Free Trade Agreements: Scrutiny

Darren Jones Excerpts

Thursday 13th July 2023 Commons Chamber

[Darren Jones (Bristol North West) (Lab)]

The Business and Trade Committee has today published a report on the scrutiny of free trade agreements. The Select Committees of this House were recently restructured following the Prime Minister’s decision to restructure Government Departments. This resulted in the Business, Energy and Industrial Strategy Committee becoming the Business and Trade Committee, with the International Trade Committee being wound up. My Committee therefore now has the responsibility, on behalf of the House, for scrutinising any future free trade agreements that the Government enter with other countries.

The report sets out how we on the Business and Trade Committee intend to do that work, and I will now update the House on a number of key points. First, when the UK left the European Union we took back responsibility for negotiating our own free trade agreements, which also meant that this Parliament took back responsibility for the oversight of such processes from the European Parliament. However, our Select Committees are structured and resourced differently from the committees of the European Parliament. Crucially, our powers are based on a convention agreed in the late 1920s, the so-called Ponsonby rule, which was to some extent codified in the Constitutional Reform and Governance Act 2010. The rule was codified at a time when we relied on the European Parliament to scrutinise trade deals on our behalf. Post Brexit, our powers are therefore out of date, inadequate and in need of reform.

The powers that exist today mean that Parliament does not, by right, have access to information during a negotiation period or to draft free trade agreements in advance, nor do we have the power to vote on or amend specific parts of a free trade agreement. Under the Constitutional Reform and Governance Act, all we can do in this House is delay the ratification of an agreement, in the hope that we might persuade the Government to change their mind during the delay. In reality, this power has never been used.

The International Trade Committee and the International Agreements Committee in the other place secured a number of non-binding commitments from the Government by way of correspondence. We list these commitments in the report, on the assumption that my Committee will continue to enjoy the limited access to information granted to our predecessor Committee. Thankfully, although our constitutional arrangements are out of date and inadequate, the Public Administration and Constitutional Affairs Committee is looking at this issue. I look forward to reading its recommendations.

Secondly, when the Government publish the final draft of a free trade agreement, it is sent to my Committee. However, my Committee has neither the capacity, the time nor the expertise to conduct legalistic line-by-line scrutiny of such a complicated legal text. Until such time as the Government decide that such a parliamentary function ought to exist and be resourced, we will therefore not do it. Instead, we will take a thematic approach to any free trade agreement scrutiny and highlight any policy areas that we think warrant further attention or changes.

Thirdly, and lastly, with the Committee having taken a thematic approach to reviewing a free trade agreement, the question is what this House then does about it. As noble Lords will tell us, although the International Agreements Committee may review an international agreement, the other place does not have the power to take any action. Only this House can postpone the ratification of an agreement, through the Constitutional Reform and Governance Act process. That requires my Committee to request a debate on a substantive motion, asking the House to vote to postpone. Ironically, as I understand it, the Government must agree to such a substantive motion, and they never do, which is probably why the postponement power has never been used.

However, as we set out in our report, my Committee intends to call for a substantive motion to postpone the ratification of an agreement only when we conclude that substantive issues raised with the Government have been unanswered and when the consequences are significant. In more normal, but not all, circumstances, we will reserve the right to call for a debate on a neutral motion, to give Members the opportunity to debate the merits of a proposed free trade agreement on the record.

This is a technical, internal report about the scrutiny process in this House, but free trade agreements can have significant consequences for people and the economy, so we thought it important to update the House today on our conclusions about this scrutiny work.

While I have the Floor, I pay thanks and tribute to James Hockaday, who is one of the Committee’s trade specialists. He and his colleagues on the International Trade Committee spent many a night doing the legalistic review of free trade agreements that we have concluded we will no longer do. He is moving from my Committee this week to work with the Clerk of the House, and we wish him well in his new role.

I thank the Backbench Business Committee for giving the Committee time to update the House, and I thank you, Sir Roger, for calling me to do so.

[Anthony Mangnall (Totnes) (Con)]

I congratulate the Chairman on subsuming the International Trade Committee, and on running the Business and Trade Committee so effectively. I join him in sending my best wishes to James Hockaday following all the excellent work he has done, particularly on scrutiny.

I have two questions. First, does the Chairman have any concern that, if the Committee does not receive timely information on a free trade agreement, there will not be enough advance warning for us to know whether we will need a debate on the Floor of the House within 21 sitting days? Would it not be advisable, as other Committees are discussing, to consider whether we should put parts of these free trade agreements to other Select Committees, such as the Environment, Food and Rural Affairs Committee or the Treasury Committee in the case of financial services, so they may review and report on them individually to ensure that the House has a full comprehension and understanding of the trade agreements we are signing?

[Darren Jones]

I welcome the hon. Gentleman to the Business and Trade Committee, following the demise of the International Trade Committee.

There are two important points. First, the 21-day period under the Constitutional Reform and Governance Act needs to be reformed. One such reform might be that the Committee needs more than 21 sitting days to be able to take a view on often complicated and full free trade agreements. No doubt the Minister for International Trade, the hon. Member for Mid Worcestershire (Nigel Huddleston), who is sitting on the Treasury Bench, will have heard that request.

Secondly, it is not for me to commit other Committees to a work programme, but it is right to point out that there are many issues, such as agriculture, defence, human rights and environmental issues, on which colleagues on other Committees take an interest.

I gave evidence this morning to the International Agreements Committee in the other place, and it does significant work on trade agreements among other things. One of the commitments we made was that, between our Clerks and between both Houses, we will co-ordinate our action to try to improve our capacity for reviewing trade agreements.

[Dame Nia Griffith (Llanelli) (Lab)]

I thank my hon. Friend the Member for Bristol North West (Darren Jones) and his Committee for their important work on this report. As the report points out,

“we operate within finite resources and recognise that attempting exhaustively to scrutinise every aspect of the Department’s work is impractical… We intend, therefore, to adopt a case-by-case approach to scrutiny of prospective free trade agreements in future.”

Given that important and entirely understandable finding, does my hon. Friend agree that the Government need to overhaul the wider scrutiny process on trade negotiations to allow greater opportunities for parliamentary scrutiny of these agreements?

I applaud the Committee for highlighting the importance of a debate on negotiation objectives. Does my hon. Friend agree that this needs to be timely and meaningful, so that Members have a genuine opportunity to contribute? Does he also agree that more should be done to allow scrutiny earlier in negotiations, so that the parameters of trade talks can be better informed? As a Welsh MP, I am particularly keen to ensure that the nations and regions of the UK are able to contribute properly.

The report notes that the former International Trade Committee criticised the Government for a lack of transparency on the timetabling of the CRaG period, and for the difficulty of securing oral evidence from the Secretary of State in relation to the Australia and New Zealand trade deals. Does my hon. Friend think the Government might have been concerned about a backlash, given the criticism of the Australia deal from some of their own MPs, such as the right hon. Member for Camborne and Redruth (George Eustice)?

Finally, does my hon. Friend have any concerns that the resource implications of the Committee’s scrutiny of trade deals will undermine any of its other vital work?

[Darren Jones]

I thank my hon. Friend for her questions and comments from the Dispatch Box, and I will take each in turn.

My hon. Friend is right about resource allocation. As I said in my speech, we have subsumed not only the responsibilities of the International Trade Committee but those of our former colleagues on the European Parliament committee that had power and resources to scrutinise trade agreements on our behalf when we were a member of the European Union. I gently suggest to the House that this is just one example of where, post Brexit, Committees ought to have greater resources, both financial and otherwise, for the additional work we have taken on after leaving the European Union.

The issue of time has been raised both by me today and by the predecessor Committee and our colleagues in the other place. These agreements are long and complicated, and the House’s Select Committees have other work to do in holding Departments to account. Having as much time as possible is always very welcome.

On access to information, let me add that I have learned, having taken on these responsibilities, that it is often easier to look at the press coverage in the other country to find out what is going on than it is to try to get information from the Government. If this information is on the public record, albeit in another country, it ought to be readily shared with us in this Parliament. I encourage Ministers to take that action.

Lastly, on Australia and New Zealand, my hon. Friend pointed out that an unusual approach was taken in the use of primary legislation and highlighted what that meant for this House’s ability to debate and intervene in the details of those agreements. I am not privy as to why Ministers chose to do that, but it is unusual. If it were a symbol, at least, that the Government are minded to update the processes for scrutinising FTAs, perhaps we could take the opportunity to do that.

[The Minister for International Trade (Nigel Huddleston)]

I thank the hon. Gentleman, all members of the Committee and the officials, whom he mentioned, for their work on this report. It shows how seriously they take their responsibilities, which is very much appreciated by the Government.

We believe that the level of transparency and scrutiny for trade agreements stacks up quite well, particularly when compared with the arrangements in other parliamentary democracies. I understand that there is no formal requirement for a formal response from the Government, but I would like to ask him whether he would like to meet me to discuss his findings further.

[Darren Jones]

We are always very grateful for Ministers wanting to appear before the Committee, and we would be delighted to have the Minister before us. There is definitely a debate to be had about how we update our rules. I make the point again that not only were our rules set at a time when we were part of the EU and therefore the European Parliament, but they were based on a convention from 1929. Free trade agreements have changed a lot since the 1920s, and therefore our rules should probably be updated as well.

[Mr Deputy Speaker (Sir Roger Gale)]

I thank the hon. Gentleman for his report on behalf of his Committee.