Trade Bill (Fourth sitting)

Fleur Anderson Excerpts

Committee stage & Committee Debate: 4th sitting: House of Commons
Thursday 18th June 2020 Public Bill Committees

[Bill Esterson]

Thank you, Sir Graham. My hon. Friend is right to raise this issue, because it is absolutely relevant to amendment 24, which deals with

“labour market interventions and compliance with ILO standards”.

The way that workers are treated in supply chains is an extremely important aspect of procurement, and a great deal can be learned from the Modern Slavery Act 2015, which was passed by this Government’s predecessor. The way that those at the top of supply chains are required to police those supply chains for evidence of modern slavery and exploitation more widely gives us a valuable lesson about how procurement might be used to achieve the goals set out in all these amendments, not least amendment 24, which deals with labour.

I mentioned defence security. Security is a carve-out of its own: Governments are allowed to procure domestically on the basis of security. However, we are all aware of the saga of the fleet solid support ship. Happily, it appears that the Government, having delayed taking decisions or making announcements, are heading to the point where there may be a domestic award of that or a similar contract. It is remarkable, and really quite scandalous, that we got to the point where there was a question mark over whether that contract would be awarded domestically. Security, and the way security contracts are let, gives us examples—in the same way my hon. Friend the Member for Harrow West did with modern slavery—of how the amendments might be applied by Government if we can negotiate them with our GPA partners.

Too many UK companies are not winning UK contracts—a point that was made by Nick Ashton-Hart earlier—and it would be a challenge for them to compete on price in other GPA markets with lower regulatory and labour standards, such as China, which I think my hon. Friend touched on earlier, other parts of south-east Asia, and even the United States. There is a massive question mark about whether that is desirable, which is one of the reasons I tabled amendment 24, which addresses labour market interventions and compliance with ILO standards.

I know that the Government are very keen on non-regression when it comes to labour rights and standards. That is one reason why amendment 24 matters—it gives the Government an opportunity to demonstrate, in the area of procurement, that they do what they say they believe in. Indeed, all these amendments give the Government an opportunity to support policies that were proposed in the manifesto that Conservative Members fought the December election on, or to support things like “buy British”. I am not advocating a similarity to Buy American, but that is the way the United States applies its GPA provisions and there is much we can learn from that, as I said earlier about support for smaller firms. Domestic procurement spending is an essential part of how we will recover from the economic crisis that has come alongside the covid crisis, and I hope the Government will act on that basis.

[Interruption.] It is always a good idea to come to a Bill Committee very well prepared. I could not help but enjoy the Minister’s description in this morning’s evidence session that he had not enjoyed a filibuster for a long time. I assure you that I have no intention of filibustering and I will not be reading out the entirety of what I have available, but in bringing my remarks to a close, I want to say this: the four amendments are tabled in the hope that we are supporting Government policy, as stated by the Prime Minister and Ministers and in the Conservative manifesto.

The four amendments are designed to support our domestic economy, and to balance the needs of our domestic economy with supporting the rules-based approach to international trade. They are designed to support the levelling-up agenda that the Government say they are keen to promote. I hope that the Minister and Conservative Members will take them in that context and consider the long-term economic, social, environmental and labour value to be had from this kind of approach to procurement. Unless we are prepared to use this moment to deliver the continuity that the Bill is about, it is hard to see how we will maintain the standards of procurement that we have at the moment, let alone enhance them.

[Fleur Anderson (Putney) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham. This is my first opportunity to speak in a Bill Committee as a new MP, and what an honour it is to speak in such an important debate—an important debate for not only my constituents in Putney, who are very interested in this Committee, having been told all about it, but people across the country and across the world.

In bringing forward the Trade Bill, there is an opportunity to take back control. It is as if we were all in a car and we decided we would like to start driving, so we said to the driver, “Can we start?”. There were a couple of years of intense negotiations about who would drive the car, and we have taken back control of the car, but instead of doing something with that—driving better, maybe moving from the middle to the fast lane of the motorway, having a better car, or going further and faster—we have decided to chunter along in the same way and to just decide journey by journey. The Bill could give us a better journey every single time. This is an opportunity to have a much more modern and ambitious Trade Bill, and the amendments we have tabled seek to do that. Standards and scrutiny will improve the Bill enormously.

Turning first to the International Labour Organisation and amendment 24, the UK was a founder member of the ILO in 1919 and has been an active member ever since. It has ratified 87 conventions, including the eight core fundamental ILO conventions contained in the 1998 declaration on fundamental principles and rights at work, as well as two protocols. Amendment 24 absolutely aligns with that.

The ILO makes it clear in no uncertain terms that member states must treat the conventions with the utmost seriousness, and agreeing the amendment would do just that. The declaration states:

“all Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions”.

Since the 1998 declaration, it has become commonplace for the ILO conventions and instruments to be implemented in free trade agreements, so the amendment is absolutely within the remit of the Bill. For example, only recently, the free trade agreement between the European Union and Vietnam has been praised by the ILO for its commitment to labour standards. We could endorse that approach and lock it into the continuity and future agreements by passing the amendment.

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[Gareth Thomas]

My hon. Friend is quite rightly setting out some of the reasons why the ILO standards are so important. In the context of how ILO standards benefit British workers, is there not a significant fear that by not including amendment 24 in the Bill, we might inadvertently encourage a race to the bottom? It might allow other countries with lower standards and pay arrangements to win procurement contracts that British firms could have won. In turn, that would encourage British firms to lower wages and standards to try to win those contracts in future.

[Fleur Anderson]

I thank my hon. Friend for that apposite remark. That is what we risk if we do not include the amendment. If it is not explicit in the Bill, it will have to be negotiated in every single agreement, so we might miss out on some.

The dangers have already been manifested through the continuity trade agreements that have been agreed. Trade deals have already been struck with countries where labour and human rights abuses pervade, such as Colombia and South Korea. In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights, while Colombia remains the most dangerous country in the world for trade unionists, as around two-thirds of murders of trade unionists take place there. The risks are very real. The UK has also rolled over an agreement with Lebanon, which was criticised last year by Amnesty International for allowing the exploitation and abuse of many of the country’s 250,000 migrant domestic workers, most of whom are women.

None of those continuity agreements contains mechanisms to sanction Governments who fail to respect fundamental labour and human rights, yet every member of the Committee would agree that that is what we would want to do. All trade deals must contain mechanisms to enforce labour rights and decent work, so as to prevent trade deals from being used as a way to pressure labour standards to be lowered, causing a race to the bottom. To ensure that those mechanisms are effective, trade unions must be given a role to trigger investigations into abuses of workers’ rights. The Bill must therefore affirm that all UK trade deals will contain a mechanism to enforce International Labour Organisation conventions, so that trade unions are able to trigger investigations into suspected abuses. Amendment 24 will achieve that and assure that the UK upholds its responsibilities to the International Labour Organisation.

Amendment 25, on climate and carbon considerations, would put us firmly in line with sustainable development goal 13 on taking climate action, to which we have signed up. On 1 May last year, we in this place declared a climate emergency and, as has been mentioned, that was echoed by councils and devolved Governments. Wandsworth, in my own constituency, declared a climate emergency, and we want to see that reflected in the Bill. While our attention has rightly been on responding to the coronavirus crisis, we would all agree that the climate crisis has not gone away. That is why we feel it was important to table the amendment.

The rush to fill the gap created by leaving the customs union cannot be used as an excuse to undermine and circumvent our legally binding climate change commitments, made under the Paris agreement, or the Government’s own target of achieving net zero by 2050. That is why that issue is listed in new clause 2, along with a whole list of important issues, such as waste, water, quality and biodiversity.

In February, I was in the Court of Appeal when it ruled in a landmark judgment that the national policy statement underpinning a third runway at Heathrow airport was unlawful, as it was incompatible with the Paris agreement. The decision not to take the Paris agreement into account in that policy statement was deemed by the judges to be legally fatal to the national policy statement. If we do not accept this amendment, we risk having a contradiction between our environmental agreements and our trade deals.

To date, trade deals have been negotiated separately to climate agreements, but a joined-up policy would be far more effective for both. Not having a joined-up policy is a mistake, as current trade rules place trade promotion and liberalisation ahead of climate goals. The Trade Justice Movement, which we heard from this morning, has identified three ways in which current trade rules can do that. First, investment chapters in trade and investment deals allow companies to sue Governments for measures taken to support climate goals, such as the denial of a permit to construct an oil pipeline, and thus to undermine those goals. Secondly, WTO rules have been used regularly by states to challenge each other’s subsidies to renewable energy industries, and yet not one case has been brought against fossil fuel subsidies. Thirdly, no trade deal that is currently in force contains any binding commitments to ensure that international trade supports climate targets.

Trade agreements also impede Government implementation of climate commitments. For example, they prohibit the use of local content requirements, which can be crucial in producing domestic support for renewable energy. If trade agreements do not have an explicit commitment towards honouring climate commitments, they can hinder the sharing of green technology, for example by implementing far-reaching intellectual property provisions that threaten to hinder the sharing of green tech.

Trade rules can also threaten to increase fossil fuel use, which we explicitly decided not to do in declaring a climate emergency. Current trade and investment agreements foster a global culture of fossil fuel dependency, for instance by prohibiting export and import restrictions on fossil fuels, thereby depriving Governments of a tool to limit production of those fuels.

Unless it is properly regulated, trade can present a huge barrier to alleviating the climate emergency and achieving carbon reduction targets. Indeed, when trade agreements are done badly, they can accelerate a race to the bottom on environmental standards. Therefore, I echo the call of Greener UK in its evidence to the Committee, including its written evidence, that the Bill must include a lock and a legal commitment on carbon reduction targets.

The Bill is silent on climate issues and carbon reduction issues, and so misses a huge opportunity to enshrine our climate commitments and the SDGs in UK law. We have an opportunity to be world leaders in enshrining climate commitments in our trade legislation, but we are missing that opportunity.

Our new clauses and amendments would ensure that all trade agreements that the UK negotiates are climate-aware. The UK should use trade deals to show the world how trade and trade agreements can be made compatible with net zero ambitions, including by prioritising goods and services that are low carbon and environmentally sustainable.

We can push on from what already exists in the continuity agreements and show the rest of the EU what can be done. We could ensure that the UK’s trade negotiations and agreements are underpinned by high environmental standards. That would act as a safeguard against regression in standards, and not just those linked purely to economic advantages.

The Government have already shown that they are willing to backtrack on global environmental standards. For example, the Environment Bill fails to include a legally binding commitment to meet World Health Organisation guidelines for fine particulate matter. That is a very big issue for people in Putney, because Putney High Street has one of the highest levels of air pollution in the country, and we look to the EU to set that standard. My constituents would not be encouraged by trade deals that do not include an assessment of the impact on air quality, for example. Amendment 25 would also prevent trade agreements from impeding the UK’s ability to ratify and properly implement international treaties such as the Paris agreement, which would send a message to the world that compliance with international climate agreements are the norm—this is how we can do it.

Amendment 26 is about small and medium-sized enterprises. As has been said, SMEs have been hit incredibly hard by the coronavirus crisis. Since March, more than 60 businesses in my constituency have written to me in desperate need of help, and I am sure the same is true for other Members. The future of 39% of businesses in my constituency, the majority of which are SMEs, rests on the trade deals contained in this Bill. Many have fallen through the cracks of the Government’s economic support package. They are unable to secure grants, loans or even business rate support for different technical reasons, and they are staring down the barrel of liquidation.

SMEs are the lifeblood of the UK economy—the backbone, as was said earlier. Future trade agreements must be tailored to support the sector and give it the hand-up it needs, over and above the interests of large multinationals, which otherwise disproportionately win out. In particular, the Bill must establish a level playing field—we all love a level playing field—for procurement, and procurement rules must be simplified to encourage and enable bids from SMEs. The Bill must make it easier for SMEs to export. It currently offers very little for small businesses. Surely everyone on this Committee wants to support the SMEs in our constituencies and across the country. Our amendments would ensure that the needs of SMEs are met.

Amendment 27 is about public health. The covid-19 crisis has taught us some valuable lessons about the importance of our national health service. Through the PPE scandal and the EU ventilator scheme farce, the Government have learned the hard way about the importance of procurement and trade to public health. At the peak of the crisis, I called every major social care provider in my patch, and they were all experiencing shortages of PPE. We discussed earlier companies whose offers were not taken up. In Putney, local voluntary groups had to resort to 3D printing their own visors. There are 100 volunteers right now at their sewing machines making up packs of scrubs for local health providers. The Turkish shipment of 400,000 gowns that failed UK safety standards showed us the importance of high procurement standards in trade Bills for public health services. We learned the hard way, across the country, how important that is.

As the NHS Confederation noted,

“Health issues are often not high on the agenda (or on the agenda at all) in trade negotiations.”

Trade agreements often risk a trade-off between lowering standards and increasing the financial burden for patients and the health and social care system. Impact assessments must be carried out to ensure that trade deals do not prioritise commercial advantage over and above health.

Operating on World Trade Organisation terms will not force the NHS to open services to foreign providers. If the NHS is sold off bit by bit to foreign providers in trade deals, that will be a political decision made by the Government. Yesterday in the House, I asked the Secretary of State for International Trade about the trans-Pacific partnership and the risks to the NHS. She said that there is no risk that the NHS is on the table. However, if that is not explicitly written into the Bill, we run the risk of it being missed out and changed through negative ways of doing trade deals.

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[Greg Hands]

I thought, Sir Graham, that as a Manchester MP, you would enjoy that story.

The hon. Member for Sefton Central made an impressive oration, and had an impressive memory of our oral evidence earlier. He made some good general points on procurement. Alas, not all were relevant to the government procurement agreement, but let me try to deal with a few of them. First, he mentioned the EU public contracts regulations expiring in 2020; they date from 2015. To be clear, they will not expire in the UK; they are preserved in preserved EU law under the EU withdrawal agreement.

Secondly, the hon. Gentleman made comments about small business, and it is important to emphasise that the Federation of Small Businesses is absolutely right behind our GPA accession. It says that it is essential for the UK to become an independent member of the GPA; it will allow small businesses to have continued access to Government contracts and procurement opportunities.

Let me deal with the specific comments on procurement by the hon. Members for Warrington North, for Harrow West, for Warwick and Leamington and others. I was interested—in fact, I was shocked—to hear what they had to say about alleged discrimination faced by companies that they had reported. I was also shocked at the slight implication that the Opposition had some kind of monopoly on this Committee over northern voices. I looked around and counted more midlands and northern MPs on the Government Benches than on the Opposition Benches, so I thought that that was a bit unwarranted. On a serious note, I would be very interested in seeing significant evidence of discrimination. I will certainly get the Government to investigate those reports and I will copy the response to the whole Committee.

Overall, these amendments would be unhelpful. Each time there was a change to the UK schedule, we would have to produce the four reports. Let me give an example. The current schedule is through our membership of the EU. The EU schedule, which was last updated before 2010, includes names of Government Departments that no longer exist. I think the old BERR—Department for Business, Enterprise and Regulatory Reform—is on the list. DCMS is obviously the Department for Culture, Media and Sport. Every time we made one of those changes—if, for example, we changed DCMS back to its previous name—we would have to produce, as I understand it, the four reports and enter into negotiations, which would simply be an unrealistic and wasteful use of the Government’s time.

The hon. Member for Sefton Central talked a bit about a lowering of standards. To be absolutely clear, we are joining the GPA on the same terms as our current membership, so we are not reducing standards. The EU withdrawal Act preserves existing standards, and of course we already exceed or greatly exceed many EU standards in these spaces. The fact that we have rolled over continuity agreements demonstrates exactly that there has been no lowering of standards.

The hon. Member for Putney made a comprehensive maiden speech for a Bill Committee. As a constituency neighbour, I was delighted to hear her praise for Wandsworth Council. That is a fantastic thing. It is a very, very well-run local authority. She complained about the poor air quality on Putney High Street. If only the Labour council on the other side of the river, in Hammersmith and Fulham, could even monitor its air quality in the first place. Of course, one cause of the deterioration in air quality is Hammersmith and Fulham Council’s closure of Hammersmith bridge, so perhaps if she could join the lobby to reopen Hammersmith bridge, she would then realise that there is better air quality to be delivered on Putney High Street.

[Fleur Anderson]

Just to clarify, the air quality in Putney High Street was dreadful before the unfortunate closure of the beautiful Hammersmith bridge, due to years of neglect under previous administrations, so that is not the reason; it has been a long-term issue.

[Greg Hands]

I accept that, but the additional 4,000 cars a day going over Putney bridge into the hon. Lady’s constituency as a result of the closure of Hammersmith bridge has certainly not improved air quality—shall we put it that way?

The hon. Lady raised concerns and, I think, quoted the TUC in relation to continuity agreements with South Korea and Colombia. It is worth pointing out that both those agreements have been rolled over with largely identical wording on labour provision and workers’ rights, so those concerns are not valid. The UK takes labour rights extremely seriously, of course, and UK legislation already provides for robust measures to tackle such issues as human trafficking. Continued GPA membership will not affect that.

In September 2019, the Government announced new measures designed to ensure that Government supply chains are free from offences of slavery, servitude, forced or compulsory labour and human trafficking. The hon. Member for Harrow West, in what I think was an impromptu speech, made some good points on co-operatives. I am delighted to see that on this side of the aisle, we immediately trounced him with the commitment to co-operatives from my hon. Friends the Members for South Ribble, for Arundel and South Downs and for North East Derbyshire.