bill Esterson (Sefton Central) (Lab)
Welcome back, Sir Graham. It was getting warm for those of us standing up and holding forth, so I am grateful for your ruling. My hon. Friend the Member for Harrow West intervened before the break and asked me to comment on the Command Paper and the indications in it about reports on changes to agreements that have been made. In his speech earlier, he pointed out that the Government have changed their mind several times on this matter, and I think we are none the wiser.
The point is that it is desirable to have the reports on the differences between the existing EU agreements and the so-called continuity agreements that replace them, but more important is what we do with the information. Unless there is adequate scrutiny and proper analysis of it by having the right processes in the House and outside, it is very difficult to do anything meaningful with them.
I had just one or two more pieces of evidence that we had been presented with and I was reminded of a cautionary tale from Australia about what happens when international trade agreements are not properly analysed and scrutinised before they are signed. In Australia, there used to be a car industry and there is no more, in large part because of the international trade agreements—the free trade agreements—that Australia signed, including the one with Thailand in 2005, in which Australia agreed to lift the import tariff on cars from Thailand. Since then, more than 2 million Thai-made vehicles have been imported into Australia. They are familiar brands: Ford, Holden, which is familiar to Australians, Toyota, Honda, Nissan, Mitsubishi, Mazda and others. In return, Australia ships to Thailand just 100 Ford Territory SUVs. The reason for that imbalance in trade is the hidden non-tariff barriers that the Thais maintained while Australia opened its borders completely. It is a cautionary tale of what goes wrong when international trade agreements are not properly implemented, when they are not adequately scrutinised and when one party does not get it right. We would do well to learn from that example.
Bill Esterson
I was hoping that we would be able to accept the advice from the Chair and move on, but I will briefly give way.
Robert Courts
The hon. Gentleman mentioned Australia and the vehicle tariff, and he is right that Holden was the last big Australian manufacturer, but is it not the case that there is a 5% tariff on imported vehicles for Australia? Is not the cause of the demise of Australia’s vehicle industry in fact the protectionist tariff that was imposed? I think it lingers on.
Bill Esterson
I think that we will be in a rather worse position if we do not sort out our agreements in this country, where we would face a 10% tariff, with rather more devastating consequences for the car industry here. Anyway, we dealt with the car industry at some length this morning; I do not anticipate spending longer on it.
Gareth Thomas
Is not the significance of the intervention from the hon. Member for Witney the fact that it underlines the need for a proper opportunity for the House to consider the impacts of free trade agreements and all their tariffs—10%, 5% or whatever—on British industry?
Bill Esterson
My hon. Friend is quite right. That was the point he was making this morning at slightly greater length. If we want to get these things right and avoid unintended or adverse consequences, scrutiny is the answer. I thank my hon. Friend for pointing that out again.
I want to remind the Committee of the work of the International Chamber of Commerce UK. Its coalition of business groups, trade unions, consumer groups, environmentalists, other non-governmental organisations and civil society more widely produced a paper in 2017, “A Trade Model That Works for Everyone”, in which there was consensus about the need for proper scrutiny from elected representatives and wider stakeholders. It is a point made right across society. In its written evidence to the Committee, the ICC UK points out:
“The Bill ignores the seriousness of the situation we face regarding trade. Public trust in the system is at an all-time low—this is an opportunity to acknowledge the failures and get it right if the UK wants to set new global standards, ensure everyone benefits and future proof trade governance.”
The Bill is the chance for this country to set new global standards—to lead the way and show the rest of the world what is possible, by creating a new gold standard.
As George Riddell from Ernst and Young told us last week, business wants certainty, political security and support across the board, so they know trade deals will last. That means proper parliamentary and non-parliamentary scrutiny. That is how we can achieve the new global standards that the ICC recommends.
Greg Hands
More than half of the continuity agreements have already been ratified, each with a report. The intention is to carry on producing those reports. I will deal with some of the points that the hon. Gentleman raised earlier, including his quite technical points in relation to the roll-over of the South Korea and Switzerland agreements. I will come back to him on the points he raised about differences between the EU version and the UK version.
The reports have enhanced parliamentary scrutiny, and I can confirm that we will continue to publish reports for the remaining continuity agreements.
Bill Esterson
A moment ago, the Minister mentioned that the Lords had held debates on previous agreements that have been subject to these reports. That did not happen in the Commons; that has gone. Given that the Government set the time, will the Minister take this opportunity to promise that the Government will create time in the Commons for debates on the remaining so-called continuity agreements, not least because agreements such as the one with Japan are significantly different to the ones we were party to as members of the EU?
Bill Esterson
The Minister has said that many times. CRAG was designed and passed in this place when we were a member of the European Union. It was designed when international treaties were an EU competence, to complement the system in the EU. I read that out earlier; I will not read it out again. He wants this to be a continuity Bill, but what is the equivalent continuity of scrutiny and parliamentary process for what we were party to where CRAG was part of that European process?
Greg Hands
It is simply not correct to say that all international treaties are subject to EU competence. Many international treaties are, of course, subject to a UK competence, and CRAG has worked well. It is worth remembering that CRAG was arrived at after an extensive period of consultation—and it may be, Sir Graham, that you voted for CRAG in 2010 as well. It was backed by both the Government party of the day, represented by the hon. Member for Harrow West, and the main Opposition of the day as a sensible way of codifying what he referred to earlier as the 1924 Ponsonby rule. The whole purpose of CRAG was to codify that long-standing rule that has served as well, including over the past 10 years. An extensive change such as this would add significant and unnecessary risk to the Government’s ability—
Bill Esterson
Yes, it is an international trade agreement, absolutely correct. Where is the equivalent to the EU process that we have been party to? CRAG was party to that international trade bit of it, and yes, I accept that it applies to other elements of international treaties. Where is the continuity from the EU process to what we have now? That was the other half of my question.
Greg Hands
Again, we are talking about continuity agreements that have already gone through a process of scrutiny in the House. I was a member of the European Scrutiny Committee pretty much exactly when the hon. Member for Harrow West was a member of the Government. There was an established process by which treaties were recommended by the European Scrutiny Committee for scrutiny in this House. Most have already been through an established process of European scrutiny.
On future trade policies, I would say that the EU has a fundamentally different constitutional set-up from the United Kingdom. Our most similar constitutional set-ups are in countries such as Canada, Australia or New Zealand, which have very successful independent trade policies, and have done for a number of decades. I am confident that our scrutiny system, as proposed, stacks up well—in fact, it exceeds those, and stacks up very favourably—against those systems in making sure that our Parliament can have its say on future trade agreements.
I stress again, however, that this Bill is not about future trade agreements; it is about the continuity of our existing arrangements. Such an extensive change as proposed in the amendment would add significant and unnecessary risk to the Government’s ability to secure and bring into effect the remaining continuity agreements by the start of 2021. That situation was not advocated by any of the witnesses we heard from. None of them said, “We want to junk all those 40 agreements and pretend that we have never had them”, from ClientEarth right the way across to the Institute of Directors. Only the Opposition seem to want to junk those agreements by voting against Second Reading of the Bill and by not having the continuity agreements in place.
Gareth Thomas
At the risk of disappointing the Government Whip, I shall be brief in my concluding remarks. We had a very strong contribution from my hon. Friend the Member for Sefton Central, who underlined that, at present, we will find out more on a UK-US deal from Congress than from anywhere else. My hon. Friend the Member for Warwick and Leamington rightly raised, among a series of other points, concerns about our ability to scrutinise the impact of a new free trade agreement on the automotive sector. My hon. Friend the Member for Putney rightly drew attention to the significance of scrutiny, or otherwise, of the roll-over agreements, given that some 39% of jobs in her constituency depend on trade with countries where there are roll-over agreements.
We also heard interesting interventions from the hon. Member for North East Derbyshire, who I hope has used the lunchtime adjournment to look up the reference in the Queen’s Speech to the Trade Bill. It makes it very clear that the Trade Bill’s purpose is to put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy on exit from the European Union. I appreciate that the Minister has sought to somewhat change the stated purpose of the Trade Bill, to provide some cover for not being willing to give Parliament proper scrutiny arrangements for future free trade agreements, but that is what the Queen’s Speech said.
Other interventions included that from the hon. Member for Witney on Australian cars. In their own different ways, hon. Members supplemented the arguments that we were making for greater scrutiny of free trade agreements.
Perhaps the most striking revelations were in the Minister’s winding-up contribution. In the previous Parliament, the Government committed to make limited improvements to the Bill by allowing parliamentary scrutiny in the form of reports and sunset clauses. Having witnessed them backslide on those commitments, we have now heard the Minister step back from commitments made in the Command Paper less than 15 months ago on scrutiny of free trade agreements. The Minister appeared to be clear that Parliament, including the International Trade Committee, will not have the opportunity to scrutinise the negotiators, receive private briefings from them, or access sensitive information, as was promised in the Command Paper. He was also studiously vague as to whether the commitment in the Command Paper to publish and lay before Parliament a round report following each substantive round of negotiations will be maintained or not. One can only conclude from his answer that that commitment is not being maintained, albeit one report, on the UK-US deal, has already been published.
This Bill is lamentable in the lack of proper opportunities it offers to scrutinise the continuity agreements, in particular the bigger ones, which have yet to be negotiated, on Canada, Japan and Turkey. It is also lamentable, as a series of witnesses and hon. Members have stated, in the arrangements for scrutinising new free trade agreements. On that basis, I intend to press the amendments to a Division.
Bill Esterson
On a point of order, Sir Graham. Is it in order to make a further speech at this stage? I understand that it is, but I stand to be corrected.
The Chair
It is in order, but given that the amendments have been moved, if you could do so briefly, that would be appreciated.
Bill Esterson
I shall be brief. I speak purely because the Minister made a number of comments that need further attention. He talked about our approach to the need for these agreements to be implemented. Our reasoned amendment said:
“That this House recognises that upon leaving the European Union, the UK will need effective legislation to implement agreements with partner countries corresponding to international trade agreements of the European Union in place before the UK’s exit”.
That is what it said and that is what we voted on, and we are clear in our commitment to doing just that.
The significance of the six times that the Minister’s hon. Friends asked questions of various witnesses last week was not lost on us—they wanted it clearly on the record that there is a desire for the continuity agreements to be concluded. We accept that, which is why we put it in our reasoned amendment. It is important that the Minister is under no illusion on that point. Our concern is that they are done properly, scrutinised effectively and that mistakes are not made, which is why we tabled these amendments.
The Bill has to go through this year. It was in the Government’s gift. They could have passed the Bill—or a very similar version of it—last year, as amended. They could have brought back that version, as amended, this year if it was so important to them. More than two years ago, we were in a nearby Committee Room having very similar debates on very similar amendments. The Government had the chance to do this. It is on them that there has been a delay in getting to this point. In some of the evidence sessions, we heard that, while the Bill is not perfect, the witnesses wanted it to go ahead. Last year’s Bill was not perfect either, but the Government could have brought it back and got it through earlier to address the witnesses’ concerns. It is important that these things are said.
The Minister distinguished between future trade agreements and existing ones. He tried to use some clever language right at the start of his remarks. He pointed out that the Bill, as drafted, does not cover free trade agreements with new trading partners. That is correct, although it has scope to do so, which is why our amendments are in scope. However, the Bill does cover new free trade agreements with existing trading partners, which is why our amendments are entirely appropriate in calling for scrutiny of the corresponding agreements.
The Minister used the phrase, “Parliament should be able to properly scrutinise trade agreements”, in the context of new trade agreements and the framework, and said that his door was always open. He did not say when we could expect to see that new framework. The United States agreement is already under way without that new framework. If not now, when? Why is that US trade agreement going through without that new framework in place, given that the Minister and the his colleagues deem it so important in enabling proper scrutiny? As he knows, the CRAG approach relies on the Opposition using one of their Opposition days within a 21-day period. There were occasions in the previous Parliament when there was not an Opposition day for a period of greater than 21 days. It is entirely dependent on the Government making time available in Parliament for CRAG to be applied. It is one of a number of flaws in our scrutiny process, and one of a number of reasons why changes are needed—because the Government are not addressing it at this stage.
I have no doubt that the Lords will table amendments similar to those tabled last time. The Minister’s colleagues in the Lords are going to have to face this question. The Government are going to win every vote in this House, but it could be a different story in the Lords. If not now, when? And why not take on board the scrutiny that we have suggested? Why not accept and retain the amendments from last time, including that dealing with the publication of reports?
My final point is that if it is the Government’s intention to always publish reports on the difference between the existing agreements and the new ones, why not keep that amendment in the Bill? At the moment, they have the option to not publish if they so choose or if a new Minister has a change of opinion. Given what the Minister has said, there are so many places in which what we have proposed has been justified, and the Government will need to consider them in the Lords even if they do not today.
Question put, That the amendment be made.
Greg Hands
I was intrigued by the amendment, but let us pause for a moment on what it would do. Amendment 9 would stipulate that agreements are in scope of the clause 2 power only if the underlying EU agreement were ratified, rather than signed, by end of the transition period. For the benefit of the Committee it might be useful to explain the difference. Something can be signed—but the dates on which a trade treaty can be signed, come into effect and be fully ratified are three different dates. A trade treaty can come into effect—this is the way the EU does it—when a certain number of EU countries have ratified it. I forget what that number is, but if about half of EU countries have ratified the agreement it comes into effect. Those three things—being signed, coming into effect, and ratification—happen on three different dates. Under the amendment, the clause 2 power that we currently say must relate to an EU agreement signed before 31 January 2020 would relate to an EU agreement ratified before that date.
Opposition Members will realise—I think, to be fair, the hon. Member for Harrow West covered that in his speech—that the amendment would restrict the scope of agreements that we could implement using clause 2. It would make the scope much narrower. However, it would do so in an entirely unreasonable manner. Important agreements such as the Canada one that he has mentioned would be excluded, as CETA has not been fully ratified by each individual member state of the EU, despite having been in effect for some time now.
Development-focused agreements would be similarly affected. The important matter of international development has yet to feature in discussions of the Bill—with the exception of something that the hon. Member for Putney said about it in passing. However, many development-focused agreements—those important economic partnership agreements—have been signed but not yet ratified. One example, involving the countries of the Caribbean, is the CARIFORUM agreement. In 2017 I signed an agreement with the CARIFORUM countries. We all gathered together—17 countries, I think, which was basically CARICOM—plus the Dominican Republic. We gathered together in Brussels to sign a continuity agreement. The nations of the Caribbean recognise the importance of that trade agreement, and one thing that they mentioned was its importance not just to their citizens but to the Caribbean diaspora in this country.
Greg Hands
No, I am not going to give way.
I think that a Member with quite a big Caribbean community in his constituency has quite a lot of explaining to do about why he is now opposed to the CARIFORUM agreement. It is a great agreement that does major good work for international development in Caribbean countries. I represent a quite substantial Caribbean community. I think its members would be alarmed if they were to learn that the Labour party is opposed to that international development agreement, which does great work among our Caribbean friends.
Bill Esterson
On a point of order, Sir Graham. The Minister has a number of times asked us to explain things and then refused to give way. Can you perhaps shed some light on how we might overcome that apparent stand-off?
The Chair
I think that the hon. Gentleman has been here long enough to know that these things happen.
Greg Hands
I will allow the hon. Gentleman to intervene. Perhaps he can explain and apologise for his position in relation to those countries.
Bill Esterson
The party that has just abolished the Department for International Development is not in a good place to be criticising anybody for their approach to international development. The Minister knows full well, as he did with the reasoned amendment, that we fully support international development—in a way that his party, apparently, does not. Perhaps, if this is a problem because of the drafting of our amendment, he will tell us that on Report he will come back with an amendment that deals with the problems that he is taking great pains to explain.
Greg Hands
I am certainly not coming back on Report with a drafting correction for the deficiencies in the hon. Gentleman’s amendment; that would be a novel approach to Parliament. The fact is that this amendment rules out of scope all these agreements for roll-overs. I have to say, in fairness to him, that some of these agreements were controversial; some people opposed these EU EPAs in the first place, and I imagined that it was the Labour party’s position that it opposed these EPAs. If we listen to one or two groups, for example, they think that the EPAs have been stacked too heavily in the EU’s favour.
However, I think the hon. Gentleman is now saying that actually that is not his intention, and that his intention was not to prevent their being rolled over. I think he is now saying he is suddenly in support of the continuity of these agreements, despite having voted against the Second Reading of the Bill and despite the fact that virtually every word that we have heard from the Labour Party in this Committee has been against these agreements and against these Bills.
Returning to my point about continuity, these agreements have been subject in this country to the full EU agreement scrutiny process. The delay to ratification is not in this country, but relates to individual country or state delays. There is no scrutiny gap.
Gareth Thomas
The Minister has been at his most diversionary with that characteristically chutzpah-led speech. As he knows only too well, constitutionally, the Government are able to sign and ratify international agreements. He went on at some length in his winding-up speech on the previous group of amendments about how wonderful that process was.
The Minister does not need the Trade Bill to sign agreements with CARIFORUM, Canada or Vietnam. The powers are already there for the Government to do so. If Ministers think the provisions in the Bill relating to those clauses are so important, one wonders why they did not bring the Trade Bill back in the last Parliament. It fell because Ministers chose not to bring it back, not because of opposition from the Labour party.
There were genuine concerns about the future of a UK-Canada trade pattern. On this side of the House, we repeat our concern that if Ministers cannot agree to roll over a deal with one of our oldest allies where the Queen is Head of State, it prompts questions about the effectiveness of the Department for International Trade. This was a probing amendment, which we will not push to a vote. The point about scrutiny remains on the record. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 10, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with—
(a) the provisions of international treaties ratified by the United Kingdom;
(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;
(c) the primacy of human rights law;
(d) international human rights law and international humanitarian law;
(e) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to—
(i) the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and
(ii) the fundamental principles and rights at work inherent in membership of the International Labour Organisation;
(f) women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;
(g) children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and
(h) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
I will give my hon. Friend the Member for Harrow West a chance to rest his vocal cords. Amendment 10 is part of a run of amendments that get into the implications of domestic and international policy on everyday life here and abroad. Amendment 10 would ensure that regulations on an international trade agreement can only be made if the provisions
“do not conflict with, and are consistent with…Sustainable Development Goals…the primacy of human rights law…international human rights law and international humanitarian law;…obligations on workers’ rights and labour standards as established by but not limited to…the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and…the fundamental principles and rights at work inherent in membership of the International Labour Organisation;…women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;…children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child; and…the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
There are some things in there that sound very much like taking back control to me. They are very much about the rights of human beings here and abroad, whether workers, women or children. What is not to like? What is there not to support in the amendment? What is there not to support in getting behind sustainable development goals at every available opportunity?
In the previous debate, my hon. Friend the Member for Harrow West mentioned the difficulties in Vietnam. Trade unions and workers in Vietnam face a very difficult time. They face persecution and exploitation. A trade agreement with Vietnam should include labour provisions under the ILO, consistent with amendment 10. The measures in amendment 10 also protect UK businesses by avoiding undercutting.
For the sake of posterity, Sir Graham—I think that is the right way of describing it—I checked that the amendment is similar to one moved by your co-Chair two years ago. At the time, my hon. Friend the Member for Bradford South (Judith Cummins) spoke about the human rights of the Sahrawi people and Morocco’s attempts to include them in international trade agreements. She set out the need for the ethical dimension in international trade agreements and talked about how poorest are left behind. She quoted Paul Collier’s work on the bottom billion and described how international trade agreements all too often lock the poorest in the world into the natural resource trap rather than benefiting them through export diversification, as is sometimes claimed.
It was a good speech then, and the points that my hon. Friend made remain good points now. That is backed up by what we were told in written briefings from Amnesty, which makes the point about the current Bill’s lack of provision in those areas, saying that
“the Bill as currently framed, makes it possible to alter human rights and equality protections using secondary legislation, in order to comply with renegotiated trade deals.”
Here we are again with the problem of Ministers’ use of secondary legislation because of the inadequate provisions in the Bill. The briefing goes on:
“Such powers should not be necessary if existing EU trade agreements, which are the subject of the Trade Bill, are to be rolled over primarily to ensure continuity, as claimed by the government.”
As such, the Government should not object to amendment 10.
The briefing states that the Bill grants
“extraordinarily wide powers to Ministers to amend retained EU law - including the Equality Act 2010, the Modern Slavery Act 2015 and the Data Protection Act 2018 - leaving domestic rights protections open to alteration”
and that it lacks
“real parliamentary scrutiny and accountability throughout negotiations. This is essential because of the complexity and far-reaching implications of trade agreements for business and public policy”
in the areas of human rights. The briefing continues:
“Unlike the US and the EU, the UK looks set to conduct major elements of trade negotiations without any oversight role or negotiating mandate from Parliament.”
After the debates and votes that we have already had in this Committee, I think we can safely say that that is true.
Gareth Thomas
Does my hon. Friend agree that it would be sensible to include in the Bill a commitment to trying to achieve the sustainable development goals, as this amendment seeks to do, not least because with their decision to abolish the Department for International Development, Ministers have thrown away some of their soft power and global reputation for being good on development?
Bill Esterson
That is an incredibly important point. Given the Government’s previous apparent commitment to SDGs, one might have thought they would be open to such a suggestion. The EU conducts sustainability impact assessments of all new trade agreements to assess their the economic, environmental and social impact, including their impact on human rights and labour standards. That is a similar point to the one my hon. Friend just made.
Once in force, EU agreements include a commitment to assess the effects of the agreement on sustainable development. Although those sustainability impact assessments could go further in terms of detail, with sector-specific impact assessments on human rights or labour standards, they nevertheless provide a clear commitment to human rights and labour standards that the UK should replicate and improve on. I thought this was a continuity Bill—the Minister has told us that enough times—so why are the Government not doing the same thing with sustainability impact assessments?
There is no provision in the Bill for undertaking social and environmental assessments of prospective trade agreements, or for conducting related studies and surveys. Decision makers will be operating without the evidence base to take full decisions on complex instruments that will bind the UK for many years. Methodologies for this are well developed, and the Government should commit to undertake them in legislation and to make them public. If not now, when?
Gareth Thomas
One concern that led me to want the Bill to refer to the sustainable development goals is the fact that both Ghana and Kenya have not yet felt able to sign a continuity agreement with the UK. As I understand it, that is because of their concern that the tariff regime that Ministers are suggesting under such a continuity agreement would hinder the scope for regional integration in eastern and western Africa. Although I do not expect my hon. Friend to comment on it, perhaps my intervention might encourage the Minister to give some clarity on my genuine concern about those two continuity agreements.
Bill Esterson
I am glad my hon. Friend has raised the issue, and I hope the Minister can give clarity on those two continuity agreements. If the Minister missed the names of the agreements, I am sure my hon. Friend will repeat them for him. It appears that that may be necessary.
I turn to what the TUC has said to us. It has particular concerns about trade unionists. In its briefing for the Committee, the TUC refers to the lack of consultation on the text of the 19 continuity agreements that have been finalised so far. That has been a concern, because many of the deals that have already been signed are with countries where labour and human rights abuses are widespread. The TUC refers to Colombia and South Korea:
“In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights. Colombia, meanwhile, remains the most dangerous country in the world for trade unionists with around two thirds of murders of trade unionists taking place in Colombia.”
That is according to an ITUC report from last year entitled, “The World’s Worst Countries for Workers”. The TUC continues:
“Whilst the UK’s trade deals with South Korea and Colombia have commitments on paper to uphold ILO standards, similar commitments in EU trade deals with South Korea and Colombia have not been effective in improving rights as they have no mechanism for effective enforcement.”
We had that discussion with Rosa Crawford in the evidence session last week, and that is what she confirmed to me.
Compare that with what goes on elsewhere. The TUC states:
“Trade unions in a number of other countries are consulted routinely by their governments in the process of trade negotiations, such as the US, Austria and Sweden…The TUC believes it is crucial for trade unions to be consulted on the text of trade negotiations in order to ensure they have adequate provisions to ensure labour rights commitments are upheld, contain effective protections for public services as well as other social standards and do not contain Investor-State Dispute Settlement Courts that would allow foreign investors to sue governments for enacting policies for the public good”,
including in the areas of workers’ rights and human rights. The TUC continues:
“The TUC believes it is also crucial for MPs to be able to see and comment on the text of continuity deals so that negotiations are subject to proper democratic scrutiny.”
All that brings us back to the text of the amendment. If the Government are committed to upholding sustainable development goals and to supporting human rights, workers’ rights, women’s rights and the rights of the child, the amendment is an opportunity. If the Government do not support this amendment, they might, as I suggested to the Minister on another occasion, want to bring back their own drafting that civil servants can tell them is appropriate to deliver the goals that I have just set out.
Charlotte Nichols (Warrington North) (Lab)
Can I say what an honour it is to serve under your chairmanship, Sir Graham? In the context of the debates about racial inequality that are taking place around the world, and the Government’s announcement that they will seek to absorb the Department for International Development into the Foreign and Commonwealth Office, it is vital to ensure that we do not shy away from our international responsibilities. That includes ensuring that any future trade deals cannot be used as vehicles to undermine human rights and workers’ rights, either at home or abroad. The safeguards in the amendment are, frankly, common sense, and it should not prove any barrier to free trade agreements with a wide range of trading partners, as is the Government’s stated aspiration. However, it is important that those safeguards are explicit in the Bill.
To illustrate why that is the case, I will give an example. In the public evidence session, I asked the Digital Trade Network about the risk of the US exporting section 230-style provisions into trade deals. As members of the Committee will be aware, these provisions are pushed by the big technology firms, because they effectively restrict US trade partners from making domestic legislation that might introduce any regulation. Without the safeguards in the amendment, there is increasing concern that the UK will be bullied into accepting these provisions in the upcoming UK-US trade deal, which will gut the upcoming online harms Bill and its promise to increase protection for children online.
Ensuring consistency with children’s rights is essential, but the threat is not just to our children. The Community Security Trust’s report, “Hate Fuel: the hidden online world fuelling far right terror”, outlines the global threat of far-right terror, which has its own online language and subculture that are developed and sustained on these social media platforms. This material repeatedly and explicitly calls for Jews to be killed. Indeed, many of the most hateful things that I receive as a Jewish parliamentarian originate from the US and Canada.
Governments, law enforcement and technology platforms must co-operate internationally to combat the propaganda that fuels far-right terror, just as they have done previously to tackle the propaganda that encourages and promotes jihadist terrorism. Protecting the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law will ensure that this place does not have one hand tied behind its back in its efforts to do just that.
As we discussed at length in debates on earlier amendments, because there is limited scope for parliamentary scrutiny of new trade agreements and because the Minister is unable to give guarantees on this issue today, despite being given repeated opportunities to do so by diligent Opposition Members, building these safeguards into the Bill will make sure that they cannot be missed out and that the scrutiny is sufficient to prevent adverse consequences that could result in a breach of one of the regulations set out in the amendment.
The amendment would also benefit our continuity agreements. The Minister mentioned that some of the predecessor agreements had been signed when Labour was last in Government. I was a teenager when Labour was last in Government, and a lot has happened since then—not just that my hair has started to go grey. I cannot understand the reluctance to ensure that continuity agreements that we are trying to secure are consistent with and do not conflict with these safeguards, given many of the seismic shifts that we have seen in geopolitics over the last decade or so; things have moved on considerably in that time.
It is only right that we ensure that continuity agreements remain fit for purpose. If they do not meet the criteria outlined in the amendment, why have we endeavoured to keep them? If the agreements do meet the criteria, there is really no need to oppose the criteria.
Gareth Thomas
The Minister has made a gracious intervention and offer, which I am happy to accept. On that basis, I am happy to conclude my speech.
Bill Esterson
We had an excellent contribution from my hon. Friend the Member for Warrington North, whose points about safeguards were well made. It is entirely common sense that we support the provisions of the amendment, but they need to be explicit. The Minister confirmed why in his remarks. The use of trade provisions to promote online hate is, sadly, all too familiar to my hon. Friend and to many other people in this country, including some in this Parliament. She described that extremely well.
My hon. Friend the Member for Putney rightly made the case for the sustainable development goals and ensuring that we deliver on them. The fact is that they are tied directly to trade. That point was reinforced by my hon. Friend the Member for Harrow West, who spoke on the importance of the Kenya and Ghana continuity agreements and the impact that they have on the LDCs. It reminded me of the reference, which I quoted in my remarks, that my hon. Friend the Member for Bradford South made to Paul Collier’s book “The Bottom Billion”. I am glad that the Minister has offered to write to members of the Committee about those concerns.
I think the Minister used the word “replicate” regarding how the agreements are carried over from the EU. Unfortunately, the Bill allows for dilution and for weaknesses, such as those that I set out in the South Korean and Colombian agreements, to continue. Such weaknesses will not be addressed, and the question is: if not now, when? In the case of South Korea and Colombia, it is: if not then, when? Of course, we will have another go at South Korea, because it wants to renegotiate what has been passed already.
I am afraid that the Minister’s points about Colombia rather miss the point. The point I made, in reference to the International Trade Union Confederation report from last year, is that it is the most dangerous country in the world for workers. We cannot simply accept continuity without doing something about that situation. Such things need to be dealt with in international trade, as well as through the Foreign Office and other mechanisms of Government; otherwise the abuses will continue.
Bill Esterson
I beg to move amendment 11, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with the United Kingdom’s environmental obligations in international law and as established by but not limited to—
(a) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;
(b) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and
(c) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety.”
The Government say they are committed to addressing the climate crisis and to net zero by 2050, even though they have missed the targets set by the fourth and fifth carbon budgets and the gap is getting worse, and even though their own analysis shows that their spend on nuclear export finance for energy projects has favoured the fossil fuel sector substantially, to the point where 99.3% of that budget spend over a five-year period went to fossil fuel projects, including recently to Bahrain. There is no sign of a real and meaningful switch away from fossil fuels and to renewables.
The Government can say that they are committed to something, but unless something is in legislation and in writing, and unless there are meaningful commitments, the situation does not change. That is why it is important to amend legislation such that we confirm our commitments to the Paris agreement, the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity, including the Cartagena protocol on biosafety.
Matt Western
What was telling about the evidence sessions was how everyone—including the Institute of Directors, the CBI, ClientEarth, the TUC—agreed that this type of amendment should be at the heart of what we do, and that they were disappointed that it was not included.
Bill Esterson
My hon. Friend is absolutely right. The Bill really should be the framework for what a progressive international trade policy framework should look like. There was an opportunity. Given that the Government did not pass the Bill when they had the chance last year or the year before, they could have included the provision this time. This amendment would produce a framework of the order expected by the witnesses.
There are real problems in international trade that affect our ability to meet our climate obligations. Trade agreements are used to liberalise regulations, including environmental regulations. The Bill is an opportunity to redesign trade policy to support our environmental ambitions, as the Government set out. The target of net zero carbon emissions by 2050 and associated commitments are in our amendment. The opportunity is there for the UK to require trade partners to ratify and implement key climate change agreements, such as Paris, before entering into trade negotiations, and for us to suspend ISDS agreements.
Environmental policy has been the object of investor-state dispute settlement litigation. Companies that have fossil fuel interests have sued other companies’ Governments because of the impact of Government regulations and legislation on their interests. That undermines investment and support for the renewables sector, and efforts to decarbonise economies and meet our climate obligations. Similar points are made about the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity. If the Government want to address this agenda, they have an opportunity to do so with this amendment, and I hope they take it.
Given that the Bill is widely drawn and has the potential to address future trade agreements, let us look at what the US has been saying. This should worry us, given the damage that could be done by international trade agreements. In December, the US ruled out talk of a climate crisis in trade negotiations—yes, that is what trade representative Lighthizer said. He was categorical about that when the UK inquired—I am pleased that the UK did this—about the possibility of including reference to climate change in a future UK-US trade agreement, given that the UK has a strong historical stance on climate change and pushed strongly for the Paris agreement. The UK also highlighted in those talks the pressure for that that would come from civil society and non-governmental organisations. My hon. Friend the Member for Warwick and Leamington referred to the evidence that the Committee received.
What was the response from the US? It
“responded emphatically that climate change is the most”
politically sensitive
“question for the US, stating it is a ‘lightning rod issue’, mentioning that as of 2015,”
US trade representatives
“are bound by Congress not to include mention of greenhouse gas emission reductions in trade agreements. US stated this ban would not be lifted anytime soon.”
The US trade representative went further:
“we have an obligation to help real working people...there’s no point in being so ambitious we don’t end up with an agreement at all”.
The problem with that statement, of course, is that it is not one or the other. In the end, real working people need a planet that they can live on. They need the global temperature not to increase by more than 1.5°. They need the action on climate that will deliver that agenda. They need the jobs that will come from investment in low carbon industries now and in the future.
We should be worried about what the US is saying on this subject. We should take note of it and make sure that if the price of an agreement with the US is to oppose action on addressing the climate crisis, it is a price far too high for us to accept. I hope the Government will take the amendment on board, because there is nothing in it that is not in accordance with Government policy.
Fleur Anderson
Moving on from the sustainable development goals, and looking at the environmental regulations and the environmental issues that are baked into the Bill, we are already committed to climate action. The Minister has affirmed that we are and want to be compliant, and we aspire to see the achievement of the sustainable development goals. That means taking radical action and treating the climate situation as an emergency. To do that we need to add the amendment to the Trade Bill.
In doing so, we will be safeguarding life in water and on land. Earlier this year, the Prime Minister reaffirmed his Government’s commitment to achieving net zero by 2050 and boldly stated that “we will crack” the climate emergency. As a global leader on climate action, the UK must set an example to the rest of the world by honouring its international obligations under the Paris agreement and other multilateral environmental agreements. Trade policy is an integral part of that, so it should not be left out of the Bill.
Trade agreements can foster good climate action, but they can also impede Government implementation of climate commitments. They could threaten to increase fossil fuel use, for example, which we explicitly decided not to do in declaring a climate emergency. They could also hinder the sharing of green technology.
Trade agreements typically include national treatment for trade in gas, thereby locking in dependency on a fossil fuel with high greenhouse gas emissions, while incentivising increased fracking and fossil fuel infrastructure. We would not want continuity agreements that include those. The EU’s own impact assessment of TTIP—the EU-US trade deal—predicts that it would generate an additional 11 billion tonnes of carbon dioxide per year. That is fundamentally at odds with our international climate obligations, so we must bring our trade policies up to date with our environment obligations.
The dangers that trade deals pose to the environment can be clearly seen in the EU-Mercosur trade agreement currently under negotiation. A fortnight ago, the Dutch Parliament rejected the agreement, due to a lack of enforceable agreements on the protection of the Amazon or the prevention of illegal deforestation. Conducting trade negotiations without clear environmental red lines on the statute book—which this amendment would provide—with countries led by individuals such as President Bolsonaro, under whom deforestation of the Amazon has increased by 27% according to the NGO SOS Atlantic Forest Foundation, poses a huge threat to the Government’s international, climate and environmental obligations.
As the WWF has noted, rushing into trade deals with partners that do not share our ambitions could undermine UK leadership on positive environmental outcomes, by allowing imports from industrialised agricultural systems or through supply chains that promote deforestation. “Risky Business”, a report by the WWF and the Royal Society for the Protection of Birds, demonstrates that the UK is already moving backwards on reducing the UK’s overseas land footprint, which increased by 15% between 2016 and 2018, suggesting that we are increasingly offshoring our environmental impact. We need to do better.
To conclude, the Bill gives us an opportunity to ensure that our trade policy supports our environmental ambitions by explicitly putting them into the Trade Bill, including the target of net zero carbon emissions by 2050. Amendment 11 is a positive step towards that goal and is consistent with the Government’s own commitments and obligations, so everyone should agree to it, to ensure that the UK complies with international law and that we remain a world leader on climate action.
Bill Esterson
I thank my hon. Friend the Member for Putney: it is absolutely right that we set an example to the world by honouring our Paris commitments, and honouring them in primary legislation is a formidable way of doing that. I am glad that she reminded me about fracking. There is fracking a mile from my constituency, and it causes enormous problems. Its relevance to the amendment is that the same companies engaged in fracking are able, under ISDS provisions if they are in place, to take action against the UK Government to defend their fossil fuel interests, even if the Government do not want to support such an industry and want to pursue a renewable energy agenda, so it is an important consideration.
That is why the amendment or something similar—if the Minister wants to bring it back, I will be very happy to look at it on Report—is the way to deal with this matter. We need to ensure that it is there, specified and clear in primary legislation, as part of our international trade framework, which is what the Bill should be. It is great of him to reference the Labour Government’s Climate Change Act 2008, but it is time for this Government to put such things into law as well, and this is their opportunity. I will press my amendment to a vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 12, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not in any way restrict the ability—
(a) to make public services at a national or local level subject to public monopoly;
(b) to make public services at a national or local level subject to exclusive rights granted to private operators; and
(c) to bring public services at a national or local level back into the public sector for delivery by public sector employees.”
We have significant written evidence to support this amendment—from the TUC, the British Medical Journal and the Trade Justice Movement. It is about ensuring that international trade agreements do not undermine the ability of Governments at national or local level to run services in the public sector or in a public monopoly in the private sector. Importantly, it also has provision for bringing services that have been privatised back into the public sector—as we have just seen with the probation service—when they have failed after a botched privatisation. We have seen the desirability of doing that all too often with outsourcing, as more and more councils seek to bring services back in-house.
However, with negative lists, standstill clauses and ratchet clauses in international trade agreements, it is becoming increasingly difficult for Governments to do these things. Negative lists ensure that only those services that are specified can be considered in the public sector. Standstill clauses mean that services cannot be brought back into the public sector. Ratchet clauses mean that we see increasing privatisation, with no prospect of a reduction. Failure to abide by them enables overseas interests to take legal action against the Government in this country. The proposed provisions need to be included for those reasons; otherwise, we face real problems in our national health service and elsewhere in our public services.
The Conservative party pledged in its manifesto last year that the NHS would be off the table in a trade agreement, but the pledge did not specifically cover any of the aspects that I have just described, including negative listing and standstill and ratchet clauses. There is digital trade as well. I did not deal with digital trade in my earlier remarks, but it is important because it covers areas such as NHS data, including patient data, which is of great concern to many people.
There is an opportunity for Government Members to rectify that omission from their manifesto by voting for our amendment. If they are committed to the NHS and our other public services, they can support the amendment and ensure that the opportunities are available for the public sector to deliver public services in the public interest.
Andrew Griffith (Arundel and South Downs) (Con)
Will the hon. Gentleman give way on that point?
Greg Hands
Amendment 12 would mean that the power in clause 2 could not be used to implement agreements that might restrict the delivery of public services through public monopolies, exclusive rights or nationalisation.
The amendment is not necessary, because this is a continuity Bill. None of the agreements in question restrict our ability to deliver public services in that way. We have always protected our right to choose how we deliver public services in our trade agreements. Indeed, the UK’s public services, including the NHS, are often protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. No trade agreement has ever affected our ability to keep public services public.
Colleagues will observe from our record of the signed agreements that the continuity programme seeks to preserve current trading relationships and not to alter the way in which our public services are designed or delivered. The amendment is therefore unnecessary, and I ask the hon. Gentleman to withdraw it.
Bill Esterson
Again, through secondary legislation the Bill enables the Government to do some of the things that we have described. More to the point, however, this issue is important because of the nature of the continuity agreements that will be renegotiated. We have discussed the agreements with Canada, Japan, Mexico and Turkey. I do not know whether any of those agreements would do what I have described, but they could potentially do so because they are not just continuity agreements.
The Bill sets the framework for trade agreements, because the Government are not bringing forward a different framework or alternatives on how trade agreements will be scrutinised and how they will end up. The Government are not challenging what the United States might do. We know the concerns that exist about how the US has expressed in the past its desire to intervene in public services in this country. We should be concerned and we should put this kind of commitment into law as it relates to international trade. I will press the amendment to the vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 13, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations may only be made under subsection (1) if—
(a) the provisions of the international trade agreement to which they relate are consistent with standards for food safety and quality as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(b) the Secretary of State is satisfied that mechanisms and bodies charged with enforcement of standards for food safety and quality have the capacity to absorb any extra requirement which may arise from the implementation of the agreement;
(c) the provisions of the international trade agreement to which they relate are consistent with policy to achieve reduction in the risk of disease or contamination as set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(d) the provisions of the international trade agreement to which they relate are consistent with achieving improvements in public health through any food policy priorities set and administered by—
(i) the Department of Health;
(ii) the Food Standards Agency;
(iii) Food Standards Scotland; and
(iv) any other public authority specified in regulations made by the Secretary of State;
(e) the provisions of the international trade agreement to which they relate are compliant with policy to achieve targets for farm antibiotic reduction set by the Veterinary Medicines Directorate;
(f) the provisions of the international trade agreement to which they relate are compliant with retained EU law relating to food standards and the impact of food production upon the environment; and
(g) any food or food products to which the provisions of the international trade agreement apply meet standards of labelling, indication of provenance, and packaging specified by the Food Standards Agency or Food Standards Scotland.”
The amendment relates to food standards—food production standards and food safety standards. That is an important distinction, because the Secretary of State and the Ministers do not appear to appreciate that we are talking about both types of standards. We saw this during the latest International Trade questions, where the hon. Member for Dundee East and I both made a point that was about food production as well as food safety, but that seemed to escape the notice of the Secretary of State.
The reality is that the US Government have a rather different view of what is important. Their trade representative has told us that the US has the best agriculture in the world; he has also said that it
“has the safest, highest standards”,
and that we
“shouldn’t confuse science with consumer preference.”
One thing that worries me is that when the Paymaster General was answering questions on this topic in the House the week before last, she made the point that consumers will decide. That has made people on the Opposition side worried that perhaps the Government are not as concerned as about this as they might be.
Representative Lighthizer has also described chlorinated chicken as thinly veiled protectionism. He clearly wants that to be part of a deal—he has said so—and has told Congress that the American Government are looking for a comprehensive deal, not a more limited agreement. By “comprehensive deal”, they mean agriculture in a very significant way, with lower food production standards. He has expected a push for access to the UK market for American farmers, and he has said that on issues such as agriculture,
“this administration is not going to compromise”.
Mike Pompeo, the Secretary of State, has made similar points, saying that chlorinated chicken must be part of the deal.
What do American standards mean? They mean a chlorine or acid wash to kill the pathogens in chicken, but those pathogens only need to be killed because of the poor animal welfare those chickens experience throughout their life. Other animal welfare concerns exist elsewhere, including the use of the feed additive, ractopamine, in pig farming and the use of injected growth hormones in cattle. Both give rise to significant welfare concerns for the animals involved; both are banned by the EU, and have been banned by the UK up to this point.
However, this is not just about food production standards, but food safety. The United States has 10 times the level of food poisonings that the European Union does, and one of the reasons is the allowable defect levels it has. It has a defect levels handbook, which sets out the maximum number of foreign bodies—such as maggots, insect fragments and mould—that can be in food products before they are put on the market. Chocolates can have insects in them, or parts of insects; noodles can have rat hair in them; and orange juice can contain maggots.
Bill Esterson
Those are just some of the horrors that UK consumers could be forced to accept if this country signs the kind of wide-ranging deal that Mike Pompeo and representative Lighthizer seem to be implying. I take it that the hon. Gentleman accepts that these things have been said by Mr Lighthizer and Mr Pompeo.
Robert Courts
The Opposition made the point about orange juice in a debate on the Floor of the House some months ago. It has since been completely debunked. Instead of using scaremongering about the standards of American food, could the hon. Gentleman address the facts?
Bill Esterson
The hon. Gentleman may want to withdraw that comment. I am not sure whether it was a bit close to the mark, but I know it has not gone over the mark; otherwise, you would have pulled him up, Sir Graham. The problem with what the hon. Member has just said is that the defect levels handbook says that US producers are allowed to include up to 30 insect fragments in a 100g jar of peanut butter.
Bill Esterson
The hon. Gentleman needs to get used to the idea that when someone takes an intervention, they have to answer that intervention before they take another one.
US producers are also allowed to include 11 rodent hairs in a 25g container of paprika, and 3mg of rat or mouse droppings per pound of ginger. There are similar rules for cocoa beans, cornmeal, ginger, oregano and spices. I will give way if the hon. Member wants to tell me that is not what is in the defect levels handbook.
Lee Rowley
I am happy to explain what I think is the case. Those are the thresholds at which the United States undertakes automatic prosecution against companies. They are not, as he is describing, the thresholds for what the US necessarily accepts in its domestic food production. That is a misrepresentation, as my hon. Friend the Member for Witney suggested. If the Labour party wants to have a mature and open discussion about trade in the future, given that we have just got these competencies back from the European Union for the first time in 40 years, it would do well to acknowledge those key and important nuances, which it is currently glossing over.
Bill Esterson
What is interesting about that intervention is that the hon. Member is right to say there are prosecutions above those thresholds, because it is illegal to cross them. However, US producers are legally allowed up to those thresholds, which is one of the reasons why food poisoning is such a problem in the United States. The difference between the United States, the EU and the UK is that we do not allow any of them. We have zero thresholds in this country, and I want that to continue. I am sure that everybody in the Committee wants that to continue, but unless we take action to provide safeguards in the event of international trade negotiations, there is a threat that such changes can be implemented.
We heard oral evidence from the NFU and have received written evidence from the RSPCA and the British Poultry Council to back up what I have just said. British and European standards are the highest in the world.
Gareth Thomas
Is not the broader significance of the intervention by the hon. Member for North East Derbyshire, when he asked whether the Labour party wants a mature and open discussion about trade, that we absolutely do want that? It is his ministerial colleagues and his Government who are preventing that from happening by denying a proper scrutiny process of future free trade agreements, including with the US.
Bill Esterson
A number of times, my hon. Friend has effectively reminded the Committee, in response to interventions from Government Members, that scrutiny will ensure that we do not have those sorts of problems. They would do well to take on board his advice and expertise, which is driven by his experience in government of looking at such matters. I daresay that when the Bill goes to the Lords, their Lordships will do just that. We might end with some changes to the Bill, even if we do not make any changes in Committee or on Report in the Commons.
We would do well to look at the evidence that was given to us. We would do well to look at what was said during the proceedings on the Agriculture Bill. We would do well to remember that some Government Members were led to believe that there would be an amendment to the Trade Bill that gave protections against the sorts of problems that I have just set out. That is why we have tabled an amendment later in proceedings to ensure that we deliver exactly that.
For now, the Paymaster General wants to leave it to the consumer. I want to ensure that the consumer is not put in a difficult position because, whereas in this country and in the EU we require labelling on meat about where it was hatched, reared and slaughtered, the US repealed similar legislation in 2015. If we do not want to have problems over the safety of our food—I will mention GM and some of the problems with vegetables as well—I suggest we attach an amendment such as this one to the Bill, or do as Ministers told their hon. Friends on the Agriculture Bill, and pass that amendment when we get there, probably, on Thursday.
Fleur Anderson
I have a few short remarks to make about food standards, which are of huge concern to my constituents. More than 100 people have written to me in the past week or so calling for a food standards commission to be set up, and they are watching this amendment carefully. I am sure this is another in a series of amendments on which we will hear from the Minister how much he agrees with what we are saying, and then he will go ahead and vote against it.
If so, and if we do not have these amendments in the Bill to say what our standards are, where would we have them? We could just have a note from the Secretary of State saying, “I am getting on with the trade agreements; let me carry on.” But no, we have a Bill, so we can set out what we want in those trade negotiations. The past few months have served as a reminder to us all to value our food, to think about where it comes from, its safety and its traceability, and to value our farmers and growers who produce it.
In a post-Brexit world, liberalised trade could expose British agriculture and mean that our farmers would have to compete with products that would be illegal to produce here in the UK. Now is the time for us to be world leaders and use that position to increase the animal welfare and environmental standards of food production across the world, in the continuity agreements and in others.
The chorus of voices in the food sector who are concerned about the future of food standards in our trade policy is deafening. The NFU has expressed concerns, noting that in our current and forthcoming trade negotiations other countries will not only urge the UK to follow their own sanitary and phytosanitary standards arrangements, which in many cases diverge from current UK practice, but resist any suggestion that their own producers meet the production standards and additional costs required of UK farmers, who will then lose out.
That leads us to the conclusion that it is hard to see how trade liberalisation will not inevitably lead to an increase in food imports produced in ways that would be illegal in the UK. In addition, the British Poultry Council believes that if food produced to lower standards is allowed to enter the British market, it will create a two-tier food system, in which only the affluent can afford to eat British food grown to British standards. That is unacceptable.
Turning briefly to animal welfare standards, it is important to understand that this is not a mere ethical luxury or a nicety—a nice-to-have addition to the Bill that we could have or not. Friends of the Earth has pointed out that intensive farming with few welfare protections is associated with deforestation, local pollution, poor workers’ rights and high emissions.
The Government have repeatedly assured us that they do not want to see regression in this area, and I am sure we are about to hear that again. Michael Gove committed on multiple occasions to ensuring that the UK was a global leader on animal welfare. That promise was reiterated in the 2019 Conservative manifesto. However, Friends of the Earth is concerned that future trade partners will want to water down the UK’s very high animal welfare standards, and that free trade agreements, which are the subject of the Bill, could pose a serious threat to the Government’s existing commitments to maintaining and improving UK standards.
The most effective way to prevent a regression in food and animal welfare standards, which is a worry for many different groups, and for the Government to keep their word would be to enshrine these standards in primary legislation before entering trade negotiations, taking them off the table altogether and therefore agreeing amendment 13.
Contrary to some commentators’ views, the amendment is not incompatible with global trade rules. Trade rules enshrine the rights of nations to regulate to achieve public policy goals, and to require that goods and services reach specific standards to qualify for import, as long as those requirements are applied fairly. The amendment would achieve that, and ensure that we have good food standards.
Bill Esterson
I am grateful to my hon. Friends for their contributions, as ever. My hon. Friend the Member for Putney reminded us to value our food and its origins, and of the threat to farmers in the UK if they have to compete with lower-standard food. She was right to do so.
My hon. Friend the Member for Warwick and Leamington reminded us about the fact that the public are in favour of high animal welfare standards, as well as food standards. We have some of the highest standards in the world.
My hon. Friend the Member for Warrington North rightly raised the issue of antibiotics; the potential for diseases to jump species, in the context of covid-19; and why it is so important that we maintain not just food safety standards but food production and animal welfare standards, and that we do not allow imports of food that do not meet those high production and animal welfare standards. I noticed that the Minister referred to food safety in his answer. The Food Standards Agency and Food Standards Scotland do that job, but their remit is food safety, not how the food was produced or the animal welfare under which it was produced. The point about antibiotics should alarm us all right now, given the nature of the crisis that we are going through.
The Minister and his colleagues should keep the promise that was made to colleagues in debate on the Agriculture Bill about the inclusion of provisions in the Trade Bill. Colleagues were told that that would happen, which is why they did not pursue things in the Agriculture Bill. It is essential that we maintain standards—yes, in the continuity agreements, but in future agreements too. That is the relevance of the amendment. That should be the framework for all trade agreements, not just so-called continuity ones. I will press the amendment to a vote.
Question put, That the amendment be made.
Trade Bill (Seventh sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Department Debates - View all Bill Esterson's debates with the Department for International Trade
Trade Bill (Seventh sitting)
Bill Esterson ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
Gareth Thomas
It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.
Bill Esterson (Sefton Central) (Lab)
The point about Lord Price is that what he said has turned out not to be true; that is the reality. My hon. Friend mentions the agreements that have been concluded, but the one with South Korea, for example, is only a temporary agreement with notice for a renegotiation. Listening to what my hon. Friend is saying, I wonder whether the Government have reverted to the five-year period because they realise that they would quite like these provisions still to be in place for the South Korea deal when it comes back for the renegotiation.
Gareth Thomas
If my hon. Friend will forgive me, I will come to South Korea in due course.
The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.
The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:
“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.
Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:
“Turkey…probably will not be carried over, regardless of the Bill.”
He went on to say that the Bill would allow the continuity and trade agreement to happen,
“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”
He went on to underline a similarly important point:
“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]
We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.
Let us take the UK-Japan continuity agreement. Again, we are led to believe that this is simply a matter of two very close allies sitting down together briefly and changing the words “EU-Japan” to “UK-Japan”, as well as perhaps changing the odd comma here or there, and dotting the odd i and crossing the odd t. In practice, however, something very different appears to be taking place. Just on Tuesday, the Financial Times carried a story saying that Japanese negotiators have given Britain an ultimatum: “Do the deal with us in six weeks, or we will not be able to get it through our Parliament and there will be no continuity trade agreement in place by 31 December.”
Bear in mind that Professor Winters, in his evidence to the Committee on Tuesday 16 June, at Question 31, said in response to the probing of my hon. Friend the Member for Sefton Central that
“with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 26, Q31.]
Again, when the Minister gets to his feet, it would be helpful if he gave us a little more detail on the substance of what is going on in those negotiations. I thought we were told that when we left the European Union, we would stop being a rule taker any longer, and here it appears that Japanese negotiators are telling us: “Do a deal or you don’t get your trade agreement in time.”
Bill Esterson
My hon. Friend is developing his point extremely well. I think it is fair to remind him that it is not just Canada that puts our deal with the EU ahead of its deal with us; Japan and Turkey want us to do a deal with the EU so that they can base their deal with us on the terms of trade that we have with the EU. That is a whole other set of complexities that go way beyond this being a simple matter of continuity and of changing the letters “EU” to the letters “UK”.
Gareth Thomas
Let me chide my hon. Friend for his negativity. We were told at the last general election that an oven-ready Brexit deal would come before us, with a wonderful new free trade agreement, easy to sign, with the European Union. Presumably the scepticism that I have allowed to creep into my remarks about whether the roll-over agreements will be signed by 31 December are entirely unreasonable, and the Minister will say that all the other 20, even the one with Andorra, will be done by 31 December.
I know that the South Koreans want to start completely fresh talks in about 18 months’ time, but surely that will not take five years, or 10 years to complete—or will it? I am an optimist. I take the Minister at his word. He has repeatedly said that roll-over agreements will be simply a matter of rolling over the EU agreements into UK agreements, changing some tiny details, and that they will all be done on time. One wonders, then, why we need the flexibility set out in subsection (7).
Let us remember when the previous Trade Bill was prepared and developed. It probably happened at around the time the right hon. Member for Maidenhead (Mrs May) took over as Prime Minister. Members of the Committee will remember that she decided to sack George Osborne, the then Chancellor of the Exchequer, for gross incompetence. One can imagine that the Cabinet Secretary got on the phone to the permanent secretary at the Department for International Trade and said, “There’s good news and there’s bad news. The good news is that the man who introduced austerity, destroyed our economy and damaged public services has finally left the Government. The bad news is that one of his chief cheerleaders is moving into your Department. Whatever you do, given the way in which they have messed up the economy, don’t let them mess up trade agreements. Write into the Bill a bit of extra time—five or 10 years, or perhaps even longer—so that we can get these trade agreements done.” The Minister may not share my assessment of how this provision got written into the Bill.
Bill Esterson
I have to take the opportunity to congratulate my hon. Friend on the moment in our deliberations. The lines he just delivered cannot be improved on, and I would not wish to do so. Does he remember Nick Ashton-Hart, in giving evidence to us this time, reminding us of his evidence to us last time that trade agreements inevitably take a lot longer than expected, and that trade agreements between parties fall in favour of the bigger party? We are now a smaller party than when, as part of the EU, we made agreements with all the countries he mentions. That is one reason why these things will take a lot longer—those countries want to renegotiate a better deal, which they think they can get because of the power they have.
Gareth Thomas
My hon. Friend has always grounded his remarks in reality. Let us remember that Conservative Ministers and Members have always wanted to present trade negotiations as a Christmas sale, where one just turns up and gets a shedload of lovely bargains. They have not, as yet, been open and honest with the British people about the trade-offs that trade negotiations inevitably bring, on which—I suspect this afternoon—more anon.
I gently suggest to my hon. Friend that we are likely to hear the Minister, in his wind-up speech, chastising us again for our lack of belief in the calibre of the Secretary of State himself and the Department to complete these UK-specific trade agreements. If the Committee remembers when the last Trade Bill was discussed, so confident were the previous ministerial team that this power was actually not quite as necessary as first appeared, they agreed to reduce the sunset period from five years to three years. One can only assume that the Cabinet Secretary got back on the phone after the current Prime Minister was selected and said, “I’m really sorry to bring you bad news, but one of the chief acolytes of the little-lamented George Osborne is back in your Department—”
Greg Hands
It is a pleasure to welcome you to the Chair, Ms Cummins. I did not get the chance on Tuesday because the supergroup carried on for the entirety of the morning.
Amendment 16 seeks to remove the power to renew the sunset clause after five years, and I am afraid I cannot support it. It would undermine our ability to implement our obligations from trade agreements beyond the first five years, which risks putting us in breach of the agreements and could open us up to legal challenge. I am sure that is not what the Opposition are seeking to achieve.
Bill Esterson
If the Minister cannot support a change to the five-year sunset period, why did he support it in the previous Parliament, when it was three years?
Greg Hands
I think the hon. Gentleman’s timeline—or the timeline of the hon. Member for Harrow West—may be a little incorrect. As it happens, I left the Department on 21 June 2018, which predated that amendment being made. In any case, the context then, which I will explain, was rather different from the context now, and I think it is very desirable that it be five years, not three years, for the reasons that I am about to explain.
There is a fundamental misunderstanding in everything that the hon. Member for Harrow West just said. The power is in large part needed to make technical changes that ensure that the agreements remain operable. The fundamental misunderstanding on his part is that it is not five years extra to complete the negotiations, sign the deals or finish the negotiations—no. It is five years that is needed to make sure the agreements remain operable once they have been signed.
Before I come to the real detail, let me give the hon. Gentleman an update on some of the agreements he asked about. It was interesting to hear him focus on Andorra and San Marino. Those countries are, of course, in a customs union with the European Union.
We are in discussions with both countries, but in our view, they are largely dependent on what the future relationship between the UK and the European Union looks like, for those two countries are in a complete customs union with the European Union.
The hon. Gentleman asked for clarity about Turkey. I was surprised by that question, because I checked his Twitter feed, and he does actually follow me on Twitter, which I do not take as a compliment ordinarily. He must have seen what we put out three hours ago from my right hon. Friend the Secretary of State for International Trade:
“Great to see”—
UK and Turkey—
“trade talks progress today. Let’s build on our already strong trading relationship worth £19bn. We are working hard to ensure we can reach a UK-Turkey trade deal at the end of the transition period.”
He has it right in front of him on his own Twitter feed; I urge him to read it. People mock social media—I might have been critical of social media in my time—but they occasionally perform a useful function. Helping us to keep up to date with what is going on in the world is one of the most useful aspects. So there he has it from just three hours ago.
The hon. Gentleman asked about the so-called temporary agreement with South Korea. It is not a temporary agreement. The agreement includes a review clause after two years, which is a standard feature of many international trade agreements. The review clause states—I am paraphrasing slightly—that if the two parties do not believe it is mutually advantageous to continue the agreement, there is the option not to. That does not mean to say that it is a temporary agreement. All international agreements can be cancelled by one party or the other, if they feel the agreement is no longer mutually advantageous. Of course it leaves open the possibility of doing a more extensive agreement in the future, but that is the case with all trade agreements.
When a country signs an agreement, no one is saying that it will stay in place forever. There may be opportunities in future to extend it into areas of trade that had not been thought of when the original agreement was signed. That is an entirely normal phenomenon. For example, the EU and Mexico have done an enhanced agreement based on their original agreement, which dated from about 2000 or 2002, to bring it up to date. New things come along, such as e-commerce and so on, so of course trade agreements are updated, but it is wrong to describe that trade agreement as temporary.
We are in discussions with Canada, but I return to the points that the hon. Gentleman made on Tuesday. He is so against the Canada agreement that, if there were any delay in the discussions with Canada, he should be cheering that not condemning it, because he is opposed to the agreement in the first place. I thought that would update him on where we are with the agreement.
Let me describe what it is all about. In the case of a transition mutual recognition agreement, we may need to change secondary legislation after the point of signing, and after 1 January 2021, to update the names of awarding bodies and third countries so that UK businesses can continue to use such bodies legally. It is not extra negotiating time. It is extra time to ensure that the agreement remains operable.
Alternatively, where our trade agreements reference international standards, such as environmental protection, we may need to update references in domestic legislation to ensure that we remain in compliance with our international agreements. Equally, a potential use of the power could be to upgrade the list of entities subject to procurement obligations to reflect machinery of government changes.
I used the example last week of DCMS changing its name from the Department for Culture, Media and Sport to the Department for Digital, Culture, Media and Sport. That name change might need to be reflected to keep one of those agreements operable, so a change in domestic legislation would ensure that the procurement obligations in the agreement are kept operable. It is not extra negotiating time. The power could also be used to update the list of entities subject to procurement obligations, as I have said.
I think there is a misunderstanding of the nature of the power. If Opposition Members had expressed concerns about the breadth of the power—in other words, the ability to carry on amending legislation for many years afterwards—that would be a much more legitimate concern than the professed concern about extra negotiating time. The Bill has been scrutinised by the Delegated Powers and Regulatory Reform Committee. Its 33rd report on the 2017-19 Bill raised no concerns about the delegated powers in the Bill, including the sunset clause, and welcomed our move to introduce the affirmative procedure for any regulations made. I see no reason why it should reach a different conclusion on this Bill.
Stewart Hosie (Dundee East) (SNP)
I start by addressing new clause 22 in the name of my friends from Plaid Cymru. In one regard, it seeks to do something similar to our amendment 8, which the Committee has already debated: to lay down in statute respect for devolution. We witness that in (c), (d) and (e), which would require motions relating to a ministerial statement to be approved by the Senedd, the Scottish Parliament and the Northern Ireland Assembly prior to regulations being made to implement an international trade agreement. New clause 22 would also, at (a) and (b), empower Parliament by requiring a statement on the terms of such an agreement to be approved in the House of Commons and a take-note motion passed in the other place.
That is eminently sensible. However, I suspect that the Minister will say it is not necessary. He may suggest that it is not necessary because international agreements, including trade agreements, and the decisions to implement them are reserved matters. There is some merit in that. He may also make the case, as he did on Tuesday, that it is better if the UK speaks with a single, if not a united, voice in order to give our negotiating and trading partners certainty about what a deal may or may not deliver.
That, however, is rather to miss the point, as the hon. Member for Harrow West said. We know that some sectors or industries are disproportionately important to the economies of Northern Ireland, Scotland and Wales, compared with their importance to the UK economy as a whole. I cannot remember the precise numbers, but it has been suggested on multiple occasions that the white fish industry is 10 times more important to the Scottish economy than it is to the UK economy as a whole. There are clearly sectors that are vital.
It is equally the case—this is probably accepted now—that modern trade agreements are by and large not about quotas and tariffs; they are about regulation, conformance and product safety. They have the ability to impinge directly on the reserved competencies in Scotland, Wales and Northern Ireland. It is, therefore, sensible that we understand and respect why my friends from Plaid Cymru and others seek not just to empower both Houses of Parliament in the decision-making process on implementing an international trade agreement, but to give statutory voice to the devolved nations to ensure their legitimate interests are properly protected.
I turn to clause 2 stand part. I accept what the Minister said about the Bill being primarily about rolling over the pre-existing trade agreements that we had by dint of our very successful membership of the European Union, but I also take on board the serious point made by the hon. Member for Harrow West. He said that the Queen’s Speech described a Bill to facilitate trade, not just roll-over agreements. He also talked about the long title, which says that the Bill will
“Make provision about the implementation of international trade agreements”.
That is rather wider than negotiating and implementing roll-over arrangements only.
In the previous debate, we began to touch on some of the key flaws in clause 2 that run to the heart of this legislation. As I said on Second Reading and in my introductory remarks last week, clause 2(6)(a) allows for the Government to make provision
“modifying retained direct principal EU legislation or primary legislation that is retained EU law”,
which runs to the heart of people’s concerns. Even if I accept—and, by and large, I do—that the provision is designed to roll over our current deals, the ability to modify in that way may well mean that we end up with an agreement that is substantially different from the one we started with.
That is a concern to me. Although the Minister has said there are restrictions on how the modification process can be used, subsection (6)(a), (b), (c) and (d) allows for the modification of retained EU legislation or primary law. It confers functions on the Secretary of State or any other person, including conferring discretion. It allows for the delegation of function, and for civil penalties to be introduced for failing to comply with regulations. The only restriction in subsection (6) is the restriction on the power to make subordinate legislation. I will have to check Hansard carefully, because I think the Minister spoke about amending secondary legislation in the previous debate. That would not be possible under this restriction, but it is the only restriction in terms of the ability to modify.
That brings us to the other flaw in clause 2—namely, the five-year or 10-year limit. Subsection (7) says:
“No regulations may be made under subsection (1) after the end of…the period of five years”—
so far, so good—
“or…such other period or periods as are specified in regulations made…in accordance with subsection (8).”
Subsection (8) states:
“Regulations under subsection (7)(b) may not extend the initial five year period…by more than five years.”
This is not simply, as the Minister suggests, to ensure that regulations are up to date. This five-year period and the five-year extension—this 10-year period—actually allows for the modification of principal EU legislation or EU laws under subsection (6), with the exception of the power to make subordinate legislation. That is an extraordinarily wide power that the Government have given themselves—a 10-year period. While I accept that the Bill is principally about rolling over existing deals, the ability to modify in a fundamentally unrestricted way for a period of more than two full Parliaments is an extraordinary power for the UK Government to seek to give themselves.
On that basis, if there is a vote on clause 2 stand part, I will certainly vote against the extension of these discretionary powers to the Government.
Bill Esterson
It is a pleasure to see you back in the Chair, Mrs Cummins, and we shall continue to enjoy serving under your chairmanship for another 19 minutes. I thank you for your contribution as joint Chair of the Committee.
I rise to speak to new clause 16. I remind the Minister of the point touched on by my hon. Friend the Member for Harrow West on 13 March 2019, when the Minister’s then ministerial colleague—
Bill Esterson
Sorry, it is new clause 18 that I rise to speak to. I am grateful for the correction.
On 13 March 2019, an identical amendment was tabled by Baroness Fairhead in the House of Lords. I will just remind the Minister of what she said in her brief contribution:
“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]
She said that in good faith, because she wanted the amendment to be accepted. It was accepted by the House of Lords and became a substantive part of the Bill, and the Commons would have considered it had the Government brought it back in the time available. There was plenty of time to discuss it then. The Government Whip made a point of order earlier. If the Government have a real problem with timing today, they should think about the problem that was caused by their not bringing back the Bill at any time during the period after March 2019, when an identical amendment, tabled by the Government, was agreed. The Minister has to answer the question why, if this measure was good enough for the Government on 13 March last year, it is not good enough now.
Greg Hands
Over the past few days, I have outlined the Government’s position on our approach to clause 2 and I will not repeat that to the Committee. The general point about the continuity powers has been frequently made. I will focus my remarks on the Opposition amendments.
First, I must inform the Committee that the letter I promised the hon. Member for Harrow West on the position of Kenya and Ghana has gone out to all members of the Committee. I pledged that on Tuesday, so I think that is pretty swift. It should be in everyone’s inboxes.
Trade Bill (Eighth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Department Debates - View all Bill Esterson's debates with the Department for International Trade
Trade Bill (Eighth sitting)
Bill Esterson ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
The Minister for Trade Policy (Greg Hands)
I begin by welcoming you to the Chair this afternoon, Sir Graham. I appreciate the concerns that there should be adequate parliamentary scrutiny of regulations made under the clause 1 power. I am satisfied that that is the case, and let me explain why.
As I have said, the power is intended to allow the UK to make technical changes—for example, to reflect new parties joining the government procurement agreement or existing parties withdrawing from it. In the case of a new or withdrawing party, it is important that the UK is able to respond quickly and flexibly. Once a new party deposits its instrument of accession, there is, under the rules of the World Trade Organisation GPA, 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 procurement opportunities covered by the GPA, and of course vice versa. If the UK failed to offer the new party this guaranteed access, we would be in breach of our GPA commitments. Equally, a party to the GPA can decide to withdraw unilaterally. When a party notifies the Committee on Government Procurement that it intends to withdraw, it will cease to be a GPA member just 60 days later. It is therefore vital that we are able to react quickly to such a notification, either to join or to withdraw.
If the power to amend UK legislation to reflect a party’s withdrawing from the GPA were subject to the affirmative resolution procedure, we might not be able to legislate in time to remove the party within the 60-day time limit. This could result in UK contracting authorities continuing to give a party that has left the GPA—companies from that country—guaranteed access to the UK’s procurement market that it is no longer entitled to have. Furthermore, the former party would have no obligation at the same time to give UK businesses reciprocal access to its procurement markets. I am confident that Members will agree on the need to regulate quickly in these instances, both practically so that UK businesses are not disadvantaged and to show good faith to the other party.
Bill Esterson (Sefton Central) (Lab)
The Minister made great play two years ago of the idea that the affirmative resolution procedure takes 30 days longer than the negative resolution procedure. However, that is not an issue because the Government are notified months in advance that this is coming, and Government officials are able to put in place the necessary regulations, whether negative or affirmative. There is plenty of time to get ready to avoid the catastrophic outcome that the Minister describes.
Greg Hands
The hon. Gentleman makes a fair point. In fact, accession to the GPA typically take some years, so in that sense it would have been telegraphed quite far in advance—the most recent party to join is Australia. But it would be inappropriate for us to ratify someone joining the GPA in advance of them actually depositing the papers, so although joining is a lengthy process, the actual ratification process is very short. That is the key difference in this case.
The Delegated Powers and Regulatory Reform Committee’s report on the Trade Bill 2017-19 raised no concerns, nor made any recommendations, about the use of the negative procedure in relation to this power. However, let me clear: when new parties are seeking to accede to the GPA, we will ensure that Parliament is kept informed. Parliamentary scrutiny is more effective before an accession is agreed, because that is when the views of Parliament can be taken into account.
Where a WTO member is seeking to join the GPA, it is our intention to notify Parliament, to keep the relevant Committee—in this case, the International Trade Committee—informed as the negotiations proceed, and to allow further discussion where desired. That is the right time for Parliament to be actively involved in a debate, for example, on Australia’s accession to the GPA—although the case of Australia is backward looking, of course, to when we were covered by the GPA through our EU membership. If there were such a case going forward, the right time would be during the discussions to the accession, not after the accession had been agreed.
I remind Members that there has already been parliamentary scrutiny of the UK’s market access schedules and the text of the GPA, which were laid before Parliament in line with the Constitutional Reform and Governance Act 2010. That process concluded without objection in 2019. Any further changes to the GPA, including the UK schedules prior to our accession, will again be scrutinised in line with CRAG.
I hope my comments provide reassurance to the Committee. I ask the hon. Gentleman to withdraw the amendment and commend schedule 2 to the Committee.
Bill Esterson
I beg to move amendment 1, in schedule 4, page 15, leave out line 14 and insert—
“(a) a member to chair it, appointed by the Secretary of State with the consent of the International Trade Committee of the House of Commons,”.
This amendment would establish the requirement for Parliament, through the relevant committee, to give its consent to the Secretary of State’s recommendation for appointment to the Chair of the Trade Remedies Authority.
It is a pleasure to see you back for the final sitting of the Committee, Sir Graham.
I know that the Minister sometimes forgets what we said in our reasoned amendment, so in case he has forgotten again, I remind him that we recognised the desirability of—indeed, the need for—the UK to pass
“effective legislation to implement agreements”
and
“to set out the basis of a Trade Remedies Authority to deliver the new UK trade remedies framework”.
Yes, we do indeed support the creation of the Trade Remedies Authority. There it is again, for the avoidance of doubt, on the record. No doubt the Minister will claim otherwise, as he has done numerous times in the past two years.
Schedule 4 states that the Secretary of State will appoint the chair, who will in turn appoint the chief executive and non-executive members of the Trade Remedies Authority. The amendment is about how the appointment of the chair is carried out. The chair is appointed by the Secretary of State and in that process there is no recourse to Parliament or to other scrutiny of the appointment. The Secretary of State is therefore free to appoint someone in their own image, with the same political leanings and economic opinion—which is the more important point.
Indeed, although I have no idea of his politics, when Simon Walker gave evidence he gave every indication that he entirely agrees with the approach of the Secretary of State to trade remedies. I do not say that to denigrate Mr Walker. I have known him for a number of years and he is a well-travelled representative of business, who has had a number of different roles. The amendment is about not him as an individual, but the principle. It is about the opportunity to appoint someone with a particular approach to trade remedies and the appointment, in turn, of an unbalanced Trade Remedies Authority that looks only at the approach favoured by the Government.
The previous Secretary of State had advisers from Legatum and the Initiative for Free Trade. The current Secretary of State has an adviser from the Adam Smith Institute. It is clear what the main thrust of Government advice is on those matters.
Gareth Thomas
Has my hon. Friend seen the evidence from the British Ceramic Confederation, which thought there was already a very strong ideological view on tariffs, protectionism and dumping? It highlighted, for example, the recent UK global tariff announcement and suggested that the Government’s pre-eminent view was that all tariffs are protectionist.
Bill Esterson
I am familiar with the evidence that my hon. Friend cites. It reminded us that the Minister has previously said in meetings—I believe he has put it in writing, too—that experts on trade would be appointed to these roles on a non-ideological basis. Yet the evidence on how the people are appointed to the roles suggests that the Government have one single approach, which is as my hon. Friend indicated.
The British Ceramic Confederation has set out concerns that include how global tariffs have been implemented. The way in which the Government tariff schedules have been set out causes a problem for many of the confederation’s members because of the small margins involved in the industry and because even small differences in tariffs between different countries creates a difficult problem for competitiveness.
The Government’s ideological direction of travel is about supporting consumers. The Minister will probably say that the Opposition are against the consumer interest, that we do not support consumers and that we do not think they should have access to good quality low-price imports. But that misses the point. Of course consumers are one of the interests and should be supported. Of course they have every right to be included, but they are one—not the only—consideration in these matters.
Gareth Thomas
It is obviously important that we have the Trade Remedies Authority. Two industries particularly concerned to have it are steel and ceramics. Have there not been consistent concerns in the past about China and one or two other countries trying to dump steel products and ceramics into Europe for UK markets? We need someone robust enough to stand up to such practice, and perhaps only parliamentary scrutiny of that person will help tease that out.
Bill Esterson
My hon. Friend is right. We have discussed ceramics, and he has spoken in other debates about steel and how not having an international trade agreement with Turkey runs the risk, as we were told by UK Steel, of 15% tariffs being levied in one direction and creating a very uncompetitive situation in the streel industry.
However, this is a slightly different point. The point is about trade remedies and the example of steel. In the 2015 steel crisis, cheap imports of Chinese steel flooded the European market, often not of the same quality or standard, and our steel industry was in crisis. The steelworks at Redcar closed, despite the fact that it had world leading carbon capture and storage technology, which was lost for good. The international competitive advantage in that emerging technology has gone from this country, and the rest of our steel industry faced a very difficult time. There are difficult times again now, partly because of the covid crisis and because the Chinese economy has emerged more quickly. The Chinese went into it first and have come out of it first.
In the 2015 crisis, David Cameron’s Conservative Government were resistant to the use of trade defensive measures as part of the European Union. This country delayed the introduction of those measures and the lifting of the lesser duty rule, with the effect that we were very late to take the action needed. The loss of SSI at Redcar was one consequence. We took action too late and we did not take the same action as other countries, which were in a much stronger position to resist the dumping of Chinese steel as a result.
Gareth Thomas
Absolutely, Sir Graham. I was merely going to say that the need for parliamentary scrutiny of the chair of the TRA is surely even greater given the point my hon. Friend made about the risk of China perhaps again trying to dump steel or ceramic products into our markets. The Government have an appetite for joining the transatlantic partnership, which China also wishes to join—it has made that wish very clear. Does my hon. Friend not think that amplifies his point about the need for robust parliamentary scrutiny to check that we have a genuinely robust chair of the TRA?
Bill Esterson
Yes, that is absolutely right, and of course there must be a chair who balances interests in exactly the right way to do these things; in his evidence, Simon Walker said he hoped that would be the nature of the make-up of the Trade Remedies Authority.
However, hope is not a recipe for success and there must be parliamentary involvement to ensure that, whoever the chair is, they take measures when they are appointed, including receiving representations from across industry, employers and unions, consumer groups—I say to the Minister that we recognise the importance of consumers in these matters—and the devolved nations. My hon. Friend was right to raise this issue. That is why parliamentary scrutiny of the appointment of the chair matters; it is so that these points are picked up.
I will talk about the economic interest test: further evidence given to us by the British Ceramic Confederation. The confederation made the point to us that there is no explicit presumption in favour of adopting the measures in the European equivalent to the economic interest test. The European equivalent balances the interests of producer, worker, and regional and consumer groups; the problem with the economic interest test is that it looks at only one. The EU is cited:
“The need to eliminate the trade distorting effects of injurious dumping and to restore effective competition shall be given special consideration.”
That is what the EU says. There is the explicit reference to “special consideration”; that is the presumption in the EU model, which is not there in the UK equivalent. Currently, the Bill only infers this, which is why something on—
The Chair
Order. The hon. Gentleman knows that I try to be generous, but with the best will in the world this is a very long distance away from the very tight wording in the amendment. I ask him to come back to the precise point of the amendment or draw his remarks to a close.
Bill Esterson
Absolutely, Sir Graham; I do apologise. The point that I am making is that there is this request to go on the record, and the Minister indicated earlier that this was the opportunity to do that. Perhaps he can put something on the record for the British Ceramic Confederation of the nature that they have written to him about and that I have just referred to.
I bring the discussion back to the amendment.
Gareth Thomas
One of the issues that Parliament would surely want to scrutinise is the role of the chair of the TRA in the appointment of the other board members. Some of the evidence presented to us makes clear a fear that some of the trade remedy experts that a putative chair of the TRA might want to bring on board will not be enthusiastic about keeping competition fair. Rather, they might want to turn a blind eye to the dumping of products in the UK, to create unfair competition with British companies.
Bill Esterson
My hon. Friend is right, and that is what the amendment is about. It is about ensuring that, when cross-examined—presumably by the Select Committee—the chair is asked whether they will take a robust approach in their appointments to the Trade Remedies Authority, to protect British industries, including the steel sector, ceramics, dyers, chemicals and pharmaceuticals, all of which trade remedies are likely to be involved in. That is the basis for the amendment. I hope the Minister will deal with the point that the British Ceramic Confederation asked him to deal with. Fundamentally, this is about ensuring that the chair is scrutinised properly, to ensure that there is a balance in the competing interests.
Gareth Thomas
Another concern about trade remedies that it would be useful for Parliament to raise with the chair of the TRA is the chair’s attitude to the international dispute resolution process, because the TRA will not be acting in a vacuum—a case of dumping of products in the UK market might have to go up to the World Trade Organisation dispute resolution process, which is currently not functioning. Would it not be sensible to be able to hear from the putative chair of the TRA their view on the connection between the UK TRA and the WTO’s currently blocked dispute resolution process for dumping cases?
Bill Esterson
That is an excellent example of what a parliamentary hearing would be used for. The model that we seek to emulate is the one used for the Office for Students, although that is not the only example of where parliamentary hearings are used before a chair of a body of this nature is appointed. The Office for Students uses that exact process to ensure that the chair appoints people who have a wide range of interests, rather than a narrow approach. We advocate a model along those lines, with the chair interviewed by the Select Committee.
Gareth Thomas
Were I involved in such a parliamentary scrutiny process for the putative chair of the TRA, I would want to know, as I hope my hon. Friend would, the attitude of the chair to the EU-led multi-party interim appeal arbitration process, which is an attempt to get around Donald Trump’s blocking of the appointment of judges to the WTO dispute resolution process. That is surely a sensible scheme for the UK to join, and we would want to hear that the putative chair was supportive of it. The Minister has, again, been studiously vague on whether the UK would want to be part of such a sensible anti-dumping process.
Bill Esterson
It would be important to ensure that, in the absence of the WTO functioning properly, international alternatives were being considered. Asking the chair their view of those proposed measures and our attitude to international co-operation is extremely valuable. I am glad my hon. Friend raised that point.
Gareth Thomas
I hesitate to test my hon. Friend’s patience. Were I to catch your eye, Sir Graham, when schedule 5, on staff transfer schemes, is being debated, I would be interested to explore the scope for members of staff moving from the Department for International Trade to the TRA, to get some experience of both the WTO dispute resolution process and the new multi-party interim appeal arbitration process. Again, does my hon. Friend not think that we should find out the attitude of a putative chair of the UK TRA towards staff transfers so as to get such expertise before they need to deploy it in a UKTI context?
The Chair
Before you respond, Mr Esterson, I gently point out that we have had some wonderful illustrations of some of the questions that might be put to the putative chair of the TRA, should the amendment be passed. We have probably had enough to get an idea of the argument being advanced.
Bill Esterson
Sir Graham, I am guided by you. The Chair is always right and I completely accept your point. The Minister may choose to respond to the excellent suggestions that my hon. Friend the Member for Harrow West has made, but I think we have made the case that the chair of the TRA should be interviewed and there should be adequate parliamentary scrutiny of his or her appointment.
Greg Hands
I hear what the hon. Gentleman has to say, and I think he is wrong to say that there is resistance, but I gently suggest that the matter is without the scope of the Bill, interesting though that topic and the future of the WTO might be.
We will be appointing the best people to the TRA, including the non-executive members of its board. As with any public appointments, the appointment of non-executive directors will be subject to the well-established rules that govern public appointments of this kind.
Amendment 1 seeks to give the International Trade Committee the statutory power to approve or veto the appointment of the TRA chair. It is established practice that decisions on public appointments are for Ministers who are accountable to Parliament and the public for those decisions. The Cabinet Office “Public Bodies Handbook” explicitly states that Ministers normally appoint the chair and all non-executive members for non-departmental public bodies.
Following the Liaison Committee’s report in 2011, further guidance was issued by the Cabinet Office setting out the tests for determining which non-departmental public body appointments should be subject to pre-appointment scrutiny. That guidance makes it clear that pre-appointment scrutiny should apply only in respect of three types of post:
“i. posts which play a key role in regulation of actions by Government; or
ii. posts which play a key role in protecting and safeguarding the public’s rights and interests in relation to the actions and decisions of Government; or
iii. posts in organisations that have a major impact on public life or the lives of the public where it is vital for the reputation and credibility of that organisation that the post holder acts, and is seen to act, independently of Ministers and the Government.”
In my view, none of those three requirements is met. The TRA is not a regulator, it does not protect or safeguard against the actions and decisions of Government, and, although we believe it is important for business confidence that it is seen as independent of Ministers, it is not an organisation that can be described as having a major impact on public life or the lives of the public.
I turn now to a few other points that cropped up. On EU remedy measures, we have been clear that we will transition appropriate measures into the UK. We have launched transition reviews of those, and we have consulted and will continue to do so. The economic interest test is a matter for the Taxation (Cross-border Trade) Act 2018, but there is of course a presumption in favour of measures in that Act.
On the engagement of trade unions, Simon Walker and the interim body—the Trade Remedies Investigations Directorate—met the Trades Union Congress yesterday and is engaging unions frequently. I remind the Committee that the board are not the decision makers on trade remedies; they set the strategy and hold the chief executive and the executive to account. There is no role for the TRA at the WTO or any involvement with the appellate body. I believe that I have responded to the British Ceramic Confederation letter, but I will study carefully what is in it.
Under the provisions of schedule 4, to which we will turn shortly, the TRA must produce an annual report, which the Secretary of State must lay before Parliament. The TRA will also be subject to the scrutiny of the National Audit Office and parliamentary Committees. In addition, complaints against it can be considered by the Parliamentary and Health Service Ombudsman, who may also share information with Parliament. I hope that that reassures the Committee that the amendment is not appropriate, and I ask the hon. Member for Sefton Central to withdraw it.
Bill Esterson
The Minister made a number of interesting comments. He talked about businesses and consumers having full confidence in the Trade Remedies Authority. He did not mention workers, and he did not mention the devolved Administrations in that statement at the start of his response. I am sure that causes concern.
The Minister spoke about the need to act independently and repeated the point about business confidence. He has also made the point that the TRA needs to be an organisation that business can trust. But if it is to be independent, there needs to be scrutiny of appointments. He said that a reason why it does not come under the code for appointments to be approved, other than by Ministers, is that it does not have a major impact. Trade disputes have major impacts. I mentioned the SSI closure; that was 5,000 jobs. I am shocked that the Minister does not regard that kind of incident as having a major impact. I am sure that workers up and down the country would share my concern on that point.
Greg Hands
I have checked exactly what I said. I said, “organisations that have a major impact on public life”. I did say that it would have a major impact on jobs, but I think “public life” would be considered more broadly than the immediate jobs of a particular workforce, important though they are. We are talking about the broader public.
Bill Esterson
The Minister is in danger of dancing on the head of a pin with his phrases. Honestly, 5,000 jobs is not a major impact on public life? I think the people of Redcar and the north-east would disagree with him strongly about that.
It is essential that we have this system of scrutiny in place. There are pre-appointment scrutiny sessions for many roles in public life. The Minister set out the rules—I think he set them out correctly—but he also gave us, in his description of what is independent, and in the phrase “major impact on public life”, an argument in favour of our amendment. For that reason, we will press it to a vote.
Question put, That the amendment be made.
Stewart Hosie
I have no intention of pressing the amendments. I listened carefully as the Minister rattled through that answer. I have no doubt that, with the exception of the specific point he made about staggering five-year terms at the very beginning, things are being done in line with guidance that has been used previously. However, that does not really answer the point that, because of the ministerial discretion, particularly on the removal of a member, there may still be a perception, real or otherwise, that members can be removed for considerations that are political and nothing to do with their actual unfitness to serve.
While I will not divide the Committee on the amendment, notwithstanding that the Minister read his answer very quickly, the Government may want to seriously consider how these matters are addressed. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 2, in schedule 4, page 19, line 26, at end insert—
“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”.
This amendment would ensure that the Secretary of State must lay the annual report of the Trade Remedies Authority before Parliament within a reasonable time frame.
The Chair
With this it will be convenient to discuss amendment 3, in schedule 4, page 19, line 26, at end insert—
“Recommendation reports
31A (1) The TRA must prepare a report on each of the individual recommendations it makes to the Secretary of State in connection with the conduct of an international trade dispute.
(2) The report must accompany the recommendation submitted to the Secretary of State.
(3) The Secretary of State must lay the report before Parliament as soon as reasonably practicable, and not later than five days from the time it is submitted to the Secretary of State by the TRA.”
This amendment would ensure that Parliament is kept informed, in a timely fashion, of the individual recommendations made by the Trade Remedies Authority to the Secretary of State in connection with cases of dumping, foreign subsidies and import increases causing injury to UK producers.
Bill Esterson
As with amendment 1, it is the lack of scrutiny that we are opposed to, not the creation of the Trade Remedies Authority. That is the subject of amendments 2 and 3, which are particularly important—as my hon. Friend the Member for Harrow West reminded us in the debate on amendment 1—in the absence of an effective WTO and given the concerns about international co-operation and collaboration on important matters that can lead to damaging trade disputes.
The amendment requires that the Secretary of State lay the annual report of the TRA before Parliament
“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”,
and amendment 3 requires that a report is prepared for Parliament in a timely fashion on each recommendation made to the Secretary of State.
Parliament should be able to scrutinise the work of the TRA to ensure that it is working in the best interests of the UK economy and all of its components. Such requirements are nothing new in the realm of trade remedies. In the European Union, the Commission is obliged to report to the European Parliament. This is supposed to be a continuity Bill; the continuity in this case would be to apply equivalent processes in the UK to what we had in the EU.
The report to the European Parliament is obliged to give MEPs statistics on the cases opened and the number of measures adopted. MPs here should be given the same information by our TRA so that they may scrutinise its work. MPs should be able to look at the number of cases initiated and the number of measures adopted, and therefore be able to judge whether the TRA is taking measures to defend our industries and jobs, and is working with the devolved authorities—not just putting the consumer interest first, at the expense of producers, jobs, and the regions and nations of the country.
Industry would be more comfortable if there was a more rigorous approach for parliamentarians to get involved in the setting of the rules for the system—it is not just us saying this, but industry, and both sides of it. As in the rest of the Bill, the Government propose nothing on parliamentary oversight or scrutiny of the TRA. Yet again, they want to make decisions that will have profound impacts—on key sectors of industry, on thousands of jobs and on the regions and nations—behind closed doors, without scrutiny and without accountability to Parliament. Unless that scrutiny is there in law, there is no guarantee that it will happen.
Giving parliamentarians an oversight power over the work of the TRA would ensure proper scrutiny and accountability. A weak trade remedies regime is of benefit to nobody in our country. If anybody thinks that having a weak regime will open up trade opportunities with international partners, they are mistaken. Partner countries will take advantage of that, once again, and we will see the loss of jobs that we saw in the steel sector in 2015 and 2016. It is only right that this House gets to scrutinise the work of the TRA to ensure that it is doing its job properly.
Greg Hands
I recognise the desire of Opposition Members to ensure that our trade remedies system is impartial, objective and transparent. Those have been our guiding principles, too.
That is why we are establishing the Trade Remedies Authority as an arm’s length body and why we will require the TRA to produce a report on the performance of its functions during each financial year, which the Secretary of State must lay before Parliament. The Bill requires that to be produced
“as soon as reasonably practicable”
after the end of that financial year. That is in line with other arm’s length bodies, such as the Office for Nuclear Regulation and the Nuclear Decommissioning Authority.
Imposing a fixed deadline by which the TRA’s annual report must be laid before Parliament is unnecessary. Prioritising an arbitrary deadline over ensuring a full and detailed report for Parliament and businesses to scrutinise is in no one’s interests. I am sure that the TRA, like all other NDPBs, will use its best endeavours to publish the annual report as quickly as possible following the end of the financial year. It is of course possible that that could be within the timeframe suggested in the proposed amendment. However, the TRA statement of accounts must be certified by the Comptroller and Auditor General before being laid, and that reliance on processes outside the TRA’s direct control makes it unreasonable to set a deadline for publication in statute.
The TRA’s annual report will follow best practice on openness and accountability as set out in the Cabinet Office publication, “Public Bodies: A Guide for Departments”, which provides a clear structure of best practice requirements, although we recognise that these will not be specific to each organisation that they cover. As with all non-departmental public bodies, we expect the TRA to follow best practice for an organisation of its type and to include appropriate performance indicators, rather than that being set by statute. As a new organisation, it is important to ensure that the TRA has the flexibility to develop and adapt these key performance indicators as it settles into its functions and continues engagement with stakeholders.
Bill Esterson
The Minister has certainly given us some rationale. I take him at his word on the practical reasons why the amendments would not do what we intended. However, it is important that we scrutinise the TRA’s work on individual investigations in realtime. I am sure there are alternative ways of doing that in Parliament—bringing reports before Select Committees, for example, where there is need to handle scrutiny sensitively if commercially confidential information is involved. Perhaps the Minister can bring some of those back to us.
However, I take at face value what the Minister says, which will now be in Hansard, on what the Government propose to do around scrutiny. While I remain concerned that there is a gap, I do not intend to push the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Schedule 5 agreed to.
Clause 6
Provision of advice, support and assistance by the TRA
Bill Esterson (Sefton Central) (Lab)
I beg to move amendment 28, in clause 6, page 4, line 22, at end insert
“and
(c) analysis of the impact of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018 (as amended by section 94 of the Finance Act 2020) to vary an amount of import duty if he or she considers that it is appropriate to do so.”.
Amendment 28 would require an analysis of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018, which I assume will be amended when the Finance Bill achieves Royal Assent, to vary import duty as she—it is “she”, at the moment—considers appropriate. This is a move away from working within the rules-based system. I entirely accept that there is a challenge because of the situation with the WTO; my hon. Friend the Member for Harrow West and I raised this in relation to other matters to do with the Trade Remedies Authority. This is an enormous step, and a great deal of power that the Secretary of State is potentially granting herself, or being granted by the Finance Bill, assuming it goes through, and there is presumably a role for the Trade Remedies Authority in scrutinising that.
The Minister was telling us earlier how wonderful social media can be and how immediate its effects can be. I use it to look at the newspapers in the morning. The Financial Times and The Times reported a number of things today that were relevant to our proceedings. I confess that I do not always pick up what the Minister and the Secretary of State are saying on their Twitter feeds; one of the problems with Twitter is that people scroll down and miss what someone has said. I mention social media because this morning The Times reports:
“President Trump has revived his trade war with Europe”.
He is threatening tariffs on £3.1 billion of goods, including beer, whisky, which we know about, and biscuits—I knew that mentioning British beer would gain the attention of some hon. Members—as well as Spanish olives, French cakes and German lorries.
The Times states:
“The primary focus of Mr Trump’s ire over trading has been China, but his America First agenda has found little room for the country’s purported allies either”—
that is, us. It continues:
“One of his earliest actions as president was to slap tariffs on imports of steel and aluminium from the European Union”,
and our steel and aluminium sectors have suffered as a result. The Boeing-Airbus dispute has caused great problems for businesses and workers in this country. There is the 25% levy on Scotch and Irish whiskey; I raise these because they are real examples of where trade disputes need responses, robust analysis and the correct approach.
Charlotte Nichols (Warrington North) (Lab)
On a point of clarification, my constituency manufactures one fifth of the world’s gin. Would my constituents be impacted by the measures that my hon. Friend refers to?
Bill Esterson
I am glad that my hon. Friend has had the chance to put on record the fact that Warrington is home to a fifth of the world’s gin. I know that she has been looking for the opportunity, and she has found it. The Times does not record whether gin is in the sights of the President of the United States for increased tariffs, but it would not surprise me. The list of proposed tariffs includes cakes, vodka—it does not say gin—potatoes, chocolate and cheese. Some of those are from the UK, but all of them are from the UK and Europe together. The article states:
“The EU has accused the US of providing state aid to Boeing, the American aircraft manufacturer, and is seeking to apply tariffs on $11.2 billion of US goods.”
We await a ruling from the WTO. As we have discussed, that is not without problem, and the dispute over aircraft subsidies goes back over a decade.
I mention those examples because they show just why it is important to get this right. The proposed change to the cross-border trade Act is relevant to the Bill as well, because that Act created the powers of the Trade Remedies Authority that we are setting up belatedly in this Bill. A power is being created here to vary rates of import duty in an international trade dispute. As I have just described, that power is significant and of great concern. This needs to be done correctly, because once a trade dispute starts it can grow and become a much bigger problem. That is why the amendment proposes a role for the Trade Remedies Authority. It is entirely consistent with the Bill, which says that the Trade Remedies Authority’s responsibilities include scrutiny and advice. We are suggesting that advice be given to the Secretary of State before she uses the new power.
The Secretary of State can act if she considers that to be appropriate. That sounds enormously wide-ranging. I have concerns that, without adequate scrutiny and the involvement of the appropriate organisation, mistakes might be made. They might be made in good faith, but we want the best possible evidence base to ensure that trade remedies of the sort that these powers envisage are used in the right way.
In the Finance Bill Committee, the Treasury Minister was asked a number of questions, and I would like to ask some of them to this Minister, because he might have had a chance to look at them. The answers will inform our view on whether, through our amendment, we are seeking the right power. The Treasury Minister said that provisions in various international trade agreements allow the UK to vary the amount of import duty applied to goods in the context of a dispute. Will this Minister please tell us what those provisions are? That was not clear from what the Treasury Minister said in the Finance Bill Committee.
The Treasury Minister described the provision in the Taxation (Cross-border Trade) Act 2018. Will this Minister tell us why a provision that was included in legislation only two years ago has now been found to be inadequate? What has changed in two years? Some of these problems with the WTO were entirely apparent even in 2018.
Who is advising the Government that the legislation is inadequate, and that the Secretary of State needs this additional power? The Treasury Minister said that, in certain circumstances, countries are within their rights to impose additional tariffs quickly in response to the actions of other WTO members, and where necessary outside WTO proceedings. If that is the case, why is that not sufficient for what the Government are trying to achieve?
The Treasury Minister referred to the problems with the WTO appellate body, which he rightly said had stopped working. He neglected to say that that was the result of President Trump declining to appoint to it. Will this Minister say what the Government are doing to ensure that President Trump appoints to that body?
The Treasury Minister appeared to say that the problems with the WTO appeals system meant that the UK Government should operate outside the WTO. Is there not a danger of our further undermining the WTO if we are not careful in how we go about doing that?
In the Finance Bill Committee, the Treasury Minister said that the change to the Finance Bill was similar to one being proposed by the EU. Will this Minister give further details of what the EU has said and done to give itself such powers?
The Treasury Minister said that the Government recognise the importance of having regard to relevant international arrangements. Will this Minister tell us what those arrangements are, and how the new powers will be exercised in line with international law and our rights as an independent WTO member?
Will the Minister tell us what initiated this change in a law that was so recently passed? Was it the digital sales tax and fear of retaliatory action by the United States, for example? The Treasury Minister reiterated the Government’s support for the international rules-based system. We agree on its importance. He indicated that any changes in import duty would be made by statutory instrument. That is a familiar concern in our deliberations on the Bill.
Greg Hands
As we have heard, amendment 28 seeks to create a new role for the TRA in analysing the impact of retaliatory or rebalancing duties imposed by the Secretary of State as a result of an international dispute. We should perhaps remind ourselves of the roles and responsibilities relating to international disputes, and the purpose behind the provision in the customs Act—to give it its proper title, the Taxation (Cross-border Trade) Act 2018—which the amendment refers to, and which the hon. Member for Sefton Central has been referring to as well.
Before going into the detail, I will say a couple of things about some of the broader issues that the hon. Gentleman has raised. The Airbus-Boeing dispute is clearly not directly within the remit of amendment 28, but it is not, I suppose, so far from it. Let me be clear about today’s announcement. We oppose the tariffs coming from the US vigorously. We find them unnecessary and harmful to trade between the US and the UK. We have raised our opposition with the US trade representative in person in recent weeks. I confirm to the Member for Warrington North that my understanding is that gin is included. There is not a decision to impose tariffs on gin, by my understanding, but gin is one of the products they are actively looking at.
On the questions that the hon. Member for Sefton Central asked about the Finance Bill, I think I am best off offering to look at those, and the most appropriate Minister will respond to him. As a former Treasury Minister, I am slightly mindful that the questions are probably within the Treasury’s area, and it may be better for the Treasury to respond. I do not think that there will be time to respond before the sitting ends at 5 o’clock in any case. However, contrary to what he suggested, it is highly unlikely that a Treasury or other Minister has said that we should operate outside the World Trade Organisation’s rules in the cases that he raised.
Section 15 of the Taxation (Cross-border Trade) Act provides for the Secretary of State to change the amount of import duty that applies to certain goods as a result of an international dispute. There are several scenarios under which that could come about. The first is if the UK has successfully challenged trade-restrictive measures imposed by another WTO member under the WTO’s dispute settlement system. If the other member fails to comply with the WTO’s ruling in favour of the UK, the UK Government would be able to impose duties to redress the issue.
Secondly, if there is a dispute between the UK and one of our partners under the terms of a free trade agreement, the UK may be able to impose retaliatory duties. Thirdly, there is the possibility that the UK could be subject to a dispute in the WTO, or as part of an FTA, and be required to provide compensation to the relevant WTO member or FTA partner. That conversation could take the form of imposing lower duties on certain goods. I reassure Members that variations in import duties in response to trade disputes are intended to be temporary in nature, and will be removed when action has been taken by the country or territory in question to bring itself into compliance.
What is clear from all this, and what Parliament has already accepted in passing the Taxation (Cross-border Trade) Act, is that it is for the Government to decide whether it is necessary to change import duties as a result of a dispute. We should be clear, however, that the resulting duties, whether higher or lower, are not trade remedies measures. That is the problem with the amendment.
Although the Trade Bill enables the TRA to provide expert support to the Secretary of State in order to build the evidence base for decisions on international disputes where needed, as we have already discussed during our consideration of amendment 3, the TRA does not have a role to play in determining duties arising from international disputes, and those duties are not trade remedies measures. Interesting though they may be to the Opposition, that would expand the role of the TRA into areas for which it is not intended. The TRA will be the UK’s expert body on trade remedies—that is the reason we are establishing it. It will not have the wider remit that the amendment would confer on it. I hope the Committee will agree and I ask the hon. Member for Sefton Central to withdraw the amendment.
Bill Esterson
That was a quite remarkable finish. I think the Minister said that the TRA will be the UK’s expert body on trade remedies.
Bill Esterson
Yet it is not going to be able to get involved in helping the Secretary of State by advising her where she might vary import tariffs in the event of an international trade dispute. Clause 6(1)(a) refers to
“the conduct of an international trade dispute”,
which seems to be entirely the right place to be looking for support for the Secretary of State when she is being given remarkable and unusual powers. If that support does not come from the Trade Remedies Authority, the Treasury will be advising, but it is a role for the Secretary of State for International Trade, not for the Chancellor.
The Minister correctly said that aspects of what I have asked about are for Treasury Ministers, but this is a responsibility of the Secretary of State for International Trade. That is why it has come to this Bill Committee; there is not another opportunity to deal with this issue. It is entirely relevant to look at support from within the Department for International Trade, which is why we tabled the amendment. I am concerned that the Minister has not come back with an alternative to how this power might be used.
Greg Hands
I would not normally intervene on the hon. Gentleman’s summation, but I think he is confusing two things: he is confusing an international trade dispute, the result of which may be retaliatory tariffs or some kind of other tariff action, with a trade remedy, which is in place to prevent something like the dumping of products where the UK is a producer of those products. They are fundamentally different things. The Trade Remedies Authority is set up to deal with trade remedies, not per se with the subjects of international trade disputes.
Bill Esterson
Not per se. The clause states:
“The TRA must provide the Secretary of State with such advice, support and assistance as the Secretary of State requests in connection with—
the conduct of an international trade dispute”.
It is not just about prevention, but about the conduct of an international trade dispute. We will end up disagreeing on this issue. With the way that the Bill is crafted and the way that the Government are setting up the Trade Remedies Authority, this was an obvious place to be looking to give the Secretary of State support and advice. Given that that is one of the key functions of the Trade Remedies Authority, it would be wise for her to have support in making such decisions.
I will wait for the Minister’s response to my questions. I think the problem was that the Treasury Minister was not able to answer them because they are technically challenging. The questions he was asked were difficult, so I am not surprised by what he says about answering a little later. It is very important that we get this right. Perhaps he can come back with exactly how advice and support will be given to the Secretary of State. I gave the examples at the start because they are current and show just how serious these issues are, and it is really important that we get them right. So I will wait to hear back from him. In the meantime, we will test the will of the Committee.
Question put, That the amendment be made.
The Chair
We now come to the new clauses. New clauses 1 to 8, tabled by the official Opposition, have been debated but not moved.
New Clause 9
Import of agricultural goods after IP completion day
“(1) After IP completion day, agricultural goods imported under a free trade agreement may be imported into the UK only if the standards to which those goods were produced were as high as, or higher than, standards which at the time of import applied under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health.
(2) The Secretary of State must prepare a register of standards under UK law relating to—
(a) animal health and welfare,
(b) protection of the environment,
(c) food safety, hygiene and traceability, and
(d) plant health
which must be met in the course of production of any imported agricultural goods.
(3) A register under subsection (2) must be updated within seven days of any amendment to any standard listed in the register.
(4) ‘Agricultural goods’, for the purposes of this section, means anything produced by a producer operating in one or more agricultural sectors listed in Schedule 1.
(5) ‘IP completion day’ has the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020.” —(Bill Esterson.)
This new clause would set a requirement for imported agricultural goods to meet animal health and welfare, environmental, plant health, food safety and other standards which are at least as high as those which apply to UK produced agricultural goods.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 11—Import standards—
“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the agreement—
(a) includes an affirmation of the United Kingdom’s rights and obligations under the SPS Agreement, and
(b) prohibits the importation into the United Kingdom of agricultural and food products in relation to which the relevant standards are lower than the relevant standards in the United Kingdom.
(2) In subsection (1)—
‘international trade agreement’ has the meaning given in section 2(2) of this Act;
‘relevant standards’ means standards relating to environmental protection, plant health and animal welfare applying in connection with the production of agricultural and food products;
‘SPS Agreement’ means the agreement on the Application of Sanitary and Phytosanitary Measures, part of Annex 1A to the WTO Agreement (as modified from time to time).”
This new clause would ensure that HMG has a duty to protect the quality of the domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.
New clause 17—Animal welfare and sentience—
“Regulations may only be made under section 2(1) if the provisions of the international trade agreement to which they relate are compatible with—
(a) any provision in UK law (including retained EU law) relating to animal welfare standards and the welfare of animals in the production of food; and
(b) any obligations relating to animal sentience by which the UK is bound, or any principles relating to animal sentience to which the UK adheres.”
Bill Esterson
New clauses 9 and 17 stand in my name and those of my hon. Friends. New clause 11 stands in the names of the hon. Member for Dundee East and the hon. Member for—
Bill Esterson
Inverness, yes. There we are. I knew that inspiration would be with me.
The explanatory statement shows that new clause 11 is entirely consistent with the other new clauses. It is about the protection of
“the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.”
Labour has tabled a new clause 17 on animal sentience. It is important that the Trade Bill is consistent with other pieces of legislation on animal sentience. The Government have agreed to introduce, under an animal welfare and recognition of sentience Bill, a process to ensure that any future legislation or policy is assessed against animal welfare standards. This should be recognised in the Trade Bill as one of the most important areas that could undermine animal welfare standards, and those standards should be outside the ambit of the trade negotiations.
We had a similar debate on Tuesday, but I will spend a few moments on this because a few things have happened since then, such as the Secretary of State appearing at the International Trade Committee yesterday. She said no, but what did she say no to? She did not say no to taking action on food standards, and the Minister did not say no on the same thing on Tuesday. They are very good at making it clear that food safety will not be affected, but they do not talk about food production standards. We have pride in this country in our high standards not only of safety, but of production and animal welfare as well, and those are the elements that have so far been missing in what Ministers have said.
In trade talks the more powerful side wins, and if that more powerful side wants a reduction in our food production standards, it is very difficult to resist if we want a trade agreement with it, and that is the problem. We have tabled a new clause very similar to one on the Agriculture Bill, and we have done so because Ministers told Back-Bench Conservative MPs that the Trade Bill was the place for such an amendment and for this to go into legislation, so we have done what the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Banbury (Victoria Prentis), told us we should do.
I wonder whom British consumers will believe. Will they believe Ministers who will not quite bring themselves to guarantee food production standards or take the action needed on animal welfare, or will they believe the British Standards Institution? Its chair, John Hirst, was quoted in The Times today, expressing fears over a potential American attempt to
“replicate the approach to standards”
agreed in its deal with Canada and Mexico, which President Trump’s officials see as a model for future accords. He says that such an accord would
“undermine our sovereignty over regulation”
by allowing the US to replace UK standards with its own. The Government should perhaps listen to Mr Hirst.
If the Government do not want to listen to Mr Hirst, they could listen to the executive director of Waitrose, James Bailey, who has said that a trade agreement with the US that loosened food standards—production standards—would amount to an “unacceptable backwards step”. He, very commendably, has said that Waitrose will never sell chlorinated chicken, hormone-treated beef or meat from animals subject to extensive use of antibiotics.
Gareth Thomas
Has my hon. Friend has seen the representations to the Committee from the British Poultry Council? That makes it very clear that the UK has multiple pieces of national legislation aimed at various aspects of animal welfare. For chicken alone, that includes on-farm catching, transport and slaughter. By comparison, the US has no national animal welfare legislation, particularly covering farm animal welfare. It is true that some states do have laws, but the three major chicken-producing states of Georgia, Alabama and Arkansas do not. Is that not at the heart of what his new clause seeks to do?
Bill Esterson
It is, and this lack of consistency in the US is one of the problems in doing a trade deal with it, because it has different standards in different states.
While my hon. Friend was speaking, the evidence from Which? came to mind. As we know, it represents consumers in the UK. It has cited consumers’ views on these matters: 79% would be uncomfortable eating beef produced with growth hormones, and 77% would be uncomfortable having milk from cows that have been given growth hormones. Giving antibiotics to healthy farm animals to promote their growth was of concern to 78%. It is not currently allowed in the UK, but it could be under a trade agreement if we give the Americans what they want. Seventy-two per cent. would be concerned about eating chicken treated with chlorine and 93% think it is important that UK food standards be maintained after we leave the EU. Nearly three quarters—72%—think that food from countries with lower standards should not be available.
Katherine Fletcher (South Ribble) (Con)
I welcome the hon. Gentleman’s clarification that while people have concerns about food standards the things he mentioned are not allowed in the UK at the moment. I noticed he said that sotto voce so I wanted to emphasise it for the record. They are not allowed, we are not going to have them, and it is not relevant to a continuity roll-over of a free trade agreement.
Bill Esterson
As we have debated many times, the Bill, with its long title, is a lot more than that.
Bill Esterson
The last Bill became an awful lot more after it was amended in the Lords, and I suspect that things are heading the same way. However, the hon. Member for South Ribble is right. Of course we have the highest food standards in the world. I say it already, and we have pride in those high standards. It is matter of safety, production and welfare, and all three of those have to be retained. I remind you, Sir Graham, that it was the US Secretary of State Mike Pompeo who confirmed that chlorinated chicken must be part of any post-Brexit trade agreement with the UK. That was confirmed by trade representative Lighthizer on many occasions, including when he said that on issues such as agriculture
“this administration is not going to compromise”.
Gareth Thomas
Further to the intervention by the hon. Member for South Ribble, my hon. Friend will be more than aware that a UK-Canada agreement is very much within the scope of the Bill. The Canadians have lower animal welfare standards and lower pesticide protections than we have in the UK. That is perhaps an even stronger rebuttal of the argument that the hon. Lady advanced, that the new clause is not relevant to the Bill. It is very relevant.
Bill Esterson
Of course my hon. Friend is right. It is not a question just about the US. It is about other countries with different food production, safety and animal welfare standards, where agriculture will be part of the agreements. I am grateful to my hon. Friend for reminding us that that is an important part of what we are discussing. You would of course have told me if I had been out of order, Sir Graham, and got me to sit down, but you did not, so I was not.
I remind the Committee again that there are real concerns about the impact on human health of using antibiotics and growth hormones. That is in addition to the impact on animal welfare, and the contribution that things such as antibiotics make to the potential for a growth in problems such as zoonotic diseases, and diseases crossing species—something we should all be extremely concerned about in the middle of a pandemic that probably results from exactly that.
The hon. Member for Tiverton and Honiton (Neil Parish) said in debate on the Agriculture Bill that he had been promised that the issue would be covered in the Trade Bill. He recognised that the Agriculture Minister who made the promise was possibly not in a position to make it. He said:
“We are being led down the garden path—we really are”.—[Official Report, 13 May 2020; Vol. 676, c. 300.]
Will the Minister tell us whether his hon. Friend has been led up the garden path? That is how it looks to most people out there, as well as to us in Committee.
Stewart Hosie
I want to speak to my new clause 11. Trade deals can put pressure on food standards and lead to the importation of food of a low standard. We know, for example, that the US Administration wants the UK to lower its food and animal welfare standards precisely to allow the export of products currently banned in the UK. The new clause includes a ban on the importation of food produced to standards lower than those currently applying in the UK.
The US and other countries have far lower animal welfare standards and adopt practices that are illegal in the UK for health and environmental reasons, such as the production of chlorine-washed chicken and hormone-fed beef; use various pesticides outlawed in the UK; and produce genetically modified crops, which are completely outlawed in Scotland. We believe that the quality of Scotland’s food and drink produce, and indeed that from elsewhere in the UK, as well as the standards of production, are essential to retaining our established international reputation in those products.
Greg Hands
I am happy to have a debate with the hon. Gentleman about the difference between standards and methods, but I am not sure that the difference is that big.
The dictation of our domestic standards to our trading partners might well appear a laudable goal, but the new clause would require them to keep aligned with just seven days’ notice. Subsection (3) of the new clause states that a register
“must be updated within seven days of any amendment to any standard listed in the register.”
Our trading partners’ standards would therefore have to remain dynamically aligned to our domestic production standards with just seven days’ notice. That could have serious consequences for our existing trade flows, let alone anything negotiated in the future.
This is true for the developing world. The beans that we can buy at Waitrose in Fulham—I imagine that they are similar to the ones at Waitrose in Putney, for example—come from Kenya and Egypt. The last time I bought beans was at the weekend. Bananas from the Caribbean might not have production standards that are the same as those in the UK, but they can still meet our import standards.
Those markets would not be able to keep up with our changes. Given just five days’ notice, they would have to dynamically align with whatever the UK decided and, within seven days, make the changes to their domestic production standards. That strikes me as being wholly impractical. The impact of the new clauses could be severe on livelihoods in the developing world. I invite Opposition Members to go and see some of the Kenyan or Egyptian beans being produced and tell some of those workers that, as a consequence of new clause 9, they might well find themselves having to align with UK production standards in the future.
The new clauses might have been drafted with the US in mind, but this is UK law and it would apply to all our trading partners. These measures would likely render inoperable the very continuity agreements we have been discussing and, indeed, potentially prevent a deal with the EU itself. There would be an irony in the UK, through our domestic law, seeking the EU to dynamically align with our standards.
As I said on Tuesday, the UK banned veal crates some 16 years before the EU, and we can take great pride in that; it is a great achievement. The idea that the EU would sign a trade deal with us whereby it would have to commit to dynamic alignment with our standards with just seven days’ notice is highly questionable, to say the least. Members who want continuity with those 40 deals should not vote for these new clauses, nor should those who want a trade deal with the European Union.
New clause 9 would have the unwanted effect of discouraging partners with whom we are yet to sign a continuity agreement from negotiating with us. This Government were elected on a manifesto promise that, in our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards, and we will not. Parliament will have significant oversight of any regulations made under this power, and any statutory instruments brought forward will be subject to the affirmative procedure. Given our robust commitment to British food and farming, I ask the hon. Member for Sefton Central to withdraw the new clause.
Like new clause 9, new clause 11 stipulates that all food imported to the UK should be held to the same standards as that which is produced in the UK. The proposal stands in the name of the hon. Member for Dundee East, although I suspect he has the same intentions as the hon. Member for Sefton Central in tabling it. I have already provided assurances that EU import standards, praised by the NFU and others, will be replicated in domestic law at the end of the transition period. Our import requirements include a ban on using artificial growth hormones in domestic and imported products, and any changes to existing legislation would require new legislation to be passed by Parliament.
Given that we have high safety standards in place, and that the wider unintended consequence of the new clause would be to threaten both the resilience of our food supply chains and our opportunity to ensure that we secure continuity for British businesses and customers through our ongoing continuity negotiations, I hope that the hon. Member for Dundee East will not press the new clause.
New clause 17 stipulates that any animal welfare or sentience regulations arising from trade agreements must be aligned with existing commitments in UK and retained EU law. I can assure Members that our world-leading animal welfare standards are at the heart of our continuity negotiations. None of the agreements already signed with 48 countries is inconsistent with existing standards, as the parliamentary reports published alongside those agreements demonstrate. In fact, the UK has some of the most comprehensive animal welfare regulation in the world. We have introduced one of the strictest ivory bans in the world and we have a manifesto commitment to end excessively long journeys for slaughter and fattening. World Animal Protection rated the UK as having the joint-highest animal welfare standards in the world, tied with Austria, Switzerland, the Netherlands, Denmark and Sweden.
I share Members’ desire to ensure safeguards both for British consumers and for farmers. However, the protections we are already putting in place, coupled with the unintended consequences of the proposals, mean that these measures would be of no benefit. Our manifesto commitment is clear: the Government will stand firm in trade negotiations to support farmers, protect consumers and safeguard standards. I hope that that explanation, alongside the 20 continuity agreements that Parliament ratified, provides reassurance to the Committee that the Government’s commitment to maintaining standards is being delivered. I therefore ask hon. Members not to press their proposals to the vote.
Bill Esterson
That was really telling. It has taken until today for the Government to come up with a form of words to justify not supporting higher food production standards. The intervention, I think by the hon. Member for Dundee East, really did nail it. There is a world of difference between methods and standards, of course there is. How something is produced to a certain standard is one thing; the method used is entirely another. This is the point we have been making again and again in the proceedings of both this Bill and the Agriculture Bill. The Government have been pushing a defence of food safety, but not how it is produced, how animals are looked after or, indeed, how plants are protected. It is really telling that that is the defence being used and that it has taken them a while to get there. There can be and there are different methods of production all over the world, of course there are, but they can be to the same high standards. I am afraid that it did not work, and it will not work. It will not wash, unlike the chlorine the previous Secretary of State at one point said was perfectly safe and acceptable, before changing his mind when he realised it was not acceptable or palatable.
So, there are those differences and we should have concerns about hormones in animals. We should have concerns about the impact of antibiotics. We should have concerns about the impact on fruit and vegetables as well. As my hon. Friends have pointed out it is not just the United States, but countries that are directly a part of the continuity aspect of the Bill, that the Minister is so fond of reminding us about. It is Japan as well as Canada, by the way.
Charlotte Nichols
I recently took part in an update call with the Secretary of State about the progress of the UK-US trade deal. She made a very interesting point in answer to a question from the hon. Member for Wyre Forest (Mark Garnier) regarding food standards. He asked about outcome versus process and the technicality of that when it comes to animal welfare. The Secretary of State said that we had spelled out our red lines to the US in negotiations, but that the issue the Government had with the amendment to the Agriculture Bill on 13 May, which would have guaranteed high standards for food and drink entering the country post-Brexit, was to do with Canada not meeting our domestic standards. Could the Minister perhaps shed some light on that?
Bill Esterson
That is a matter for the Minister rather than me. Perhaps it is one he will take away and respond to in time, but my hon. Friend makes a very important point. It reinforces the argument we are putting and is part of the reason that we shall press the new clause to a Division.
The reality is that the Minister is relying on safety standards, saying, “A chemical wash at the end of the process is good enough and it does not matter how we get there if it produces cheaper food. If production is cheaper because there is less animal welfare, let’s not worry too much about it.” There are a host of problems with that relating to health, morality in the way that animals are treated, and the animal sentience amendment. Indeed, there are also grave concerns about the impact on human health over the longer term in areas such as the use of antibiotics—not just its impact on zoonotic diseases but the effect on human health of antibiotics and other chemicals getting into water courses.
So no, we do not buy it; we do not accept it. I think we will stick with what the hon. Member for Tiverton and Honiton said. We do think we are being led up the garden path. Getting on for 80% or 90% of the public agree with us and, frankly, so does the NFU. It wants to keep high production standards, whatever the Minister might have said in his response to the debate.
Question put, That the clause be read a Second time.
Greg Hands
On a point of order, Sir Graham, I thank you, Ms Cummins, and everybody involved in the Bill for all your hard work in Committee. Once again, I am both pleased and privileged to have been able to engage in a thorough debate on the contents of the Bill, which bears an uncanny resemblance to the Trade Bill in the last Parliament. I have been in and out of the Department for International Trade, but on returning to the Department, I found the Bill looking more or less the same as when I left the Department in June 2018.
I thank the Committee for engaging with the issues in a positive and constructive way; we have had some real insight, not only into trade policy overall, but into how opposition parties deal with trade policy. I will not dwell further on that, because I have made a few points already, but it is good to see that the approach patented by the hon. Member for Brent North (Barry Gardiner)—with the Opposition’s trade policy a moving feast—lives on today in his absence.
We have had a great debate, carried out in a good spirit, during our two-week immersion in trade policy. I think that, no matter which party one belongs to, a full two-week immersion in trade policy is a great thing as we move forward towards our independent trade policy, effective from 1 January 2021. We can all only benefit from such an immersion.
My thanks also go to the Government and Opposition Whips, who have ensured that the Committee has run smoothly and effectively, and to you, Sir Graham, and Ms Cummins, for being exemplary Chairs. I am very grateful for your guidance during our deliberations. I pay tribute to the usual channels for their help and guidance throughout; to Hansard for their diligence in recording all that we have said for posterity; and to the Clerk for his advice.
I also thank my team of officials for their support in undertaking box duty without ever entering the Palace of Westminster; I do not think that is a good thing overall, as I always encourage civil servants to come into Parliament as often as possible. It is very important for civil servants to understand how Parliament works but, given the current circumstances, I am fully understanding of the Department’s procedures for the scrutiny of the Bill.
The last time I stood here, I said that this was the first ever piece of legislation from the Department for International Trade. It is still our first Bill. I am confident that this legislation will now make its way on to the statute book and will be all the better for the work of the Committee.
Bill Esterson
Further to that point of order, Sir Graham. I add my thanks to you and your co-Chair, Ms Cummins, for your diligent and considerable efforts to ensure order during our deliberations. I thank the witnesses who gave evidence, the Clerk, all the officials and Hansard. As the Minister said, it is a challenging time for all who are involved in making sure that Committees operate effectively.
I thank the Whips. The Government Whip was entirely fair in her criticisms of the Opposition, as she raised the same number of points of order about my hon. Friend the Member for Harrow West and me—fair play to her for her fairness. The Minister described the Bill as a continuity Bill a number of times, and he has been the continuity Minister on the continuity Bill. He is nothing if not consistent, because he gave exactly the same answers as he gave last time around. I hope that this time we will make some progress on the Bill and see the end result. I dare say that we will return to some of these arguments on Report, and that the Lords will have their say.
The Minister mentioned my hon. Friend the Member for Brent North. Where would we be without the hon. Gentleman? At least this time we did not have to resort to making up fictional names for countries to make our points. There will have been no Xanadu in Hansard until now.
I thank hon. Members on the Government Back Benches for bearing with us—it is a thankless task. I hope one day to be on the Government side, although I do not know whether I would hope to be a Government Back Bencher. Being a Government Back-Bencher in Committee, where they take a vow of silence, is undoubtedly a thankless task, but most of them managed to perform their duties diligently. One or two found it impossible, but I understand that. With that, I thank everyone for their contributions.
The Chair
I thank the hon. Gentlemen for their points of order. I add my thanks to Hansard and in particular to the Clerk, given that we go back to the Education and Employment Committee in the 1997 Parliament. I have been well served and well advised by this Clerk for many years.
Question put and agreed to.
Bill accordingly to be reported, without amendment.
Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)Department Debates - View all Bill Esterson's debates with the Department for International Trade
Trade Bill
Bill Esterson ExcerptsMonday 20th July 2020
(4 years, 4 months ago)
Commons ChamberRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 July 2020 - (20 Jul 2020)
Greg Hands
I have much more to say, in relation to 50 different amendments, but I appreciate that there are a large number of other speakers, so I will call it a day there in order to allow other people their say. I think I have covered the main areas, outlining why we have the requirements in new clauses 5 and 6 on data, why we are confident of our robust approach to parliamentary scrutiny, using the CRAG process and enhanced things that we have introduced to ensure that Parliament gets the information and has the say that it needs, and finally our absolute commitment to not compromising on standards for food safety, animal welfare and the environment.
Bill Esterson (Sefton Central) (Lab)
International trade has rarely been more important. It is critical as we forge a new place in the world outside the European Union. It is also critical to how we recover from the pandemic, as it has the power to deliver prosperity at home and abroad, especially in the developing world as we aim towards the sustainable development goals. We will support the Government where they are right and challenge where they are wrong.
There are three key areas to which our amendments to the Trade Bill refer: social, environmental and democratic. First, on social, the Bill has profound implications for workers’ rights, human rights, public services and the economy. Secondly, on environmental, as my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) reminded us on Second Reading, international trade agreements have a massive impact on our ability to tackle the climate and environment emergency. Meanwhile, food production and animal welfare standards are matters of enormous concern to farmers and consumers alike. Thirdly, on democratic, the complete absence of scrutiny runs like the Sant Andreas fault through the Bill. [Hon. Members: “San Andreas.”] Thank you—the San Andreas fault.
Craig Williams (Montgomeryshire) (Con)
Will the hon. Member give way on that point?
Bill Esterson
I will give way in a moment. Our amendments attempt to rectify the Bill’s serious shortcomings and the lack of accountability. We were promised a modern framework for international trade negotiations in the Queen’s Speech. The Bill was supposed to be the opportunity to deliver that framework. It does not. The Bill gives Ministers powers to make changes to retained EU law upstairs in a Committee of 17 MPs after a maximum debate of 90 minutes. These powers are retained for up to 10 years. That is quite some grab by the Executive—and it is far from the whole story, either.
The final text of an agreement depends on the Government granting debates to the Opposition during a 21-day period: something that did not always happen in the last Parliament. It relies on the Opposition using their limited opportunities to determine the agenda for such a debate. The Government should be holding the debate and a vote in both Houses as a matter of course. New clause 4 is an opportunity to address some of the democratic deficit in the Bill.
Only half of the 40 agreements covered by the Bill have been signed. We are told by the Minister that they have already been scrutinised by the European Union. But these are not the simple matters of continuity that the Minister would have us believe. Only three out of 20 existing mutual recognition agreements have been signed with Switzerland, our third largest non-EU trading partner. South Korea has only signed a temporary agreement and wants to start again, and a number of the remaining 20 are going to be completely new. Japan—new agreement; Turkey, our 10th largest non-EU trading partner is in a customs arrangement with the EU and is waiting for the UK to sign a free trade agreement with the EU. Canada is in no hurry to negotiate at all. As I said, these are far from being simple matters of continuity, which is why they need proper scrutiny.
Barry Gardiner
Does my hon. Friend share with me the sense that the Government have told us that they needed the Bill to be able to produce these roll-over agreements? Yet the Minister has stood at the Dispatch Box today and said that we have concluded 20 of these roll-over agreements. In fact, they have managed to do that without this Bill having passed into law. Is not what he is saying absolutely relevant? It is these future agreements that we need legislation for, and it should be proper legislation that sets out the framework under which this Parliament scrutinises what is going on.
Bill Esterson
My hon. Friend is absolutely right, and I pay tribute to his time as the shadow Secretary of State and the work he did on scrutinising and opposing this Bill first time around. He is also absolutely right to say that what we have heard already from the Minister just bears out everything that we have been saying for the past three years.
As I say, these are not simple matters of continuity. That is why we need proper scrutiny. The problems do not end there. The Bill will put in place the framework for a new generation of new agreements, including those with the United States and Australia, and the controversial so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership: CPTPP.
Craig Williams
I thank the shadow Minister for giving way.
I am a member of the International Trade Committee, which of course has cross-party membership; I wonder why the hon. Gentleman cheapens that Committee by saying that there is no scrutiny. I welcome the involvement from the Government to date. I ask the hon. Gentleman directly: prior to the CRAG protocol Act, how many trade deals did this place vote on while the power rested in Brussels?
Bill Esterson
As the hon. Gentleman knows from being on the International Trade Committee, CRAG was part of the process that we had as EU members. I will come to that in more detail a bit later.
Caroline Lucas
I just note that, as a member of the European Parliament’s trade committee, I had far more powers of scrutiny over trade agreements as an MEP than I have ever had as an MP here. However, does the hon. Gentleman share my concern that the Government’s refusal to bar imports from producers that produce to lower environmental or animal welfare standards spells real disaster for our farmers? If they are going to get undercut by cheaper produce that does not meet the same standards, how on earth can they make a living if they have to meet higher standards, and therefore probably higher costs as well?
Bill Esterson
The hon. Lady anticipates some things I am going to say a bit later. What she says is entirely consistent with what I said about the environmental aspects of the Bill.
There is widespread recognition across society that parliamentary scrutiny is essential in international trade agreements. The hon. Member for Huntingdon (Mr Djanogly) and his colleagues deserve credit for their sterling efforts to build consensus. Their new clause 4 has many elements of good scrutiny practice that a modern, confident, outward-looking country should want to adopt: scrutiny of, and a vote on, the negotiating mandate; assessment against domestic standards; consultation with the devolved Administrations; and a vote on the deal by both Houses. These are a good place to start. We can also learn from good practice elsewhere. For example, a very different approach is taken in the United States, where advisory committees have access to negotiating texts, trade unions are represented as well as employers and confidentiality agreements ensure that consultation is at an appropriate level. The result is that agreements can be amended, as with the recent United States-Mexico-Canada agreement, of which a strengthening of the labour chapter is intended to end union busting in Mexico.
How do we compare? Oh dear. So-called expert trade advisory groups—ETAGs—in this country are completely different. The Government do not tell us the criteria for membership or who the members are, and trade unions are excluded from a number of groups that were not set up to scrutinise trade deals. Talk now of a room-next-door approach has raised concerns because of the over-restrictive nature of the non-disclosure agreements, which, as drafted, would prevent sensible consultation and analysis of the text, even by the existing self-selecting and very limited memberships of the ETAGs.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend accept that we can learn through failure as well? One reason that the Transatlantic Trade and Investment Partnership failed was the lack of involvement of trade unions, industry and a number of different partners until right at the last minute, when people were asked to vote on something that they had not been brought along with.
Bill Esterson
My hon. Friend is absolutely right. I shall come to TTIP as an example of how not to carry out scrutiny and of why it is so important to have that wider engagement.
Bill Esterson
I will give way a little later, if the hon. Gentleman does not mind, because a lot of Members are waiting to speak. This talk of a room-next-door approach has raised concerns because of the over-restrictive nature of the NDAs. The chaotic way in which the Government plan to create their room-next-door system sounds more like a sketch by Mr Michael Spicer than how a responsible Government might engage with scrutiny.
Emily Thornberry (Islington South and Finsbury) (Lab)
On the Michael Spicer point?
Bill Esterson
I do not know if Michael Spicer is talking to the hon. Gentleman or not; we will find out in a moment.
Jonathan Gullis
The shadow Minister talks about scrutiny and refers to trade unions. However, if we have trade unions at the table, who will scrutinise the trade unions to ensure that they are not pushing their own agenda from their own sector on a UK-wide deal? How will we ensure their impartiality if they are beholden to a militant number of members? As we know, not every trade union member is politically motivated or engaged.
Bill Esterson
It is a shame that the hon. Gentleman has taken up other hon. Members’ time in the debate with such rubbish. The Constitutional Reform and Governance Act 2010 is the only formal parliamentary process in place for agreements not covered by the Bill, including with the United States. That is not scrutiny, is it?
Matt Western (Warwick and Leamington) (Lab)
Just to backtrack a moment, I remind my hon. Friend of the claims made by the Minister in his opening remarks, when he claimed we would enjoy better scrutiny than countries such as Australia and New Zealand, which I think is disputable. There was an exceptional omission, which was the United States. Should that not concern everyone?
Bill Esterson
Absolutely. We compare very badly with the scrutiny in the United States, some of which I have already described. My hon. Friend is right to make the comparison. Is it not ironic that we are in the middle of trade talks with the United States, where they have full scrutiny and we do not? While we are stuck with CRAG, in the United States debates and votes will take place in Congress, alongside the engagement with business and the unions that I described earlier.
Let us remind ourselves that CRAG was introduced as part of our scrutiny process while we were EU members, because trade agreements were an EU competence. The process included full scrutiny in the European Parliament —scrutiny that has not been replaced by an equivalent system. The hon. Member for Brighton, Pavilion (Caroline Lucas) reminded us of her experience performing exactly that role.
The Minister wrote to MPs last week. I think he read out quite a lot of his letter in his speech. He told us last week that legislation will be debated and scrutinised by Parliament in “the usual way”. The usual way? There is no “usual way”, because the usual process only worked alongside the scrutiny carried out for us in the European Parliament. Despite what the Minister says, CRAG on its own makes no sense unless the Government wish to avoid scrutiny.
Today’s amendments to the Bill are similar to those passed in March 2019. The Minister is fond of telling us how vital it is that the Bill passes, so why did the Government not accept the amended Bill last year? It could have saved a lot of trouble.
Bill Esterson
And time. What possible reason can the Government have for wanting to avoid scrutiny, and why on such important areas? Perhaps there are some clues in the topics covered by the various amendments. The threat to our NHS is right at the top of the list. Investor-state dispute settlement was a scandal that came to prominence during the TTIP negotiations. Let us look at some examples of the threat posed by ISDS. The Portuguese Government were sued using ISDS when the Lisbon metro was returned to public ownership. ISDS clauses in bilateral investment treaties are being used now to prepare a series of cases against the UK Government for pausing construction contracts during the pandemic.
ISDS is not the only issue. Standstill clauses prevent Governments from returning privatised public services to the public sector. Ratchet clauses require further services to be privatised. Then there are negative lists, which require Governments to specify exactly which services are to be exempt from privatisation, with everything else up for grabs. The Prime Minister told us he favours a social insurance system in his Daily Telegraph article, so when Ministers tell us not to worry about the NHS, it simply will not wash.
Statements alone are worthless. It is very simple: the detailed text of all agreements must include cast-iron commitments, because it is not just the Prime Minister who wants to hand over our NHS to the healthcare corporations; it is his friend the US President, and it is in the US negotiating objectives, which refer to
“full market access for US products”.
They want access to NHS medicines and more, and they are not shy about saying so.
Scrutiny matters, nowhere more so than in the protection of our NHS in international trade agreements. That is why our new clause 17 is so important. Ministers say that they want export opportunities for our farmers in the United States and Australia. Export opportunities? Really? Ministers are missing the point. Farmers have to survive first. If food imports are allowed with lower production, welfare standards and costs, farmers will struggle to stay in business. They will be undercut. As trade representative Lighthizer warned us, on issues such as agriculture
“this administration is not going to compromise.”
There is no ambiguity in Mr Lighthizer’s commitment not to compromise, is there? The idea that farmers will make up for domestic sales by exporting more is a fantasy. The magical thinking of Ministers will not stand up to scrutiny—that is, of course, if scrutiny is ever allowed.
Jim Shannon (Strangford) (DUP)
Northern Ireland producers in the agrifood sector export 75% of their products, so it is really important for us to have more markets and more markets will come across the world. Mash Direct, in the agrifood sector in my constituency, already exports its various vegetable and potato products to the United States. So there are markets that we can grab and take forward to get more jobs and employment. Northern Ireland will do better because of that.
Bill Esterson
I am grateful to the hon. Gentleman for raising that point about Northern Ireland. When the Bill was published, the Government were sticking to the mantra that there would be no border. How the new arrangements will operate in Northern Ireland and the impact on the UK is exactly why there needs to be proper scrutiny of the agreements and their impacts.
The Trade and Agriculture Commission is advisory, not regulatory. It has no teeth. It is not representative. It does not report to Parliament. It cannot enforce import standards and it will be gone again in six months’ time anyway. It cannot stop changes to food standards if the Government agree them in a trade deal with the US because it does not have any teeth. The hon. Member for Tiverton and Honiton (Neil Parish) said that he had been led up the garden path by the Government on the Agriculture Bill. The Government should lead him and his colleagues back down again, accept his new clause 4 and our new clause 11, and guarantee them in primary legislation. Mega-farms in the United States and Australia stand to benefit from any lowering of animal welfare and production standards. When we banned sow stalls in the UK, we had to admit pork from countries that had not caught up with our standards. What happened? Half our pig farmers went bust. If we were to accept chemical-washed chicken, our poultry industry would go bust, too. It must not happen again.
Public health, animal welfare and food production are inextricably connected. Hormones in animal feed may cause cancer in people. Industrial farming techniques affect the environment and global warming. In the middle of a global pandemic, minds should be concentrated. The use of antibiotics in farming is linked to the ability of diseases to jump between species. A coalition of businesses, unions, consumers, environmentalists and civil society is warning of a democratic deficit. The coalition is headed by the International Chamber of Commerce, which states:
“We no longer live in a world where trade can be treated separately from our international commitments on issues such as climate action, digitisation or building a more resilient health system. The public need to feel confident that trade decisions and processes are working for them and the Bill is a good opportunity to embed a more transparent, consensus based, democratic approach that clearly demonstrates a net benefit to all. It’s an opportunity to set a new gold standard.”
Bill Esterson
I am not going to take any more interventions because I am about to finish.
I said at the start that the Bill is really about social responsibility, environmental protection and democracy. The lack of scrutiny threatens to leave the NHS wide open to pharmaceutical giants and to undermine farmers and consumers. Chemical washes of chicken, hormones in beef, ractopamine in pork and GM crops are banned in the UK. What is wrong with keeping it that way? If the Government are saying, “We are going to do it anyway”, what is the objection to putting it all in primary legislation? The trouble is that we all know what is really going on here: they do not want to put protections for our NHS farmers and consumers in law or take the action needed on the climate crisis, because they have no intention of keeping their promises.