Trade (Australia and New Zealand) Bill (Third sitting)

Bill Esterson Excerpts

Committee stage
Tuesday 18th October 2022 Public Bill Committees

[The Chair]

If colleagues would like to remove their jackets, they can—it is rather warm in here. I remind colleagues to put their electronic devices on silent. I call Bill Esterson.

[Bill Esterson (Sefton Central) (Lab)]

It is always a pleasure to see you in the Chair, Mr Pritchard. I was struck by a number of points that my hon. Friend the Member for Harrow West made about the fact that the Bill is about procurement alone, and about the way that it has been drawn up. He said at the start of his speech, in talking about the then Trade Secretary, who is now the Prime Minister, that a few mistakes were made in negotiating the trade agreements—that things were done in a rush. In listening to my hon. Friend make the case for the amendment, I wondered whether that is becoming something of a habit of this Government. It was not just the way the agreements were negotiated but the way that the Bill was brought forward—and just last night, of course, the Prime Minister apologised to the nation for the mistakes that she made as head of the Government in the recent mini-Budget and the disastrous effect that it had on the economy.

The clause gives Ministers the powers to put into operation what my hon. Friend and others have referred to as GPA-plus, with contracts of unknown value, and more contracts being advertised, to benefit not just companies from Australia and New Zealand but companies across the world whose countries are GPA members. I found what my hon. Friend said about the—I assume—unintended consequences extraordinary. I hope we all agree that if they are intended consequences, that would be a very retrograde step, because it would be deliberately harmful to small and medium-sized businesses in the country. As we heard from the Federation of Small Businesses and the other business groups that gave evidence to the Committee last week, it is already very difficult for smaller firms to get contracts in this country. Like my hon. Friend, I hope that the Government genuinely mean it when they say that they are trying to improve the situation for smaller firms bidding for Government contracts.

Government procurement is one of the best ways to stimulate the economy and push funds through smaller firms, which are a source of growth, of much innovation and creativity, and of job creation across our country. That is an incredibly important part of what any Government should offer if they want success, and it is at the heart of the Labour party’s offer in our industrial strategy and in our plans to make, buy and sell more in Britain. I hope that the Government’s approach to the legislation has not undermined support for small firms.

As my hon. Friend set out, if that has not been considered because the Bill has been rushed, some countries—the example of the Republic of Ireland is a good one, but the same applies to other European Union countries—may see an opportunity to win contracts in the United Kingdom at the expense of UK firms, in particular smaller ones, purely by dint of the fact that they have gained a competitive advantage through very poorly drafted legislation. I fear that that risks making it harder, not easier, for domestic companies to benefit from Government spending.

My hon. Friend was also right to mention the carbon footprint aspect. It cannot make sense for us to move away from the idea that, where it is sensible, domestic firms should win contracts from public bodies and, in building a more resilient, local supply chain and delivering British jobs, should have the best possible advantage. I will add one thing to my hon. Friend’s excellent point about the carbon footprint: in the light of the international situation—we all know that we face serious times because of Putin’s invasion of Ukraine—building greater domestic resilience in our supply chains must be a fundamental part of public policy. Moving away from that, which would weaken supply chains and make it harder for small firms in this country to win contracts from our own Government, sounds to me like the opposite of improving resilience and supporting the economy around the country.

I share my hon. Friend’s concern that the consequence of subsections (2) and (3) would be to weaken potential support for UK businesses and the jobs of the people who work in them. For those reasons, I agree with him that we should support amendment 19 and remove those subsections from the Bill.

[The Chair]

It gives me great pleasure to call the Minister, Sir James Duddridge.

--- Later in debate ---

[Gareth Thomas]

I am grateful to the Minister for his reply. Although I am not 100% convinced by the argument that he advanced, this is a probing amendment and we will reflect on what he said.

We cannot find any evidence that there was a consultation with the FSB or anyone else on the impact of extending contracts of unknown value and length and on the requirement to advertise them online and in English to every other country with which we have a trade agreement, notwithstanding the Minister’s argument and the evidence we heard in Committee that there have been consultations between the Department for International Trade and the representatives of small and medium-sized businesses. I wonder, therefore, whether this so-called GPA-plus provision has had quite the attention it merits.

[Bill Esterson]

Did my hon. Friend notice that the Minister did not actually address one of the central points that he and I raised, which is that the opportunity would be widened to all countries that are signed up to the GPA? That causes great concern about the loss of contracts to businesses in this country.

[Gareth Thomas]

To be fair to the Minister, he sort of touched on the issue in very loose terms. Perhaps my hon. Friend may be reassured that amendment 5, which we are inching towards, would require much more consultation down the line. Perhaps that is a way to try to improve things for SMEs across the UK.

--- Later in debate ---

We have heard evidence from the farming unions, and the estimated losses vary considerably, but according to the Farmers’ Union of Wales we are talking about a £29 million loss of gross output for Wales’s beef and sheep sectors. The other worrying point that has been mentioned several times is the precedent for future trade deals and the implications of the sections of the Bill that open the doors for anybody and everybody. Another point made by the FUW is about the reduction in food security. In the light of recent events, I cannot imagine why anybody would want to reduce our food security; in fact, there is a good case for doing the exact opposite.

[Bill Esterson]

My hon. Friend is making the case very well about the need to involve the farming and agriculture industry in trade agreement scrutiny. Was she struck, like I was, by the comments from Jonnie Hall of NFU Scotland about “retrospective scrutiny” and the fact that this weakened the role of the Trade and Agriculture Commission? Does she share my view that the evidence we heard is exactly why we need the kind of analysis referred to in amendment 7 before the regulations are implemented?

[Dame Nia Griffith]

I absolutely agree with my hon. Friend. The whole point is that there should have been much better consultation, either directly with the farming unions or by their representatives in the Scottish and Welsh Governments who have raised these points and have very good, close relations with the stakeholder groups in their respective nations. As my hon. Friend rightly says, a number of concerns were raised by the NFU. The whole point of having consultation and impact assessments is that those concerns can be properly documented and we do not rush into the legislation produced by clause 1 and leave people in a more difficult predicament.

--- Later in debate ---

Other countries do not do it like that; in most others, their Parliaments and trade commissions are involved at the beginning of the trade negotiations. In France, they have the social pact of trade unions, businesses and NGOs all sitting around the table together through the creation of any form of international agreement. That is replicated in the European Union, where France and other European countries negotiate trade deals. The Government have refused to implement that, so ensuring that under the regulations they have, first, to consult with the TAC is an important amendment, because we cannot trust that they will do it on their good word alone.

[Bill Esterson]

My hon. Friend makes good points about the way that France and European Union scrutinise trade agreements. In the context of agriculture, the other really good example is the United States. Recently, the United States trade unions had access to negotiating texts during the negotiation period and were able to insist on improvements to employment rights in the recent United States-Mexico-Canada agreement, which, crucially, protects workers in Mexico who face draconian approaches and attacks on trade unionists. Does my hon. Friend agree that we should have a similar process in this country? In the absence of that process, the amendments are a desperately needed back-up.

[Lloyd Russell-Moyle]

I totally agree. The US is a much better example than us of scrutiny and engagement. It engages its elected representatives early on. We see a Democrat Government there—one of our sister parties—putting trade unions and small businesses front and centre in their ongoing prosperity, rather than trying to run roughshod and have corrupt practices, which the previous party of Government in the US was all in favour of.

There is a better way of doing this. The amendments are not the ideal. I am, desperately unfortunately, missing my Select Committee inquiry this morning on international trade agreements and how we how we process them. I am sure I will read the transcript of the evidence hearing with fascination this evening. The Public Administration and Constitutional Affairs Committee’s inquiry makes it clear that the current ways that we produce trade deals and scrutinise their implementation—what these amendments are about—are inadequate. They are inadequate because they were created in an age when most of it was farmed off to the European Union and we had strong scrutiny processes of secondary legislation that came via the European Union—Committees that looked at that and debates in Parliament.

All that was swept aside—I will not get into the rights and wrongs of leaving the European Union. We have then just relied on a CRaG process and no other proper form of ongoing scrutiny process, which we would have accepted under the European Union, or which every other country has now developed, because trade deals are dynamic.

Gone are the days when trade deals were fixed in one piece of writing; they are ongoing, living, breathing documents. That is quite right, because trade deals really are multilateral deals on numerous issues: on not just direct trade but intellectual property and procurement, as we are discussing today. They affect the domestic implementation of issues, affecting how councils and public bodies are able to go about their day-to-day business, and the ability to consult.

--- Later in debate ---

The former Trade Minister, the right hon. Member for Bournemouth West (Conor Burns), in his barbed criticism of the Prime Minister at the Conservative party conference, talked about the need to move away from a time when trade policy seemed to be as much about Instagram photos as anything else. I strongly agree with that. Once an agreement has been negotiated, we need to get into the details of what has been agreed and think through properly the different impacts of each of the procurement chapters. A little more consultation might help achieve that.

[Bill Esterson]

My hon. Friend is talking about consultation and amendment 5 refers to the representatives of the English regions. Earlier, the Minister was talking about Essex County Council. He did not mention Southend-on-Sea City Council, where he is a Member of Parliament. I could not help but notice that the procurement objectives of Southend are:

“Maximising the opportunities for Social Value, Economic Sustainability, and benefits for the local community”.

Does my hon. Friend agree that the Minister, in accepting the amendment, would do well to engage with the objectives of his own local authority to ensure that procurement policy is put into practice in a proper way?

[Gareth Thomas]

My hon. Friend makes a very good point in suggesting that the Minister look to his own backyard in the troubled times that he and his party are in at the moment. In the context of the free trade agreements’ procurement chapters, it would be particularly helpful for the Minister to seek the views of Labour-run Southend-on-Sea City Council and see whether it agrees with the stance that he is likely to be advancing, which I suspect will be against the idea of more consultation—