Trade Bill (First sitting)

Faisal Rashid Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[Martin Vickers]

Q Going back to the issue of parliamentary scrutiny, under schedule 2, either House of Parliament can annul the regulations and prevent them from entering into law. Why do you regard that as inadequate?

Nick Dearden: That is a really important point. On the public policy aspects of trade deals, traditionally we thought that we did not need to worry about whether we ratified the trade deal, because Parliament would have the power to authorise implementing legislation for the various things that we needed to do to put the trade deal into effect. There is a problem with that: once a trade deal is signed and ratified, it really makes no difference whether Parliament enacts that legislation or not—we are committed to it under international treaty. It is too late to say no. Normally, we do not intend to say no—we have done the deal—but if there was a real dispute, and Parliament said, “We have a problem with that”, we would have real difficulty in stopping it, because we had already agreed to do it.

Various things that impact on public policy are never brought forward for implementation as legislation anyway. One of the things that people were particularly concerned about with TTIP, as you probably know, was the investment protection tribunals that allow overseas companies to sue Governments for various things—for what they regard as unfair treatment, for the indirect expropriation of assets and so on. There is a lot of public concern about those bodies, because people feel that this infringes on democratic sovereignty and accountability, yet those things never need to be signed off by Parliament. They just exist in the trade deal, from day one, so Parliament does not have a say in whether things that have been proved to have tangible impacts on public policy come into effect. That is one example of why it is important for the ratification process to be seen as directly impinging on public policy, and why scrutiny and accountability are necessary.

[Faisal Rashid (Warrington South) (Lab)]

Q What impact assessment should be conducted on the process, and why?

Nick Ashton-Hart: Several. I think first for the agreements you wish to transition you would look at the net economic benefit of transitioning them. You would then have to look at what likely changes the other party would be asking for—they would be doing the same analysis—and what changes you would ask for. You have to assume the worst. You have to assume the other party is going to ask for changes, and you have to assume that you will need to ask for some also. If you get lucky and you do not have to do any of that, that is great, but you cannot do this on hope. You have to do it on the worst-case scenario.

I think at that point you would have to bring in stakeholders to help you make that analysis. The expertise to do this is not all in government. It never is. It is also in the private sector and in academia. At the point where you had that you would know the basis on which you were transitioning the arrangements. This is not a trivial undertaking. Because of the regulatory impacts that newer deals, especially, have, you would also have to look at the consequences of certain changes to other arrangements.

For example, if there are most-favoured nation clauses in a deal that you wish to transition, as there often are, and if any changes are made to that arrangement when you transition it, it can impact all the other deals that have MFN clauses. This is now being discussed publicly, related to whether the EU could do an expanded services deal with us, and who would automatically get the benefits of it. For example, a Canadian deal would provide that the EU would have to give the benefits they give us to several other parties, Japan and Canada included.

We are in the same situation because there are MFN clauses in these agreements that we wish to transition, so you have to analyse the net economic benefit to you of the deal in question, but also the consequences of any changes to other deals that you want to transition, because you can guarantee that, for any MFN clause in any other deal, the parties that you are going to negotiate with will be looking at what you are giving in these other discussions and of course expecting to receive in them also.

There is a good reason why trade arrangements are slow, and there are not many going at one time. It is because this is an enormous number of moving parts to try to manage at one go—for us but also for the other Trade Ministries, because deals with us are not the only deals that they have going or that they are working on. If I were you, I would be asking the Ministry: “Look, what is your plan for dealing with these different eventualities?”

[Faisal Rashid]

Q You mentioned things such as stakeholders and scrutiny a few times. Obviously the UK has not been directly responsible for trade deals for 40 years. Do you think this is the right opportunity to make a Bill that is more democratically, socially and economically transparent?

Nick Ashton-Hart: I think it is essential, aside from the benefits in terms of being a democracy that is looked up to by others as an example, and not wanting to set an example that is far below the minimum level of accountability in any other developed economy, which is what we would be doing—we would be setting a precedent here that should concern everyone.

Secondarily, it is in our interest to do that, because there is going to be a political hue and cry about various provisions in probably all the 40-plus deals. There is going to be something that someone does not like about them. That is the nature of trade agreements. Some sectors win and some lose. Losers complain and winners keep quiet mostly, because they do not want to provoke people who won. The objective is to have a net benefit, but that does not mean that within that there are not winners and losers.

There is going to be controversy associated with these arrangements. Having effective and robust consultation now will help insulate the negotiating process and provide a rationale for all of you, the Members, to go to your constituencies and say, “Look, there is a reason why we are doing it this way. We have had an oversight process. Here is what the country will get out of this.” For those districts or constituencies that will be negatively impacted by a deal, you will be able to go to your constituents and say, “Okay, on this one we may not do so well, but we will do well on this and this and this, and the net benefit to all of us is positive.” The consultation process provides all of you with the ammunition you need to explain why at a real level—the firm level and the sectoral level—transitioning the arrangements in the way that they will be agreed is in your constituents’ interests and the national interest.

Without that dialogue, you do not have that ammunition. Every time you are hit with a news story, you will have to go and ask the Ministry concerned, “How do I counter this?” Being reactive all the time on trade policy has a very unhappy history of negative views of trade in general, and of deals in particular. Criticism does not have to be true to stick, as I am sure we are all familiar. I would say—Nick might disagree—that there was some criticism of TTIP and provisions that were alleged would be in the deal, such as things that affected NHS procurement, which were actually excluded from the negotiating mandate. The fact that those criticisms were levelled did not stop there being a political cost to the negotiation as a whole from the allegation that those provisions would be inbuilt. On a pragmatic basis, there is a very strong argument for a robust consultation process, but the negotiators themselves are going to need information that is in the private sector and in academia as part of their negotiating arguments, and without a robust consultation process they will not have access to those.

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[Mrs Badenoch]

Q Does anyone else want to come in on the make-up of the board, impartiality, timeliness, and so on?

Tony Burke: I think we would agree with everything that was said about the make-up of the board. It has to be wide-ranging and it has to have expertise. On the point you raised: when we put our evidence in from the Manufacturing Trade Remedies Alliance—industry and the unions—we wanted a system that worked. Don’t forget, we have not done this for a long, long time. We needed to make sure that we got it right. There were some folks’ voices saying, “Let’s have a fast-track. Look at America, it takes a long, long time”. We said, “No, if you do fast-track, you could get it wrong”. You need to have a system that works, step by step, but is widely consulted on, as has been said.

We may have problems in a particular industry, where we have to bring expertise in and we need to have people in that discussion at the remedies authority who know exactly what they are talking about and are able to demonstrate it. They can be very complex. When we look at the US system, it takes a very long time and moves very slowly. We do not want to rush it, but we need something that works and is as wide as possible. As I said earlier, I do not think impartiality comes into it, providing there was oversight from Parliament.

[Faisal Rashid]

Q I understand there were 60,000 responses to the consultation. The trade White Paper was published the day after the consultation closed. I apologise if I am wrong, but I think you said earlier that you were quite comfortable with the process. Do you think it is practical and do you think the consultation feedback from the stakeholders has been taken into account?

Martin McTague: We believe it has been taken into account at this early stage, but a lot more consultation needs to take place. We have a position and we are developing that position on exactly how this will affect smaller businesses. At this stage, it is not a developed position.

[Faisal Rashid]

Q So what exactly has been taken into account?

Martin McTague: It is only in conversations with officials that we believe that a lot of those consultations have been accepted, or at least understood. We are not at a position now where we are taking a firm line on this issue.

[Faisal Rashid]

Q I am trying to understand in real terms what in the Bill has been replicated from the consultation?

Martin McTague: I can come back to you with concrete examples, but I do not have them at my fingertips.

Chris Southworth: No, I do not think it has been satisfactory at all, certainly for the international community, which is what I represent. When I asked the question of officials, “Who have you actually consulted?” I was told, “The USA and Japan.” That is completely inadequate in terms of the countries that the UK is trading with. Their voice—they also have SMEs, also in supply chains, also funding livelihood—is equally important. This is going to affect other people’s countries and communities. So it was completely inadequate and haphazard. If you happen to name a name, that person will get consulted. If that person happens to be missed, we do not know, and they are completely missed off the consultation. That is not a way to consult on trade. It is slapdash.

[Faisal Rashid]

Q Do you think it is practical that the consultation finishes tonight and the Trade Bill is published tomorrow? Is that practical in terms of taking all views into account?

Chris Southworth: As I understand it from the explanatory notes and the Secretary of State’s speech on Second Reading, there is no intention of consulting within the Bill—that all comes later, whenever that is. It was not clear in any of the communications whether that would be a further Bill or a paper. It all sounds distinctly like it will be something informal, which I would argue is completely the wrong approach. Bear in mind that the Bill is the first opportunity for Government to tell the world, not just the UK, how they will create a free trade model that works for everyone. This is the moment to set out the stall on what that structure for engagement will be. It is all missing in the Bill. There is nothing in it.

[Faisal Rashid]

If there is no new Trade Bill, those Henry VIII powers stay.

Chris Southworth: I go back to my point that, if I were living in Scotland, Northern Ireland, Wales, the Yorkshire Dales—where I am from—Sheffield or the north, I would be concerned about where my voice is coming into this process. We are talking about rolling over the terms of 88 countries. That is a lot of countries, and they are not all EU. It is extremely unlikely to happen. I would want to have a say in that process, not to wait.

Tony Burke: When the Manufacturing Trade Remedies Alliance put forward its document, which it had worked considerably hard to produce over a long time, we were surprised at the speed at which the whole thing moved. There were areas that we had gone through in great detail to prepare.

As I have said, there was unanimity on things such as International Labour Organisation conventions, trade union representation and industry representation, and on some of the real technical detail as well, which we could not go into today. We would be happy to revisit that document. I understand that the other folk from the MTRA are giving evidence to a different Committee today, and I think they will say very much the same thing. We have no problem in going through it again and picking out some of the key issues from the point of view not just of trade unions but of industry.

Some trade associations on that body are very concerned about what could happen to their industries. They will be putting forward those points of view today. The speed at which it was done was far too fast. The view seemed to be that that was it, even though people had spent a lot of time putting the arguments together.

[Tom Pursglove]

Q In my constituency—I represent the steel town of Corby—trade remedies are not theoretical, but reality. Mr Burke, what do you think the impact would be of not having a Trade Remedies Authority in place on day one when we leave the European Union?

Tony Burke: The big danger is that, if we do not have one that works on day one, we could be subject to what we have already seen in the past few years. Steel has been subject to the most horrendous situation for the past two or three years—lots of jobs have been lost. The industry came together to try to make sure that it holds together, but without a trade remedies structure in place, the big fear is that we would be subject to the dumping of steel again, particularly from countries such as China, although I am not singling it out. That is one of the issues.

There are other constituencies where we talk to colleagues—MPs and others—and our members. The tyres industry, for instance, is very concerned about the dumping of cheap tyres on the market, which would undermine our premium brands and well-paid skilled jobs. We need something in place. Of course, as I have said, we have not had anything for 40 years and it will take some time to work through, but it is important to have a wider group of people who can push the arguments for various industries.

My fear, and the fear of our members in steel in Corby and other steel areas, is that, if we do not have trade remedies in place, we could be faced with horrendous dumping on the basis that, in respect of what is happening and what has been said, there is massive over-capacity. Steel in particular is being sold at cheaper rates than it costs to produce.

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[Alan Brown]

Q Does anyone want to add anything about devolved Administrations?

James Ashton-Bell: I agree with that.

[Faisal Rashid]

Q Obviously, we talked quite a lot about consultation and stakeholders, and I really appreciate that. Listening directly to you guys from very powerful organisations in our country is important for all of us parliamentarians. I need to understand exactly how important it is to consult with stakeholders in forming the Trade Bill or trade deals. What could be the impact for UK businesses in future if that is not done in the right way? I would like one quick line from each of you. Another quick question for Tony: does this Bill have the support of trade unions, yes or no?

Tony Burke: As it stands, no.

Chris Southworth: Look at what you have got today. That is what you get when you do not get proper consultation and involvement in trade. That is what we are dealing with right now: huge social division, division and disparity across the regions, industries vulnerable. You get all of that. That is what we are dealing with. That is what you have if you do not make change. That is why the Bill needs to demonstrate change.

James Ashton-Bell: The reason we have been calling for a very formalised form of consultation is twofold. One, there are many examples in history—many countries have designed very elaborate free trade agreements that businesses do not use because they were not designed with business in mind. That is a waste of everyone’s time and our negotiating effort.

The second reason is that we find in many instances, as we saw when trying to ratify CETA, through Belgium, or with TTIP, if you do not have an inclusive process that is incredibly formalised and elaborate, you actually lose public support. Having the right advocates to push the deal across the line is something that is good for the economy. It needs to be grounded in fact to ensure that it is good, and also something that has consensus and that we can actually stand behind.

Tony Burke: Again, I am in danger of agreeing with a lot of folks in what they are saying at the moment. Regarding what has just been said, if you look at CETA and TTIP, there was massive opposition from across the spectrum. It is important that we get this right, and inclusivity is the key. We had no involvement in discussions with regard to the UK in those trade agreements and I think the same thing could happen again if we are not careful. We cannot just go casting around trying to pick one off the shelf. This is going to be a very complex issue, so everybody needs to be on board.

Martin McTague: We have regarded this as an enabling piece of legislation. It is a framework. I can say that the area where TTIP really came alive for small businesses was when they introduced the small business chapter, which meant the real concerns of small businesses had a basis on which they could discuss those issues and get them properly grounded.

[Faisal Rashid]

Thank you.

[The Chair]

Matt Western, very quickly. We have got literally two minutes left.

Trade Bill (Second sitting)

Faisal Rashid Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[The Chair]

I am sorry to interrupt. May I just say that there is a gentleman in the gallery who may not take photographs? Please carry on.

Dr Fowler: If you wanted to take a minimalist view, merely as a bit of constitutional housekeeping, it seems to me that there is scope for at least clarifying how the CRAGA provisions would be used, before possibly going into strengthening the powers.

[Faisal Rashid (Warrington South) (Lab)]

Q May I ask Dr Fowler to expand on a point raised in the Hansard Society paper, “Taking Back Control”, about the issues surrounding Government control of parliamentary time, and any implications this is likely to have for both the trade deals covered in this Bill—including the government procurement agreement membership—and the delegated powers that it grants, especially with regard to the negative procedure?

Dr Fowler: As you will know, under the negative procedure, Parliament has the power to pray against an instrument. In order to do that, first, Members need to use the early-day motion procedure, which is obscure and many Members do not even know about. Secondly, and more importantly, there is the issue of trying to get time on the Floor of the House. There have been cases where Members have wished to pray against a negative instrument and time has not been granted on the Floor of the House within the scrutiny period, so it has simply been impossible to annul a negative instrument before it came into force. That is one problem with the current system.

[Faisal Rashid]

Q So is it fair to say that the Government have the ability to control debate and thus limit—or even totally deny—parliamentary scrutiny of the deals or the secondary legislation?

Dr Fowler: Inasmuch as the Trade Bill provides for use of the negative procedure, yes, that would be fair. I am sure there would not necessarily be any wish to do that on the part of any Government, but as the procedures currently stand, Back Benchers cannot be sure that they can get time on the Floor of the House if they want it.

[Judith Cummins (Bradford South) (Lab)]

Q We have heard a lot today about the importance of societal acceptance in the scrutiny process, and Jude Kirton-Darling certainly explained the scrutiny process for trade agreements currently in place in the EU and the European Parliament. Dr Fowler, could you explain the current parliamentary framework for the signature, ratification and implementation of trade agreements in the UK?

Dr Fowler: At the moment that procedure happens through the European scrutiny system because of the EU’s competence to conduct trade policy. The main instrument is the so-called scrutiny reserve, under which the Government deposits relevant documents with the European Scrutiny Committees in both Houses and they scrutinise them. The relevant Minister is not supposed to sign up to things in the EU Council if the relevant documents are still held under scrutiny. That works every time a new set of documents is tabled along the process.

The system can be quite effective but there is a difficulty about timing, and getting time on the Floor of the House. There is a difficulty if something has to move quickly at EU level, and then the Government quite often uses what is called the scrutiny override where it just says, “We had to go ahead with this.” Then there is also the difficulty about trying to schedule appropriate debates in Committee or on the Floor of the House.

Jude Kirton-Darling: My only addition would be that currently, one of our frustrations as MEPs is about what happens when some things that we have scrutinised heavily at European level, pass to the national level. We see the level of scrutiny in the German Parliament, in the Belgian Parliament, in Scandinavian Parliaments, where there are very detailed scrutiny processes—often going on at the same time as we are scrutinising at European level, so we get feedback from those Parliaments during the process—and we do not feel, in many cases, that same process from Westminster. So, regardless of what happens in terms of Brexit, it is one of the ways in which Westminster could do more to scrutinise trade in any case, and that would be a benefit for everybody.

Dr Hestermeyer: Just as a reminder, the scrutiny override was used for CETA. To compare that, under German law, for example, Parliament gets involved very early on. There was a change in the constitution and then an additional statute was passed, so Parliament gets involved very early on and can make binding statements for the Government, which will then be taken into account by the Government also in the Council. That way, there is a large impact of parliamentary statements in governmental positions, because in the end, the Government will have to defend measures in the Council.

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[Iain Stewart]

Q Do you have any concerns about the practicalities of Her Majesty’s Revenue and Customs operating the system, as envisaged by the Bill?

Professor Winters: I am not sure that I can comment on the practicalities. They certainly want a large amount of information. My general rule would be that that needs to be information that firms collect anyway in the normal course of their business, and that it should be a simple matter to transfer it to HMRC.

[Faisal Rashid]

Q Professor Winters, given what you discuss in the UKTPO paper with the example of South Korea, do you think it is fair to say that what the Government are presenting as bilateral discussions are actually trilateral discussions?

Professor Winters: Yes. I gave the example of rules of origin and tariff-rate quotas. Those very clearly have to be negotiated with the EU, because the EU is intimately involved in them, and they have to be negotiated with the partner. We cannot just arrive in Korea and say, “Here it is. We don’t want to talk about it.” They very clearly have trilateral dimensions, which I guess need to be sequenced and taken seriously.

Remember that there is a further wrinkle: these are going to be new trade agreements and we are going to have to notify them to the WTO. Although the WTO procedure for reviewing regional trading arrangements does not require us to ask permission, the WTO secretariat will make a good deal of information available to members, and other members may wish to clarify things to discuss and even, ultimately, to dispute. It is actually somewhat broader than trilateral, but you cannot avoid a tripartite discussion on quite a lot of aspects.

[Faisal Rashid]

Q Thank you. According to the Queen’s Speech last June, the Bill is meant to set out the legislative framework for our independent trade policy. Do you believe that it establishes a proper framework to deliver what was promised?

Professor Winters: I would not hold myself up as an authority on exactly what was promised, but it does not deliver a satisfactory framework for negotiating new trade agreements. There are many different models, but experience from around the world suggests that one needs a good deal of consultation, input and legislative oversight of trade agreements. You cannot have a position where Parliament can unpick a trade agreement that has been concluded. If Parliament claimed that right, no one would negotiate with us. That means that Parliament and the devolved Administrations need to have an important role in setting mandates, and there need to be consultation and information during the process. Civil society would certainly claim that it, too, ought to be consulted, and I would advocate that, to the extent that one can generate one, there should be a discussion publicly.

Trade policy comes along in treaties. It is intrusive. It affects people’s livelihoods. It is a very good thing that we are talking about trade policy now in a way that we have not for decades—since before the EU existed, in fact.

George Peretz: I would add as a footnote that one of the best short things I have seen written about this is a piece by Stephen Harper, the former Prime Minister of Canada. He is not generally known as a politician who always wanted to do everything by consensus, but it is simply an explanation of how the Canadian side prepared itself for the CETA negotiations. It very much emphasises the need to consult with everybody in Canada, to bring the provinces together as well as all industry, trade unions, all the political parties and other actors to try to get as much consensus as possible on what Canada was trying to achieve at the outset of the process, before it started. It is a very good piece from somebody whose perspective on it is interesting.

[Barry Gardiner]

Q Picking up on both what Professor Winters said about not unpicking—Parliament should not be able to unpick a trade agreement—and what Mr Peretz said about Canada, Mr Clancy, once the UK Government, rather than the EU, set international trade agreements in place, what would be the implications if the devolved Administrations had a consent reserve and could implement some form of veto on internationally agreed obligations? How do you get that whole-of-governance approach where the consensus Mr Peretz was talking about is achieved so we know that what is agreed can ultimately be delivered without introducing an ex post facto power of veto that would stop it being implemented?

Michael Clancy: That is a very difficult question to answer without getting into uncomfortably hot waters.

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[Bill Esterson]

Q Do you think that needs to be appointed independently from the Secretary of State to achieve that?

Tom Reynolds: It is not something that the BCC or the Manufacturing Trade Remedies Alliance has made a submission on; it is something that we would have to consider, and maybe we can write to the Committee.

[Faisal Rashid]

Q The membership of the Trade Remedies Authority, which, according to the Trade Bill, is entirely at the discretion of the Secretary of State: do you think it is appropriate and effective? How does the proposed TRA compare to similar bodies in other countries?

Cliff Stevenson: Obviously, the wording is not effective at the moment in terms of ensuring that there is a balanced composition of those members. If you look elsewhere and compare, the closest major trade remedy regime to the UK’s proposed system is Australia’s. It has a separate anti-dumping commission that works in a similar way to how the Trade Remedies Authority would work, but there is a big difference in the sense that it is headed up by one person, an anti-dumping commissioner: there is not a committee or a group of members in the way that is proposed for the UK.

One concern I slightly have with this is that it is an extra level of decision making. There is no detail on how the members might make a decision—whether they would vote if they disagreed—and that could hold up investigations, which are always subject to very severe time limits given the amount of work that has to be done.

In the US and Canada, for example, there are examples of independent bodies such as the United States International Trade Commission, which does the injury determination for the cases. It is a completely independent body that has six commissioners who vote at the end of the investigation. If there is a positive finding of injury and three out of six vote in favour, it will be an affirmative determination. In that case, where there is a quasi-judicial system where it is completely separate and not under any political control, there are these commissioners taking a vote on the basis of the technical information.

Gareth Stace: You have to look at what the TRA and the whole system is trying to achieve. Why is it being set up? It is being set up because we are leaving the EU. Is that an opportunity to have a system that is fleet of foot, quite simple and employs fewer people than the European Commission does?

That is why a year ago we, as UK Steel, said that actually what this arm’s-length, independent body could be doing is just looking at the dumping margin, because that is a really simple, straightforward—almost—calculation. It is what they do in the US, which is seen as a champion of free trade, and we want to create strong links with the US going forward. There was that opportunity to do that, and so the make-up of the TRA and the committee would not be as important as if it was then doing the injury calculation—that is much more of a black box. You stick a load of numbers in, and you hope that something will come out. You twiddle some dials as well, and the tariffs come out of that. So you probably do then need some independent committee to look at it, but how much are they going to influence—[Interruption.]

[The Chair]

Order. There is a Division in the House, so I suspend the Committee until 10 minutes past 4.

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[Iain Stewart]

Q I would like to put to the panel the same question I asked the previous panel about part 3 of the Bill, which relates to trade information and the collection of exporter information by HMRC in particular. Are you content with the content of the Bill in this part? Is there anything missing or do you foresee any practical difficulties in HMRC collating this information?

Anastassia Beliakova: Not at first glance. However, the wider picture around trade data is that trade data is imperfect. It is particularly lacking when it comes to services, of course, and when it comes to intra-EU trading data. That is where we currently have significant gaps. If, in the future, there can be a more robust collection of data and stronger assessments of UK-third country trade, that would be helpful.

Stephen Jones: I have nothing to add.

Edward Bowles: Obviously, the collection of data is largely in respect of goods that cross borders. It is very difficult to do that for services, so I would have thought that a way of more robustly measuring cross-border flows of services would be quite an important thing to look at, so that you can get a better grip on revenue as much as anything else. Largely, it is more on the goods side than it is on the services side.

[Faisal Rashid]

Q My question is to Mr Bowles: one of your chief economists for the African region noted that African countries such as Kenya were extremely concerned about having to renegotiate trade agreements with the EU and the UK. However, she concluded—her name is Razia Khan—that this process has taken many years already. Can you tell us what your views are on how long these deals will take and what difficulties will be encountered in the negotiations, from your point of view?

Edward Bowles: The great thing about having economists is that they are independent of those of us who do jobs outside of research. Razia is an expert in her own right and would be the best placed person to speak to those issues.

In fact, they are not really trade agreements; they are economic partnership agreements that the EU has with most African, sub-Saharan and, indeed, subcontinent markets. It is certainly true that they have undergone a high degree of revision under the current Commission’s administration. I am not aware, frankly, of any overwhelming dissatisfaction. I attended a recent meeting only two months ago between quite a lot of these markets and Cecilia Malmström, so things do seem to be moving in a good direction. The question is what the UK’s approach would be to that and how much it might be minded to depart, if at all, from the approach. The starting point must be simply to mirror the current arrangements, as was said on Second Reading and in the Government’s response to the consultation on the Trade Bill.

[Faisal Rashid]

Mr Jones, would you like to add anything?

Stephen Jones: No, I have nothing specific to add in relation to Africa in general.

On a more generic point in relation to the Trade Bill, it is obviously focused on existing trade agreements and economic partnership agreements. From a services perspective, we need to look beyond that and reflect on arrangements that exist beyond that, which are critical to the cross-border flow of trade in services, because there are very few provisions and services agreements in trade treaties that relate to services. There are lots of mutual recognitions and memorandums of understanding that relate to infrastructure, to recognition and co-operation between supervisors, to the flow of data and to the recognition of exchanges, but which do not exist within the context of a trade agreement. They nevertheless facilitate cross-border trade in services that already exists between the EU—including the UK—and other jurisdictions. It is very important that we do not lose sight of those specific provisions, but seek to mirror them so far as the financial services industry is concerned, simply because the existing trade treaty provision is so poor in services.

[Bill Esterson]

Stephen Jones, you are the UK Finance representative. Sorry, it has been a long day. Can I ask about the written evidence you gave to the Procedure Committee, where you indicated the benefits of a triage or sifting process and stated how you might apply those when looking at new trade agreements? For the purposes of the phrase “new trade agreements”, given some of the evidence we have heard today, can we include anything that changes the agreements that are part of this Bill? Can you explain what you think the merit of such an approach would be, how you might apply it, and the importance of such a sifting process?

Stephen Jones: Given the time available in the context of Brexit, from the perspective of the financial services industry, clearly continuity, speed and the correct process and scrutiny to transpose the existing trade arrangements that the EU has with the rest of the world to the UK are incredibly important for continuity. That does not directly benefit the financial services industry. It benefits mostly the customers of the financial services industry, but in that context it is very important.

To the extent that your question relates to prioritising whether one should seek to amend the agreements in order to ensure more robust coverage of services within the context of those agreements, I think that in the first phase that is unrealistic. There is not enough time. What we need is as much certainty as we can get. Business in general needs as much certainty as it can get in terms of the transposition of the existing EU arrangements.

In terms of the ongoing amendment of those treaties to seek to extend them and prioritise what should be done—the sifting process, if you like, for services—we can develop a modus operandi in terms of markets that are important. However, as I say, there are significant factors beyond trade agreements that influence the ability to conduct cross-border business between the UK and the rest of the world. Those are a susceptibility to inward investment; strong regulatory and supervisory co-operation; aspects of data protection and the willingness to mutually recognise the cross-border sharing of data; and infrastructure, with the recognition on a cross-border basis of critical market infrastructure in each jurisdiction, such that member firms in each place are able to access and utilise the infrastructure in the other country. To the extent that that can be captured within a trade agreement, that is great.

To date, that has failed and our focus very much is on an ambition for the UK with the EU to seek to build an ambitious free trade agreement that has not been attempted in services anywhere else in the world. But we believe it should be attempted in the current context, simply because of the importance of the cross-dependencies that already exist and the fact that we are starting with a fully converged rulebook, which is extremely unusual in a trade negotiation context. So we believe that there is the prospect of an ambitious mutual recognition-based trade agreement in services between the UK and the EU and that potentially should be the first focus, to the extent that we are talking about prioritisation of negotiation of trade agreements.

--- Later in debate ---

[Barry Gardiner]

Q To follow up, I want to ask you all a question as business people. If someone introduced a break clause in a contract with you or one of your businesses, would you not take the opportunity to renegotiate the deal? Given all that you have said about the importance of clarity, stability, understanding and certainty about the future, which we entirely agree with you on—that is why we need a Bill to do this—do you not think that, if we were seeing changes introduced by these countries because of this opportunity, and some of the changes were substantial, and changed that clarity and certainty, then actually there should be a process of parliamentary scrutiny looking at them?

At the moment, we may not be in control of that process. We know that we would like it to be very simple, but it may not be. Given that, should the scrutiny not be in place for Parliament either to assist procedure or, using some other mechanism, to say, “Yes, this is important, and we need to make sure that we, as Parliament, deal with it in the appropriate democratic way”?

Edward Bowles: I would say be careful what you wish for, and I do not say that completely comedically. It would very much depend upon the scale of the market that you are interacting with, and the significance of it. The experience that I had of TTIP was one where the lack of initial transparency, of engagement with civic sector societies, and of disclosure of the mandate for the first 15 months of the negotiations very much allowed the debate to be run by outside interests that felt disenfranchised. Effectively, that stymied the political will to take the negotiation further forward even before the new President was elected.

It was absolutely clear that there are lessons to be learned from a negotiation of that scale, ambition and impact for the UK’s economy, to make sure that you have the right level of engagement, transparency, scrutiny and so on in an ongoing manner. For a much smaller market, I dare say that, given the time involved, it may not necessarily warrant a full-scale similar application of scrutiny because, frankly, the relative impact for the UK economy, and therefore for consumers, healthcare and so on, would be much less. Judge each of them on their merits.

Anastassia Beliakova: To follow up on what Mr Bowles said, the TTIP example certainly shows us how critical it is to have appropriate stakeholder engagement mechanisms. At the moment, the Bill is meant to deal just with continuity of existing agreements that have already had the relevant scrutiny from the European Parliament and have passed through the European Scrutiny Committee here. However, if there are very substantial changes or if we are talking about completely new agreements, provisions certainly need to be made for appropriate scrutiny in Parliament, and for stakeholder engagement for business, civil society and non-governmental organisations. It might make sense for that to have some form of statutory underpinning so that there is input that is not contingent on the political environment, which may change. As has been said, negotiations take a long time, sometimes even up to a decade, and during those negotiations you still need to be able to test both the public views and the impacts. I would urge for these kinds of mechanisms to be put in place where new agreements are implemented.

[Faisal Rashid]

Q I will put Barry’s point in a different way. You mentioned continuity, which is absolutely fine—the industry needs continuity. You also mentioned that you do not want to see any change, but the Government have already noted that these agreements will be legally distinct and are likely to be different to the corresponding EU trade agreements. Do you believe that it is appropriate for any changes to be waved through using Henry VIII powers? That is one question. For British Chambers of Commerce members, how important is consultation on any elements that might change in these agreements?

Anastassia Beliakova: Consultation is absolutely critical. If there are changes through these agreements that would alter the benefits that businesses currently see, our members would want to be consulted. At the moment, there is a question as to how the UK will set out on having an independent trade policy. We are conducting a study with the London School of Economics on that topic, which I would be happy to share once it is published.

There is a balance of interests between continuation—ensuring that there is no gap between the current benefits and some new measures that will be implemented—and appropriate scrutiny. That has to be considered on a case-by-case basis when it comes to the existing agreements. For any new negotiations, however, there needs to be a more clearly set out process.

William Bain: There are two important points to make. First, if we look at the guidelines adopted by the European Council on 15 December and the drafts that are circulating in Brussels for the draft directive to be adopted next Monday, it is very doubtful that the EU will permit the UK to vary these agreements at all. It will basically be small changes that will require the UK to still be subject to its current obligations under these agreements. That is all that the EU will be prepared to accept.

Another important point is that if the mechanism for the transition is that the UK is under the common commercial policy and the EU common external tariff, the UK will be applying all the EU’s external tariffs vis-à-vis third countries. That means that Canada and South Korea will get the advantage of relatively low-tariff trade into the UK market, but unless we get the EU on board to help us with the transitioning process, we will not get the advantages of access to the Canadian and South Korean markets. That is the absolute imperative of why this task has to be completed—so that we can have certainty and continuity for business.

[The Chair]

The imminence of another Division tempts me to think that we ought to finish, unless it is a very short question.

[Faisal Rashid]

Q A very short one, actually. You mention that obviously the European Union might not let us change anything—it will only roll over the existing deal—so why does this Bill need the Henry VIII powers?

Stephen Jones: It is a rhetorical question, I think.

[The Chair]

A rhetorical question that Hansard will have noted. I thank our four witnesses very much for your evidence. You were very good value for money considering you were not paid to be here. Thank you for taking time out—it was most useful for the Committee.

Ordered, That further consideration be now adjourned. —(Craig Whittaker.)

Trade Bill (Third sitting)

Faisal Rashid Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Anna McMorrin]

Q Are you concerned that there could be a compromise on the definition of whisky, for example, in future trade agreements?

Sarah Dickson: Looking at future trade agreements, I would hope not, because I would assume that the UK Government would give the same priority to protecting its geographical indications, like Scotch whisky.

[Faisal Rashid (Warrington South) (Lab)]

Q May I ask Ms Dickson a question about the process for engagement on trade policy through the EU’s market access strategy, and the market access advisory committee? How do those compare with the frameworks in place for engagement with the UK Government?

Sarah Dickson: I think the engagement with the UK Government is the missing piece of the puzzle, but we assume that it will happen at some point, and that we will have more detail on it. The market access advisory committee is a great way for us, the industry, to feed in our views formally to all the member states. We regularly attend it. It has a spirit-specific working group that we are able to contribute to. It feels very much like a partnership. We explain the problems we face in markets around the world and the EU then works out how it can respond to that. It has to prioritise, but because you have all the sectors contributing in that way and it is quite an open, transparent process, you know that you are at least being listened to and included in its strategies.

[Faisal Rashid]

Q That is very useful; thank you very much. In your experience, do ad hoc mechanisms for stakeholder engagement work or do they need to be structured by statute?

Sarah Dickson: We would feel more confident at the moment to have that laid out formally by the Government, in terms of what they are planning to do and how it will work. Ad hoc can work where you have developed personal relationships. We used to know everybody who did trade policy in the British Government, but that is not true anymore. Now there are 500, 600 or 700 people across Government doing it. When there used to be 40, it was much easier. As that grows and changes, having a very clear structure, so we know how to feed in and when and how, would be very helpful for us.

[Faisal Rashid]

Q Excellent. That is very useful. To Ms Macdonald, in your opinion will it be possible, as the Government claim, to simply copy and paste the existing agreements without any substantial changes and without the need for consultation and scrutiny? Surely that has not been possible in the case of Switzerland, Norway and Turkey.

Elspeth Macdonald: I do not think I am equipped to answer that question. It is almost more of a legal question, in terms of how the Bill would apply.

[Faisal Rashid]

Q The question is, do you think that it is possible to copy and paste existing agreements without any scrutiny, if changes are being made?

Elspeth Macdonald: Certainly, in terms of being able to provide the public with assurances that the trading relationships that the UK will have in future when it leaves the EU will provide the same degree of public confidence and public health protection, scrutiny is critically important.

[Faisal Rashid]

Mr Stephenson, can you comment on that?

Gary Stephenson: I was going to jump in there anyway. It is an optimistic view that it is just a lift and shift. If you go for trilateralism, you are more likely to get there; if you go for bilateral agreements, you are more likely to get some differences.

[Faisal Rashid]

Thank you. That is very useful.

[Judith Cummins (Bradford South) (Lab)]

Q This is a question for Ms Dickson. The Scotch Whisky Association has set out a framework for consultation set in statute through a UK trade policy advisory network. Could you explain what that proposal is?

Sarah Dickson: It would be very similar to what the US does. It has cleared advisers. When you are into a negotiation, I know one thing that this House has talked about before is how you talk about a negotiation while it is ongoing and how you consult on those provisions without revealing what is a moving target. What the US does is to have cleared advisors in statute; they are people it is able to talk to to work out how to make a success of a provision within a negotiation. We can see that there might be a role for legislation in this area, where you want to be able to talk to people on a formal basis about what is essentially a Government-to-Government discussion.

--- Later in debate ---

[Faisal Rashid]

Q As you are probably aware, the Bill does not make provision for the involvement of Parliament or others in the scoping negotiations or any ratification of new trade agreements. What provisions do you think it should make on future free trade agreements?

Jonathan Hindle: A very quick answer from the furniture industry point of view is that we would want to see as much scrutiny as possible. You referred to parliamentary scrutiny; whether that is the most effective form of scrutiny is another matter. We would certainly want the TRA to be made up of appropriate individuals to provide good-quality scrutiny.

[Faisal Rashid]

Q The Government always said that they would set out a major consultation mechanism for new free trade agreements. Do you not think that that should be provided for in the Bill?

David Scott: As I said at the start, consultation is absolutely essential. You have to start with the industries and then bring it to yourselves from that point of view. If it being in the Bill would force that to happen, I would certainly say that that is a good thing from my perspective. I guess that what we do not want is one or two people making a decision for the populous.

Gordon MacIntyre-Kemp: Very quickly, that was my point in response to Mr Esterson’s question. Yes, it should be in the Bill.

[Faisal Rashid]

Q Are you aware of any consultation system in any other country that we can adopt as a starting point?

Gordon MacIntyre-Kemp: I am not an expert on other nations. For almost all my life, we have been in the EU. We did not need to study what other people did. We are just making it hard for ourselves now.

[Mike Wood]

Q Mr MacIntyre-Kemp, you spoke about your concern that the Bill is not clear on the Government’s powers to conclude trade deals, and you talked about chlorinated chicken from the United States. I just want to check that you understand that the Bill is perfectly clear that it would not give any powers to the Government to conclude any trade deal with the United States, regardless of whether it included any type of chicken.

Gordon MacIntyre-Kemp: You are talking specifically about it not allowing anyone to do a deal to do with chicken, but I was using that as an example to point out that the actual wording of the Bill seems to allow a significant amount of power in one particular place and to not have sufficient levels of consultation. Basically, afterwards, it would indeed be applicable across many different sectors, food being one of them.

Trade Bill (Fifth sitting)

Faisal Rashid Excerpts

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

[Barry Gardiner]

I am delighted to see you in the Chair, Ms Ryan. I look forward to the Committee proceeding at a rapid pace under your guidance. I am tabling amendments 5, 9 and 10, in my and my colleagues’ names, as on the amendment paper.

We are now talking about the implementation of the new international trade agreements to be negotiated between the UK and those third countries that already have an agreement with the European Union. The Government are seeking to appropriate to themselves the power to make regulations to implement those new agreements without any scrutiny by Parliament. I cannot state it better than the House of Commons Library briefing paper, which states that the Bill

“seeks to minimise Parliament’s role”

in this regard, in that it will make all secondary legislation under clause 2(1) subject to a negative resolution procedure only.

The rationale behind this attempt to sidestep due democratic process is that the trade agreements that the EU had previously negotiated with the third country in question had already undergone scrutiny when they were prepared for ratification—that is the argument the Minister used last week when we debated this. By the Government’s sleight of hand, he would say there needs to be no parliamentary scrutiny of any new UK trade agreement because that job will already have been done on the earlier agreement negotiated by the EU.

The Minister was particularly keen to point out that we were suggesting that all the levels of scrutiny that took place at the EU would be done away with. I think he thought he was trapping us when he asked us to agree that a good level of scrutiny had taken place, and that we should allow these measures to go through on the nod because that scrutiny had already happened. We reject that argument, and we were pleased to register that business representatives who gave oral evidence to the Committee agreed with us. The Committee will recall that.

The new trade agreements are not only legally distinct, as the Government have admitted, but may well include substantial new obligations, which will have been through no process of scrutiny whatever. That is why we demand a new approach to these agreements in subsequent amendments to schedule 2, where scrutiny is addressed. However, the provisions of clause 2(3) and (4) go even further, in that they allow the Government to sidestep scrutiny of not only those new UK agreements that are set to replace existing ones, which have been through the full scrutiny process prior to ratification, but UK trade deals that replace EU agreements, which have not even been through the process of ratification. Our amendment speaks to that extraordinary attempt to undermine democracy still further, the significance of which might be demonstrated if I give the Committee an example.

The economic partnership agreement between the EU and Japan was finalised last month. Negotiations were concluded on 7 December last year, and the text of the agreement is currently undergoing the double process of what is called legal scrubbing and translation into the official languages of the EU, so that it can proceed to signing in 2018. The agreement will subsequently undergo the due process of ratification by Japan and within the EU, including parliamentary scrutiny by the European Parliament. However, that process will not be completed until later in 2019, if experience is any guide, and therefore after the point at which the UK is no longer a member of the EU.

Japan is also one of the countries with which the Government have established a trade and investment working group. That working group held its first meeting in Tokyo during November of last year, and is tasked with advancing the trade and investment relationship of the two countries, with the eventual aim of signing a UK-Japan trade agreement at some point in the coming years.

According to the Bill, any future UK trade deal with Japan will be counted as a roll-over agreement, and will therefore escape parliamentary scrutiny altogether, because the EU and Japan will have signed a trade agreement during 2018—that is, before the UK leaves the EU. Note that that will be the case even if the future UK-Japan deal bears no resemblance to the EU-Japan economic partnership agreement. As stated earlier, the Bill makes no requirement for the future UK deal to match the EU’s agreement in any way, shape or form; the Bill requires only that the other country and the European Union were signatories to a free trade agreement before Brexit takes effect. The regulations to implement those new obligations will be subject to a negative resolution procedure, which is the effective negation of parliamentary scrutiny, as the Government would have us consider the new UK-Japan deal simply to be a roll-over or a grandfathered agreement.

I would like to draw attention to the oral evidence provided last Tuesday by Dr Lorand Bartels of the University of Cambridge, who spoke to exactly that issue. Dr Bartels drew particular attention to the forthcoming trade agreement with Japan, and pointed out that

“there is a fundamental difference in international law between a signed and provisionally applied agreement and a ratified agreement.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 42.]

The Government would do well to heed that distinction. I hope that the Minister might accept our amendment and that he will see it, in a friendly spirit, as one that might improve the Bill.

Without the amendment, we are in danger of effectively granting the Government carte blanche to do what they like to secure a new UK-Japan deal. That would be a major concern to businesses and workers up and down the UK. Japan is a major player on the world stage, and Japanese companies are important investors in our economy, so the obligations that we, as a nation, undertake in relation to those companies are critical to the future of some of our most dynamic industries. Are the Government really telling us that we, as parliamentarians, should have no right to scrutinise those obligations?

[Faisal Rashid (Warrington South) (Lab)]

Despite the fact that the Government have continued to argue that there is no need for parliamentary scrutiny in the Bill because existing deals have been subject to sufficient scrutiny in the European Union, does my hon. Friend agree that that is not the case here and therefore that it is vital in the interests of the British people that we secure such an amendment?

[Barry Gardiner]

I am grateful to my hon. Friend for his intervention because he reinforces the very point that I am trying to establish. Despite the processes that are currently in place for scrutiny of trade deals as they proceed through Europe, and ultimately through the European Scrutiny Committee and through the House under the Constitutional Reform and Governance Act 2010 procedure, we have here a situation in which a deal that was going to be concluded between the EU and another country can proceed to be signed, but not implemented. Then, in the lacuna—that is, the space between that signature and our leaving the EU—we could be confronted by the Government with a completely different set of trade relations. The trade agreement could be totally different, yet, under the Bill, the Government would have the power to sign and implement it simply because they had already signed a previous agreement before we had left the EU. That cannot be the right procedure for what could be completely new issues under that future agreement.

In one sense, the amendment is a modest one, given the seriousness of the issue it addresses. It merely seeks to exclude from the antidemocratic provisions of the Bill any regulations stemming from treaties such as a future UK-Japan trade agreement, where the correspondent EU agreement will have been signed but not yet ratified, along with all the scrutiny that ratification requires.

Other EU trade agreements could fall into this same category: the EU-Vietnam free trade agreement, the text of which is also being prepared for signing at some point this year; the EU-Singapore free trade agreement which has been initialled but held up by internal EU discussions as to whether it is a mixed agreement or exclusive EU competence, leading to the European Court of Justice ruling on this issue in May last year; and, potentially, some of the economic partnership agreements still to be finalised between the EU and different groupings of African, Caribbean and Pacific states, which were criticised so trenchantly by Professor Alan Winters of the UK Trade Policy Observatory in his oral evidence to the Committee last week. Also in this category is CETA, the comprehensive economic and trade agreement between the EU and Canada, which has been signed but not yet fully ratified, as it is a mixed agreement requiring ratification in each of the EU member states, in addition to the centralised EU institutions of the Council of Ministers and the European Parliament.

Finally, the amendment tightens up the language of subsections (3) and (4) by requiring not just that the EU and the other signatory or signatories should have ratified trade agreements, prior to Brexit, but that they should have done so with each other. The Bill as it stands simply says that they must have signed “a” trade agreement; it does not say that they have to have signed it with Japan—with the corresponding party. This is ridiculous. The Minister is looking confused. If he wants to intervene, I would be happy to give way to him on this point because it is material.

--- Later in debate ---

[Barry Gardiner]

I am happy to address the Minister’s point and have set out the Labour Front-Bench position very clearly. He should know that the provisions of the amendment do not do what he has claimed they do. What it says is that there must be proper parliamentary scrutiny. He is denying precisely the opportunity for that to happen when a treaty has been signed but not yet ratified. The point of the amendment is to ensure that proper scrutiny can take place and that ratification can have taken place to ensure that.

[Faisal Rashid]

On the point about CETA, does my hon. Friend share my concerns about the implications of bringing in certain provisions of the deal and not ratifying—for example, the investor-state dispute settlement provisions? The key point is that there will not be sufficient scrutiny or consultation or an impact assessment carried out.

[Barry Gardiner]

My hon. Friend pre-vents me—I think that is the sort of Latin term: he goes before me. He picks up a theme I was about to come to. The ISDS procedures have been a major concern of not just parliamentarians but many other people in this country and across Europe. Any hon. Member who says that his postbag and email have not reflected that has simply not been examining them carefully enough.

On my point about the requirement to sign “a” trade agreement, clause 2(3) states:

“Regulations under subsection (1) may make provision for the purpose of implementing a free trade agreement only if—

the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day”.

It does not specify that it must be the same agreement, and stating the need for a treaty “with each other” would clarify that, which is what the amendment seeks to do. There is no great confusion, but there might be some because the clause is ambiguous.

Amendment 9 speaks to the first of two Henry VIII powers. Those powers are the most egregious example of the power grab that characterises the Bill, despite the extraordinary spectacle of the Secretary of State using the letters page of The Guardian to claim the opposite—a travesty I detailed on Second Reading and which, for reasons of time, I do not wish to reprise here. For the record, though, I draw attention to paragraph 2 on the very first page of the delegated powers memorandum that accompanies the Bill, which states, in plain English:

“The Bill contains 6 individual provisions containing delegated powers. Two of these, clauses 2(1) and 7(3), include a Henry VIII power.”

I am still waiting for the Secretary of State to correct the record that he so carefully muddied previously. Amendment 9 simply seeks to remove the first of those two Henry VIII powers.

Ms Ryan, I am glad that your grouping of amendment 9 with amendment 5 has enabled me to speak to it now, because it follows nicely on from my comments on the UK-Japan trade agreement. It is bad enough that talks towards a trade agreement should have been initiated behind closed doors by a secret working group—no agendas, no minutes, no access to any documentation, no website to keep Parliament or the public abreast of what was being decided in our name—but at the end of that charade, a set of formal negotiations, still in secret, determined what obligations we as a country might or might not be saddled with for a long time.

[Faisal Rashid]

Does my hon. Friend agree that if the Government are certain of their ability to roll over existing agreements, there is surely no need for the Henry VIII powers?

[Barry Gardiner]

My hon. Friend is entirely right. The Henry VIII powers show that the Government also realise that it is not simply replica provisions that are being rolled over but, in fact, new agreements that may contain substantially different clauses. Because of that, they need powers to be able to progress those agreements. The Committee tried to address that during its sitting last Thursday afternoon but the Minister has been reluctant to take the matter on board, even when pressed on how he thought, given the Government’s red lines, he would be able to roll over our current agreement with Norway on the free movement of people, and that with Turkey on the relationships we have through that country’s agreement with the EU customs union. The Minister has failed comprehensively to address those points. It would be interesting if he were to do so when he responds to this group of amendments, but I fear my hon. Friend might languish in hope rather than expectation of the privilege of hearing such a response.

--- Later in debate ---

Amendment 10 would narrow the definition of a trade agreement to the extent that certain agreements that would be widely accepted as instrumental aspects of trade relationships, such as bilateral procurement agreements, would be ruled out of scope.

[Faisal Rashid]

The Minister mentioned a few times proper parliamentary scrutiny of future trade agreements but, clearly, the provision confirming that there will be parliamentary scrutiny in future should not be in the Bill.

--- Later in debate ---

[Judith Cummins (Bradford South) (Lab)]

I beg to move amendment 6, in clause 2, page 2, line 29, at end insert—

“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with—

(a) the provisions of international treaties ratified by the United Kingdom;

(b) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015;

(c) the primacy of human rights law;

(d) international human rights law and international humanitarian law;

(e) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to –

(i) the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and

(ii) the fundamental principles and rights at work inherent in membership of the International Labour Organisation;

(a) women’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Elimination of All Forms of Discrimination Against Women;

(b) children’s rights and are in accordance with the United Kingdom’s obligations established by but not limited to the Convention on the Rights of the Child;

(c) the United Kingdom’s environmental obligations in international law and as established by but not limited to—

(i) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;

(ii) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and

(iii) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety; and

(d) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”

This would ensure that international trade agreements do not conflict with the provisions of international laws or conventions on human rights and the environment, or with the rule of law.

The amendment is designed to apply to regulations implementing all UK trade agreements, of whatever sort. It is a high-level amendment that sets out our trade policy in the proper context of respect for human rights, environmental sustainability and the rule of law. I hope therefore that the Government will have no difficulty in accepting it as a friendly amendment.

The casual observer might think it bizarre that a trade agreement could endanger human rights. Luckily, help is at hand. For those members of the Committee who have not read it, I heartily recommend the comprehensive report of the United Nations independent expert Alfred de Zayas for the UN Human Rights Council, dated 12 July 2016, in which he enumerates the many ways in which trade agreements may indeed infringe on human rights and sadly have done so in the past.

I will not take the Committee through the whole report, but suffice to say that de Zayas examines the threat posed to human rights by international trade and investment across not only civil and political rights, but economic, social and cultural rights such as the rights to work, health, education and one’s own culture. In all cases, de Zayas offers examples of where international trade and investment activities can threaten the enjoyment of human rights. He warns against creating any new agreement that might exacerbate the harm that has already been done as a result of failure to pay proper heed to the nexus between trade and investment, and human rights.

I will draw out one recommendation in the UN independent expert’s report, because it is so utterly pertinent to our discussion of the Bill. His first and foremost recommendation to Parliaments around the world states:

“No parliament should approve trade agreements without exercising oversight functions and examining the compatibility of the agreements with human rights treaty obligations in the light of impact assessments.”

That sentence might usefully be read out, I suggest, at the beginning of every sitting of the Committee and at any subsequent debate on trade policy held by this House.

The amendment seeks to ensure that future UK trade agreements will never be able to undermine human rights in the ways that Alfred de Zayas describes so powerfully for the UN Human Rights Council. In particular, proposed new sub-paragraph (c) aims to establish a proper hierarchy in cases of conflict between human rights law and the treaty obligations of international trade agreements, so that human rights law will always take priority. That is in line with the Vienna declaration and the programme of action adopted by the world conference on human rights on 25 June 1993.

Sub-paragraph (c) also speaks to the basic legal principle of pacta sunt servanda, namely in this case that states are obliged to fulfil their human rights treaty obligations in good faith and should never enter into any trade or other commercial agreements that would undermine or in any other way render impossible the fulfilment of their human rights treaty obligations.

Our amendment goes further, however, in light of the fact that we have higher-order principles that are not related to human rights alone. We also require the UK’s international trade agreements to be consistent with international humanitarian law, which is the body of law governing the conduct of war, so that there can be no question of the UK entering into any agreement with a trading partner that might undermine such a critical pillar of the international order.

One obvious example of what happens when that principle is ignored can be found in the ongoing difficulty caused at European level by Morocco’s attempt to include the fishing rights of the Sahrawi people in its trade agreement with the EU. The trading relationship between the two partners has been critically undermined as a result of the European Court of Justice 2016 ruling that Morocco has no right to negotiate a fishing agreement with the EU covering the waters of the occupied Western Sahara, a territory that the UN has confirmed must be granted the right to self-determination, but where the Sahrawi population has lived under Moroccan military occupation for more than four decades.

Just this month, the ECJ advocate-general publicly stated that the EU fisheries deal with Morocco should be declared invalid because of its failure to accord with international humanitarian law. I am sure that, like us, the Government would not wish any future UK trade agreement to fall into a similar trap.

[Faisal Rashid]

Trade deals often impact a wide range of public policy areas. For example, a deal done with a foreign state can impact on the provision of services such as transport. The powers outlined in the Bill could potentially remove a duty on service providers to make reasonable adjustments for people with disabilities. According to Liberty, that would make access to transport more difficult for one in five of the UK population. Does my hon. Friend agree that, as we build the foundations for our future trade policy—I understand that the Minister argues with that—it is vital that the legislation contains provisions that protect such human rights, which are incredibly important for a huge number of people?

[Judith Cummins]

It is incredibly important to include an ethical dimension to any human rights legislation in the Bill. We also require all future UK trade agreements to be consistent with the sustainable development goals adopted by the UN General Assembly in September 2015.

The importance of those goals needs no further elaboration but may be a useful point on how the world’s poorest countries have been marginalised from the gains of global trade over the past 40 years. Although emerging economies such as China have clearly been able to use the export opportunities of a globalised economy to develop into leading actors in many fields of trade and investment, the countries that are home to the bottom billion, as the poorest have been called, have been left behind.

That is precisely what the World Bank’s former research director, Paul Collier, warned of in his best-selling book “The Bottom Billion”, where he concluded that reliance on trade is more likely to lock yet more of the bottom billion countries into the natural resource trap than to save them through export diversification.

--- Later in debate ---

[Greg Hands]

I thank the hon. Member for Bradford South for her interesting and wide-ranging speech. I wholly agree with her strong comments on human rights and the UK being a leader in that space and the wide range of fields referred to in the amendment. In fact, I think all Conservative Members wholly endorse that.

However, I assure the hon. Lady that the amendment is unnecessary. The UK has always sought to comply with international law, and we will continue to uphold our strong commitments to human rights and labour and environmental standards around the world, as well as to the sustainable development goals, gender rights, disability rights, endangered species, fighting climate change and so on. The process of exiting the EU will not alter that position, and we will still be bound by our commitments under international law. Both the Secretary of State and I stated in the Chamber on Second Reading that our aim in undertaking the transition programme is to seek continuity in the effects of existing trade agreements. This is not an opportunity to renegotiate the terms of those agreements, which have already been scrutinised by Parliament.

The hon. Lady referenced least developed countries. I remind her that, despite her warm words, she voted against the Taxation (Cross-border Trade) Bill on Second Reading, which is currently being considered in another Committee and which enshrines a system of trade preferences for developing countries as we leave the EU, to make sure that those powers are in place for the UK to offer unilateral trade preferences. Unfortunately, if her vote on that Bill had been the majority view in the House earlier this month, the UK would not have a system of trade preferences for developing-world countries as we exit the EU.

The amendment is unnecessary, particularly in relation to our compliance with international law.

[Faisal Rashid]

The Government recently published a 25-year plan for the environment, committing the UK to:

“Leave a lighter footprint on the global environment by enhancing sustainability and supporting zero deforestation supply chains.”

Does the Minister agree that it is vital that the Bill is amended to ensure that the Government can meet that commitment, and to ensure that trade policy does not result in a reduction in environmental standards and protections or in an unacceptable, unsustainable global footprint?

[Greg Hands]

Let me be absolutely clear: there is no intention to reduce environmental standards. In fact, the point of the 25-year environment plan was to enshrine this country’s commitment to the environment over a very long period of time. I heartily commend that plan, but it is not part of today’s Bill. I am happy to underline that we will, of course, remain compliant with international law. On the basis of that assurance, the broader applicability of international law, and the UK’s commitments in all such areas, I ask the hon. Member to withdraw the amendment.

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However, the EU’s legal team soon came to realise that the public utilities exemption was itself defective. Two papers that it published in 2011 confirmed that public services were still potentially exposed to the trade liberalisation regime, as incorporated in both multilateral and bilateral agreements. The same concern applied to the major bilateral trade deals under negotiation with the US and Canada—TTIP and CETA—as well as the negotiations that are continuing outside the WTO framework towards a plurilateral trade and services agreement, known as TISA, in which we understand the UK is currently engaged only by virtue of its membership of the EU. The Minister might want to confirm whether the UK is engaged in those negotiations when he responds. In all these cases, the inclusion of public services is a major cause of concern, not least among trade unions, which have come out against all such deals unless there can be an unequivocal guarantee that public services will not be included.

[Faisal Rashid]

Does my hon. Friend agree that modern-day international trade agreements extend into a wide range of public policy making and it is therefore essential that our Government maintain the capacity to deliver public services?

[Bill Esterson]

That is absolutely right. It is at the heart of amendment 7 that our Government and this country retain the right to decide who runs vital national services. Our concern from the body of evidence over the years—I have started to run through where some of those concerns come from—is that there is doubt about whether that will continue to be possible.

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[Greg Hands]

As I have mentioned, the aim of continuity means that this exercise will not be used as a back-door way to alter how the UK delivers public services. I make it clear to the Committee that the protection of public service delivery is written into many EU trade agreements and they already include safeguards to protect EU country Governments from being forced to privatise their services. That protection has worked for 20 years.

I will turn to some of the individual points that have been raised. The hon. Member for Sefton Central talked about the agreement on government procurement. Just to be clear, the GPA operates on a positive list basis—that is, only areas listed by GPA members in their GPA schedules are covered by the GPA’s obligations.

Secondly, the hon. Gentleman will know, as I do, that negotiations on the trade in services agreement are ongoing at the WTO, but are not making a great deal of progress. The UK’s position, as it currently stands, will be represented in those discussions by the European Union.

[Faisal Rashid]

If the Government will not support the amendment today, will the Minister provide assurances to the Committee and to the British people that the Bill will not put vital public services, such as the NHS, at risk of piecemeal privatisations that are ultimately detrimental to those who rely on those services?

[Greg Hands]

We have been clear that many EU trade agreements presently provide those protections and we have been clear that this exercise of transitioning existing EU free trade agreements will not be used for any back-door attempt to do anything to the NHS that would prevent our right to regulate domestically for the NHS. This party has a proud record of defending and protecting the national health service, and that will continue.

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[Judith Cummins]

I thank my hon. Friend and the hon. Member for Kilmarnock and Loudoun for their interventions, in which they both made valid points.

In the USA, the requirement is reversed. Those who wish to introduce products or processes to the market are free to do so unless the authorities can prove that they are unsafe. What they have tried to call the “scientific” approach to food safety, as opposed to the risk-based approach that we enjoy in this country and throughout Europe, has meant that the USA has ended up with lower standards of food hygiene and food safety. That is why the processes behind meat production on either side of the Atlantic are so radically different.

More than 90% of US beef is produced with the use of bovine growth hormones that have been linked to cancers in humans. We have food safety regulations in place across Europe that have banned any imports of hormone-grown beef from the USA and other countries for 30 years. US poultry producers are permitted to douse chicken and turkey carcasses with chlorine washes before selling them on to consumers. Again, that practice has been banned in Europe for more than 20 years, and the USA has challenged the ban at the WTO as being a barrier to its ability to penetrate the EU market.

The connection with animal welfare is paramount in this respect, in that the European regulations seek to introduce at least some consideration for the welfare of the animals that are farmed for human consumption. The USA has no comparable regulations on animal welfare, and the conditions in which its industrial farming takes place do not bear thinking about. Let me make the central point clear: the issue before us in this Bill is not whether we like the idea of eating hormone-grown beef, or whether we care about animal welfare in the raising of poultry for slaughter—those are debates we can have another time; the issue before us here is that we must be the ones to decide on food safety and animal welfare issues, and we must do so in an open forum as the elected representatives of the people of the United Kingdom.

[Faisal Rashid]

Does my hon. Friend agree that, if we do not secure an amendment to protect food safety standards in the UK, we will be failing our constituents and potentially putting public health at risk?

--- Later in debate ---

[Judith Cummins]

I am referring to the right hon. Member for Twickenham (Sir Vince Cable).

Amendment 8 also seeks to ensure that the food we eat comes from healthy animals that are naturally resistant to disease, not dosed up with antibiotics as an alternative to maintaining food hygiene throughout the production process, which is a standard model of industrial farming in the USA. We all know about the real threat of superbugs that develop their resistance to antibiotics. That is why the Veterinary Medicines Directorate has set targets for the reduction of antibiotic use in agriculture. This is where the interface between animal welfare and food safety becomes most compelling, and why British farmers should be proud to produce food that adheres to the highest standards—all the way from farm to fork.

Finally, this amendment would ensure that the bodies responsible for upholding and enforcing food standards in this country have the capacity to meet any extra requirements placed on them.

[Faisal Rashid]

I was just reading some of the evidence submitted by Sustain, the alliance for better food and farming, which says exactly what my hon. Friend is saying:

“We want affordable food, not cheap food, which may be poor quality or unsafe to eat. Cheap, poor quality, imported food will come at a cost—to the farmer or food producer, to animal welfare, to the environment or jobs in UK food and farming. There may be hidden costs to our NHS and economy from food poisoning and lost days at work.”

Does my hon. Friend agree that this amendment will help to protect our food standards?

Trade Bill (Sixth sitting)

Faisal Rashid Excerpts

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

[The Minister for Trade Policy (Greg Hands)]

May I start by welcoming you to the Chair, Mr Davies?

The Government have already made it clear that we will not use the necessary and indeed pertinent exercise of continuing the effects of our existing agreements as a back-door way to reduce standards, including food safety standards. As the Prime Minister said in Florence in September, we are

“committed not only to protecting high standards, but strengthening them…we will always be a country whose pitch to the world is high standards at home.”

I am happy to reaffirm the Prime Minister’s commitment to the Committee. We are committed to upholding and strengthening our high standards in public health and safety, product performance and protecting the environment.

[Faisal Rashid (Warrington South) (Lab)]

How does the Minister plan to prevent a race to the bottom on food safety standards in the UK and to protect British consumers if he is not prepared to accept the amendment?

[Greg Hands]

The Government have always been clear that we will maintain our very high standards on food and animal welfare, and for protection in that space. There will be no race to the bottom. Nothing in free trade agreements precludes a Government from regulating in the domestic environment. I hope that that is enough reassurance for the hon. Gentleman. On protecting the environment, high standards and high quality are what our domestic and global consumers demand, and that is what we should provide.

To be clear, nothing in the Bill would allow us to do a free trade agreement with the United States because, as we know, the United States does not have a free trade agreement with the European Union. While the hon. Member for Bradford South gave an interesting speech of some length about what may or may not happen in any future trade agreement with the United States, it is worth mentioning that the Bill does not cover free trade agreements with the United States. Any future free trade agreement with the United States must work for UK farmers, businesses and consumers, and uphold food safety and animal welfare standards. However, that is a matter for a future day; it is not relevant to the Bill before us.

--- Later in debate ---

I am not suggesting that we should rush the negotiation of any of the new trade agreements that will replace those that we have enjoyed with third countries by virtue of our membership of the EU—far from it. We need to get them right. What I am saying is that we should have a proper process of consultation and parliamentary scrutiny by which to debate and vote on what comes out of those negotiations.

[Faisal Rashid]

Does my hon. Friend agree that, without limits on the renewability of the sunset clause and against the backdrop of a Government failure to commit to a second trade Bill, this Bill will certainly be seen by many as a potential Trojan horse for the Government to introduce future deals with minimum levels of scrutiny?

[Barry Gardiner]

My hon. Friend is absolutely right to be sceptical. The Minister has made much of the arguments that, first, there is a need for speed and, secondly, this is only a temporary Bill that puts in place temporary provisions to roll over the existing agreements. In fact, the powers—certainly the ones relating to the agreement on government procurement—are not temporary; they last longer.

Here, in the provisions of the sunset clause, we have not just one sunset period but the possibility of indefinite roll-overs of the sunset clause itself: five years, followed by five years, followed by five years. If the Minister is absolutely confident that the Bill is a temporary necessity, one must wonder why he wants the sunset clause to continue indefinitely into the future at the Government’s will, when it enables the Government to take on a Henry VIII power.

When I say that there should be a proper process of consultation and scrutiny by which to debate the negotiations, I am only replicating what Anastassia Beliakova of the British Chambers of Commerce demanded in her oral evidence during our final witness session last Tuesday, when she said that provision needs to be made not only for “appropriate scrutiny in Parliament” but for a proper process of “stakeholder engagement for business” and “civil society” in order to scrutinise any changes that might arise as a result of the negotiations.

If the Government are adamant that such a process is to be denied us, rejecting the advice of business and the demands of trade unions and other civil society bodies, it should be denied us for an absolute maximum of five years, with no renewal of the sunset clause, as provided for in clause 2(8) and (9). Every day longer that the Government have those powers is another day for which parliamentary democracy is put on hold. The first of our amendments says that five years is enough. We believe that it is five years too many, given the unmerited powers that the Bill grants to the Government and the rights that it strips away from Parliament, but certainly five years should be enough. If the Government still have not managed to roll over their agreements by March 2024, that power should disappear along with the expiry date.

I really wonder whether Government Members themselves believe that an indefinite use of a roll-over to give an unending Henry VIII power to the Government is a sensible power that this Committee should grant.

Let us say that the Government persist in getting rid of amendment 11. Amendment 12 would allow the Government one renewal only. That is, the Government would be allowed to ask Parliament for permission to renew the sunset clause for one extension, but no more. That would allow the Government the unmerited powers in the Bill right up to the end of March 2029. Can the Minister really demand, with any sense of integrity, that this Committee afford him and the Government greater power than that?

--- Later in debate ---

[Faisal Rashid]

It has been widely documented that the use of the negative resolution procedure the Bill proposes affords Members less opportunity for scrutiny in the House than is currently enjoyed by Members of the European Parliament. Indeed, Jude Kirton-Darling MEP told the Committee in no uncertain terms that the Bill is

“an enormous step back in democratic oversight of trade agreements.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 43, Q86.]

Does my hon. Friend therefore agree that, for the Government to meet their commitment that the Bill will replicate existing arrangements as closely as possible, they must support the amendment to ensure the opportunity for scrutiny enjoyed by Members is closer to that currently enjoyed by MEPs?

[Barry Gardiner]

Indeed—my hon. Friend is right. Many Members on both sides of the House think it a travesty that we are afforded less opportunity to scrutinise things and less transparency than is afforded to our colleagues in the European Parliament.

On the agreement on government procurement, once we have had our opportunity to debate and vote on the terms under which we will rejoin it, the Government will then lodge our annexes with the WTO. The next stage is to issue the regulations that will implement the terms of our accession to the GPA, and then, in the years thereafter, to make changes to our domestic legislation that reflect the accession of new parties to the GPA or the withdrawal of any countries that decide to leave it.

It is important to note that that is not a temporary power covered by a sunset clause, as with the international trade agreements in clause 2. This is a permanent power for the Government to issue regulations implementing the UK’s obligations under the GPA into the indeterminate future—for as long as the WTO remains and the GPA is one of its constituent agreements. When we look at the fine detail of the Bill, we yet again discover that it is not a temporary little Bill about rolling over existing agreements; it actually has permanent, lasting effect. The roll-over powers could give Ministers the powers in perpetuity, under the Henry VIII provision.

We hear that the Bill is small, necessary, timely and time-limited, but in actual fact it is not. Our amendment 13 seeks to replace the negative resolution procedure, which the Government wish to apply to clause 1(1), with the affirmative procedure. I will remind the Committee of what that means so that we have a proper understanding of what we are talking about in this context, because it will also be essential to several later amendments that we will bring forward to other parts of the Bill.

The scrutiny procedure for delegated legislation in the House of Commons has come in for intense criticism in the context of the European Union (Withdrawal) Bill. That criticism is well merited. The Hansard Society’s expert report, “Taking Back Control for Brexit and Beyond”, lifted the veil on just how badly the system is failing to deliver the necessary scrutiny of secondary legislation at precisely the moment we need full confidence in it as we rebuild our system of checks and balances for the post-Brexit future. That report does not make pleasant reading.

The negative resolution procedure the Government propose for regulations under clause 1(1) is the least rigorous of all parliamentary procedures available. Secondary legislation subject to the negative resolution becomes law automatically once it has been laid before Parliament and has remained unchallenged for the requisite number of days—no need for a debate, no call for a vote. MPs may pray against any regulation by means of an early-day motion, but there is no obligation for the Government to schedule parliamentary time to debate that prayer.

The convention is that prayers made by Her Majesty’s official Opposition should receive parliamentary time for a debate, yet even then there is no guarantee that the convention will be respected. In the 2015-16 parliamentary Session, the Leader of the Opposition tabled a dozen prayer motions for debate—five were granted. Of the 585 negative instruments laid before Parliament in that session, only 3% were even debated. In the following parliamentary Session, fewer than one in 100 statutory instruments subject to the negative resolution procedure were debated at all.

The main point of the negative resolution procedure is to allow the Government to have their way without any need to bother parliamentary democracy, and it has been spectacularly successful. The last time a negative instrument was successfully annulled in the House of Commons was the Paraffin (Maximum Retail Prices) (Revocation) Order in 1979. I think that tells the story about what is intended by making these provisions subject to the negative resolution procedure.

[Faisal Rashid]

Almost every individual who has appeared before this Committee over the past week, from business leaders to academics, civil activists and lawyers, has told us that more needs to be done by way of parliamentary scrutiny in this Bill. If the Government will not support these amendments, what good reason do they have to ignore the recommendations of these individuals?

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[Greg Hands]

Hence, the clarification, twice over, to be absolutely precise how that vote would work. I know the hon. Gentleman has attacked the negative resolution procedure, but I do not remember any such exhortation when he was a Minister under Tony Blair—I did not listen to every single thing he said in those years, but I do not recall that. I think he would have troubled the scorers if he had attacked such a procedure at the time under CRAG, which as we know is an Act of Parliament introduced by the last Labour Government.

The hon. Member for Brent North confirmed last week that he did indeed vote for CRAG. He said it was important in the days when the treaties in question had already been scrutinised by the EU and scrutiny was also passed down to

“this Parliament, where the European Scrutiny Committee…would examine forensically the contents passed from Europe”.—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 149.]

I can reassure the hon. Gentleman that the revised GPA in 2012 went through the very process he described to the Committee and the very process that he voted for in 2010.

The hon. Gentleman asked why the GPA power is not time-limited. The answer is that new accessions to the GPA are covered by the clause to ensure that the UK does not breach its own GPA commitments. It is also essential to have the power to reflect withdrawals to ensure that withdrawing parties do not continue to enjoy guaranteed access to UK procurement markets. I will speak in more detail about withdrawals from the GPA.

The hon. Gentleman asserted that the GPA power continues into perpetuity, including the Henry VIII power. There is no Henry VIII power in clause 1, which allows for the implementation of the GPA. The powers in clause 1 are narrow in scope. They are designed to allow the UK to make legislative changes that reflect its new status as an independent member but, none the less, as a member of an existing and settled agreement.

The UK needs to use the power in clause 1 quickly to prevent UK businesses from losing guaranteed access to valuable procurement markets. The revised GPA has already been scrutinised by the EU and the European Scrutiny Committee, using the powerful microscope the hon. Gentleman described last week and for which he voted not so long ago.

[Faisal Rashid]

Last Thursday my hon. Friend the Member for Brent North spoke of the emails members of this Committee had received from members of the public urging them to amend this Bill to protect our democracy. The number of these emails in my inbox—and, I am sure, in all other Members’ inboxes—has reached just over 5,000. If the Government will not support these amendments to introduce at least some degree of parliamentary scrutiny, what good reason can they give the 5,000 individuals who have taken time to contact us for ignoring their concerns?

[Greg Hands]

I thank the hon. Gentleman for his intervention, because it allows me to put on the record something that concerned all members of this Committee when they logged on last Tuesday and discovered, seemingly, a large number of emails—hundreds and, in one case, 1,200—about this Bill. I am sure he, in the course of being a good constituency MP, would seek to check whether those emails were, indeed, from his constituents. I have to report that my colleague who received 1,200 such emails discovered, following further examination by his very diligent parliamentary staff, that precisely four of those 1,200 emails came from his constituents.

I would say to the hon. Gentleman that, in respecting parliamentary rules, I would have a close look at those emails and ask where they are coming from. Is the hon. Gentleman, indeed, answerable to these people? All of them will have a Member of Parliament in this House who will be the right person to direct those emails to. Getting 5,000 emails from across Britain in relation to one issue in this Parliament need not necessarily be representative of a wider move against this Bill, which is a technical Bill all about the continuity of our existing trading arrangements.

[Faisal Rashid]

I thank the Minister for giving me time. This is a national issue; it is not just a constituency-based issue. I understand that there is parliamentary procedure and that we do not have to reply to all those emails if they are not from our constituents. However, surely it tells us, as parliamentarians, that the problems and issues among the general public and in the business environment are quite immense.

--- Later in debate ---

If, on the other hand, the Government vote down amendment 15, we will have failed to introduce a proper process of scrutiny prior to ratification. In that instance, trade agreements will have been ratified with a minimum of parliamentary involvement. We will therefore need to rely on scrutiny of the implementing regulations. We would then press to a vote amendment 19, which provides for the super-affirmative procedure.

[Faisal Rashid]

The super-affirmative procedure closely replicates the powers that MEPs enjoy in the European Union, so does my hon. Friend agree that if the Government are to meet their commitment that the Bill will replicate existing arrangements as closely as possible, they must support the amendment?

[Barry Gardiner]

Again, my hon. Friend makes the point about the discrepancy between the scrutiny available to us here in this sovereign Parliament and the scrutiny available to members of the European Parliament. It would seem entirely at odds with the Government’s stated purpose for the European Union (Withdrawal) Bill if we ended up having fewer scrutiny powers than Members of the European Parliament. That would seem to be a travesty.

I look forward with perhaps slightly more than the usual expectation to the Minister’s response to the amendment, given that this is the issue on which not only the right hon. and learned Member for Beaconsfield spoke on Second Reading, but on which several other hon. Members from across the House registered their profound concern. This is the moment when we discover whether the Government are prepared to heed the calls of right hon. and hon. Members alike and look at the Bill in a much more sensible way.

[Greg Hands]

Let me reassure hon. Members that I listened very carefully to what the hon. Member for Brent North said. First, let me repeat that the majority of free trade agreements within the scope of the Bill have already been ratified, and Parliament had the opportunity to scrutinise them during ratification. Parliament’s European Scrutiny Committee also scrutinised these agreements when they were negotiated, included, signed and provisionally applied. They had, of course, already gone through the European Parliament process as well, to which the hon. Member for Warrington South helpfully drew our attention.

The Government have made clear their intention to ratify by exit date all the EU free trade agreements that currently provisionally apply, including the EU-Canada comprehensive economic and trade agreement, and the economic partnership agreement with the Southern African Development Community, or SADC.

The hon. Member for Brent North drew attention to the comments of a South African Minister. To be honest, I cannot remember precisely whom he referred to, but for clarity I refer him to the memorandum of understanding signed by the Secretary of State for International Trade in South Africa in either August or September. Both parties specifically agreed to transition the agreement and maintain continuity, without substantive change. Whatever the hon. Gentleman’s South African said, the memorandum of understanding is absolutely clear in that regard. As I said to the International Trade Committee last week, 70-plus countries have agreed in principle to maintain continuity in trading arrangements. For example, we signed a similar memorandum with the CARIFORUM group to do precisely that.

Parliament’s scrutiny of these agreements, which have already been scrutinised, will be guaranteed by the process under the Constitutional Reform and Governance Act 2010. As we have made clear, this is a technical exercise to secure continuity in our existing trading arrangements, not an opportunity to renegotiate the terms of existing agreements. That means that further scrutiny of those agreements, the benefits of which are already felt by businesses and consumers, is unnecessary. As we have made clear, we want Parliament to play a vital role in the scrutiny of future trade agreements that are not covered by the Bill, but that is for a separate occasion. We made clear in the trade White Paper and in this Committee on Thursday that our future trade policy must be transparent and inclusive.

[Faisal Rashid]

We heard from many witnesses last week that so-called roll-over agreements not only will be legally distinct from our existing EU agreements, but are likely to be substantially different in their terms. Does the Minister agree that those new agreements need to be subjected to adequate scrutiny and parliamentary oversight, and that a super-affirmative procedure is appropriate?

[Greg Hands]

I thank the hon. Gentleman for his intervention. I very much appreciate the way, as a new Member, he is getting stuck into the Bill, but I remind him that, in terms of securing the continuity of agreements, more than 70 countries have now agreed that there will not be substantive change. I mentioned South Africa, with which we have a memorandum of understanding saying that. There is no need to re-scrutinise agreements that are substantively the same and have already been through the proper scrutiny processes of both Houses. That is why we made clear in the trade White Paper and in this Committee on Thursday that our future trade policy must be transparent and inclusive, and that Parliament will be engaged throughout the process. I therefore ask the hon. Member for Brent North to withdraw amendment 16.

--- Later in debate ---

[Hannah Bardell]

rose—

[Faisal Rashid]

rose—

[Bill Esterson]

I am spoiled for choice. I will give way to the hon. Lady.

[Bill Esterson]

It is really important that we take on the challenge set by the hon. Lady and apply it to all public bodies. How we achieve such a gender balance is perhaps a question for wider discussion, but her point is well made. The Minister might achieve the balance she suggests when he creates the authority.

[Faisal Rashid]

The role of Parliament in overseeing the creation of the Trade Remedies Authority was described to the Committee as “critical” by Chris Southworth of the International Chamber of Commerce. Does my hon. Friend share my concerns that if the Government do not support the amendment, they are clearly choosing to ignore the voice of the ICC? Does he also share my concerns about the repercussions that that might have for the future of UK trade?

[Bill Esterson]

My hon. Friend makes an excellent intervention, as he has done throughout Committee. That body has to carry the confidence of all sides of industry and all parts of society and of the United Kingdom. It is crucial that it does so, which is why we are attempting to push the amendments through. I imagine, from what the Minister has said, that he is unlikely to support us—why change the habit? Perhaps, however, he will explain how those points will be addressed and how the Government will respond to the witnesses mentioned by my hon. Friend, as well as some of the other witnesses.

The Minister is not letting on that trade remedies are not simply a technical detail of trade policy. They have the potential to be highly political. In essence, trade remedies defend domestic producers from unfair competition from dumped goods from other countries. The remedies are an essential policy tool to correct multilateral distortions, as Mr Stevenson, the specialist adviser to the Manufacturing Trade Remedies Alliance told us last week. Deciding when and how to use such trade defence instruments, however, is a political decision, and a highly political one at that, as is that on the membership of the TRA. It is crucial to get the membership right, to ensure that the TRA makes correct, balanced and evidence-based recommendations—as the hon. Member for Hertford and Stortford put it—to Government.

As the system is to operate under this Bill and the Taxation (Cross-border Trade) Bill, the Secretary of State has the capacity to use an economic interest test to allow the Government not to take action even when problematic trade behaviour by another country has been identified. In other words, the Government will have the capacity to decide that even when harm is being done to our domestic industries, other interests such as the consumer interest may outweigh those of the producers affected. To quote the words of George Peretz, QC, who we heard from last week:

“That seems to me to be a political position: it is balancing the interests of jobs in a particular area of the country against the interests of consumers across the country”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 55, Q105.]

The same point was made on Second Reading by a number of hon. Members, including about the Scotch whisky and steel sectors.

The Minister cannot pretend that the Bill and the structures created by it are apolitical and purely technocratic. Trade remedies can make the difference between the survival of an industry and its decimation. They can protect thousands of jobs or let them be exported overseas. They can defend our foundation industries or let them fall by the wayside. I am sure the constituents of the hon. Member for Corby can attest to that.

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[Greg Hands]

May I start by correcting an inadvertent error I made earlier? I mentioned an agreement that was signed by the Secretary of State for International Trade with South Africa and SADC in August or September. It was actually earlier than that. It was signed in July by Lord Price. I know that the hon. Member for Brent North takes an interest in South Africa, so I will quote briefly from what was said:

“The Southern African Customs Union…has welcomed the UK’s intention to prevent disruption of trade relations with other countries as it leaves the European Union”.

I think that clears up where we are with South Africa.

Let me start by stressing that the Government recognise the important role that Parliament, industry stakeholders and the devolved Administrations play in building the UK’s future independent trade policy. We look forward to working with all those groups and organisations on the establishment and operation of the Trade Remedies Authority to ensure that their views and interests are taken into account where appropriate. However, these amendments are not appropriate to the creation of that new function.

Decisions on trade remedies cases can have profound effects on markets, so we need to create an independent and objective investigation process in which businesses and consumers have full confidence. That is why we are setting up the Trade Remedies Authority as an arm’s length body with the appropriate degree of separation from the Department for International Trade. The hon. Member for Sefton Central said that trade remedies are inevitably political. That is precisely why we are ensuring that investigation and evidence-gathering must be done independently.

[Faisal Rashid]

James Ashton-Bell of the CBI told us that the fundamental question it has about the Trade Remedies Authority is

“who makes the ultimate decisions about when to take action and when not to take action.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 24, Q52.]

Given the lack of clarity about that, does the Minister agree that it is vital that appointment to and operation of the Trade Remedies Authority is as transparent as possible?

[Greg Hands]

Yes, and the authority is very transparent in its operation. A lot of how the authority operates is outlined in the Taxation (Cross-border Trade) Bill, which is being debated down the corridor. I strongly feel that there is really good transparency in the arrangements we have made regarding the authority’s independence, arm’s length nature and specialist and independent evidence-gathering. We are also ensuring that it is accountable to the Government and that, at the end of the day, a political decision is still taken about whether to impose trade remedies.

Trade Bill (Seventh sitting)

Faisal Rashid Excerpts

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

[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.

[Faisal Rashid (Warrington South) (Lab)]

Does the right hon. Gentleman agree that the amendment seeks a role for MPs that is akin to the role that MEPs have with regard to trade remedies?

[Greg Hands]

I thank the hon. Gentleman for that intervention. It is right that MPs have a role and that the TRA reports to Parliament. That is why the TRA publishes the annual report and is answerable to the Secretary of State, who is answerable to Parliament. Publishing the TRA’s recommendations before the Secretary of State has made the decision based on them is not a good idea, for reasons I will outline.

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[Greg Hands]

I thank the hon. Gentleman for his set of questions, which I will answer as far as I can. Let me start with why we need the data collection and sharing powers.

It is important that the Government have a more comprehensive understanding of UK exporters. The powers will allow the Trade Remedies Authority to fulfil its function by using full and proper data on the UK business population. They will also equip my Department with robust data to develop trade plans globally, and help us better to understand the impact of future trade agreements and policies so that we can direct our resources appropriately. Ultimately, that will provide better value for money for the taxpayer by enabling more targeted approaches to Government intervention and support for existing and potential exporters.

Clause 8 sets out the powers necessary for HMRC to share the data with the Department for International Trade and other Departments and organisations, for those bodies to carry out their public functions related to trade. I will come to the points raised by the hon. Gentleman in a moment, but those powers need to be wide enough to be able to withstand future institutional developments, so the clause will also allow HMRC to share the data with, for example: other bodies that DIT sets up to cover specific functions, such as the Trade Remedies Authority; bodies that carry out a public trade function, to ensure that the UK is able to put in place and maintain an independent trade policy as we leave the EU; and bodies outside the United Kingdom, such as the World Trade Organisation, with which the UK will be obligated to share data as part of our international obligations. That is currently done through the European Union; there is no change to the effect of that provision.

Amendment 32 would restrict the Government’s ability to take on functions related to trade formerly carried out by the European Commission, such as those related to trade remedies. You will know, Ms Ryan, that the European Commission currently does trade remedies investigations, a lot of which are data-driven. The amendment would hinder our ability to take such a data-driven approach ourselves.

Amendment 26 duplicates in clause 7 the necessary data sharing powers already set out in clause 8. Looking ahead to this country leaving the European Union, the amendment’s requirement to seek HMRC commissioner approval before any data is shared would also restrict the Government’s ability to share data at speed. It may be necessary, for example, to share data with the Trade Remedies Authority quickly or immediately when dealing with a trade defence case. I would not want the Trade Remedies Authority to be prevented from taking urgent action—sharing data about an important trade remedy quickly and efficiently, for example—in relation to a sector such as steel or ceramics because the Opposition had imposed an artificial delaying power with their requirement to seek HMRC commissioner approval before any data is shared.

[Faisal Rashid]

I understand what the Minister says about speed and things that have to be done, but many businesses, particularly small businesses, often struggle to stay on top of their reporting and administration requirements. There is a risk that any increased burden on them could put them off exporting. How do the Government intend to collect this information while ensuring that they do not place an unfair burden on small businesses?

[Greg Hands]

First, in the long run, small businesses will benefit from the Government being informed by a full set of data on the exporter community. It is difficult for the Government to set policy in relation to exporters without having a full picture of how many exporters there are and in which sectors. In the medium to long run, our ability to collect that data would help small businesses considerably. Secondly, the provision of that data will of course be voluntary. If a small business did not want to participate, for whatever reason, it would not be compelled to do so. It is very important to recognise that.

Trade Bill (Eighth sitting)

Faisal Rashid Excerpts

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

[Bill Esterson (Sefton Central) (Lab)]

Welcome back to the Chair, Mr Davies.

May I say how much I agree with the comments of the hon. Member for Kilmarnock and Loudoun? The impact of HMRC closures, which the hon. Member for Livingston mentioned, on communities and on those losing their jobs was well stated. The same is true of my constituency, with the closures in Bootle and Liverpool.

The Minister advised the Committee in an earlier sitting that

“the resources given to HMRC post Brexit to deal with Brexit are already there.”

He also said 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.”––[Official Report, Trade Public Bill Committee, 30 January 2018; c. 261.]

I therefore trust that Government Members will support the new clause, as the hon. Member for Kilmarnock and Loudoun said. The Opposition will support it.

Of course, the Minister may well see fit to release the cost analysis he referred to in order to allay not only our concerns but those of the business community about the impact of additional duties on HMRC, given the significant task it faces in preparing for Brexit and in the light of the up to 40% cuts in staffing levels it has faced over recent years. The Minister referred to funding that has been made available to HMRC to support its preparedness to be Brexit ready. Will he tell us what that funding is, or confirm that it is the £250 million that the Government have made available to the cross-departmental and inter-agency border planning group?

[Faisal Rashid (Warrington South) (Lab)]

Does my hon. Friend share my concern that HMRC is already significantly understaffed? There have been widespread complaints over the last two years about poor customer service and the closure of hundreds of offices across the country.

[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.

[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.

[Faisal Rashid]

I will give my hon. Friend a rest. Does he share my concern that if HMRC is not adequately resourced to collect and disseminate data in relation to our exports, placing any additional burdens on businesses to furnish that information is entirely unhelpful?

[Bill Esterson]

Absolutely. We made that point earlier in our proceedings and my hon. Friend makes it extremely well.

Coming back to what the hon. Member for Kilmarnock and Loudoun said, HMRC has suggested to the Public Accounts Committee that it will need 3,000 to 5,000 extra staff to perform effectively post-Brexit, but that will depend on the level of risk that Ministers are willing to take. The Public Accounts Committee received written evidence suggesting:

“There are very few International Trade businesses, both importers and exporters, who take Customs compliance seriously”

and that businesses need more support from HMRC to deal with post-Brexit requirements.

If that is the case, clearly a voluntary information disclosure, which the Minister has assured us the Trade Bill makes provision for, would be entirely futile as a means of gathering the information his Department requires. I note, as I did on an earlier occasion, that the Bill does not suggest that it is voluntary, and we are not aware of any business that would ever consider a request from HMRC to be voluntary in nature. The second point—that businesses require more support from HMRC to deal with post-Brexit requirements—is more telling; it further suggests that there will be a significant strain on HMRC’s resources if it is to carry out its existing functions, let alone carry out new ones.

If those new functions are subject to voluntary application, will they also be subject to voluntary roll-out from HMRC? In that case, perhaps there will be nothing to report in 12 months’ time. The additional burdens being placed on civil servants to prepare for Brexit are significant, and with limited resources being made available to support those endeavours, we are right to be concerned about the ongoing operability of HMRC, and indeed other public bodies. That is why we shall support the new clause.

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[Barry Gardiner]

I beg to move, That the clause be read a Second time.

I made brief reference to this new clause during our discussion of new clause 3, but let me set out in a little more detail why we believe it is required. We have heard from the Minister about the Government’s intention to engage with the devolved authorities in respect of matters that may fall within devolved competences. However, if the Government are to demonstrate that they are serious in this regard, they must ensure that such a consultation framework is established in the Bill.

Modern trade agreements are increasingly broad and comprehensive, and extend into all aspects of governance, public policy and commerce. Inevitably and invariably, trade agreements will impact on matters that have long been, and rightly are, considered to be matters of devolved competence, albeit that our obligations to date have been determined at European level. The Government need to give clarity in the Bill about when an obligation ceases to be a trade matter that is within the exclusive competence of the UK and becomes a matter that is within the competence of the respective devolved Administrations.

We have heard that this matter is not unique to the United Kingdom. It is an emerging issue around the world, so we must consider it from an international perspective and ask ourselves not just what satisfies immediate domestic policy objectives but what we would demand from would-be trade partners who face similar issues and, perhaps more importantly, what they would expect from us.

I again refer the Committee to Nick Ashton-Hart’s evidence:

“the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that. They can watch your processes of consent and agreement and evaluate where your weaknesses are—where there are buttons they can push, but also where you are likely to need support.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 10, Q12.]

We would be nothing short of foolish to allow our trade negotiators to commence talks without first having consulted and engaged with our constituent interests, which absolutely must include the devolved authorities. Trade negotiations can be brutal. The Americans have no qualms in telling us that they refer to counterparties to such talks not as “partners” but as “adversaries”. Any weakness in position or failure to come prepared can be extremely costly and damaging—especially so if complications are presented later when the Government seek to ensure implementation and compliance with the obligations stemming from the concluded trade agreement. A whole-of-Government approach is required, not only to avoid later difficulties but to ensure the democratic will is represented fully in the determination of our international outlook and the relationships we will form with other states.

Other countries have sought to create a consultation framework to mitigate any such complications at the earliest possible stage of the process. The US has its Trade Promotion Authority, born of the fast-track scheme. There are problems and complications with it, but it is there. The Government of Canada have given a much greater role to the country’s provinces in setting mandates and consulting in negotiations, as a result of the EU’s refusal even to begin trade talks unless it had confidence that the provincial governments would ultimately agree to implementation. Will the Minister tell us whether any of the trade working groups and dialogues that the Government have established with would-be trade partners have yet covered that issue, or whether the issue has been raised in the provisional soundings taken of the third countries with which we seek a trade agreement that corresponds with one they might have with the EU?

It is rumoured that the Government’s preference is to mirror as much as possible the Australian trade policy model. In Australia, no such formal consultation exists with state governments. They have the same rights as any other lobbyist: they can submit responses to open consultation in advance of the conclusion of trade agreements. Of course, that approach presents entirely different problems, and it would be foolhardy to believe otherwise. We have seen the Queensland state government implement policy that ignores obligations under Australia’s trade agreement with New Zealand in order to deliver on Queensland’s public interest and economic performance duties.

Will the Minister tell us what discussions his Department has had with each of those countries in this respect? Have concerns been raised about consultation with our devolved authorities? Conversely, have we asked about theirs? Perhaps the Government have given assurances that they intend not to consult with the devolved authorities and will use the powers in the Bill to override devolved competence. Perhaps it is a case of “put up and shut up”.

[Faisal Rashid]

On that point, is my hon. Friend aware that the Institute for Government found that in other countries, such as Canada, buy-in from provinces is crucial to make trade agreements such as the comprehensive economic and trade agreement work? The institute states that, otherwise, it is “political hell”. Does he agree that, similarly, the political buy-in of the devolved Administrations in the UK is necessary to implement trade agreements, and that early consultation and involvement is necessary to avoid political hell?

[Barry Gardiner]

Absolutely. My hon. Friend uses language that I would not wish to use in the Committee, but it is certainly a political mess. I think we can see that other countries have taken their responsibilities to their trading partners seriously, as well as their responsibilities to their constituent states, provinces and members. That is what we are seeking to do through the new clause.

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[Anna McMorrin]

I thank the Minister for asking that question. As he will recall, I spoke widely in support of that amendment. We will discuss that at a later stage.

In Wales, our economy offers great opportunities for both trade and investment. The Bill must not put that at risk. As I just mentioned, I spoke last week on the principles of devolution. Today, I want to reiterate that the Bill seriously lacks consideration of the principle of devolution and the appropriate frameworks to make it work. It is unacceptable that the Government expect the Welsh and Scottish Administrations to be content with handing over power on devolved areas to Whitehall.

The Bill in its current state hands over an unnecessary amount of power to the Government of the day, whoever they may be, and in no way does it safeguard the principles of devolution that people in Wales and Scotland have fought so hard for. I want to stress, once again, that my reservations with the Bill’s lack of consideration for devolution have nothing to do with extending the powers of devolution.

[Faisal Rashid]

Mr Southworth of the International Chamber of Commerce said that the devolved Administrations have cause for concern due to

“vulnerabilities on a whole range on different industries.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 35, Q80.]

Does my hon. Friend therefore agree that there is greater need for consultation with the devolved Administrations?

[Anna McMorrin]

That is exactly what I am saying. I absolutely agree that we need that consultation and agreement with the devolved Administrations, in order that we do not jeopardise future trade agreements on an international level.

Our concern is that devolution is being rolled back because UK Ministers would be allowed to use Henry VIII powers to reach across into legislation within devolved competence and make changes. The Joint Ministerial Committee was created with the purpose of giving the devolved Administrations the chance to give their input. So far, it has been used sparingly: there have been few meaningful discussions, it has met rarely and little has come out of it. That needs to change.

Good governance requires co-operation between the UK Government and the devolved Administrations, as my hon. Friend the Member for Warrington South just set out. That was also set out in the devolution settlements. The Bill as written is unacceptable. It must contain appropriate frameworks that respect the devolution settlement. We will not agree to the rolling back of devolution and to seriously risking damaging our future trading agreements. Unfortunately, that is what the Government seem to want to do.

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[Alan Brown]

As the hon. Lady said, nobody can argue against the new clause’s intentions: maintaining animal welfare and food production standards when entering into international trade agreements. I am sure that the Minister will say that the new clause is not needed, because existing agreements will roll over and they comply with all the legislation, but as we heard from witnesses, in the roll-over process everything is up for grabs, so there is an argument for protecting animal welfare and food production standards in the Bill, and I understand why the proposal has been made.

One concern that I have about the new clause is that it refers to UK law and does not recognise that law is devolved; animal sentience should also be a devolved matter once we withdraw from the EU. From my perspective, the new clause does not take cognisance of the Scottish Government and the devolved Administrations, so that causes me concern about how it is written.

The hon. Member for Saffron Walden said that the Tory Government are bringing in good law, but then admitted that the Environment, Food and Rural Affairs Committee has made recommendations against the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill. As a member of that Committee, I can say that witnesses have basically said that the current proposal as regards recognising animal sentience is not good law and not fit for purpose, and the Committee is recommending that the Government think again on that Bill in terms of sentience, so they are a long way from making good law.

I support the principles of the new clause, but as stated, I have concerns about it not recognising the devolved Administrations.

[Faisal Rashid]

I commend my hon. Friend the Member for Brent North for his excellent opening remarks in support of a very important new clause. I hope that the Government will agree with me and my hon. Friends that it is vital that we protect animal welfare and food production standards when building our trade policy. We must prioritise a sustainable, long-term future for our farming, fishing and food industries. We cannot allow Brexit to be used as an excuse to reduce food standards or to allow cheap and inferior produce to flood the UK market. We have a moral duty to protect animals and their welfare, and that should go hand in hand with the protections that we must afford to our farming and production industry and to British consumers.

[Anna McMorrin]

Does my hon. Friend agree that this is not a partisan issue, but a question of the kind of society we want to live in?

[Faisal Rashid]

Absolutely. That is a crucial point, which I hope Government Members will take into account.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

Is it not actually the case that good law is not made on the rush? The very nature of the new clause that we are debating is on the rush, and that is why we should reject it.

[Faisal Rashid]

I will give the Minister time to respond on that.

[Alan Brown]

I completely agree with the previous intervention: good law is not made in a rush. But that is exactly what the Government did in reaction to voting down amendments to the European Union (Withdrawal) Bill: they rushed out legislation that is really poor.

[Faisal Rashid]

I thank the hon. Gentleman for that intervention. I ask the hon. Member for Hertford and Stortford how the new clause would prevent the easy roll-over of EU trade agreements. This issue is controversial, but I will move on.

There are real concerns that if we produce trade agreements that allow the UK market to be flooded with cheap and poor-quality food, we will be forcing our farming and food production industries to make an impossible decision. Either they face becoming uncompetitive and being undercut by cheap and poor-quality imports, thus risking the jobs of the 3.9 million people employed in the industry, or they are pressured to cut corners and their own standards, putting at risk the welfare of the animals and potentially of consumers.

Many health risks are associated with poor-quality produce, and often such produce is consumed without knowledge, especially given the mass catering in schools, hospitals and takeaways. British people deserve to feel confident that they will be eating high-quality produce, wherever it has come from, following our departure from the European Union.

Nick Dearden of Global Justice Now told the Committee that

“we probably all now know more than we would like about chlorinated chickens”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 6, Q3.]

That is true, but it is important that we are aware of the potential negative impacts of failing to build a strong and sustainable future trade policy. Have the Government considered the negative impact on animals, on the farming and production industries, and on consumers of not supporting this new clause?

UK farmers have made great strides in recent years to improve animal welfare, and we are proud to have some of the highest animal welfare and food standards in the world. We have heard many times that our departure from the European Union is an opportunity for the UK to return to being a world leader in international trade. That prompts the question of why the Government are not committed to legislating for animal welfare protections to ensure that the rug is not pulled out from under the food and farming markets and to help the British farming industry to continue to lead the way in animal welfare and international trade.

There has already been much controversy surrounding the Government’s approach to animal welfare and sentience. It is no secret that the Prime Minister has faced difficulties in getting the Cabinet to agree on much in recent weeks, but she claims that it remains unified. The Secretary of State for Environment, Food and Rural Affairs said that there will be

“no diminution in our environmental or animal welfare standards in pursuit of trade deals.”

In that case, I am hopeful that we can expect Government support for this new clause, which would legislate for the protection of animal welfare standards—or is the Cabinet no longer unified on that position?

[Matt Western]

I rise to speak to new clause 12, and I thank my hon. Friend the Member for Brent North for proposing it. It would ensure that we provide important safeguards for not just livestock but our farming communities and our consumers by specifying animal welfare and sentience in the legislation.

In November, as we have heard, the Secretary of State for Environment, Food and Rural Affairs promised to make “any necessary changes” to UK law to ensure that it recognises that animals can feel pain. That came after proposals to accept that they are sentient beings were voted down. Now the Government are apparently looking at making UK law that specifically recognises animal sentience. I remind the Committee that the first sentence of the Bill says that it will

“Make provision about the implementation of international trade agreements”.

That is why—when we have spoken at previous sittings about ensuring that it is a comprehensive Trade Bill—we have said that this issue should be included.

According to the written evidence from the RSPCA, the EU has 19 farm animal welfare laws that the UK has implemented, giving a high degree of consistency on standards and a level playing field for trade in farm products. That will not be the case when the UK starts to negotiate FTAs with other countries. Thankfully, the UK has some of the highest farm animal welfare standards in the world, although it is well documented that Canadian and American farm welfare standards tend to be based on corporate standards rather than federal law, as we heard in the International Trade Committee yesterday.

Likewise, an FTA may include sectoral chapters on cosmetics, pharmaceuticals, chemicals and pesticides. The UK needs to be careful that it does not compromise any existing UK laws, such as cosmetics regulation, or risk that those laws are as sensitive to change as the farm animal ones that I have mentioned.