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

Drew Hendry Excerpts

Committee stage
Wednesday 12th October 2022 Public Bill Committees

[Gareth Thomas]

Or has a unit in the Department for International Trade been set up to support you?

Lucy Monks: We are having those conversations. I think there is more focus on it, because International Trade Week is coming up soon. The Department for International Trade has been talking to us and other bodies about encouraging opportunities. It is an ongoing process, because the Australia and New Zealand deals are very new in the context of the UK, so it has to be an ongoing process in which businesses are also able to feed back and to say, “This is working”, or, “That isn’t working.” There has to be a degree of flexibility, because we do not want to be landed with a product that essentially does not improve with time. But the Department is talking to us lots.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Q Thank you, Lucy, for coming here in person and enabling us to keep going. What is the view of the FSB of the fact that implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had an opportunity to debate the agreement under the Constitutional Reform and Governance Act or CRaG provisions?

Lucy Monks: If it is a matter of process for Parliament, I guess you will have discussions with relevant Ministers about your concerns about scrutiny. There is always a point at which it is useful for us to be able to be part of those conversations. The more information that is available to us and the public, in general, and that we are able to feed into, the better.

[Drew Hendry]

Q To follow on from that, do you feel you have had enough information about this free trade agreement before it has come to this stage?

Lucy Monks: In all honesty, we have had extensive conversations with the Department for International Trade. We have also given evidence to your colleagues on the International Trade Committee. I feel that we have had the opportunity to have thorough conversations. In all fairness to colleagues at the Department for International Trade and the civil servants leading on it, they have been proactive in engaging and pursuing those conversations for a number of years. I have been doing this job for only six months, but I was doing a similar job at a similar organisation before this and we engaged quite extensively with the Department there.

[Drew Hendry]

Q I have one final question on that subject. You said you have had extensive engagement. Do you think it is right that it has come to this stage without the parliamentary scrutiny I have mentioned?

Lucy Monks: I think the process issue is one for you to take up with your colleagues. It is obviously critical because this is new and, as I said, there has to be a feedback process. However, the way in which you and your colleagues across Government and Parliament interact is one for you, I think.

[Dame Nia Griffith (Llanelli) (Lab)]

Q In the past, there has been criticism from some in your organisation that there was no SME chapter in the treaties. Do you feel that the Bill provides sufficient protections and the mechanisms that you would wish to see to give that ongoing support to small businesses?

Lucy Monks: Yes. There are SME chapters in the Australia and New Zealand agreements. If we had a concern with the Bill and the issue around procurement, it would be that, as I said, small businesses tend to be cut out of the procurement process even in our own country, so both the FTA and anything that impacts procurement legislation need to be done in a way that supports small businesses. I am not as concerned about competition from Australian and New Zealand small businesses as I am about the ability for larger businesses to take opportunities that could be sitting there for smaller businesses.

Separate from that, for a long time there was a conversation between various Government Departments about trying to improve the central Government procurement system, not only for small businesses, but generally in its ability to encourage greater social value through public spending, basically. A couple of years ago, the Government finally published a social value model, part of which is supposed to be about encouraging engagement of small businesses both in the direct procurement system and as part of that supply chain. Obviously, larger businesses can go and bid for contracts, but they kind of have to promise that they will engage with x, y, z number of small businesses in delivering bits and pieces.

The Government have promised to keep monitoring how that model is implemented. I would ask that we keep monitoring how these measures are implemented in terms of both the ability for small businesses to actually access those procurement markets in Australia and New Zealand, and the impact of larger businesses that are going forward and trying to procure those projects and their ability to bring along UK small businesses as part of the process.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Leo Verity, the senior political adviser at the Trade Justice Movement, who is appearing via Zoom. The session will last until 10.35 am. Could the witness introduce themselves?

Leo Verity: Good morning. My name is Leo Verity. I am the senior political adviser at the Trade Justice Movement. We are a network organisation that represents around 60 non-governmental organisations and trade unions, and we work on issues around trade rules, including trade democracy and scrutiny, which is something I would like to focus on this morning.

[Drew Hendry]

Q You will be aware that the scope of this session is very limited, but what is the view of the Trade Justice Movement about the fact that the implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had the opportunity to debate the agreement under the CRaG provisions?

Leo Verity: Yes, that is a problem with the trade scrutiny system we have and the parliamentary processes we follow. There are major inconsistencies with the way the Government are approaching parliamentary scrutiny, so it is maybe worth touching on some of the problems we saw during the Australia ratification period. You will be aware that the 21-day CRaG period took place before summer recess, so Parliament has officially given its consent to that agreement.

Parliamentarians had major problems during that period with trying to secure parliamentary debates in the Commons. In the end, an urgent question that was tabled was the only opportunity for parliamentarians to debate the Australia agreement. Now we are in a situation, as you say, where New Zealand has not been through that process. There is a question here about what chronology Parliament should be following. It seems illogical that we are talking about legislation implementing an agreement that Parliament has not yet given its consent to, and that is probably a reflection of the way in which the Government view the CRaG process. Given that the Australian CRaG process was so fast that it was difficult to get meaningful scrutiny, I think that debating and implementing the legislation on New Zealand at this point implies that the Government are not expecting any further meaningful scrutiny of the New Zealand agreement in the CRaG period.

We would like to see consistency, and the logical standpoint should be that Parliament should approve these treaties through the CRaG process before Parliament discusses the legislation needed to implement them for future agreements. I certainly think that consistency is the key thing we need to see for future agreements.

[Drew Hendry]

Q Do you think that has led to a deficit in the ability of organisations such as yourselves and others to communicate with MPs to ensure that issues are raised in a timely manner and through a proper process, so that people can see publicly the scrutiny of such an important piece of legislation?

Leo Verity: I think so, yes. In truth, I think that awareness of the ratification process for Australia among not only the public but parliamentarians was extremely low, given the way it was snuck through, really, before the summer recess without meaningful notice of when it would be coming. I have seen that the new Secretary of State has made a commitment that for future agreements there will be at least 10 sitting days between the Government’s final report on trade agreements—the section 42 report—and the triggering of CRaG. That is less than the ITC requested—they wanted it to be a 15-day period—but at least it is some kind of structure that we can work by, so there is something about how these processes are supposed to work. But given that we saw that the CRaG process for Australia was so unfit for purpose, I certainly think it needs reform for future agreements.

[Gareth Thomas]

Q Just to pursue that area of questioning, we hope to table amendments that will improve the scrutiny of what comes out of the Bill. Talk us through what you understand about the way that both Australia and New Zealand, or other jurisdictions, scrutinise their free trade agreements, which might be an improvement on the process we currently have here in the UK.

Leo Verity: In terms of Australia and New Zealand, I know that in Australia the treaty is in front of joint committees that are constituted to properly scrutinise the agreement line by line, which is certainly more thorough than what we have. I think that is a relevant point about the Australia timeline. It is another question about why CRaG was rushed through for the Australia agreement prior to the summer recess, given that in Australia the treaty is done in front of a committee and then the implementing legislation will come forward, so there was certainly no rush for that happen.

In terms of other scrutiny processes to learn from, it is worth pointing to places such as America and the European Union, where there seem to be more meaningful scrutiny opportunities throughout the whole process of negotiation. For example, in America negotiating objectives come before Congress; that would be something that we would really welcome. As it stands, Parliament has no opportunity to debate the negotiating objectives that negotiators take forward. There are also more meaningful opportunities for legislators to see texts during negotiations; again, at the moment, parliamentarians do not see negotiating texts at any stage of the process. We would argue that it would be beneficial for the International Trade Committee to at least have a view of the negotiating text during the process. Finally, there will be guaranteed votes and debates on the content of trade agreements after signature; that is the big omission that we saw with the Australia CRaG process. The International Agreements Committee was debated in the Lords, but the International Trade Committee and the Liaison Committee pushed extremely hard for an opportunity to debate the Australia agreement, which was not forthcoming. In the end, an MP tabling an urgent question provided the only opportunity to debate the agreement, but there was still no vote on its content, which is something that happens elsewhere.

Finally, and linked to that, CRaG allows for parliamentarians, in lieu of a vote, to pass a motion against resolution. There is no opportunity to amend the text or anything like that. Even that motion, as I understand it, would just delay ratification rather than resolve against it. Given that there is no precedent, it is not completely clear what form that motion would have to take for parliamentarians, so it seems that ultimately there is no meaningful way for parliamentarians to express dissatisfaction with the trade agreements that our negotiators are coming back with. I think that is a problem.