Trade Bill

Debate between Bill Esterson and Greg Hands

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 17th July 2018 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

We raised concerns in Committee about the Government’s power grab in the Bill. For 40 years, we have subcontracted our responsibility for trade agreements to the EU, while scrutiny has been delivered through the European Parliament and by our own European Scrutiny Committee, yet the Government are not proposing any equivalent scrutiny processes for agreements that will replace those we currently have through our membership of the EU. This lack of scrutiny is a major issue, and we raised the concerns of business, trade unions, civil society, consumers and many more in Committee.

The Labour party submitted a series of amendments in Committee that embodied a full process of parliamentary scrutiny and extra-parliamentary consultation. The Government responded by saying that the new UK agreements would just roll over the terms of existing EU agreements and would thus need no process of scrutiny, having already been scrutinised.

[Greg Hands (Chelsea and Fulham) (Con)]

Does the hon. Gentleman not accept that we are dealing with existing EU agreements that have already been scrutinised in both Houses of Parliament and that in many cases have already been in effect for a long time—in some cases, decades? It is important to have the ability to scrutinise the agreements if they have changed, but in general I think that he is barking up the wrong tree in alleging that this is an attempt to avoid parliamentary scrutiny.

[Bill Esterson]

The former Minister should have waited, because he anticipated my remarks: the Government’s delegated powers memorandum told a different story. Paragraph 46 noted that the new UK agreements would not just be legally distinct but could include

“substantial amendments, including new obligations”.

In other words, these will not just be roll-overs; they will be new treaties that can introduce wholly new terms of trade between the UK and our trading partners—terms that will be binding on us for years to come.

Government new clause 12 is confirmation that Labour was right to identify the problem here. It will require a report to be laid before Parliament before the ratification of any free trade agreement that will highlight and explain any significant differences between the new agreement and the corresponding EU agreement on which the new agreement is based. It is disappointing, therefore, to see this concession wiped out immediately by Government new clause 13, which will allow them to sidestep the obligation to lay such a report. It will also allow the Government to ratify new agreements without having produced the report in question. Government new clause 14 picks up the same point prior to implementation, but by this time the trade agreement will already have been ratified.

We will support new clause 12, but if the Government really mean what they say, they should withdraw new clause 13. We will also support new clause 3, which pays us the compliment of replicating the amendments that we tabled in Committee and which sets out the scrutiny process that should be adopted for new trade agreements.

Leaving the EU: Future Trade Remedies

Debate between Bill Esterson and Greg Hands

Tuesday 17th April 2018 Westminster Hall

[Greg Hands]

I very much agree with the hon. Lady. It is perfectly possible and quite likely that of those nine members, one or more will originate from the devolved nations. The point is, however, that they should be appointed for their expertise in assessing some of these quite technical aspects, such as the determination of dumping, the calculation of injury and so on. The point is not to appoint them to represent a nation, region or particular stakeholder of the UK, but to have an interest across the board. She mentioned the possibility of satellite offices. I gave an indication of the likely size of the body.

[Bill Esterson]

I am puzzled by the Minister’s answer, as I was when he said the same thing in the Bill Committee. I do not understand why he does not see the benefit of having a mixture of independent members, who quite rightly have the expertise that he sets out, and a number drawn from different interest groups. There could be a balance of the two to reflect the needs of the different parts of the economy and the United Kingdom.

[Greg Hands]

I feel that I have already answered this. We want a set of people who have expertise in the subject matter, rather than who come from a particular perspective, body, nation or region. That is the most important thing. Returning to the question of location, I think satellite officers would add cost, but I stress to the hon. Member for Livingston that we have yet to make a decision on where the location of the body should be. Again, that will be driven by where we can access the expertise that would be needed for this Trade Remedies Authority. I mentioned earlier that the Department for International Trade has placed a significant part of its operation in Scotland, for example through the oil and gas team in Glasgow, so as a Department we are not averse to placing something in one of the devolved nations of the UK.

I do not want to labour the point, but the hon. Member for Sefton Central (Bill Esterson) goes on about his reasoned amendments. Mr Hollobone, given your long years in the House, you know perhaps better than anybody that when you put down a reasoned amendment, it normally means that you wish to vote for the reasoned amendment, because you wish to propose some way in which to improve the legislation, but you would not normally vote for a reasoned amendment and then vote against the Second Reading of the Bill. My point is that by voting against the Second Reading of the Bill, the hon. Gentleman showed that he disagreed with the central core of the Bill, part of which, of course, is to set up the Trade Remedies Authority.

This Government firmly believe in the benefits of free trade—I will come back to some of the other points raised in a moment—for consumers, earnings and jobs. My hon. Friend the Member for Stoke-on-Trent South spoke powerfully about the importance of the ceramics industry for his constituency, which is a huge UK success story as an industry. Other hon. Members have spoken about their own local industries as well. Our manufacturers benefit from trade. Manufacturing makes up 8% of our economy, but most of our exports. I think we all agree that free trade does not mean trade without rules, whether product safety or IP protection; some of the most important rules will be our system of trade remedies.

WTO members are permitted to take action where their domestic industry is suffering harm as a result of unfair trade practices such as dumping, where foreign companies sell their products in the UK for less than they are sold at home, or subsidies, which let foreign companies sell goods in the UK at a lower price than they would otherwise be able to. Members can also act in response to harm caused by unexpected surges in imports. In such cases, members can introduce safeguard measures to give industry time to adjust against unexpected surges in imports. Well-functioning trade remedies can level the playing field for domestic industry, by counteracting any unfair subsidies, dumping or unexpected import surges. They can also deter dumping and unfair subsidies from happening in the first place. It is important to have these first and foremost as a basic matter of fairness. Our industries should not lose contracts and our workers should not lose jobs because a foreign company has gained an unfair advantage. It would also be unfair if jobs were lost that could have been saved if only industry had been given time to adjust. That is why we are introducing a rigorous and robust system of remedies, which provides for the full suite of powers offered under WTO rules.

My hon. Friend the Member for Stoke-on-Trent South raised points about existing EU trade remedies. He should bear it in mind that we have just finished a call for evidence on the existing EU trade remedies. That call for evidence closed on 30 March. The response was good. We will be looking at our response to that in due course. We have been clear that when we operate our own trade remedies system, we will transition those measures in the EU system that matter to UK business. We received over 70 responses from producers and other interested parties in that consultation. Most importantly, I can assure hon. Members there will not be one day when a UK industry that needs protection from unfairly traded imports will be left alone.

I will quickly answer the point made by the hon. Member for Scunthorpe about a transparent approach. The Government will use secondary legislation to set out the details of the TRA’s framework. That is very important. Mr Hollobone, you will know from your years in the House that secondary legislation is not on the face of it particularly welcomed by legislators, but it is important in this case to be able to have a dynamic body of law that particularly reflects recent WTO case law, rather than write all of these details on to the face of the two Bills that are currently passing through the House of Commons. In particular this secondary legislation will include the different dumping methodologies and the level of remedy required to address injury to UK industry. We are meeting trade bodies in the coming days to talk about some of those details. In the future, the TRA will set out the way in which it has carried out its calculations in any investigation as part of a commitment to transparency.

My hon. Friend the Member for Stoke-on-Trent South asked about the de minimis threshold. At what level would an investigation simply not be taken on, because the amount of product produced in the UK was below a particular amount? If UK producers have a negligible share of the total UK market, the TRA would not initiate an investigation, as it would be unlikely to result in measures. For example, a company could be the only producer of widgets in the UK and therefore meet the WTO requirements to bring a case, but if that company produced a negligible proportion of the widgets actually bought in the UK—in other words, the total market that is there—putting duties in place would have a disproportionate effect on the rest of the market, much of which would not necessarily be consumers, but could be other businesses and industries purchasing that product. That is why we will have a de minimis threshold.

In special cases, the TRA could choose to waive the threshold, which, by the way, we have not yet set. That would help to avoid a scenario in which an industry’s market share is negligible precisely because of the impact of dumped imports, or in cases involving an emerging UK industry struggling to establish itself in the face of dumped or subsidised imports. I assure my hon. Friend that it will reflect a de minimis level, but there will be exceptions. The TRA will be able to overrule.

My hon. Friend asked whether EU measures will be transitioned for the full five years. We have agreed that EU trade remedy rules and regulations will continue to apply during the implementation period. We will assess which EU measures matter to UK industry, which the call for evidence that closed last month did, and maintain those measures at their current level until the TRA reviews them.

My hon. Friend the Member for Gordon mentioned agricultural imports. Our trade remedies framework will enable the TRA to investigate unfairly subsidised imports where they are injuring UK agricultural producers and to take action where appropriate. The Secretary of State for Environment, Food and Rural Affairs is working on a safeguards regime for agricultural products to address the issues that my hon. Friend identified.

My hon. Friend the Member for Hornchurch and Upminster asked whether the TRA should consist of two bodies. There are, of course, always different views. There is not an exact parallel. We have looked at systems across the world, as she knows from the evidence I gave to the Committee. However, I believe that we are setting up the TRA with the right level of independence to allow it to reach informed and objective conclusions, which includes clear projections for the TRA’s independence, impartiality and expertise. Other countries that use a single-body trade remedy system include Australia and New Zealand.

It is standard practice for the chair and the non-execs to be ministerial appointments. The other members would typically be appointed by the chair. That is the practice we have followed in relation to the Trade Remedies Authority.

Oral Answers to Questions

Debate between Bill Esterson and Greg Hands

Thursday 29th March 2018 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

GKN has total sales of £10.4 billion, £9 billion of which are outside the UK. Profits from its operations in 30 countries around the world are repatriated to the UK. It will not be much of a global Britain if the Secretary of State’s approach is to stand idly by while a business like GKN that is so vital to our international trade is allowed to be subject to a hostile takeover that can lead only to its break-up and sale. Why has he stayed so silent on such a crucial issue for our trading prospects?

[The Minister for Trade Policy (Greg Hands)]

The allegation that anybody has stood idly by is utter rot. On Monday—perhaps the hon. Gentleman has not been following the news—my right hon. Friend the Business Secretary issued an open letter to Melrose, the company that is doing the bidding, to request certain safeguards for employees, and so on, if the bid was successful. Melrose has responded, agreeing to give those very assurances. We took action on this days ago. He needs to keep up with the news.

Trade Bill (Eighth sitting)

Debate between Bill Esterson and Greg Hands

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

[Bill Esterson]

Absolutely. I know that many of my hon. Friend’s constituents in Warrington are affected by those closures. We clearly cannot on the one hand see cutbacks, and on the other hand expect an expansion of HMRC’s work commitments.

The Public Accounts Committee recently published its report, following an inquiry into our Brexit readiness, in respect of the border planning group. It raised concerns that

“HM Treasury’s usual business model is inadequate for allocating Brexit funding to departments who are forced to operate together, at pace, to a hard deadline.”

That seems pretty clear to me. When giving evidence to that Committee, representatives of the relevant bodies on the border planning group explained that funding was released on a case-by-case basis, and demonstrated that much of the funding had yet to be drawn down.

HMRC is still wrangling with HM Treasury over a £7.3 million drawdown to cover upgrades to the CHIEF customs system—I think that is what the hon. Member for Kilmarnock and Loudoun was referring to—in order to level up functionality. HMRC also told the Committee that it was not expecting any shift in the risk profile of goods coming into the UK from the EU, and that it had “no evidence to suggest” that there would be increased trade flows with non-EU countries after Brexit. Will the Minister confirm whether his Department’s assessment matches that of HMRC, and that our standards and regulations will match entirely those of the EU, such that the risk profile of goods in or out remains the same?

HMRC has planned operating resources for no change after we leave the EU, per the evidence it gave to the PAC. Will the Minister confirm that it is Government policy for there to be no change in the regulations? Will he also confirm whether HMRC was right to say that there is “no evidence to suggest” that there will be increased trade flows with non-EU countries after Brexit? He is looking at me with a puzzled look, as he often does.

[The Minister for Trade Policy (Greg Hands)]

Don’t take it personally.

[Bill Esterson]

I was not taking it personally. I have seen him with that puzzled look on many occasions, not just when I am speaking—often it is in response to comments from those his own side.

If the Department for International Trade has any purpose, it is surely to absolutely change the volume of trade after Brexit. That, in turn, suggests that HMRC was not right to say that there would be no changes in trade flows. It also suggests that HMRC is significantly under-resourced, which is more to the point, if it is operating on a no-change assumption. HMRC’s new customs declarations service is geared up for a fivefold increase in customs processing once we leave the EU. Surely the Minister accepts that that is likely to put severe strain on HMRC’s capacity and significant strain on its resourcing.

What the Government and HMRC have said appears to be at odds when it comes to standards and regulations, and whether they will match—especially the comment about there being “no evidence” of increased trade flows. [Interruption.] I thought that the hon. Member for Livingston was trying to intervene, but she is not.

Trade Bill (Seventh sitting)

Debate between Bill Esterson and Greg Hands

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

[Bill Esterson (Sefton Central) (Lab)]

I will speak to amendments 24 and 25, which stand in my name and those of my hon. Friends. As the explanatory statement makes clear, the amendments would ensure that our Parliament is kept informed in a timely fashion about the work of the Trade Remedies Authority.

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 UK producers. Such requirements are nothing new in the realm of trade remedies. At European Union level, the Commission is obliged to report to the European Parliament and to give MEPs statistics on the cases opened and the number of measures adopted. Members of this Parliament should be given the same information from our TRA once it is up and running, so that they can scrutinise its work. MPs should be able to see how many cases have been initiated and measures adopted and so judge whether the TRA is taking measures to defend our industries or mostly putting consumer interests first at the expense of British producers, jobs and the regions.

Tom Reynolds of the British Ceramic Confederation pointed out that he would be more comfortable if there were a more rigorous approach for parliamentarians to get involved in the setting of the rules for the system. Just as in the rest of the Bill, the Government propose nothing in the schedule about parliamentary oversight or scrutiny of the TRA. Yet again, they want to make decisions that will have profound impacts on key sectors of British industry, thousands of jobs and many regions, behind closed doors and without any scrutiny or accountability to Parliament. The Minister and his colleagues might talk the talk on returning sovereignty to this Parliament, but when it comes to it, they once again fail to respect the very principles of parliamentary democracy.

Giving parliamentarians oversight powers over the work of the TRA will 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, and we will once again see the loss of jobs, as we did in the steel sector in 2015 and 2016. It is only right that this House gets to scrutinise the work of the TRA to make sure that it is doing its job properly.

[The Minister for Trade Policy (Greg Hands)]

Welcome back to the Chair, Ms Ryan. May I start by congratulating the hon. Member for Livingston on redefining the term “moving an amendment”? She was actually in motion as she did it, so I commend her on her dexterity.

It is important that we create an independent and objective investigation process in which businesses and consumers will have full confidence, as I referred to previously. For this reason we are setting up the TRA as an arm’s length body with the appropriate degree of separation from the Department for International Trade. The Trade Bill requires the TRA to produce an annual report on the performance of its functions during each financial year. That must then be sent to the Secretary of State, who must lay the report before Parliament.

Let me deal with the four amendments. Amendments 42 and 43 are concerned with the sharing of the reports, requiring the TRA to submit annual reports on the performance of its functions to each devolved Administration, in addition to sharing copies with the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly. Much as I strongly endorse our consulting with and involving devolved Administrations at all stages of this process, and expect the TRA to pay due heed to the devolved Administrations and to involve them as well, I must tell the hon. Lady that the amendments are unnecessary. The Bill already requires the Secretary of State to lay a copy of the TRA’s annual report before the UK Parliament, and at that point it will be a publicly available document for all to see right across the United Kingdom, including in Scotland, Wales and Northern Ireland.

Amendment 24 is on the annual report itself. The Bill already requires the annual report to be produced

“as soon as reasonably practicable after the end of the financial year to which it relates.”

The amendment, which seeks to impose an arbitrary fixed deadline for when the TRA is required to produce the report, is therefore also unnecessary. We are balancing giving the TRA a statutory requirement to produce the report on time, while recognising the importance of safeguarding operational flexibility, which is particularly important for a new organisation.

Amendment 25, on the investigation report, is interesting. I have referred a few times to the Taxation (Cross-border Trade) Bill, which is in Committee in another room. As laid out in that Bill, the TRA will be responsible for making recommendations on trade remedies cases to the Secretary of State. However, the amendment could lead to recommendations made by the TRA being released publicly before the Secretary of State has reached a final decision. Indeed, it is unlikely that the Secretary of State would make the decision in five days given the potential need to consult across Government. In my view, this could undermine the impartiality of trade remedies recommendations by increasing lobbying of Ministers by any parties affected by the TRA’s recommendations, be they producers, consumers or other stakeholders.

--- Later in debate ---

[Greg Hands]

It is good to see people thinking similarly. Sharing data quickly and immediately may be necessary for, as I say, the TRA dealing with a trade defence case, or where data is immediately required in a fast-moving future trade agreement negotiation.

Clause 7 sets out the powers needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services. Amendments 26, 27 and 28 would narrow the ability of the Government, both now and in the future, to determine what data we wish to collect and how we may collect it. The Government should retain the ability to determine in the future what relevant trade information they may need to request from businesses, although I stress that providing that information is voluntary. At this time, we are not able to anticipate precisely what those needs will be.

On some of the individual points, I think the hon. Member for Sefton Central claimed that HMRC is unrestricted in what data it can source. I stress that the power in the Bill is to request information. The Treasury will specify what information will be requested, and will do so by regulations that will come before Parliament. There is no obligation on businesses to provide that information, although we say, and strongly believe, that it is in their interests to do so, to help to inform the Government’s export policy.

On additional resources at HMRC, I rather feel that that might be a debate for another day in another place. However, the resources given to HMRC post Brexit to deal with Brexit are already there. Various announcements have been made by the Chancellor of the Exchequer and the Chief Secretary to the Treasury over the last 18 months on that. I point out that the power has been assessed and its likely cost looked at. It has been deemed to be relatively inexpensive and overall will not add a cost burden on HMRC.

On inflating exporter numbers, I do not think that that would be accurate. The hon. Gentleman seems to think that there is some kind of Government plot to artificially boost the number of exporters, so that we can suddenly say what a great job we have done because the number has gone up. No—the purpose of collecting the data is to have an accurate picture of the number of exporters. For example, we know there are 5.7 million private sector businesses in the UK. HMRC collects export data from 1.9 million VAT-registered businesses. There are 2.2 million VAT-registered businesses in the UK. We therefore think that the Government do not collect any export data from about 4 million UK businesses. That is what we want to do. Our analysis suggests about 300,000 businesses in the UK could and should export but do not do so. The key is to find where those businesses are and encourage them to export, so that the UK does a much better job on exports.

The hon. Gentleman asked whether Intrastat will continue. When the UK leaves the EU, Intrastat will not be applicable for exports and will not continue in this case. Finally, there were questions relating to the interaction with the Small Business, Enterprise and Employment Act 2015. Similar to my response to amendments 26 to 28, the Government should retain the ability to determine in the future what relevant trade information they may need to request from businesses. At this time, we are not able to anticipate that precisely, but I have given some indication of the sort of areas we might look at and what all those needs would be.

Amendment 29 refers to powers in section 10 of the 2015 Act. Those powers relate to disclosure of existing exporter information by HMRC officials and therefore are not directly relevant to the powers in clause 7 relating to the collection of data. In other words, it is different data. Bearing all of this in mind, I ask the hon. Members not to press their amendment.

[Bill Esterson]

I thank the Minister for his answers. I was puzzled by one thing. Why does the Bill not specify that the data would be for sharing with the Trade Remedies Authority if that is the primary purpose in collecting it at this point? He says there will be other organisations, but it is a bit odd that the Bill does not say as much.

Our concern—a concern that comes from business—is about giving HMRC the power to request. That is an interesting phrase. Anyone who has had any dealings with HMRC as a business tends to experience that as a fairly strong power to request. If we asked most people who run businesses, they would say it is a bit more than a power to request; they interpret it as not having any choice in the matter. That is one of our big concerns, and I hope the Minister will take that on board.

The Minister made the point that this is about the medium to long run and there will be improvements for smaller firms over that period. By implication, that leaves out the short term. I would welcome a brief intervention to confirm the implication I gathered from what he said—that there may be a hit or an increase in the demands and burdens on smaller firms while the new system is settling down. I will give way to him if that is what he thinks is going to happen.

[Greg Hands]

I thank the hon. Gentleman for allowing me to intervene. I do not accept that there will be an increase in the burdens for anybody involved in this process, because it is a voluntary and essentially very limited process. I would say to him that the data could be extremely helpful in informing Government policy, and that is why he should withdraw his amendment.

[Bill Esterson]

I am grateful for that clarification. We are keen to avoid unnecessary reporting requirements and an adverse impact, especially on smaller firms, as this country needs them to do well in trade and exports. We are supportive of the right approach and the right level of data collection in achieving such an objective. In that spirit, I will not press amendments 26 to 28. We will press amendment 29 to a vote because we still think it is important to avoid the duplication of powers in the 2015 Act. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 29, in clause 7, page 5, line 3, at end insert—

“(3A) Regulations under subsection (1) may not make provision that could be made by regulations under section 10 of the Small Business Enterprise and Employment Act 2015.”—(Bill Esterson.)

This would avoid duplication, in respect of the collection of information from exporters, with the Small Business Enterprise and Employment Act 2015.

Question put, That the amendment be made.

--- Later in debate ---

[Bill Esterson]

Thank you for bringing me back on track, Ms Ryan.

I trust that the Committee recognises the impact that poor application of those powers might have on businesses. It may even result in entirely opposite outcomes to those intended. I look forward to hearing the Minister’s response to such concerns. I hope that he will address my questions about how some of the powers will be exercised and what measures will be put in place to protect our exporters.

[Greg Hands]

The clause sets out the powers that will enable the Government to establish for the first time ever the number and identity of UK businesses exporting goods and services. HMRC currently collects export data from approximately 70% of the 2.2 million businesses that are registered for VAT. As I said earlier, there are 5.7 million private sector businesses in the UK. That means we do not collect export data from about 4 million businesses. Our data does not include certain sectors, smaller enterprises and many exporters of services.

Why is it important that the Government have a more comprehensive understanding of UK exporters? First, the information will allow the Trade Remedies Authority to fulfil its function using full and proper data on the UK business population. Secondly, it will equip my Department with robust data to develop trade plans globally and will help us better to understand the impact of future trade agreements and policies in order to direct our resources appropriately. Ultimately, it will all provide better value for money for the taxpayer by enabling more targeted approaches to Government intervention and support for existing and potential exporters.

We are not able to anticipate all the data that we might need in future, including for those functions that I have just described to the hon. Gentleman. It is therefore vital that we retain the ability to specify the type of information to collect now and in the future to ensure that the Government are able to discharge fully all relevant trade functions.

Should amendment 30 be passed, it would not be possible to collect trade data through the tax return. We do not know whether the collection of such currently unknown data might, for example, require the modification of an Act of Parliament. I confirm to the hon. Gentleman that at such time as the Government specify what information we wish to collect and how we will collect it, we will return to this House, as is already set out in clause 7(5). I also assure him that any information collected and the way we request it will be done in such a way as to cause minimal cost to Government and business. I therefore ask him to withdraw his amendment.

[Bill Esterson]

I wish to press the amendment to a vote.

Question put, That the amendment be made.

Trade Bill (Sixth sitting)

Debate between Bill Esterson and Greg Hands

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

[Greg Hands]

Right.

[Bill Esterson]

He didn’t tell you?

[Greg Hands]

No.

Mr Davies, I would like to start by stressing that the Government recognise the important role of making sure—that you are in the right place at the right time. [Laughter.]

I will respond to my hon. Friend the Member for Hertford and Stortford because he raised some incredibly strong points. Free trade is not trade without rules, as the Secretary of State outlined on Second Reading. It is vital for us to have the ability to conduct and operate trade remedies. That is the position we need to be in. I am therefore doubly if not triply surprised that the Opposition voted against creating this body on Second Reading.

My hon. Friend outlined—I know that we will come on to debate some of this when we consider the amendments—some of the key parameters that we want in the Trade Remedies Authority, in that it needs to have regard to a wide variety of stakes and interests in this whole process: businesses, workforces, consumers and so on. We need to make sure that our regime is robust in this space.

It is also important for the message we send abroad, because Members know that free trade has been questioned by more and more countries over the last five to 10 years. Many countries are looking at what the UK does generally in trade policy—and that includes trade remedies—to show that we are committed free traders. People are looking forward to the UK rectifying its own schedules at the World Trade Organisation as we retain and regain our independent voice there to make these points. Trade remedies are a vital part of that and it would be folly for the UK not to have a proper arm’s length trade remedies authority that can do this.

As for my hon. Friend’s points on efficiency and promptness, regarding some of the detail of the Trade Remedies Authority’s operations, I advise him to have a look at what is going on with the Taxation (Cross-Border Trade) Bill, which incorporates a lot of the day-to-day workings of the Trade Remedies Authority and is being debated as we speak in another room. Most of all, regarding his important points about the independence and arm’s length nature of this body, it is incredibly important to ensure that we have specialists on it who can withstand pressures, non-executives appointed on merit and not representing sectional interests. We need to make sure that our Trade Remedies Authority members can consider UK-wide issues, but also regional issues at the same time, without being beholden to a particular sector or region. Our objective is therefore to have an independent, evidence-based approach to trade remedies.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Schedule 4

The Trade Remedies Authority

[Bill Esterson (Sefton Central) (Lab)]

I beg to move amendment 21, in schedule 4, page 14, line 24, leave out line 34 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 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.

--- Later in debate ---

[Bill Esterson]

It is interesting that the hon. Member for Hertford and Stortford chose to speak in the clause 5 stand part debate, because many of the points he made relate to amendments 21, 22 and 23, which I now speak to on behalf of myself and my hon. Friends. During his interesting and thoughtful speech, he made very strong arguments in favour of each of our amendments. He spoke of the need to be evidence-based and objective, which would be much easier achieved by the balanced membership proposed by our amendments. Equally, he spoke of the need for a broad-based membership—I agree. He also made the argument for balancing the different interests that are involved in delivering trade remedies and an effective Trade Remedies Authority. I will be interested to see how he votes, given that he made the case for supporting each of our three amendments.

As ever, the Minister reminds us of the vote on Second Reading. He neglected to say that in our reasoned amendment we called for the need for effective legislation to implement the establishment of a Trade Remedies Authority to deliver the new UK trade remedies framework. We voted for that, and he voted against it. If he wants to tell me why he voted against an amendment that called for the establishment of a Trade Remedies Authority to deliver the new UK trade remedies framework, he can do so now.

[Greg Hands]

I thank the hon. Gentleman for allowing me to do so. We all know that the usual purpose of a reasoned amendment is that it allows an Opposition party to put forward a point of view about a Bill while nevertheless still allowing it not to oppose the Bill itself. That is the standard way in which reasoned amendments operate. We were simply amazed that once his reasoned amendment fell he nevertheless opposed the Bill. That shows that he opposes the continuity of these trade agreements, the creation of a Trade Remedies Authority, and data-sharing powers that will help our exporters. I am afraid that that is on the record from his vote on Second Reading.

[Bill Esterson]

I am glad that the Minister has confirmed that we voted to support the creation of a Trade Remedies Authority and that he voted against it. I think that was very clear in that lengthy intervention.

As the explanatory statements make clear, amendments 21, 22 and 23 would have the effect of giving Parliament the power of consent over the appointment of a chair to the Trade Remedies Authority set up by the Bill. They would establish a procedure for the appointment of non-executive members to the authority, and ensure that the TRA includes representatives of key stakeholder bodies among its non-executive membership—all things that the hon. Member for Hertford and Stortford requested.

--- Later in debate ---

[Greg Hands]

I have a quick question: does the hon. Gentleman agree with his party leader that free trade itself is a dogma?

[Bill Esterson]

I think we should press on. The Minister has enough to worry about.

As Mr Stevenson of the Manufacturing Trade Remedies Alliance told us last week:

“Some see trade remedies as purely protectionist and would abolish them completely”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 65, Q124.]

It is key, therefore, that Parliament, through its relevant Committee, should get to scrutinise who the Secretary of State appoints as the head of the relevant body, and that it should make sure it is someone with the competence, experience and disposition to stand up for the best interests of British industries and the British people.

Similarly, amendment 22 would ensure that the Secretary of State cannot appoint non-executive members to the TRA at his whim and fancy. He should not be able to stack the TRA with members of a certain political and ideological persuasion that would mean they would be less likely to act on complaints brought forward and less likely to recommend measures. We heard from Mr Stevenson of the MTRA last week that if all its members

“thought trade remedies were protectionist, we would never get any trade remedies through”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 65, Q124.]

Parliamentary scrutiny of the membership of the TRA is even more important in the light of the evidence given to this committee by Mr Tom Reynolds of the British Ceramic Confederation. He highlighted to us at column 67 that, within the context of our membership of the European Union, the UK Government took on the role of the “liberal counterweight” opposing strong trade defence measures. However, now that we will not have the other 27 member states, of which a majority is for trade remedies, we cannot afford to take the same approach.

Unfortunately, according to Mr Reynolds, UK civil servants and experts are “steeped in that heritage” of the UK being a neo-liberal counterweight. We cannot afford to let that institutional memory dictate how our independent trade defence policy is conducted. We need to ensure that the non-executive board of the TRA is a watchdog that ensures balance in the system. The only way to do that is to allow this House, through the appropriate Committee, to have a say on the appointment of the board members.

Finally and most importantly, amendment 23 would ensure that the TRA includes among its non-executive members representatives of stakeholder bodies potentially affected by the recommendations of the TRA. Those stakeholders are the producers, the trade unions representing the workers and a representative of each of the devolved Administrations. We have put that into our amendment because we believe that the key stakeholders affected by unfair trading practices should be represented around the table where decisions are being made that affect the survival of their industries and jobs, and the wellbeing of their communities. The TRA will only be enriched by experts from industry, trade unions and the devolved Administrations, who are the ones facing the realities of dumping on a day-to-day basis and close to home.

[Bill Esterson]

My hon. Friend is right to raise that. The Bombardier experience shows that countries are prepared to apply very significant trade remedies. We have to be realistic. We need to be in a position to have our own trade remedies system, be prepared to use them and not expect that not using such processes is always appropriate. That is why we must have the right membership, including from the trade unions, to protect jobs, as my hon. Friend has said, because otherwise we leave ourselves wide open.

[Greg Hands]

Can the hon. Gentleman be absolutely clear? I am intrigued. Is he saying therefore that he agrees with the US approach—not having a lesser duty rule and allowing these very large punitive tariffs to be put on British industry, Bombardier in this case, exporting to the United States? I think he is agreeing that he likes the US approach.

[Bill Esterson]

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

--- Later in debate ---

[Greg Hands]

I appreciate the hon. Gentleman’s point, but the point is to have a UK-wide perspective, and for the appointments to be based on expertise in that space, and made following good governance principles. That is the objective for the membership of the TRA.

On trade remedies, I think the hon. Member for Sefton Central impugned my hon. Friend the Member for Corby by saying that he was not sufficiently interested in the steel industry. I have known my hon. Friend for some time, and he is incredibly passionate about the steel industry. He takes a keen interest in the operations of the TRA, and is quite expert in this space. He knows that much of the detail of the operation of the TRA is not in this Bill but in the Taxation (Cross-border Trade) Bill.

[Bill Esterson]

The Minister really should not make such accusations; he knows that is not what I said or what I meant. I am well aware that the hon. Member for Corby takes a keen interest in the subject, along with all Members representing constituencies across the country with a steel industry presence; they work together extremely hard, cross-party, to try to support the steel industry. It was a completely inaccurate accusation, and I hope the Minister will withdraw it. My criticism was entirely of the Government and their failure in the European Union to support the measures that were needed.

[Greg Hands]

I think we are in one of those cycles; I am alleged to have impugned the hon. Gentleman by saying that he impugned my hon. Friend the Member for Corby. I will just leave it on the record that my hon. Friend is a doughty defender of the steel industry in the House, and through his influence with the Government.

I think the hon. Member for Sefton Central suggested that the Secretary of State should not appoint members at all. We need the Secretary of State to appoint the non-executive members in order to ensure that they are directly accountable to an elected representative with responsibility for the whole UK, because ultimately trade remedy measures will be taken across the UK. That person is quite properly the Secretary of State, who is accountable to Parliament. That is broadly in line with what happens in other arm’s length bodies.

The hon. Gentleman also talked about putting in place the right framework for the TRA. We are clear that we will operate a robust trade remedies regime to protect UK industry from injury caused by unfair trading practices and unforeseen surges in imports. I said of the TRA at the very beginning that free trade does not mean trade without rules. Rules are incredibly important, and making sure we have a strong defensive capability is a key part of that. That is why there will be a presumption in favour of measures in all dumping and subsidies investigations—that is in the Taxation (Cross-border Trade) Bill.

It is right that there is a mechanism for identifying whether measures are likely to have a disproportionate impact on other economic actors in the UK, such as downstream industries and consumers, and whether they might have a regional impact or an impact in one of the nations of the United Kingdom. The economic interest test ensures that the trade remedy system takes into account wider economic considerations in addition to the interests of UK producer industries. It is a chance to step back and consider whether measures would be in the best economic interests of the UK and will ensure that measures are not imposed where that is not the case.

Points were raised about different balances within the board. We have to come back to the overriding factor that should prevail to ensure that we comply with good governance principles: appointments are made following an open, competitive process on the basis of merit and on the basis of being able to discharge the function of looking at the whole question of a particular issue that might be prompting a trade remedy on a UK-wide basis. That is why it is important that we have built appropriate processes into the framework set out in the Taxation (Cross-border Trade) Bill to ensure that impacts on Scotland, Wales and Northern Ireland are given due consideration.

--- Later in debate ---

[Greg Hands]

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

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

[Bill Esterson]

I will not be withdrawing the amendment. The Minister talks about good governance. Non-executives often, on many boards, in many situations, come from membership organisations. They then use their judgment on a wide range of issues, but they come from those membership organisations. I am afraid he is wrong about that. He speaks of the risk of political appointments. There is one way to ensure that this is a politicised series of appointments: to leave everything in the hands of the Secretary of State. That is for sure. If the appointment process is so watertight, why is there a whole section in the Bill dedicated to what happens if the chief executive is appointed by the Secretary of State? It is being anticipated as, I guess, a quite likely scenario.

The Minister talked about accountability to Parliament, but there is none under the Bill. There are a number of examples of parliamentary scrutiny of appointments. Select Committees play a significant role in a number of appointments to public office. The Treasury Committee gives its consent to the appointment and dismissal of members of the Budget Responsibility Committee. The Digital, Culture, Media and Sport Committee has the power of veto over the appointment of an Information Commissioner, and there are a number of examples of pre-appointment hearings for significant public appointments.

When something is so crucial to our economic and international trade future, why do the Government not care to involve the Select Committee in the appointments? If they will not support the amendments, I look forward to them coming forward and dealing with the point that the Minister made in his summing up about how he expects accountability to be delivered to Parliament. I will put our three amendments to the vote.

Question put, That the amendment be made.

Trade Bill (Fifth sitting)

Debate between Bill Esterson and Greg Hands

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

[Greg Hands]

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

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

[Bill Esterson]

I will not be drawn on everything the Minister said, but I will go back to what the hon. Member for Kilmarnock and Loudoun said in his short speech. The amendment and the Bill are about trade agreements and not about the single market. My hon. Friend the Member for Brent North made it clear on Second Reading exactly what our relationship with the single market will be once we have left the European Union—if we are not a member of the European Union, it is not possible to have a say in the rules, so we are therefore not a full member whatever our relationship with the single market. He explained it extremely well.

The amendment is about the relationship with future trade agreements and about having the right protections for public services. I go back to what I said in my speech: the amendment is about ensuring that we have the ability in law to bring services back in, in the light of Carillion, whether they are to do with the NHS or other services. In the public interest—the public good—this country should have the ability to decide where its public services are run.

[Bill Esterson]

I share my hon. Friend’s surprise because, as I said in my speech, repeated public reassurances and “best endeavour” commitments from Ministers are not the issue; legal certainty and absolute exemption are required. If the Minister will not accept the amendment, perhaps he will tell us now that he will bring forward his own amendment later in our proceedings to achieve exactly that.

[Greg Hands]

We are talking here about future trade agreements, on which I have clearly laid out our position. I will just pick up on a point made by the hon. Member for Warwick and Leamington. I think he is incorrect in what he said on any evidence I might have given to the International Trade Committee last February. To be clear—and perhaps to my regret—I did not appear in front of that Committee until last week.

[Bill Esterson]

It is odd to be intervened on about the comments of another Member. I suspect my hon. Friend the Member for Warwick and Leamington meant the Secretary of State. I thought all Ministers spoke as one in Government, although we have seen enough evidence in recent days, weeks and months to suggest that that is not entirely true. Today is perhaps the latest example, with the leaked reports from the Secretary of State for Exiting the European Union. We are wandering, and I think the Chair might have something to say on that.

Over the weekend, the Prime Minister left a degree of ambiguity in her words on this issue. As my hon. Friend the Member for Brent North quite rightly reminded us, the German Government felt sufficiently concerned about CETA to exclude healthcare from its provisions. We should be very mindful of that. The Government are keen to, in their words, roll over that agreement, although with the acknowledgement that that may involve technical changes. Perhaps we can all agree that it will become a corresponding agreement.

There is a body of evidence from across the years showing the need for cast-iron guarantees to protect public services, so that they can be delivered in the public good and brought back in house where necessary. Without it being legally binding in the way we have set out in the amendment, it is difficult to see how that can be achieved. I will ask again: if the Government will not support the amendment, will they bring forward their own amendment that delivers on exactly that point later in our proceedings? There will be further opportunities in this House and in the other place to do so.

Question put, That the amendment be made

Trade Bill (Fourth sitting)

Debate between Bill Esterson and Greg Hands

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

[Greg Hands]

If I understand the hon. Lady correctly, she asks about signing up to the GPA and the schedules to the GPA. I might add that, contrary to what the hon. Member for Brent North said, the UK’s joining the GPA will actually be subject to a separate process in Parliament. There might be a question about which authority within these islands has a right to administer a particular part of the GPA. For example, the relevant Scottish body might be the right body in Scotland, the relevant UK body in England, the relevant Welsh body in Wales, and so on.

The approach I described is essential for providing continuity to UK businesses, workers and consumers. As set out in our recent trade White Paper—this is the nub of the argument—we will not normally use these powers to amend legislation in devolved areas without the consent of the relevant devolved Administration, and we will certainly never do so without first consulting them. It is crucial to understand that.

[Bill Esterson]

My hon. Friend the shadow Secretary of State made the point that there is nothing in the Bill about a formal consultation. Does the Minister accept that point, and does he accept the need for such a formal process in the Bill?

[Greg Hands]

It is crucial to draw out what we are talking about. This is about transitioning existing agreements that are already in effect right across the United Kingdom. As I have already laid out, the Secretary of State and I have met the devolved Administrations in different capacities and in different ways. Our officials have certainly exchanged a lot of views on that.

I will come on to where we are with future trade agreements in a moment. Our intention is to involve fully devolved Administrations, devolved Parliaments and so on in that process.

--- Later in debate ---

[Bill Esterson]

On Second Reading, the Minister acknowledged that there may well be changes to those existing agreements. In the case of Norway and Turkey, can he confirm that that would almost certainly have to happen? Otherwise, they would cross the Government’s red lines. What consultation does he anticipate in those situations?

[Greg Hands]

As you know, Mr Davies, perhaps better than anyone, it certainly it is not for me to suggest what may or may not happen as part of the ongoing negotiations with the European Union. Clearly, aspects of the European economic area agreement will be dependent on those. It is our intention for there to be no substantive changes in those agreements as we go forward and transition. It is very important to understand that.

--- Later in debate ---

[Greg Hands]

The Government have been clear that we do not seek to renegotiate existing trade agreements. In leaving the EU, we seek to maintain continuity in our existing trade and investment relationships. As such, we seek no change in the effects of our existing agreements as we leave the European Union. Therefore, special review procedures, as proposed in new clause 8, for example, are unnecessary.

The powers in the Bill will be used only to transition the existing trade agreements that the EU has signed up to prior to exit day. The Bill does not relate to the negotiation, signature or implementation of future free trade agreements. We have taken that approach for a specific reason: we want Parliament to play a vital role in the scrutiny of future trade agreements, as it always has done. In the trade White Paper, we made it clear that our future trade policy must be transparent and inclusive, and that Parliament will be engaged throughout the process. We will continue to respect the role of Parliament when agreeing the terms of future trade agreements.

[Bill Esterson]

Is the Minister giving us an undertaking that there will be an affirmative or super-affirmative scrutiny process in Parliament on the new trade agreements?

[Greg Hands]

All that will be considered in due course. We will bring forward proposals in the coming months on how Parliament will interact with future trade agreements.

--- Later in debate ---

[Greg Hands]

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

[Bill Esterson]

Is the Minister categorically saying that there will be no changes to the agreements that we are describing as corresponding agreements before they come through?

[Greg Hands]

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

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

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

Oral Answers to Questions

Debate between Bill Esterson and Greg Hands

Thursday 23rd November 2017 Commons Chamber

[Greg Hands]

The hon. Gentleman mentions the European Parliament. Perhaps he might have a word with his own colleagues, who have sought in the recent vote in the European Parliament to frustrate the process of us even talking about trade with the European Union to start with. The purpose of trade remedies measures is to address injury caused to domestic industry. The lesser duty rule provides adequate protection to achieve the same so that industry can operate on a fair playing field and without imposing unnecessary costs on downstream industry and consumers.

[Bill Esterson (Sefton Central) (Lab)]

I should remind the Minister that it was this Government that argued against trade remedies in Europe and that failed to protect our steel and ceramics industries. That is why it is not surprising that manufacturers are concerned that the new trade remedies authority will focus on consumer interests at the expense of businesses and jobs. What assurances can the Minister give that it will not always seek to apply the lesser duty rule? Will he now commit to include social and environmental criteria in the remit of the trade remedies authority, so that the UK does not become the dumping ground for goods that can no longer be dumped in the EU?

[Greg Hands]

We have taken robust action on steel in concert with the European Union, and we are playing an active role within that. The Government of course recognise that overcapacity is a significant global issue, which is why we have been working proactively through the EU and our G20 partners. The hon. Gentleman seeks to downplay the interests of consumers in all of this, but they will be absolutely vital and at the heart of our trade remedies process—exactly where they deserve to be.