Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Trade Bill (Second sitting)
Gareth Thomas ExcerptsTuesday 16th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 June 2020 - (16 Jun 2020)
Fleur Anderson (Putney) (Lab)
Q
Professor Winters: I do not see strong and direct implications for our relationship with developing countries. Most of the countries with which we are signing these continuity agreements are, in fact, developing countries. I think the issue again, essentially, is that the Minister has powers to make regulations concerning non-tariff provisions, and some of those regulations could indeed rebound to the disadvantage of the countries we are dealing with—those on the other side. For instance, if we have issues surrounding conditions of entry for particular goods, the Bill might be used to tighten those up.
Having said that, the agreements we have with the developing countries—the continuity agreements—have genuinely continued, so far as they can, trade relations with those countries. There are some complications that are not in our gift, such as rules of origin, but I understand that the agreements that have been signed already under the heading of continuity trade agreements have made no changes, so far as access to the UK economy is concerned.
There is nothing I have seen in the Bill that is specific to developing countries that raises an alarm, but on the other hand, it is not clear that trade with developing countries is exempt from my residual nervousness about what the Bill might be used for under less satisfactory circumstances.
George Riddell: One thing that I am keen to emphasise is how the UK’s trading relationship with developing countries is split across the continuity agreements contained in the Bill and the customs Act, which gives effect to the generalised system of preferences and duty-free, quota-free access for least-developed-country exporters. You have the continuity agreements under this Bill, but there are also very important trade provisions in the customs Act, and making sure that they are aligned and work together to support developing countries’ trade into the UK is very important.
As for your question about SPS measures specifically, in my experience of working in developing countries and looking at how they trade, one of the biggest things is meeting food standards, health standards and environmental standards. The UK does capacity building very well through DFID—pending recent announcements today—and through programmes such as aid for trade in developing countries, in order to allow businesses and exporters to take advantage of the provisions in the trade agreements and EPAs.
Gareth Thomas (Harrow West) (Lab/Co-op)
Q
Professor Winters: I am not a huge fan of the process that we have under the CRAG, which seems to me to allow the Executive a bit too much scope to do things unscrutinised—
The Chair
We will try to find out whether we still have Professor Winters. Mr Thomas is there something you would like to pursue?
Gareth Thomas
I would very much like to hear what he has to say. [Interruption.]
Professor Winters: I did not catch all of your question. With the process we would be using for, say, the agreement with the US, my honest preference is that we would set up a system for new trade agreements that involved more formal consultation and more reporting back to Parliament than is obligatory under the CRAG. In one sense, I see the Trade Bill offering an even easier route for Executive decisions than the standard CRAG procedure, and I do not think that will really give us enough scope for bringing Parliament and the people along.
I think the issue, essentially, is that if this was abused in order to try to introduce major changes, there would be even less defence. There is no commitment to discuss, consult and so on, and the Minister is being granted extensive secondary legislative powers. Under the CRAG, although the treaty has to be approved through an affirmative process, if changes in domestic law are required to implement it as a new trade agreement, it would potentially have to go through primary legislation. As far as I can tell, that is not required here for any of the continuity agreements.
Gareth Thomas
Q
Professor Winters: In general, most other countries have processes that involve more formally required consultation and rather more engagement with the legislature as the process goes through. For instance, in the USA there is a whole series of trade advisory committees—I think that is what they are called—which the Government speak to on a confidential basis. There is formal approval of a mandate, particularly if they want to do something on fast-track.
Those are things we do not have in the UK. We do not yet have a completely definitive statement about how these things will be handled, but essentially the CRAG process is fairly light on scrutiny and consultation. Compared with Australia, the US and Canada—where there is, if not constitutionally, at least informally a good deal of consultation with the provinces—we have a system that allows the Government rather more discretion.
Bill Esterson
Q
Nick von Westenholz: The Bill as it stands does not go beyond continuity agreements. The provisions in clause 2, for example, seem clearly to deal with those continuity agreements that we are currently party to, or were party to as a member of the EU. Going further would require new clauses, certainly; the reason why, as you imply, we want to explore whether that is appropriate is that the point has been made on numerous occasions in recent weeks that the Trade Bill is the appropriate vehicle for that.
Gareth Thomas
Q
Nick von Westenholz: Sorry, the sound is not great, but I think that that question was about our potential concerns with the EU’s CETA deal and whether we have concerns about a UK-Canada deal.
Maybe the best answer is that all trade deals, whether they are continuity or future trade agreements, present opportunities for UK farmers. We are very keen to make that clear: we are certainly not opposed to the notion of free trade agreements, and we hope that they might present opportunities to increase our exports of our fantastic food.
At the same time, however, all trade agreements will also look to increase access to UK markets for overseas producers, which will increase competition for UK farmers. Again, that in itself is fine, but we want to ensure that that competition is fair—whether it is Canadian farmers, US farmers or anybody else. The reason why we talk about overseas farmers meeting equivalent standards to UK farmers’ is simply on the basis of fairness; we are certainly not opposed to trade liberalisation, as long as that liberalisation is fair.
Fleur Anderson
Q
Secondly, on trade information, clause 7 provides new powers for HMRC to collect information on the identity and number of UK exporters, but the Government have said that providing that information will be voluntary. What impact would that position have on your members?
Nick von Westenholz: I will answer the second question first because, I am afraid, my answer will be brief. We have members who are exporters as well, but most of our members are probably not directly exporting themselves—they will be at the start of the supply chain; it will probably be their customers who are exporting. We have not yet done any assessment on what the impact of those provisions would be, so I am afraid that I cannot comment directly on that, although I suspect that it would be minimal.
Coming to the first question, the point is that UK farmers—like most EU farmers—operate under high standards of production in terms of the requirements they observe, particularly on animal welfare, for example. That is not to say that there are not farmers around the world who operate high standards of welfare. But in many cases in the UK, those are legal requirements, for example those around stocking densities for poultry, access to light, limitations on veterinary medicines that they can use—antibiotics, for example—and many other things. All those will have a connected direct or indirect cost for farmers, and will increase the cost of production in comparison to farmers overseas, who do not have to meet the same requirements.
For farmers who then have to compete directly against produce that is produced more cheaply because the regulatory burden is lower, it is, for us, a simple issue of fairness. In a way, I am loth to put too much emphasis on the differences of approach, because, as I have said, many farmers overseas will produce to high welfare, but we know that many farmers overseas produce to lower requirements because, very simply, they are not required to by their legal and regulatory structures.
The Chair
Mr Cranshaw, I think you wanted to answer as well. Mr Cranshaw? We may have lost the line. We only have about three minutes left. Would you like to ask the witness a question, Gareth Thomas?
Gareth Thomas
Q
Richard Warren: Indeed. While it is not dealt with directly in the Bill, the complexity and complication around agreeing a deal with Turkey is that, obviously—sorry if I am teaching Members to suck eggs—it is in a customs union with the European Union. Once we have a trade deal with the European Union, we will have tariff-free access to the Turkish markets for things covered by the customs union.
Unfortunately for the steel sector, there is a rather antiquated agreement that just deals with coal and steel products. That would need to be replicated in addition for them to get access. As far as I understand from discussions with officials, it is not really on the table for discussion until an agreement with the EU has been established. Until we manage to get to that perspective, we are not looking at a replication of current arrangements and therefore it will be a 15% tariff, on average, for steel products going into Turkey. As I said before, we will not be putting any tariffs on steel coming in from Turkey, because we already have a zero-tariff position on steel. In a nutshell, that is the situation we find ourselves in. If you would like further information, we can provide it. [Interruption.]
The Chair
Apologies for the bell, which is out of our control, as the sitting is suspended in the main Chamber. We are nearly at the end of the time allotted for this session. I thank both the witnesses and all the Members for being here. If Mr Cranshaw cannot hear us, we will make sure that he is subsequently thanked for joining us.
The Chair
Mr Peretz, thank you very much. I am keen to get one more question in in the time we have available, if possible.
Gareth Thomas
Q
George Peretz: I am only broadly familiar with the US position, but I know a bit more about EU scrutiny. It is certainly at the lower end. This question was gone into in some detail at the International Trade Committee’s evidence session on 10 June, which I had the chance to listen to. It was with Brigid Fowler, who some people know from the Hansard Society, and a couple of other people whose names I cannot remember off the top of my head—one person from the Institute for Government and one from Global Justice Now. They went into some detail about the comparative perspectives, and it is worth looking at that.
In broad terms, the UK system as currently set up is something of an outlier. I do not know anything about the Canadian system, but one of the experts who gave evidence to that Committee—I think it was the person from the Institute for Government—said that Canada’s system is comparable to the UK, in that it has a reduced level of scrutiny. However, it is hard to think of any other examples of leading western countries where the scrutiny level is as low as it is in the UK.
One always has to be conscious that this sort of system is very different from the United States’ system. The US has separation of powers between the legislature and the Government, so it is rarely very enlightening when applied to a UK context, because the setup is so different. The EU is of course a very different body, because it represents a whole set of different states and has a set of controls that is appropriate for that, but not so appropriate for a unitary state. However, if we are looking at more obvious comparators such as Australia or New Zealand, I do not claim expertise on either of them, but I think there is a considerably greater degree of parliamentary scrutiny in both countries. It is certainly true, if one draws a comparison to the EU, where the European Parliament has to approve the mandates given to the Commission and has to be informed of changes and developments in the negotiations throughout. It is—[Inaudible]—comparable to what we have in the UK.
The Chair
Mr Peretz, thank you very much. I am afraid that brings us to the end of the time available for this session. Many thanks for joining us, and for assisting the Committee with its deliberations. We will now suspend briefly while we prepare for the next session.
Gareth Thomas
Q
Simon Walker: It is important to stress that it is the Secretary of State who will make that ultimate decision. There are appeals mechanisms in this country, should we come to that finally. The appeals would need to be exhausted properly, but the remedies would be enforced in the same way as tariffs are enforced on imports to this country. There is not the ability of companies in other countries just to refuse to pay. That would have the same consequence as if they refused to pay normal tariffs or import duties on any goods.
Gareth Thomas
Q
Simon Walker: Certainly there are arguments that happen at WTO level all the time. One of the realities is that proceedings at the WTO normally take a very long time—I think that is particularly the case at the moment for various internal reasons—in the course of which considerable damage could be done in that case, unless the remedy were applied. That is why it is important that this country has the ability to act in that situation.
Fleur Anderson
Q
Simon Walker: I am happy with nine as a target. Three of them are internal, but we are going to want the other five non-executive directors all to be appropriately qualified in some way. I think we will get there. Nine to me feels the right sort of level.
It is important to stress that this is a board and it is fundamentally about governance. I would not want to mislead you about its decision-making capacity. Its role will be to set strategy, to hold the Executive to account, to test the strength of the arguments internally and to maintain the independence of the TRA from any organisation, including the Government. Those are the fundamental roles of the board, and we are going to be needing people who have that governance orientation in particular.
I am not supportive of the principle of representatives of particular organisations as such—to have representatives of industry or trade unions or the devolved Administrations —for a number of reasons. One is that I feel it would compromise the objectivity of the members of the board. The second is that it might reduce the capacity to appoint on merit. Thirdly, I think it would reduce the accountability if someone’s primary reporting back was to a sectoral interest group. To me, that would be a weakness.
Will there be people with trade union or industry experience, with close links with farming or with the devolved Administrations? I absolutely hope so. I very much hope that there will be people in those categories who apply for the board and are appointed, but they will be appointed as individuals who will work together as a board to hold to account the Executive.
I suppose the special skills I would cite that I am quite keen to see in non-executive board members are someone with a strong legal background, so that they can hold the legal team to account; someone with a financial and accountancy background, with real strengths in those areas; and if there is someone who has an investigatory background, perhaps, who could probe into material that is not always going to be easy to extract, that could be a useful facet. I hope they will be people who understand and relate to the devolved Administrations. I hope they will be diverse, because that has always been a goal of the Department and will be of the TRA once it is independent, but they will there as individuals working together on a board that is fundamentally about holding the Executive to account rather than making decisions itself.
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Trade Bill (Third sitting)
Gareth Thomas ExcerptsThursday 18th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Chair
Q
Tom West: We have not run the counterfactual of saying what would happen if these had not gone in there. Overall, the idea of continuing those agreements for now, and then looking at them in the round later on, is an approach that makes sense.
David Lawrence: Yes, I agree with that. The Bills both need to pass before the end of the transition period in order for the deals to be rolled over. We are in agreement on that. The question is whether you can do that, while also having better scrutiny and setting in stone better standards for the future.
Gareth Thomas (Harrow West) (Lab/Co-op)
Q
Tom West: Starting with the US deal, we are concerned about the attempts and the approach from US negotiators, particularly around agriculture and food standards, to change the way the UK currently regulates and legislates in that area. It is clearly set out in the US negotiating objectives that they want to open up UK markets to US agricultural products. Our view is that in many areas those are produced to lower standards than is currently allowed here in the UK.
That also raises the indirect effect that trade deals can have on environmental standards, which is incredibly important. Trade rules can place restrictions on what it is that countries can do to meet their environmental goals. Our view is that achieving environmental goals is a good thing do—it is of value in and of itself—and that trade rules should work within that framework. Limiting what we can do, in order to achieve certain trade goals, is a restriction that we should not have in place.
To go back to the specifics of the US deal, another area of concern is chemicals. Currently in the UK, there are more than 1,300 chemicals for use in cosmetics that are not allowed; in the US, that is around 11. I think that demonstrates the stark difference between the regulatory approach in the US and the current approach we have here. While the UK now has the chance to do things differently—I am not saying we must stick to EU ways; that is not necessarily the approach we need to be taking—we do want to make sure that our standards get better and not worse.
David Lawrence: In terms of the scope of the Bill, I do not think what we want is for the Trade Bill to become a big debate about the US trade agreement, but we do want it to be a debate about scrutiny. If you have those scrutiny practices in place, when the US deal comes round, Parliament can actually debate that properly, rather than relying on the occasional parliamentary question or a Backbench Business debate, which is what currently happens, even though it is on the Government’s own terms for really important big trade agreements.
I completely agree with what Tom said about standards. The key thing here is that there are two dominant regulatory regimes in the world—the EU’s and the US’s. In many ways, Brexit will force the decision about which of those regimes we align with. Something that we have called for—I believe Tom and ClientEarth have called for it as well—is sequencing, whereby the EU deal comes first. We sort out our relationship with our largest trading partner, with whom we are already aligned on so many things and have been for so long, before we negotiate with the US, because the US really do want us to align with their regulatory regime, as Tom said.
You mentioned Canada. Canada and Japan have both asked not to renegotiate their existing terms, but essentially want to seek new free trade agreements with the UK. They have also both emphasised that they want the UK to sort out its relationship with the EU first, because historically the UK has been a springboard, particularly for Japanese investment in the European Union. For a lot of our trading partners, sorting out our relationship with the EU is an absolute priority. We have said let us do that first and then we can think about new trade agreements, such as one with the US.
There are a number of other concerns with the US deal. I will not go into huge detail on that unless you want me to, but we have concerns around public services provision, digital services and regulations in a number of areas, not just the environment, but also health regulations and food standards; we are also concerned about investor protection provisions, because we have seen that those have been used in really damaging ways in other US trade agreements, such as NAFTA. Those are some other concerns we have about the US deal. As I have said already, the real priority is scrutiny, because then we can have that debate properly in Parliament.
Gareth Thomas
Q
Tom West: So, as David was talking about, there is this point about the two big regulatory spheres of influence. Canada is very much close to that US sphere and so, while there might be less of the direct issues, we see that stepping-stone effect.
One extra thing to add is that there are approaches that the US takes in its trade agreements and trade deals that are clearly better than what the EU is doing. Around enforcement, for example, some of the approaches that the US will often take include better enforcement mechanisms for environmental provisions in trade deals. Looking at the different approaches is certainly worth considering.
Antony Higginbotham
It was just about what the impact of our not having a TRA might be. Have you given any thought to that?
Sam Lowe: We do need a Trade Remedies Authority. As it stands, this is dealt with at EU level, and when it comes to disputes over trade—be it because we are worried about unfair subsidies abroad, or worried about products being dumped on our markets or being sold at an artificially low price—we need a means to investigate and remedy them. In the interim, I believe the approach is that following our exit from the transition, we are just going to continue with the EU trade defence measures. However, those measures might not be justifiable if we are only taking into account the UK context, so they are all going to need to be reviewed.
I do have some concerns about the practicalities of the Trade Remedies Authority. First, I believe it has lost two provisional chief executives already, and it is still looking for a new one. Secondly, speaking as someone who comes from south Wales, from Llanelli—I am not an “everything needs to happen in London” person—I am not convinced that it was a sensible decision to put it in Reading and offer the salaries it does when it is trying to attract trade lawyers with vast amounts of experience. My fear is that it will create a false economy: we will end up paying law firms to do it all for us for a while as we build up the internal capacity, and then because of the pay constraints, the people who have learned how to do the job will be able to leap into these law firms to get paid a lot more. That may point to a broader problem with retention in the civil service.
Gareth Thomas
Q
Sam Lowe: Canada is a long story, in that it links back to the previous iteration of the Government’s no-deal tariff schedule and its publication. When we put forward a tariff schedule that was very liberal and offered a lot of access to everyone, the Canadians looked at it and said, “We do not want to roll over any more, because you are giving the whole world for free what we had to pay for via our trade agreement”—remember, they also had to open up their market in that context. I believe that the more recent update to the new global tariffs has changed that calculation slightly on the Canadian side, and will lead to a renegotiation.
The reason that the Japanese were not able to roll it over from a domestic point of view was that from their perspective, they had liberalised their agriculture sector to a great extent over previous years—through their agreement with the EU, through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and also through their more recent agreement with the US. If they were to roll the agreement over to the UK, they would be giving extra agriculture access to their market on top of all that, but for free. That was just not politically doable within the Japanese context, so it led to the need for this renegotiation.
Turning to the contentious issues, I suppose that with Canada we could return to some of the TTIP issues around investment all over again. That is also the case with Japan. I think both those deals are probably doable by the end of the year under certain circumstances, but you will notice that the UK has had difficulty replicating agreements with the bigger countries. It has not been so difficult with some of the smaller countries, but if you think about the ones that have not been done yet—Japan and Canada, but also Mexico and Ukraine—many of those countries want to be certain of what the future UK-EU relationship looks like, and what concessions the UK offers the EU, before finalising anything with the UK.
The Chair
We have until 12.35 pm for this session, and three other Members want to ask questions, so it would be good if we could keep questions and answers quite concise.
Trade Bill (Fourth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Department Debates - View all Gareth Thomas's debates with the Department for International Trade
Trade Bill (Fourth sitting)
Gareth Thomas ExcerptsThursday 18th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. The hon. Member for Dundee East has made some important observations about our proceedings, which I agree with. We may take a slightly different view on pressing our amendments, and we will come to that in due course. I make no promise; it will depend on the nature of the Minister’s answers, his ability to garner information and what he says.
The hon. Member rightly drew attention to the impact of the covid-19 crisis on trade. He also drew attention to the importance of discussing trade, and indeed legislating for international trade, at this time in recovering our economy and the prosperity of our people. He referred to the estimated fall in the economy of between 13% and 32%. He is right that that fall is far larger than in the global financial crisis—it is the largest in history, over all the time in which such figures have been recorded. It is therefore essential that, where we can, we get what we are doing as accurate as possible.
Following the hon. Member’s speech, I now have a much better understanding of the intention behind the amendment. I am confident that he is trying to do what he has set out. The Labour party, as we made clear on Second Reading, fully support the accession to the GPA. If that is the Government’s intention, it seems entirely right that they should make sure they do so, and it is odd that they have not already committed to that in the Bill.
Gareth Thomas (Harrow West) (Lab/Co-op)
Might one of the other potential benefits of the amendment be that it helps to create a voluntary pressure on the implementing authority to support businesses to take advantage of the procurement opportunities that Ministers have said the GPA offers? If there is a slightly more lackadaisical approach, as the hon. Member for Dundee East appears to suggest, the incentive for Ministers to actually find ways to support businesses to take advantage of those opportunities may not be there in quite the same form.
Bill Esterson
My hon. Friend makes a good point. We want businesses to take advantage of the opportunities available in procurement. Having the Government make the strength of that case through how they legislate is an important way of achieving that goal. It should be clearly set out that the procurement obligations that we currently have through our EU membership have passed into UK law via EU retained legislation, and the Government should make clear commitments to their implementation. The hon. Member for Dundee East said that, if the Government intend to implement the GPA, they should say so, to ensure the continuity that my hon. Friend the Member for Harrow West rightly referred to and to make sure that alignment in the regulations is in place straightaway.
Gareth Thomas
Perhaps I can be a little clearer. My concern is that, under successive Governments the opportunity, the opportunity for local organisations to take advantage of public procurement opportunities has not been given as much assistance or priority as it might have been by both central Government and—on occasion, sadly—local government. Perhaps the amendment might help to create the pressure for central Government, in particular, to take a bit more seriously their responsibility to make that happen.
Bill Esterson
My hon. Friend is quite right: we need to make more of the opportunities available in procurement, and this kind of amendment is a way of delivering on that agenda.
I am pleased that the hon. Member for Dundee East has tabled the amendment. I note his comments about waiting, to ensure that the Minister is able to respond in full and in the event that he needs additional advice. I am happy to support the hon. Member in principle, on the basis of waiting to hear what the Minister’s reply might be.
The Minister for Trade Policy (Greg Hands)
Sir Graham, first of all, it is a pleasure to serve under your chairmanship, and I welcome everyone to the Committee. I think the previous Bill Committee I served on was for the previous gestation of this Bill, in early 2018, so I know from past experience that we have interesting discussions ahead in the coming days on this important legislation.
As the Secretary of State and I made clear on Second Reading, the Bill is about ensuring continuity and providing certainty for businesses and consumers as the UK strikes out once more as an independent trading nation. We will use the freedom that we have gained through our departure from the EU to negotiate trade agreements with new partners, but we also remain committed to seeking continuity in our trade relationships.
I will turn to the amendment in just a moment, but let me be absolutely clear. I have not spoken about the Bill since Second Reading, and I was genuinely surprised that the Opposition parties opposed the principle of it. The Bill consists entirely of wholly sensible proposals to secure the continuity of more than 40 trade agreements and our continued membership of the World Trade Organisation’s government procurement agreement, and to allow UK trade defences.
I hope that the Opposition parties will reconsider their principled opposition to the Bill after all the scrutiny that we are about to have and on Report, and will consider voting for it on Third Reading.
Gareth Thomas
I am sure we would be happy to reconsider if the Minister committed at this point to being sympathetic to some of the amendments we have tabled—for example, on extending scrutiny opportunities and extending the Bill to cover future free trade agreements. I will look sympathetically at his request if he will look sympathetically at ours.
Greg Hands
I thank the hon. Gentleman. He is an old sparring partner of mine over different years and different Sessions. It would be impossible for me to commit to that today, because there is still the opportunity, as I understand it, for further amendments to be tabled, so it would be impossible for me to either rule in or out opposing all future amendments.
I want to say a quick word on the practicalities for Members who are on their first Bill Committee. Due to the social distancing requirements, as you mentioned, Sir Graham, there is no one to pass notes to the Hansard reporter. Normally, the Minister also has with him or her a small group of officials, but they are unable to be with us today, also due to social distancing. On occasion, therefore, if a Member has an extremely technical question—I am just trying to think of a good example; perhaps it would be something about diagonal accumulation rules in the EU-Faroes agreement—it may be necessary for me to write to them. However, I commit that if I do write to a Member, I will of course copy the information to all members of the Committee.
Gareth Thomas
That may be one of the issues on which the Minister needs to write to the Committee. He will know that there have been long-standing concerns about British companies’ ability to get access to public procurement markets in an honest way, in, for example, China and Russia, given the levels of support that the Governments there often give to their own companies. The market is not necessarily an honest and level playing field. I understand that China and Russia are in the process of acceding to the GPA, but it might be helpful at some stage for the Committee to understand how far along the journey to accession those two countries are. They are potentially critical for British companies that want to get into the procurement markets there.
Greg Hands
I thank the hon. Gentleman for that very good question. I do not have current information about how far down that process China and Russia may be. Of course, both those countries are members of the WTO. It would, ordinarily, not be unnatural for them to seek membership of the GPA, but, of course, the GPA does not include all members of the WTO—it has 20 members, and they are typically western liberal democracies. Australia is the most recent to join. I imagine that China and Russia joining would become a significant issue on the international stage, and at the WTO.
If the UK were not an independent member of the GPA in its own right—or if it were to fall out—our ability to influence accessions would be very much diminished. That is another good reason to be a member of the GPA—so that we can exert UK influence on the global stage to make sure that accessions are in the interests of the wider world community, as well as UK businesses and taxpayers.
The reciprocal nature of the agreement supports the public sector to get the best value for every taxpayer pound that it spends. Those benefits will increase each time another party joins. Each new party that joins increases the procurement opportunities available to UK businesses and public sector bodies.
Turning to amendment 29, the powers in clause 1 will enable us to give effect to our international obligations on joining the GPA as an independent party, and to make changes as necessary in response to specific circumstances that may arise from time to time after our accession. Examples might be changes to reflect, and arrange for, the accession of other parties to the GPA—the hon. Member for Harrow West mentioned a couple of possible future members—or to make the necessary adjustments where parties leave the agreement. The ability to make these changes is essential to allow us to keep in line, and up to date, with our international obligations.
Gareth Thomas
The Minister will understand that there have been concerns about acceding to the GPA and doing so at a time when we have exited the European Union. One concern relates to how low the threshold is for other GPA members to potentially get access to central Government contracts, thereby potentially putting at a disadvantage British companies wanting to win those contracts. What reassurance can he offer British companies that are potentially beginning to seek out opportunities to win central Government contracts that they will not lose out against other countries’ companies?
Greg Hands
It is a good question, but the assurance I would give is that our intention is to join the GPA with substantially the same arrangements as we currently have as members of the EU. That will give the assurance of continuity as we move forward.
The power in the clause is appropriately drafted to ensure that our international obligations will be fully complied with, including by making changes to national law, where appropriate, using the power in this clause. The use of the power is expressed in the usual way. I say to the hon. Member for Dundee East that we have expressed these powers using quite a usual formulation, allowing authorities to make regulations in the circumstances set out. If the wording were to be changed from “may” to “must”, as proposed in the amendment and as he suggests, changes would need to be made in all circumstances covered by clause 1. There would, however, be certain circumstances where it would not be appropriate or necessary for regulations to be made. For example, a dispute with another party might be resolved without the need to make any changes at all to domestic regulations. Likewise, not all modifications of another party’s appendix I will require changes to domestic law. On that basis, I ask the him to withdraw the amendment.
Bill Esterson
In the debate we have just concluded, the Minister referred to matters that fall under the set of amendments we are now considering and the reciprocal nature of the benefits of the GPA. These amendments relate to the impacts on those companies tendering for UK procurement contracts and the way they might be addressed through the annexes to the GPA that we might seek once we have acceded to that body. The amendments relate to the desire for procurement to look beyond short-term pricing—a problem that has bedevilled procurement—and I will give some examples a little later. All four amendments pick up elements of the points made to us by Rosa Crawford in her oral evidence on Tuesday about the desirability of price value or life cycle costing in procurement.
In his remarks just now, the Minister said that we should have the same arrangement we have with the EU, and we agree with the accession to the GPA for that reason. But if we are to have the same arrangement that we have as members of the EU, there is also the significant matter of retained EU law, which needs to continue if that statement is to hold. In this case, it is the Public Contracts Regulations 2015, which will run out on 31 December 2020. As my hon. Friend the Member for Harrow West has said, it is extremely important that we maintain the strongest possible procurement system for companies in this country, and there are other reasons referred to here to do with international and domestic labour rights.
Gareth Thomas
The House of Commons Library brief is very helpful in this regard, because it makes clear that
“the GPA will limit the ability of UK public sector buyers to choose to buy only from”
British or local companies, for example. It is surely an extraordinary situation for Ministers not to want to do more to help British companies or, indeed, to help local councils support local businesses to get access to procurement contracts.
Bill Esterson
Yes, and that is why it is important that we maintain as a minimum not just the GPA regulations but the Public Contract Regulations 2015, that they are renewed and that we look to build on them, which is the reason for the amendments. Ministers—including, on occasion, the Minister present—have indicated their support for British business, and the Prime Minister on numerous occasions has encouraged us to buy British. I imagine that the logical extension of that statement is that he wants Government procurement departments to buy British as well, and I will come to other examples of what Ministers have said.
This is about having the strongest possible procurement system. That is why our amendments call for the Government to pursue with GPA partners the potential for the inclusion of labour standards, environmental standards, support for small and medium-sized businesses and consideration of public health consequences in our annexes to the GPA. I will define what we mean by that.
In amendment 24, we refer to
“labour market interventions and compliance with ILO standards”.
That means we want to ensure that companies that fulfil their obligations to their workers, treat workers well and meet their commitments to working with trade unions in a productive manner are not undercut by companies that do not. This is about rewarding responsible businesses, as well as supporting workers.
Labour market interventions in procurement allow for minimum wages and living wages. They also allow for maximum wages, although that is rarely used. They allow for legislation to prevent discrimination on the grounds of age, sex and religion; legislation to support or regulate trade unions; a maximum working week; legislation on health and safety; behavioural nudges, which are making an appearance for a second time in our deliberations, to encourage workers to take up pensions, for example; and Government provision of education and training schemes to enhance skills and encourage the recruitment of apprentices.
Bill Esterson
I thank my hon. Friend for that excellent example of why ILO obligations matter. She is absolutely right that it is about paying decent wages, but of course one of the consequences of having such provisions in public procurement is that not only the workers and their families, but communities benefit due to greater spending power in local economics. This is an economic measure as well as a social measure. That is why it is right that progressive procurement considers it.
Gareth Thomas
I do not think my hon. Friend has the great benefit of being supported by the Co-op party. One of the ways in which I am unique is that I am from the co-operative tradition in the Labour movement, and therefore have had a lot of contact with social enterprises and co-operatives. A social enterprise that stands out is Hackney Community Transport, which has won contracts from a central Government organisation—in this case, Transport for London. It has done so while providing employment for offenders who are seeking to get back into the work environment, and offering discounted minibus hire to local community groups. The risk is that, if there is not proper support and flexibility in the procurement regulations, such initiatives will be stifled. Hackney Community Transport is a big social enterprise, but there are many similar community transport organisations that do not have its size and depth, and if this amendment is not passed, they risk not being able to access public procurement opportunities.
Bill Esterson
I am grateful to my hon. Friend. He said that smaller organisations find it difficult to win contracts, and that is why the Government have to use their authority and make sure the regulations are in place. Amendment 26 is about small and medium-sized enterprises, and it should absolutely cover social enterprises too, many of which are SMEs. It is essential that such things are in regulations to support the sorts of enterprises that my hon. Friend describes, and to pursue socially valuable activities. I will come to the Public Services (Social Value) Act 2012 a bit later, which was initiated by a former Conservative MP, Chris White, and passed with the support of the coalition Government. It gives more detail in this area.
Similar descriptions are applied in amendment 25, which mentions,
“environmental exceptions and carbon considerations”.
The current UK minimum standards take into account energy and water use, carbon footprint, resource efficiency, and life-cycle costs in order to set minimum standards of sustainability for Government purchases. Our standards need to be protected, both in terms of maintaining these procurement standards and of ensuring that our schedules at the GPA remain up to date with the action needed to address the climate crisis. If we allow the public procurement regulations to lapse, we will not include such provisions as those I have just described, which are picked up in amendment 25. I know that Ministers take this seriously because the point was made in oral questions just this morning. I cannot remember whether it was the Minister of State or the Secretary of State who quoted the Government’s attitude towards the climate crisis and the achievement of net zero, but it certainly was quoted by Ministers this morning.
Bill Esterson
It was you. I knew you wouldn’t sit there quietly.
I am glad that the Minister did mention it, because he is absolutely right, but without the support of the regulations, it is that much harder. The climate crisis will not be addressed unless there is intervention—and substantial intervention. Public procurement policy through the GPA is one very important tool in the toolbox in achieving those objectives.
Gareth Thomas
On the climate crisis, I wonder whether I can pray in aid the example of Baywind Energy, which is a comparatively famous wind energy co-operative in Cumbria. For a long period of time, the energy that it supplied and could have supplied to local authorities would have been more expensive than that from its nearby neighbour, the great Sellafield nuclear plant. Had the local authority wanted to source its energy needs from Baywind without the type of measure that my hon. Friend is suggesting be locked into law, Cumbria Council might be at risk, in a modern situation, of not feeling able to take advantage of the Baywind offer, and would, perhaps, have had to accept the lowest supplier of energy costs. That would have meant that a substantial local business helping to tackle the climate emergency did not benefit.
Bill Esterson
I thank my hon. Friend for providing an excellent example in the renewable energy sector of just how important it is that we do as we say and that we are strongly committed through Government action—at national, local and devolved level—to tackling the climate crisis.
Bill Esterson
I thank my hon. Friend. That is absolutely right, and there are a number of good examples. Unfortunately, the evidence is there that we did not adopt a life cycle-costing approach or a price-value ratio for procurement decisions, instead basing them on narrow, short-term pricing. My hon. Friend the Member for Harrow West made a similar point but, fortunately, life-cycle costing was chosen in his example from Cumbria. This is one of the changes. Yes, the amendments are about ensuring the continuity of existing arrangements, but in the end they are about improving our procurement and improving the social, environmental and labour outcomes of these matters, to the benefit of society as a whole.
Gareth Thomas
The Soil Association gives another example that perhaps supports my hon. Friend’s point. It notes the considerable amount of processed food that we eat in the UK, and how that has contributed to our obesity crisis. It says that one way to tackle that obesity crisis is to try to stimulate demand for British, locally produced fresh fruit and vegetables, particularly by trying to get public bodies such as hospitals and schools to source more of the fruit and veg that they need from domestic producers. Would that not be at risk if our amendments were not to succeed?
Bill Esterson
Again, I am grateful. We should take my hon. Friend’s question seriously, because if we have a procurement system that encourages a greater carbon footprint in our food supplies, the consequences will be damaging to our attempts to meet our climate obligations and to tackle the climate crisis. He also mentions the public health elements of this; in fact, he picked up on at least two of the amendments just in that example.
In the end, we want to address the problems of obesity, which has been one of the most serious public health challenges in our society for some time, but we also want to address the carbon footprint. There are some wider questions, which may well be raised as we discuss the next set of amendments, about where we source food from and the need to consider not only the carbon footprint and transport, but some of the impact of intensive farming more widely and the way that our society eats a lot of meat, which is a real concern not only for health, but for the climate, because of the natural resources used up in feeding animals. We have so far addressed the descriptions of ILO standards, environmental exceptions and carbon considerations in the amendments—
Gareth Thomas
Another reason to endorse my hon. Friend’s suggestion is the productivity challenge our country faces. As I understand it, we are the worst country in the G7 for productivity performance. We have even fallen behind France. We know from the evidence of business analysts that the response of medium-sized businesses and co-operatives often is often more productive because of the closeness of management to staff. Moreover, co-operatives have joint collective management and a sense that everyone benefits from the collective endeavours of the business. My hon. Friend’s suggestion of including a carve-out in the UK’s GPA arrangements would be an eminently sensible way to tackle the productivity crisis that the Government have not even begun to get to grips with.
Bill Esterson
I am pleased that my hon. Friend has mentioned the innovation and entrepreneurial ability of our SMEs. The Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), said this morning that small businesses are the “backbone of the economy”—I think I have remembered that correctly—and he is right. However, we need to encourage them more. They are innovators and entrepreneurs. That entrepreneurial spirit is often where the best ideas come from, and my hon. Friend is right that that drives productivity.
Businesses running start-ups and scale-ups with new ideas and often enthusiastic members of staff are in a stronger position to deliver the kinds of new ideas, changes and technological advances that make such a difference. Indeed, that is generally where effective research and development in technology is derived from. Lately, large firms without their own research and development departments have simply taken over small firms that do. That is because of the kind of the situation under discussion.
If we want to succeed, it is essential that we put our investment, including public investment through procurement, into those small businesses. I intended to speak later about some of the procurement problems, but I will mention one or two now. I am about to move on to public health improvements, which is the subject of the fourth amendment in this group, and in which context contracts have been awarded.
SMEs that have come to me since the start of the crisis have expressed concerns about their inability to contract directly through the Department for Business, Energy and Industrial Strategy or the Cabinet Office, or to get support for exports—this point is often made—through the Department for International Trade. They have been unable get such support because everything goes to the big firms. The big firms have their own procurement departments and they win all the contracts.
That has happened yet again with Serco, which only a few months ago was fined for failing to complete a contract successfully. Serco was the cause of so much of the problem in the failed probation privatisation. Thankfully, last week’s statement by the Justice Secretary put a final nail in its coffin. However, Serco has now won the contract for the test and trace system. It has no experience whatever in test and trace. There are companies and small firms out there that have the expertise and have been saying for months that they can do it. They have been trying to help, but they have hit a brick wall.
Once we join the GPA, I do not see why we could not negotiate along those line with our partners. Ideally, that would be part of our procurement regulations. That is possible. In the interim we need to retain the best possible arrangements and then build on them. The danger is that the public contracts regulations will expire at the end of December and we will go backwards when we need to go forwards. The Government spend nearly £6.5 billion—a very large figure—on procuring with UK SMEs. That is great, but it is not always going to the SMEs that it should.
There are other examples from the public health crisis. Companies in my own constituency have come to me wanting to either import or manufacture personal protective equipment, but they have been completely unable to do so because of the barriers to entry in our procurement system.
Bill Esterson
That is an excellent local example. As I said, constituents have made similar points to me. I have a constituent who can manufacture 40,000 reusable medical robes a month. They are reusable up to 100 times. In comparison, the winner of the contract—whichever very large conglomerate it is that keeps winning them—is delivering medical gowns from overseas. We saw the fiasco with the Turkish consignment, where most, if not all, were unusable. There have been earlier examples of where what was taken out of the packaging fell apart. Yet here was somebody in my constituency making that offer, but they were completely unable to make progress or to win the contract. They had demonstrated their capability, having gone through all the accreditations. Yes, of course, there are questions about ensuring that quality standards are in place—I understand that and they understand that—but they had done all that work because they have a long-established business. Yet they were unable to break through the procurement system.
I will give another example of a company that contacted me. It was set up by a British man in California, so it operates in America. He has the scientific specialism to design tests that identify whether people have the virus. He worked out how to do it with a saliva-only test. He had proven to the Food and Drug Administration, the US accrediting organisation, that he could do it and won a sizeable contract, including with the US military. He then approached the UK. This was at a time when we had a real problem with a shortage of tests. I will not go into how many tests we are doing, whether they are actually being done, how much double-counting is going on or any of that. He had a solution, which was better because it did not involve the invasiveness of nasal swabbing—it was saliva only. I have raised this with the Minister’s colleagues and tried to break through. I am not just using these as examples; I have done my best to get through to Government procurement, because they can really make a difference in this crisis. To this day, he still has not managed to get UK approval for those tests, which are easier to administer and easier to analyse. He could have set all that up and we could have been here two months ago, given when he first developed the technology to do it. I think that is a real shame. That is a piece of international trade we could have benefited from, which should add to the value of the story. I am afraid that we have not done this well.
Gareth Thomas
My hon. Friend the Member for Warrington North gave a great example, sadly, of bias by the Government against northern firms.
Gareth Thomas
One of the more encouraging stories of northern procurement in recent times comes from Preston, where the council has sought to use its limited procurement tools to try to counteract the gradual moving away of businesses and good jobs out of Preston to other areas. If our amendment were to be passed, and the carve-out for small and medium-sized enterprises in the US, as described by my hon. Friend the Member for Sefton Central, were adopted by the UK, would that not provide additional tools to councils such as Preston to counteract that northern bias in Government procurement?
Bill Esterson
That is my understanding. I heard a reaction from one Member on the Government Benches that suggested that they did not agree with the assertion that there was a bias against the north. I represent a constituency very near to that of my hon. Friend the Member for Warrington North. I am glad that our mutual hon. Friend the Member for Harrow West raised that point, because one of the reasons given to firms in my constituency was that they were too far from London. I am afraid that that is what has been said by procurement officials in Government, and that cannot be right. My hon. Friend is right to raise the matter, and he is right that it has to be one of the answers. It covers the environmental aspects of amendment 25 and the small business and economic requirements of amendment 26, as well as those under amendment 27.
Gareth Thomas
One cross-party concern in recent years has rightly been how to tackle the horrendous problem of modern slavery. Using public procurement to lock in the best possible defence against examples of modern slavery in procurement supply chains is surely a sensible thing for any Government to want to achieve. Is it not the case that the amendments my hon. Friend has tabled will make it easier to make the carve-outs that enable central Government, local government, the NHS and so on to put in place appropriate measures against modern slavery?
The Chair
Before I ask Mr Esterson to respond, I hope he is going to be very specific about which of the amendments relate to modern slavery, and not simply move on to that further aspect of policy.
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.
Gareth Thomas
It is a pleasure to serve under your chairmanship, Mr Brady. I cannot do as much justice to these four amendments as my hon. Friend the Member for Sefton Central did from the Front Bench or my hon. Friend the Member for Putney did from the Back Benches, but I want to raise one or two slightly different points to try to underline some of the interventions I made. There is an understandable fear that at some future point the Government will roll back existing legislation that allows public authorities, the Government, devolved Administrations and local authorities to go beyond having to accept all the time the lowest price and instead to be able to think much more seriously about accepting quality concerns within contract offers. I am sure the Minister will have his most benevolent face on when he winds up and will say that the concerns that we have articulated, as have organisations such the TUC and good trade unions such as the GMB and Unison, are without any foundation. None the less, these concerns exist, because once we leave the protection of EU regulations, we will find that the provisions in the GPA are much more limited than those currently supplementing that under the EU procurement directive from 2014, which was transposed into UK domestic law under the Public Contracts Regulations 2015.
What these organisations understandably want to achieve is that little bit of extra protection against such an event happening, through the amendments that my hon. Friend the Member for Sefton Central has tabled. Indeed, they are seeking more ambition from the Government in terms of public procurement, and to move beyond the era in which big multinationals always win the big contracts. One thinks of the Sercos, the Carillions and the G4Ss, of which a little more anon.
I come back to the example that I gave in one of my earliest interventions on my hon. Friend: Hackney Community Transport, a local organisation that has managed to become much bigger in terms of the community transport offer that it makes. It depends on winning contracts from Transport for London to provide bus services, but has also been able to win contracts in many other local areas to provide transport services.
Hackney Community Transport provides a comparatively low offer because it has managed to get to a decent size where it can compete and, as my hon. Friend alluded to, it has a number of staff who are not just providing the service but thinking about how they win contracts. However, it has never lost its community roots. For the people of Hackney, it provides very cheap minibus hire and helps to train those from the local community who want to learn to drive a minibus. It employs ex-offenders and goes the extra mile, in a way that perhaps one of the corporate giants might not.
By comparison, Harrow Community Transport, which is a much smaller organisation but much valued by many of the most vulnerable people in my constituency—it uses its services to go to local day centres—struggles to survive. It has only one employee, and cannot imagine being able to win contracts from Transport for London given its present situation. There appears to be no sustained offer from central Government to change the situation for not only Harrow Community Transport but all those other community transport associations, or all those other local organisations, be they small and medium-sized businesses or small and medium-sized charities and co-operatives, that nevertheless provide commercial services that could be used effectively by public contracting organisations.
It is important that we build in that additional protection, so that procurement under the GPA does not inhibit local organisations that are determined to do something to provide good jobs with fair pay—not the kind of jobs that some individuals in my constituency have to do. Some of them have to work three jobs in order to make ends meet because the amount they are paid is so low. Businesses that want to help those who are disadvantaged in some way to get into employment must not be excluded as a result of our accession to the GPA. Amendments 24 to 27 help, very effectively, to give a little more protection against such exclusion.
I mentioned the Modern Slavery Act, which is a remarkable piece of legislation. The campaign for it was led by the Co-operative Group, to which I pay tribute for its work through its supply chain, and for the cross-party campaign that led to the Government passing that groundbreaking piece of legislation. Surely the last thing that we would want is not to build on it, and to inadvertently stop organisations that are committed to preventing modern slavery from getting into their supply chains winning the public contracts for which they bid.
My hon. Friend’s amendments seem to be about helping to prevent that from happening.
I served for a long time as chair of the Co-operative party. As a result, I have always wanted more co-ops growing and trading in the economy, and able to win government contracts, whether in local government, the NHS or central Government. I suspect that those of us of a certain generation remember Margaret Thatcher promising a world where owning shares would be as common as having a car. That grand promise of a share-owning democracy has long since disappeared, leaving economic power—according to some, certainly—concentrated in a few hands. That is why there are, I am pleased to say, organisations that champion the building of wealth in communities.
That brings me to the powerful demonstration that is taking place in Preston, where an inspirational council leader is seeking to use the public procurement tools that he and the local authority have available to them, working in partnership with other public bodies to try to contract locally. If we can reinforce those efforts that will surely help to tackle the anti-northern bias that we discussed earlier and allow imaginative council leaders to put extra support behind community organisations that want to do the right thing.
As to the failures of the Sercos, it is not only on test and trace that Serco’s performance has begun to be criticised. I remember it being accused and, so to speak, convicted, of false accounting and of breaching its responsibilities in handling radioactive waste. Carillion is another horror story, and the Public Administration and Constitutional Affairs Committee blamed the Government for outsourcing contracts based on the lowest price, and went on to say that that had caused public services to deteriorate. Surely, then, measures that would not stop us acceding to the GPA but would help us to get the best from our membership are sensible.
Matt Western
My hon. Friend makes some powerful points, but perhaps I may add some emphasis on public health and broaden that aspect of the argument. The emphasis on lowest price is mistaken. Perhaps we saw that with small and medium-sized enterprises—or more of a medium-sized to larger business in the case of De La Rue. However, on the public health side there has over the years been public anger, resentment and frustration at pressure for very low-cost meals to be provided in local authority schools, through companies such as Compass and others that source poor quality foods when they should think about the best value for public health and the health of children. That should be part of what we are talking about on this clause.
Gareth Thomas
My hon. Friend makes a good point. Part of the problem is that schools are not properly resourced. I am sure that he agrees about that. Other examples that we might point to are the difficulties that local authorities, whether Conservative or Labour-led, have had with refuse contracts. A number have had to bring contracts back in-house, or retender. Having gone for the lowest price, as my hon. Friend said, they have not got the value for money that local people rightly demand, and that councils expect from contracts.
Andrew Griffith (Arundel and South Downs) (Con)
I, too, would like to see a greater diversity of types of enterprise and we should do anything that we can in that regard. Co-operative, owner-managed and small businesses are all worthy of our support. I did not want to let the comments that are being made and the amendments that are being spoken to conclude without recording the fact that, if we look merely at the thrust of the amendments, one would conclude that the hon. Gentleman does not fully understand the benefits of free trade, or the substance of what we are trying to achieve in terms of creating wealth, prosperity and opportunities for people, lifting people out of poverty, making sure that our economy is competitive, and creating the tax and the wealth that will produce our public services and make us thrive. I just wanted, by means of an intervention, to give him the opportunity to place on record all those positive benefits of trade, as well as the opportunities that he is seeking to create through the amendments.
Gareth Thomas
I am very grateful to the hon. Gentleman. I will send him the Co-op party membership application form as a result of this exchange. It is very nice to find a new convert from the Conservative Benches to the need for a more diverse economy. I had thought that the hon. Member for Wycombe (Mr Baker) was the only such enlightened Member of Parliament on those Benches, but I am glad that the hon. Member for Arundel and South Downs is first up of the new intake to catch my eye.
Katherine Fletcher
The hon. Gentleman may have to get a larger book to tally up those of us who are interested in the Co-operative movement. I have worked with both the credit union movement and the co-operative movement, and my grandad was a Co-op milkman. The hon. Gentleman is right that the movement has a huge role to play in productivity. Co-ops should look forward to the opportunities to export to a greater range of markets within a free trade deal, such as the framework here.
Gareth Thomas
I am in danger of leaving tonight in a good mood, Sir Graham. I am delighted that a second convert to co-ops has emerged. I will have to send another membership form for the Co-op party to the hon. Lady.
Lee Rowley
Given that we are discussing this, I would just like to declare an interest as a former employee of the Co-op, so I look forward to more such discussions.
Gareth Thomas
There was once a Conservative Co-op movement, which in practice had only one member. Richard Balfe left our ranks, in a very misguided move, and set up the Conservative Co-op group. We appear to have three potential new members of such an organisation, which would be fantastic. Membership of the all-party parliamentary group for mutuals is definitely on offer to the three hon. Members who have intervened.
Matt Western
I tried to intervene a little earlier, and I thank my hon. Friend for giving way yet again. This serious, honest, and important point will probably be echoed across the room: the contract to provide food vouchers to schools over the Easter period and Whitsun was given to Edenred, which happens to be a French company, and an unproven business. I have had a huge number of issues with constituents who did not get vouchers on time, and those vouchers could have been provided by the Midcounties Co-operative, for example, which makes them—they are available. That could have been done locally, and I am sure it would have been done very cost-effectively.
Gareth Thomas
As ever, my hon. Friend makes a serious and important point about the contribution that co-operatives can make. If I may, I will return to the intervention from the hon. Member for Arundel and South Downs, who asked me to extol the benefits of trade. I will certainly do that, but I do not think our country should sell itself short, which is why we have tabled these amendments. In a former life, in happier times, I served as Minister for Trade Policy. As a result, I am an enthusiast for the benefits of trade, but there are caveats to that enthusiasm. If the hon. Gentleman stays awake and enthused, he will listen to examples of our enthusiasm for trade, as well as some of our concerns about the Bill.
I will conclude my remarks by noting the significant potential for co-ops to help deal with some of the issues arising from our ageing society. By 2030, the number of people who need help to wash, feed, or clothe themselves in this country will have doubled to some 2 million. That will place heavy burdens on local authorities and national Governments who seek to procure the support to help those vulnerable people. With a bit of imagination from procurement managers, co-operatives could help to meet those needs, and I suggest that they would also provide a good service. That will require imagination and proper Government support and thinking about procurement, so that co-operatives, and small and medium-sized businesses—they are mentioned in amendment 26 —can benefit from those procurement opportunities. That is another reason why the amendments tabled by my hon. Friend the Member for Sefton Central are spot on.
Greg Hands
We have had a far-ranging debate, but I will speak to amendments 24 to 27. The amendments seek to place a statutory obligation on the Secretary of State to enter into negotiations with GPA parties, with the aim of advancing policy objectives across labour standards, environmental protections, SME participation, and public health in UK procurement opportunities covered by the GPA, and—crucially—before making regulations under clause 1(1).
Let me remind Committee members of our approach to the UK’s GPA succession as a whole. As I have said, we intend to join the GPA as an independent party on substantially the same terms that we had as an EU member. That approach will support a swift accession at the end of the transition period, and preserve the access of UK businesses to procurement opportunities covered by the GPA, which are estimated to be worth £1.3 trillion annually.
Ensuring continuity in the terms of the UK’s participation will not prevent public procurers from taking into account a range of factors when conducting procurement. Social, labour and environmental considerations can continue to be taken into account, as they are today, so long as they are consistent with the UK’s international obligations, including, importantly, under the GPA, non-discrimination obligations. Those obligations already apply to the UK under our current GPA membership.
Indeed, the UK has an active procurement policy agenda on SME participation, sustainable procurement, social value, and labour considerations. As an independent party with our own voice, we will have the opportunity to engage other GPA parties on those issues—for example, via the GPA work programmes, other multilateral forums or bilateral channels. Unless we succeed in securing the UK’s independent accession, the UK will not be party to those discussions within the GPA. Parliament will be updated on developments across those areas through the Department for International Trade annual report, which will be published each year from 2021.
On amendment 27 on health, let me reassure the Committee that the UK’s GPA coverage does not cover healthcare services. It does cover goods and certain services above a specific value threshold procured by the NHS, such as medical equipment, cleaning and building management services, which keeps those types of opportunities open to overseas competition. That helps to ensure that the NHS can access vital resources at competitive prices. Contracting out such non-healthcare services—it is important to stress that—has been a long-standing practice within the NHS across successive Governments that frees up money to be spent on frontline delivery.
Greg Hands
I will take the intervention from a member of the last Labour Government, which played an active role in this aspect of the GPA when he was in office.
Gareth Thomas
I remind the Minister that we are not opposing accession to the GPA. We are merely seeking to make sure that our country benefits properly from GPA membership. He gave the example of cleaning, but I gently remind him that cleaners in the NHS and more generally are often very low paid, so anything that we can do, as amendment 24 sets out, to help to raise the quality of jobs in cleaning services must be sensible. Surely the Minister recognises that, given the covid emergency that we are all experiencing.
Greg Hands
The hon. Gentleman makes a good point about raising the quality of opportunities available, but that will not be done through the GPA.
Let me explain that. Overall, the effect of the amendments would be to place on the Secretary of State a statutory requirement to have entered into negotiations with the 20 parties to the GPA on each of the four areas before creating the ability to make the regulations, and then to report on the outcome of those negotiations to Parliament. It would be an unusual approach for the Secretary of State to enter into negotiations with each of the 20 before implementing the general regulations that could implement any changes to obligations that would result from acceding to the GPA.
I will deal with a few of the individual points raised. I was surprised when the hon. Member for Sefton Central mentioned something about a filibuster. He certainly made a comprehensive speech. When I was in opposition, I remember doing an actual filibuster; I spoke for one hour 49 minutes on beer duty.
Gareth Thomas
On a point of order, Sir Graham. Surely that is not within the scope of the Bill. I ask the Government Whip to intervene, and encourage you to restore order as well.
The Chair
I think that in the spirit of the latitude that was given to the Opposition, I should offer the same now.
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.
Gareth Thomas
I heard applications to join the Co-operative party and the all-party parliamentary group for mutuals; I did not hear any new commitments towards co-operatives. None the less, I do not wish to indicate in any way that I was not encouraged by the contributions of the three Conservative Members, but it would have been nice to hear from the Minister an offer of additional support for co-operatives.
Greg Hands
I accept that intervention, but I would say that my three hon. Friends have been here, I think, for six months, six months and about three years so far, and the commitment that they have shown in that time matches quite favourably with the commitment that the hon. Gentleman has shown over his 23 years of membership of this House.
I think the take-away was the hon. Gentleman’s praise for Margaret Thatcher’s share-owning democracy. I remember him as a Minister in the new Labour years, which he referred to; maybe he thinks it is now safe to return to those new Labour years and his view of those years before the right hon. Member for Islington North (Jeremy Corbyn) took over the party. We live in hope.
I hope I have persuaded the Committee that opening negotiations within the GPA will undermine our independent accession to the GPA and thus our ability to advance UK public procurement objectives. I therefore ask the hon. Member for Sefton Central to withdraw his amendments.
Gareth Thomas
I hope to be equally brief. I have some sympathy with the amendment. I recognise the appetite of the hon. Member for Dundee East to prevent overreach by the Government in adding to legislation via secondary legislation anything that they think is a “nice to have” rather than a fundamental and necessary consequence of a trade agreement. Our biggest concern is that the Bill will not deliver the effective meaningful scrutiny of either so-called roll-over agreements or the larger agreements to come, such as the US trade deal and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, on which the Government have begun negotiations.
Taken as a package with the Command Paper from February last year on parliamentary scrutiny of future FTAs, the Government’s failure to include in this Bill several amendments that were tabled on Report in the Commons in February 2018, and in the Lords, raises concerns about Government overreach. We hope to tackle those issues with further amendments that we have tabled to clause 2. I recognise that devolved Administrations will worry that the devolution settlements might be further undermined by Government overreach because of the use of the word “appropriate” instead of “necessary”. We have some sympathy with that concern, as indicated by one of our amendments further down the line.
The witness from the CBI made a striking intervention on Tuesday morning when he said that business was desperate for certainty. To get certainty, Parliament needs to have more say and involvement in future trade agreements, otherwise we risk the development of a situation of considerable mistrust, undermining the appetite of business to take up the opportunities offered by new trade agreements. Our amendments seek to prevent that from happening by locking in more opportunities for parliamentary scrutiny. I suspect the hon. Member for Dundee East does not intend to press this amendment to a vote. In that spirit, I have flagged up some of our concerns about the Bill, which we will address in the group that begins with amendment 4.
Stewart Hosie
The effect of this amendment is clear: to provide a more precise definition of an international agreement and achieve greater clarity in the Bill. The amended wording would provide a clearer definition of an international trade agreement than is currently provided for in the Bill. That is in line with the Government’s own intention, as set out in the explanatory notes. Paragraph 31 states:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
The principle of certainty is central to good law making. In clause 2(2), an international trade agreement means “a free trade agreement”, but that is further defined in paragraph (7). Subsection (2)(b), as it currently stands, refers to
“an international agreement that mainly relates to trade, other than a free trade agreement.”
We had a discussion on Second Reading about that. These modern trade agreements have little to do with quotas and tariffs and far more to do with other things, as I said in my introductory remarks earlier this afternoon. The phrase “mainly relates to trade” does not grant sufficient certainty in terms of interpretation.
As I have said, the explanatory notes give the following definition:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
I consider that definition to be clearer than the multi-part definition currently in the Bill. This amendment does not reduce the scope of what might be deemed to be in a trade agreement, but it provides it with a purpose: to reduce the barriers to trade in services and goods. In that sense, I think it a helpful amendment, which I am sure the Government will want to look at positively as we proceed with our deliberations.
Gareth Thomas
I rise in sympathy with the spirit of the amendment moved by the hon. Member for Dundee East, but I wish to speak specifically to amendment 15, which seeks to insert at clause 4, page 3, line 26:
“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
I join the hon. Gentleman in wanting to see good law making and, therefore, proper definitions of what constitutes a trade agreement that would be covered under the Bill. The hon. Gentleman’s amendment refers just to an agreement on trade in goods and services. Our amendment includes the Government’s definition, but expands it to make it crystal clear that it includes a range of other trade related agreements, including investment agreements.
My hon. Friend the Member for Brent North (Barry Gardiner), speaking on an amendment similar to this one at the Committee stage of the Bill in January 2018, noted the lack of detail about what constitutes an international trade agreement and worried about whether trade agreements, or agreements that had substantial trade elements, would be brought to the House for even the limited scrutiny that the Minister proposes.
Mutual recognition agreements are crucial in terms of scrutiny; many of them help to minimise unnecessary regulatory non-tariff barriers. However, they potentially have implications for phytosanitary standards, food standards and environmental obligations. Strategic partnership agreements can add social and political conditionalities to accompany the more commercial aspects of trade agreements. For example, one wonders whether there might be strategic partnership agreements with some developing countries, perhaps to provide aid for trade support as they seek to implement new trade agreements with us.
Investment treaties are returning to being a UK competence, having left our responsibility in 2009. One of the most significant investment treaties that the European Union has been negotiating—the negotiations on it have not yet concluded—is with China, where there have been 28 rounds of negotiations. I suspect that there would be considerable interest in the UK, including within this House, if the Government sought an investment treaty with China. Surely, it is right to make sure that such an agreement would fall within scope, and it would also need to receive proper scrutiny.
Bill Esterson
I am glad that my hon. Friend has mentioned investment treaties; they absolutely should be part of the description given in clause 4. Does he agree that that is not least because of the fact that the 180 bilateral investment agreements that this country is party to have investor-state dispute settlement clauses, some of which are being used right now to prepare legal cases against our own Government?
Such clauses are a particular concern in areas such as construction. I suggest to my hon. Friend that in this crisis, given that they are being used along with construction contracts and procurement, we need to be very careful to ensure full scrutiny of everything of an international trade and investment nature.
Gareth Thomas
I was moving on to say where there might be concerns about an investment treaty that warranted the type of scrutiny that the Bill allows, and the Bill could allow even more of that type of scrutiny if the Government accepted later amendments. There are absolutely major concerns around the ISDS provisions in some investment treaties; I am sure that we will come to discuss those concerns when we debate other amendments.
The International Trade Committee has highlighted other aspects of investment treaties about which there are concerns, such as the question of sustainable development provisions in investment treaties so that developing countries can postpone investment liberalisation if they need to for various developmental reasons.
There have also been concerns in the past about performance requirements in investment treaties: conditions attached to foreign investors by host states, such as stipulating that a certain quantity of domestic inputs into goods that are being produced have to come from the host country.
For those reasons, therefore, we want to make sure that the Bill allows proper scrutiny in relation to any of those concerns that might or might not be raised by a future investment treaty. I look forward to hearing the Minister’s response.
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Trade Bill (Fifth sitting)
Gareth Thomas ExcerptsTuesday 23rd June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
The Chair
Good morning, everyone. Before we start, I remind Members that the Hansard reporters would be grateful if you emailed electronic copies of your speaking notes to hansardnotes@parliament.uk. At 11 o’clock, I will invite the Committee to observe a one-minute silence in memory of the victims of the knife attacks in Reading on Saturday.
Clause 2
Implementation of international trade agreements
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 4, in clause 2, page 2, line 14, at end insert—
“(2A) Regulations under subsection (1) to make provision for the purpose of implementing an international trade agreement may only be made if—
(a) the provisions of section [Parliamentary scrutiny of free trade agreements before signature] were complied with before the United Kingdom had ratified the agreement;
(b) the requirements under subsection (3) and under paragraph 4(1) to (1D) of Schedule 2 have been met;
(c) the requirements under subsection (4) and under paragraph 4(1) to (1D) of Schedule 2 have been met; or
(d) the requirements under subparagraph 4A(1) to (1D) of Schedule 2 have been met.”
This amendment would put in place a structure for Parliamentary scrutiny of proposed international trade agreements.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in clause 2, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to a free trade agreement immediately before exit day.
(4) Paragraph 4 of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing an international trade agreement other than a free trade agreement if the other signatory (or each other signatory) and the European Union were signatories to an international trade agreement immediately before exit day.
(4A) Paragraph 4A of Schedule 2 shall apply to any regulations under subsection (1) which make provision for the purpose of implementing any international trade agreement not falling within subsection (3) or subsection (4) above.”
This amendment would apply the provisions of the Bill to trade agreements other than EU rollover trade agreements.
Amendment 6, in schedule 2, page 13, leave out lines 13 to 16 and insert—
“4 (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which meets the criteria under section 2(3) or 2(4) may not be made unless all provisions of sub-paragraphs (1A) to (1D) have been satisfied.
(1A) The Secretary of State must lay before Parliament—
(a) a draft of an order to the effect that the agreement be ratified, and
(b) a document which explains why the Secretary of State believes that the agreement should be ratified.
(1B) The Secretary of State may make an order in the terms of the draft order laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft order is laid, no committee of either House of Parliament has recommended that the order should not be made, and
(b) after the expiry of a period of 40 sitting days after the draft order is laid, a motion in the terms of the draft order is approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that an order should not be made under subparagraph (2), the Secretary of State may, after the expiry of a period of 60 sitting days after the draft order is laid, make a motion for a resolution in each House of Parliament in the terms of the draft order.
(1D) If a motion in the terms of the draft order is approved by a resolution of each House of Parliament under subparagraph (1B)(b), the Secretary of State may make an order in the terms of the draft order.
(1E) A free trade agreement to which this paragraph applies shall not be deemed to be a treaty for the purposes of Part 2 of the Constitutional Reform and Governance Act 2010.
(1F) In section 25 of the Constitutional Reform and Governance Act 2010, after subsection (1)(b), at end insert “but does not include an international trade agreement to which paragraph 4(1) of Schedule 2 to the Trade Act 2020 applies.”
This amendment would establish a form of super-affirmative procedure for scrutiny of an international trade agreement before ratification and before regulations implementing the agreement could be made.
Amendment 7, in schedule 2, page 13, line 25, at end insert—
“4A (1) A statutory instrument containing regulations of a Minister of the Crown acting alone under section 2(1) in respect of an international trade agreement which does not meet the criteria under section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1A) to (1D).
(1A) The Minister shall lay before Parliament—
(a) a draft of the regulations, and
(b) a document which explains why the Secretary of State believes that regulations should be made in terms of the draft regulations.
(1B) The Minister may make an order in the terms of the draft regulations laid under subparagraph (1A) if—
(a) after the expiry of a period of 21 sitting days after the draft regulations are laid, no committee of either House of Parliament has recommended that the regulations should not be made, and
(b) after the expiry of a period of 60 sitting days after the draft regulations are laid, the draft regulations are approved by a resolution of each House of Parliament.
(1C) If a committee of either House of Parliament recommends that the regulations should not be made, the Secretary of State may—
(a) lay before Parliament revised draft regulations, and
(b) after the expiry of a period of 40 sitting days after the revised draft regulations are laid, make a motion for a resolution in each House of Parliament for approval of the revised draft regulations.
(1D) If a motion under subparagraph (1C)(b) is approved by a resolution of each House of Parliament, the Secretary of State may make the regulations.”
This amendment would establish a form of super-affirmative procedure for scrutiny of regulations implementing all trade agreements covered by the bill. The procedure would apply to agreements other than EU rollover trade agreements if amendments extending the application of the bill were agreed to.
Amendment 19, in schedule 2, page 13, leave out lines 33 to 35 and insert—
“(3A) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(3) or section 2(4) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4.
(3B) A statutory instrument containing regulations of a Minister of the Crown acting jointly with a devolved authority under section 2(1) in respect of an agreement which falls within the description in section 2(4A) may not be made except in accordance with the steps in subparagraphs (1) to (1D) of paragraph 4A.”
This amendment would extend the super-affirmative procedure under former Amendment 19 to regulations where the Minister was acting jointly with a devolved authority.
New clause 5—Parliamentary scrutiny of free trade agreements before signature—
“(1) The United Kingdom may not become a signatory to a free trade agreement which does not meet the criteria under section 2(3) unless—
(a) before entering negotiations on the proposed agreement, the Secretary of State has—
(i) laid before Parliament a sustainability impact assessment carried out following consultation as prescribed by section [Sustainability impact assessments], and
(ii) published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the sustainability impact assessment, as long as that report is published within 30 sitting days of the day on which the sustainability impact assessment is laid before Parliament;
(b) both Houses of Parliament have passed a resolution authorising the Secretary of State to enter negotiations on the proposed agreement as prescribed by section [Parliamentary consent to launch of trade negotiations];
(c) during the course of negotiations, the text of the agreement as so far agreed or consolidated has been made available as prescribed by section [Availability of agreement texts];
(d) the Secretary of State has, within ten sitting days of the close of each round of negotiations on the proposed agreement, laid before Parliament a statement detailing the progress made in each area of the negotiations and the obstacles still remaining at the close of that round;
(e) the text of the agreement in the form to which it is proposed that the United Kingdom should become a signatory has been made available to Parliament for a period of 21 sitting days; and
(f) a resolution has been passed by the House of Commons approving the Secretary of State’s intention to sign the agreement.
(2) “Sitting day”, for the purposes of subsection (1)(a)(ii) shall mean any day on which both Houses of Parliament begin to sit”.
This new clause would set out a structure for parliamentary scrutiny of negotiations on proposed trade agreements.
New clause 6—Sustainability impact assessments—
“(1) A sustainability impact assessment laid before Parliament under section [Parliamentary scrutiny of free trade agreements before signature] (1)(a) shall be carried out following consultation.
(2) A consultation under subsection (1) shall—
(a) be carried out in line with any guidance or code of practice on consultations issued by Her Majesty’s Government, and
(b) actively seek the views of—
(i) Scottish Ministers,
(ii) Welsh Ministers,
(iii) a Northern Ireland devolved authority,
(iv) representatives of businesses and trade unions in sectors which, in the opinion of the Secretary of State, are likely to be affected by the proposed international trade agreement, and
(v) any other person or organisation which appears to the Secretary of State to be representative of interests affected by the proposed international trade agreement.
(3) The Secretary of State shall ensure that public bodies, non-governmental organisations and the public may be made aware of the consultation by circulating and publishing details of it prominently on relevant government websites.
(4) A sustainability impact assessment under subsection (1) shall be conducted by a credible body independent of government and shall include both qualitative and quantitative assessments of the potential impacts of the proposed trade agreement, including as a minimum—
(a) the economic impacts on individual sectors of the economy, including, but not restricted to—
(i) the impacts on the quantity and quality of employment,
(ii) the various regional impacts across the different parts of the UK,
(iii) the impacts on small and medium-sized enterprises, and
(iv) the impacts on vulnerable economic groups;
(b) the social impacts, including but not restricted to—
(i) the impacts on public services, wages, labour standards, social dialogue, health and safety at work, public health, food safety, social protection, consumer protection and information, and
(ii) the government’s duties under the Equality Act 2010;
(c) the impacts on human rights, including but not restricted to—
(i) workers’ rights,
(ii) women’s rights,
(iii) cultural rights and
(iv) all UK obligations under international human rights law;
(d) the impacts on the environment, including but not restricted to—
(i) the need to protect and preserve the oceans,
(ii) biodiversity,
(iii) the rural environment and air quality, and
(iv) the need to meet the UK’s international obligations to combat climate change;
(e) the impacts on animal welfare, including but not restricted to the impacts on animal welfare in food production, both as it relates to food produced in the UK and as it relates to food imported into the UK from other countries; and
(f) the economic, social, cultural, food security and environmental interests of those countries considered to be developing countries for the purposes of clause 10 of the Taxation (Cross-border Trade) Act 2018, as defined in Schedule 3 to that Act and as amended by regulations.
(5) The elements of the sustainability impact assessment to be undertaken under (4)(f) must be sufficiently disaggregated so as to capture the full range of impacts on different groups of developing countries, and must include both direct and indirect impacts, such as loss of market share through trade diversion or preference erosion.
(6) A sustainability impact assessment under subsection (1) shall include recommendations for possible action to maximise any positive impacts and to prevent or offset any negative impacts foreseen, including the possible limitation of the negotiating mandate so as to exclude those sectors most at risk from the proposed trade agreement.”
New clause 7—Parliamentary consent to launch of trade negotiations—
“(1) The Secretary of State shall not commence negotiations relating to a free trade agreement which does not meet the criteria under section 2(3) unless all provisions of this section have been satisfied.
(2) A Minister of the Crown shall lay before Parliament a draft of a negotiating mandate relating to the proposed international trade agreement.
(3) The draft mandate under subsection (2) shall set out—
(a) all fields and sectors to be included in the proposed negotiations;
(b) the principles to underpin the proposed negotiations;
(c) any limits on the proposed negotiations, including sectors to be excluded from the proposed negotiations; and
(d) the desired outcomes from the proposed negotiations.
(4) The Secretary of State shall make a motion for a resolution in the House of Commons in respect of the draft, setting out the elements listed in subsection (3), but such a motion shall be made—
(a) no earlier than 25 sitting days after the day on which the draft of the negotiating mandate is laid under subsection (2), and
(b) not before the Secretary of State has published a response to any report which a committee of either House of Parliament may have published expressing an opinion on the draft negotiating mandate , as long as that report is published within 20 sitting days of the day on which the draft mandate is laid before Parliament.
(5) A motion for a resolution under subsection (4) shall be made in such a way as to permit amendment of any of the elements prescribed under subsection (3).
(6) A motion to enable consideration of the negotiating mandate shall be laid before the House of Lords.
(7) The terms of any negotiating mandate authorised by a resolution under subsection (4) shall be binding upon the Secretary of State and anyone acting on his or her behalf in the course of negotiation.
(8) “Sitting day” shall, for the purposes of subsection (4), mean any day on which both Houses of Parliament begin to sit.”
New clause 8—Availability of agreement texts—
“(1) The text of any proposed international trade agreement which is being negotiated shall, so far as it is agreed or consolidated, be made publicly available within ten days of the close of each round of negotiations.
(2) Every—
(a) document submitted formally by the United Kingdom government to the negotiations, and
(b) agenda for each new round of negotiations
shall be made publicly available by the Secretary of State.
(3) All other documents relating to the negotiations and not falling within the descriptions provided in subsections (1) and (2) shall be made publicly available by the Secretary of State, subject to subsection (4).
(4) The Secretary of State may withhold from publication any document of a kind falling within the description in subsection (3) but must publish a statement of the reasons for doing so.
(5) In the case of any document withheld under subsection (4), the Secretary of State shall provide full and unfettered access to that document to—
(a) any select committee of either House of Parliament to which, in the opinion of the Secretary of State, the proposed agreement is relevant, and
(b) any other person or body which the Secretary of State may authorise.
(6) In the case of a document to which access is provided under subsection (5), the Secretary of State may specify conditions under which the text shall be made available.
(7) The Secretary of State shall maintain an online public register of all documents published under subsections (1), (2) and (3) or withheld under subsection (4).”
New clause 19—Report on proposed free trade agreement—
“(1) This section applies (subject to subsection (2)) where the United Kingdom has authenticated a free trade agreement (“the proposed agreement”), if—
(a) the other party (or each other party) and the European Union were signatories to a free trade agreement immediately before exit day, or
(b) where the proposed agreement was authenticated by the United Kingdom before exit day, the other party (or each other party) and the European Union were signatories to a free trade agreement on the day the proposed agreement was authenticated by the United Kingdom.
(2) This section applies only if the proposed agreement is not binding on the United Kingdom as a matter of international law unless it is ratified by the United Kingdom.
(3) Before the United Kingdom ratifies the proposed agreement, a Minister of the Crown must lay before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the proposed agreement, and
(b) the trade-related provisions of the existing free trade agreement.
(4) Subsection (3) does not apply if a report in relation to the proposed agreement has been laid before Parliament under section (Report to be laid with regulations under section 2(1))(2).
(5) The duty imposed by subsection (3) applies only at a time when regulations may be made under section 2(1) (see section 2(8)).
(6) In this section a reference to authenticating a free trade agreement is a reference to doing an act which establishes the text of the agreement as authentic and definitive as a matter of international law.
(7) In this section—
“the existing free trade agreement” means the free trade agreement referred to in subsection (1)(a) or (b);
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
New clause 20—Report to be laid with regulations under section 2(1)—
“(1) This section applies where a Minister of the Crown proposes to make regulations under section 2(1) for the purpose of implementing a free trade agreement to which the United Kingdom and another signatory (or other signatories) are signatories.
(2) A draft of the statutory instrument containing the regulations may not be laid before Parliament unless, at least 10 Commons sitting days before the draft is laid, a Minister of the Crown has laid before Parliament a report which gives details of, and explains the reasons for, any significant differences between—
(a) the trade-related provisions of the free trade agreement to which the United Kingdom and the other signatory (or other signatories) are signatories, and
(b) the trade-related provisions of the existing free trade agreement.
(3) Subsection (2) does not apply if, at least 10 Commons sitting days before a draft of the statutory instrument containing the regulations is laid, a report in relation to the agreement has been laid before Parliament under section (Report on proposed free trade agreement)(3).
(4) In this section—
“Commons sitting day” means a day on which the House of Commons begins to sit;
“the existing free trade agreement” means the free trade agreement to which the European Union and the other signatory (or other signatories) were signatories immediately before exit day;
the “trade-related provisions” of a free trade agreement are the provisions of the agreement that mainly relate to trade.”
Gareth Thomas
It is a pleasure to see you back in the Chair once again, Mrs Cummins. We had an interesting sitting in your absence on Thursday afternoon, at which three Conservative Members of Parliament applied to join the Co-operative party, the Government Whip tried to shut down a debate on what we could do to tackle an anti-northern bias in procurement, and the Minister gave the first hint that he recognises the Bill is in need of improvement.
Let me say at the outset that I want Britain to be ambitious in trade, in the deals we look to achieve, and in our determination to help imaginative and innovative businesses access new markets. However, I do not want us to sell ourselves short. That is why the amendments are so important.
Trade agreements done well create new economic opportunities. They can help inspire the generation of thousands of new jobs and expand the horizons of the very best of British businesses. They can and have helped to lift thousands out of terrible poverty and hunger, and they have helped to generate substantial tax revenues for better public services.
Trade deals done badly, however, cause myriad problems. They can lead to the loss of markets for vital companies, and in turn create left-behind communities and a race to the bottom in wages and conditions. When done well, trade agreements can help to generate competition, giving more consumer choice and lowering prices for consumers, but there needs to be fair competition. When done badly, trade agreements can entrench unaccountable corporate power and miss vital opportunities to improve our environment. That is why it is essential that we have effective, detailed scrutiny, with a Trade Ministry that is determined to be open and transparent, if we are secure the trade deals that can fulfil the country’s potential and avoid creating the worst of all worlds.
As the Committee will know, Parliament has its legions of critics, but the structures it provides for scrutiny—if Ministers are willing to allow both Houses to do their job—can help to create the consensus behind trade policy that business organisations are desperate to see, as they set out in our first witness session. Ministers have told us repeatedly that the Bill will provide the basis for the country’s future trade policy once we have left the European Union. In the debate on the Queen’s Speech, it was said that the Trade Bill would
“put in place the essential legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”—[Official Report, House of Lords, 28 June 2017; Vol. 783, c. 437.]
If one potential trade deal serves to underline the failure of the Bill to meet that ambition and the need for proper parliamentary scrutiny, it is the deal that the Department seeks to negotiate with Donald Trump’s Administration. There are already a huge number of public concerns around food standards, the national health service, the use of investor-state dispute settlement mechanisms, the future of geographical indications and whether the Bill will help to cement action on climate change. Let me run through some of those concerns. The Soil Association has very helpfully charted a series of concerns that highlight the need for proper scrutiny—proper scrutiny that is not as yet locked into the Bill—of a future US trade deal. We know that US negotiators are pushing hard for the weakening of UK food and farming standards, describing EU farming—and therefore, implicitly, UK farming—as the “Museum of Agriculture”.
The UK Government have made repeated commitments, including at Trade questions last Thursday, to high environmental and animal welfare standards, but those standards could be undermined by a US trade deal, as a series of Members from across the House have noted. That underlines the need for proper parliamentary scrutiny of a UK-US trade deal, which the Bill does not currently allow for. That is why our amendments are so important.
The Soil Association has a list of the top 10 risks for the US trade deal. The first is anti-microbial resistance. Experts are warning that by 2050, as many as 10 million people could die annually from anti-microbial resistance. The use of antibiotics per annum in US farming is, on average, five times higher than in the UK. Investigations have shown that antibiotics crucial to human medicine are still being used in unacceptable quantities on US livestock farms, despite rules being brought in last year to try to curb their use and combat the spread of deadly superbugs. A US trade deal risks undermining the efforts that UK farmers have been making to reduce antibiotic use, fuelling further anti-microbial resistance, with potentially grave consequences for public health. Surely we, the House of Commons, and indeed the other place, should have the opportunity to scrutinise on the Floor of the House and in Committee whether there is adequate protection from such an eventuality.
Secondly, a number of farmers’ representatives in the unions, a number of Conservative Members of Parliament, as well as Opposition Members, and a former UK ambassador to the US have warned of the threat to the UK farming industry if British farmers are forced to compete against cheap low-quality food imports. If UK farming is forced to compete on price with countries such as the US that operate to different or lower standards, UK farming may become unprofitable. That could create a race to the bottom, putting pressure on Ministers to lower existing standards here in the UK, including standards of food quality, environmental protection and animal welfare.
Thirdly, a US trade deal could affect EU market access for our farmers. The UK currently holds a suite of significant and valuable agri-food trade relationships with the EU27. A weakening of UK food standards or a future lack of alignment with EU standards resulting from a US trade deal could result in barriers to UK farmers and food companies wishing to export their products to the EU single market. In turn, those barriers would pose significant risks for food businesses and farmers’ livelihoods. Why would we not want, as the House of Commons, to have the opportunity to scrutinise whether that fear about a potential UK-US deal merits rightful concern?
Then there is chlorine-washed chicken. The American poultry industry is more intensive, with lower animal welfare standards than in the UK. The chicken produced has high levels of bacteria, so the industry has resorted to acid and chlorine washes at the end of the meat production chain, producing chicken that may not be safe for consumers to eat. Recent comments from a senior representative of the US Government have suggested that the US is “sick and tired” of UK concerns over chlorine-washed chicken, but it remains an important issue for UK citizens, who, I suggest, have no desire to see welfare standards lowered after the UK leaves the European Union.
Bill Esterson (Sefton Central) (Lab)
My hon. Friend puts his finger on the point. For many people, quite rightly, this is about not lowering animal welfare standards. Has he seen reports from trade unions in the United States that, in order to speed up processes, there are now fewer inspections of the meat production process, particularly around chicken, which increases the likelihood that the acid or chlorine wash is less effective? There are not only animal welfare concerns, but concerns about the safety of food that we have been told we should not be concerned about because the chlorine wash removes the threat of food poisoning.
Gareth Thomas
My hon. Friend makes a good point. Not only is there a multitude of expert analysis that chlorine washing chicken is ineffective at getting rid of the risk of infection but, as he rightly points out, there are concerns that the inspection regime for the chlorine washing of chicken is not remotely as effective as we had been led to believe. That is all the more reason why it is so important that amendments 4 and 5, and the subsequent amendments, are added to the Bill.
The fifth concern that the Soil Association helpfully sets out concerns hormone-treated beef. The US Food and Drug Administration allows steroid hormone drugs for use in beef production, which we banned in the UK and the European Union in 1989. Cattle producers use hormones to induce faster, bigger animal growth, but there is a cost to that: an EU scientific review back in 2003 concluded that one of those commonly used hormones is carcinogenic. In the event of a UK-US trade deal, hormone-treated beef could be sold in the UK, posing potential public health risks. Surely it is the responsibility of the House to understand and scrutinise in detail a UK-US trade deal, to ensure that there are no such potential public health risks for UK consumers.
Lee Rowley (North East Derbyshire) (Con)
I am hugely grateful to the hon. Gentleman for letting me intervene. He is right that a US trade deal needs to be scrutinised, but I remind him that we are not debating a US trade deal. We are debating what is effectively a continuity Bill, and while much of what he says is incredibly interesting—although I disagree with it—it is not relevant to the scope of the discussions.
Gareth Thomas
With due respect, the coffee that the hon. Gentleman had this morning may not have quite kicked in at the beginning of my remarks, when I set out what the Queen’s Speech defined as the purpose of the Trade Bill. As I said, it made clear that the Bill was designed to set the tone for the future of UK trade policy post Brexit, which it quite clearly does not if all the Bill serves to do is to explore the scrutiny of roll-over agreements. Our contention is that we need a proper parliamentary scrutiny process for future trade deals that we negotiate, including with the US and the Trans-Pacific Partnership—on which more anon.
Matt Western (Warwick and Leamington) (Lab)
My hon. Friend makes some powerful points. To broaden this a little, because it would be easy to become extremely focused on the US-UK trade deal, he knows very well that these sort of issues—food standards and production, and safeguards for consumers—apply to other countries, such as Australia. Any UK-Australia trade deal will face exactly the same issues as those we are talking about between the UK and the US.
Gareth Thomas
My hon. Friend is absolutely right. There is not the option at the moment for proper parliamentary scrutiny of a trade deal with Australia. If the Government were to bring forward a trade deal with China, there is as yet no scope in Parliament for proper scrutiny of such a deal. That is why amendments 4 and 5 and those linked to them are so important.
Matt Western
I just want to elaborate on that point. It is really important that the public are fully aware of what we are talking about. Hormone-fed beef applies to Australian-produced beef as much as to US beef. When it comes to egg production in Australia, they use battery hens, caged hens and so on. It is really important that consumers are made fully aware of what will happen with these trade deals if they are opened up in the way that the Government would like.
Gareth Thomas
My hon. Friend remakes my point for me. We need to have proper parliamentary scrutiny locked into the Bill. As we have been told, this the only trade legislation that is likely to come before this Parliament. There has been no hint of any other legislation to improve the parliamentary scrutiny of future trade agreements. That is why this group of amendments is so important.
Bill Esterson
Just for the benefit of the hon. Member for North East Derbyshire who intervened, if he looks at the explanatory note to amendment 5, he will see that the amendment would apply the provisions of the Bill to trade agreements other than the EU roll-over trade agreements, so it covers trade agreements that go beyond those that were originally in the scope of the Bill. As my hon. Friend said, this is relevant, not only because of what the Queen’s Speech—
Bill Esterson
I do not think the hon. Gentleman is allowed to intervene when I am already intervening on my hon. Friend. He will get his chance to make a speech later. The important point is that we have tabled amendments precisely because of the need for the Bill to cover more than the narrow scope that clause 2 originally envisaged. My hon. Friend is right to highlight what was in the Queen’s Speech, but I want to remind the hon. Member for North East Derbyshire that it is actually in our amendments. They have been allowed by the Clerks and must therefore be within the scope of our debate.
Gareth Thomas
My hon. Friend makes his point to the hon. Member for North East Derbyshire, who intervened on me very well. I do not know whether the long title of the Bill was as badly drafted as some other parts of the Bill, allowing as a result for our amendments to be in scope, but they are. The hon. Member for North East Derbyshire in his heckle suggested that I was making a series of hypotheses. I would not use his phrase, but I gently suggest that that is surely the purpose of parliamentary scrutiny—to test the concerns that the wider public and organisations outside the House have about particular pieces of legislation.
The Soil Association highlighted a further concern about nutritional labelling—so-called traffic light labelling—which has been a very important tool in supporting improvements in UK public health. The US is clear that it considers nutrition labelling a barrier to trade, and it has an ongoing dispute with the European Union over this. Imported US food already enjoys a voluntary concession to the UK labelling requirements. Any trade deal could weaken those consumer labelling efforts still further. A US trade deal could result in low-cost, ultra-processed foods flooding the UK market, placing a potential double health burden on UK citizens. That is one of the concerns of the Soil Association, and it is right that parliamentary scrutiny should give us the opportunity to test that.
There are serious concerns about the public health implications of genetically modified foods and pesticide regulations, which we will come on to under amendment 11. Incidents of food poisoning in the US affect 14% of the US population annually—10 times greater than in the UK, where just 1% is affected. Again, surely, it is the purpose of Parliament to allow our amendments to test whether or not a deal with the US or any other country in the world is likely to lead to an increase in food poisoning. Those are the Soil Association’s concerns around food standards.
There is a series of other concerns about a potential deal with Donald Trump’s Administration. Let us take the national health service, where Ministers have been desperate to try to reassure the public. If investor-state dispute settlement clauses were to be included in a UK-US trade deal, or any other post-Brexit trade agreement, there is a real chance that the corporate giants that had bought the right to run part of the national health service might be tempted to challenge a decision by a future Government about the provision of that part. If a future Government wanted to favour a public provider over the big private corporate provider, or renationalise parts of the health service that have been privatised, that could be challenged by the corporate giant using the investor-state dispute settlement system, potentially at huge cost to the British taxpayer and resulting in huge damage to the national health service.
Bill Esterson
My hon. Friend is right to highlight the challenge of ISDS. The debate about the Transatlantic Trade and Investment Partnership, which was dragged into the public domain when negotiating texts were eventually shared with the public, was the only way for the potential problems that he has highlighted to come into the public domain. The initial lack of scrutiny poses a great threat of the kind that he has set out.
May I add to the list the concerns about the negative list system, where every single service has to be named, and about ratchet clauses and standstill clauses? In addition to ISDS, they are a real threat to the ability of this country’s Government to have control over what is in the public sector and what services are delivered, whether the health service or other public services.
Gareth Thomas
Not surprisingly, my hon. Friend is ahead of me in making that concern clear. I underline the issues about negative listing that he sets out, which I will come to. To finish the point about medicine pricing, Donald Trump’s chief negotiator has made it clear that they wish to use a trade deal to challenge the NHS’s current purchasing model for NHS drugs. That could be done through them securing specific market access provisions or other clauses aimed at helping the US pharmaceutical industry. Again, surely it is the responsibility of the House, and indeed the other place, to have in place the scrutiny mechanisms to check whether that concern is justified.
My hon. Friend set out the concerns about standstill clauses and ratchet clauses in trade agreements, which can lock in levels of privatisation and other forms of liberalisation and accelerate them, which will limit the scope of future Governments to take sensible steps, when services are not being properly provided, to bring them back into the public sector. He rightly set out concerns about negative listing, which emerged in particular in the EU-Canada deal, which we will explore in more detail in the debate on amendment 9. There are concerns that NHS management data services could be opened up to US corporate giants as a result of a UK-US trade deal. Surely it is Parliament’s responsibility to explore those concerns.
If a UK-US deal were concluded by the Government, MPs would not be guaranteed a vote or a debate on the signed deal. The proposals in the Command Paper, which Ministers were forced to publish in February last year, allow a scrutiny Committee to recommend one, but leave it at the Government’s discretion whether to hold one.
The deal is being negotiated in secret, even though it could have huge implications for Britain’s post-Brexit future. Negotiations with the US are particularly controversial, yet after six rounds of preparatory talks and one round of formal negotiations, we still are in the dark, at least from a UK perspective, about the substance of what is being debated. It is true that the Secretary of State made a statement to the House. However, apart from listing the major areas of the talks, which were hardly revealing, and reassuring us all that the meetings were positive and constructive, again, no substance was offered on the real concerns that members of the public and organisations outside this House have set out on food, import standards and medicine prices. As Mr Lawrence from Trade Justice Movement reminded us all in last Thursday morning’s witness session, there will have been more scrutiny of the decision to proceed with High Speed 2 than there will be, as things stand, of a UK-US deal. Our amendments would help put that situation right.
Matt Western
When those of us on the International Trade Committee were hearing evidence about potential trade agreements with Japan and South Korea and the Government’s failure to be transparent, to be open, to set objectives and to consult, we discovered in that process, online, that the Koreans had already shared publicly what was going on and where they were in the negotiation. It was secret from our side but open on theirs. It was not until we discovered that information online and Google Translated it that we knew what the Government were up to. Isn’t that extraordinary?
Gareth Thomas
That is an extraordinary position, but sadly, it is becoming clear that that is how Members of Parliament are likely to find out about the substance of these trade negotiations. Let us again take the US as an example. We are finding out through evidence to Congress what many of the concerns of UK business organisations are in terms of the desire to secure access to UK markets, which is surely an entirely outrageous situation for the House of Commons. We were promised we would be taking back control after Brexit, yet the Houses of Parliament and the British public are being left in the dark.
There are real concerns from a UK-US deal about the potential for ISDS.
Bill Esterson
Before my hon. Friend moves on from the point about where evidence comes around what is a negotiating text, he will remember the evidence from Rosa Crawford from the TUC that the unions in this country are finding out what is in the negotiating texts for the US-UK talks from unions in the United States, which have access to those texts from the US Government. That is completely absent in this country. Is this not yet another example of how absurd it is that we have different approaches to scrutiny in this country compared with others? Surely those approaches need to be equivalent to ensure proper scrutiny and the right outcomes in the interests of the people of our country?
Gareth Thomas
We should thank the TUC for its work with American trade unions to help inform British workers and the British House of Commons, and for that little bit more of an insight into what is really going on in the UK-US negotiations. I hope Ministers will be sufficiently embarrassed by the British people’s reliance on what is being told to Congress to open up more scrutiny opportunities for this Parliament.
ISDS clauses have been favoured by the US in many of its existing trade deals. They potentially allow new investors, if included in a UK deal, to sue our Government over measures that harm their profits. We know that ISDS lawyers are already talking up the possibility of compensation for corporate giants whose profits have been hit by Governments taking lockdown measures to tackle the covid pandemic. In case Government Members think that is not a real threat, the American firm Cargill won more than $77 million from the Mexican Government after they introduced a tax to deter high-fructose syrup to tackle serious health issues in Mexico.
ISDS provisions create regulatory chill—the temptation for Governments not to introduce necessary public health or, indeed, other environmental measures, for fear of being taken to an ISDS tribunal by a big overseas investor. They create a two-tier system, since it is rarely small and medium-sized enterprises that are able to access these secret courts. There is normally no appeals system for the Government to access, and there is extraordinary secrecy around the nature of the settlements.
The irony is that there is little obvious benefit to businesses from those clauses being included in trade agreements. Indeed, the Government under David Cameron published an analysis of the pros and cons of ISDS clauses and could not find any great pros to champion. Business organisations tell us—although this tends to be in private—that ISDS clauses do not matter much to them; what they take serious notice of is the business environments.
There are real concerns about the labelling of geographical indicators, where products in the UK have a geographic indicator that prevents their being imitated: one thinks of Welsh lamb, Scottish salmon and Armagh Bramley apples, for example. The American negotiators do not like those types of food label and will seek to get rid of them. Surely it is the responsibility of this House of Commons to explore whether those concerns have merit and to push the Government to protect those labels.
Matt Western
That labelling is so important because throughout this process the public have been led to believe, because the Government have insisted on this point, that they as consumers will always be informed about what it is that they are buying. The only way they can be informed of that is by labelling, but that is not going to happen because, as my hon. Friend says, the US negotiators will not allow it to. When I approached KFC—other leading fast-food outlets are of course available—and asked, “Will you be informing the consumer where the chicken has come from that has gone into those nuggets or whatever the product is?” there was no reply, but clearly it will not be doing so, which must be a profound concern.
Gareth Thomas
I have made my point already about chlorinated chicken, and my hon. Friend raises that concern again.
The point that I was specifically referring to is the significance of GIs for many British products, and I think particularly of Welsh lamb and Welsh beef, where the Welsh Government have concentrated much of their promotional effort around the agriculture industry in Wales on talking up the benefits of those GI-protected products. There is real concern that that is at stake in some of the trade negotiations that the Government are taking part in.
It is surely right that this House have the opportunity to scrutinise whether such concerns would be appropriate with respect to a UK-US deal, a UK-Australia deal or a UK-Japan deal. At the moment, we, as the House of Commons, will not have the chance to explore in detail whether that is a concern, or have the opportunity to force Ministers to take action. Our amendments would put that right.
One last concern to flag about a UK-US deal is Donald Trump’s hostility to action on climate, and therefore the possible lack of potential for Ministers to make progress on bringing carbon dioxide emissions down and helping to tackle the climate and nature emergencies that the world and our country face. Those are the potential concerns being talked about around the headline free trade agreement being negotiated by Ministers, which merit proper parliamentary scrutiny.
Amendment 4 would put in place a structure for proper parliamentary scrutiny of free trade agreements. New clause 5 sets out the process for scrutiny of those free trade agreements before they could be signed, including giving parliamentarians a vote on whether to approve the start of negotiations. That would help to lock in scrutiny of trade negotiations from the very beginning of the process.
Andrew Griffith (Arundel and South Downs) (Con)
May I congratulate the hon. Gentleman on his damascene conversion to parliamentary democracy and scrutiny of trade, which are things that, as part of our membership of the European Union, we would never have been able to engage in? It is only because the Government are getting Brexit done that we can even entertain these ideas.
Gareth Thomas
The hon. Gentleman opens up a whole new area for discussion and I am grateful to him for doing so. Let me confess in these secret discussions here in this House that the biggest mistake that I made when I was a Minister was to agree in 2007—in the run-up to the general election in that year that never was—to appear before seven Select Committees in the space of two weeks, confident in the knowledge that a general election was about to happen and that, actually, I would instead be spending my time with the great people of Harrow West.
Imagine my horror when I discovered that we were not going ahead with a general election and that I would have to appear and talk about our trade policy to seven Select Committees, one after the other over a two-week period. Boy, did I know the detail of trade policy by the end of those that two weeks, and crucially I also had confidence that the negotiating teams working on the EU negotiations knew the detail, too.
The hon. Member for Arundel and South Downs mentioned Brexit. The decision of the British people to go ahead with Brexit gives us the opportunity to rewrite the UK’s deal with Canada, which we will consider when we debate amendment 9—I suspect that the whole House could potentially be grateful for that opportunity. I look forward to hearing the hon. Gentleman’s interventions then, too.
As well as seeking a mandate, the amendments would require Ministers to be much more open and transparent with the British people about the likely impact of the negotiations and, crucially, how each round of the negotiations have gone. They would require the consent of the British people through their representatives in this great House of Parliament to agree to any trade treaty. In short, our amendments would genuinely help the British people to take back control of who the businesses they work in can trade with and on what terms. They would give, for example, key workers a say in how the services that we all recognise as essential—such as medicines and drugs and our health services—are delivered, and whether trade agreements should impact on them or not. They would give British people the chance to say, “These are the standards that we want those selling goods and services to us as consumers to abide by.”
I do not think it is unreasonable to expect Ministers to put their plans and their record for securing better trade terms to the House of Commons for approval. Under cover of lots of offers of consultation, Ministers seem determined to keep for themselves and No. 10 a power to decide with who and on what terms a trade deal gets done. The picture is painted already, but let us imagine for a moment that the Prime Minister decides to ignore the concerns of Government Members as well as Members across the House about a potential trade deal with China. The negotiated plans would not need the approval of the British people. We would not have access to any of the detail of how those negotiations were going, and potentially only a handful of MPs would have a say. Parliament would in effect be sidelined. The British people, as a result, would be sidelined.
Let us be honest: Government Ministers would pack any statutory instrument Committee with ambitious young Turks, such as the hon. Member for Arundel and South Downs, who recently intervened on me, who are desperate for advancement and so inclined to ask tough questions that they would sit on their hands throughout the entire process. If the Prime Minister would not listen to Conservative MPs’ concerns over Dominic Cummings’s future, what confidence can we have that he would listen to their concerns about a future free trade agreement with China or anyone else?
Modern trade agreements are wide ranging and comprehensive. They do not only cover tariff reductions, but a whole range of regulatory issues, including issues of public health, social standards, labour rights and environmental standards, so detailed parliamentary scrutiny, making Ministers work to convince the British people of the merits of a deal, should be seen as entirely appropriate.
There is a need to properly consider the trade-offs in a trade agreement. The Committee might have heard of a book that five-year-olds like called “The Enchanted Wood”, which I am currently reading with my five-year-old. In it there is a magic faraway tree. At the moment the central characters are going up the magic faraway tree and out through a hole in the clouds to a new land: the land of take-what-you-want. I gently suggest that that is the way in which Ministers are presenting the merits of the trade negotiations that they are seeking to do at the moment. They are not seeking to explain the difficult trade-offs that such negotiations involve. They seek to give the impression that it is all wins for the British people and that there are no downsides to trade agreements.
Once they are signed, trade agreements are very hard to unpick. They are not benevolent arrangements.
Fleur Anderson (Putney) (Lab)
My hon. Friend is making a powerful argument with many different opinions on how important scrutiny is. I can add to that the voices of three other groups. One is the constituents and businesses of Putney: 39% of businesses will be affected by these trade negotiations, but I as their representative would be shut out from scrutinising those negotiations by the lack of scrutiny afforded by the Bill. Another group is the Institute of Directors, which we heard from in our evidence session. It has concerns that it will not know about the standards that will feature in the negotiations. It is concerned about immigration policy, temporary labour mobility, e-commerce and digital commerce and how wide the Bill will go. The final voice is that of the Confederation of British Industry which, in its paper, “Building a world-leading UK trade policy”, said:
“Governments worldwide are finding that public concerns on trade are necessitating an opening up of transparency, and it is becoming increasingly crucial for ratification of trade agreements”
and for building public support for trade agreements that will last. While the rest of the world is opening up its trade scrutiny and getting better trade deals as a result, we are going in the opposite direction.
Gareth Thomas
My hon. Friend is right. I fear that if Ministers persist with their refusal to give the House of Commons greater opportunities to scrutinise and vote on trade deals, her membership of this Committee may be her only opportunity to vote on concerns about a future UK-US deal. She rightly also opens up a concern about immigration. One of the trade-offs in trade deals, under so-called mode 4 agreements, is often the requirement for Governments to give ground on immigration requirements, yet we hear no mention of that from Ministers.
Ministers give the impression that it is a win-win-win and there are no trade-offs, but trade agreements are not benevolent arrangements in which our negotiators can simply rock up to another country’s trade ministry and pick up some wonderful new bargain deals. We cannot just take what we want. That is the nature of negotiations.
Another analogy might be that Ministers talk about trade agreements as if they were the Christmas sales; they only have to turn up and there are amazing bargains to be had. They have not bothered to explain that the negotiator sitting opposite them will want something in return, which will not necessarily be a comfortable choice for us as a country. All the more reason, therefore, for us to have proper scrutiny to consider whether the downsides of a potential trade agreement are not as significant as the gains.
To listen to some sceptics about a UK-US deal with Donald Trump’s Administration, our farmers will be undercut, standards of food production will be lowered, the NHS will be on the table, climate change will not feature, big corporates will be even more powerful and labour rights will be undermined. Ministers will say that is an outrageous and scurrilous description of the likely benefits of a UK-US trade deal. Those are the potential downsides, however, so we should be able to consider whether the trade-offs of a UK-US deal, or indeed any deal with any other country, outweigh the benefits and therefore should not be approved, or whether, in fact, the benefits outweigh the downsides.
It is certainly the job of the Government to try to negotiate the best possible terms for a free trade agreement with another country, but surely it is for the people of this country to decide in the round, through their Members of Parliament, whether, on balance, it is the great deal that it has been set out to be. I ask the Committee why Ministers are apparently desperate to exclude the British people from having the final say, through their MPs, on whether a trade deal goes ahead.
Trade agreements can take a long time to negotiate and can seem like great prizes to have. I recognise the potential desperation of the Secretary of State to rock up to the signing ceremony for a new free trade agreement and bask in the positive glow from newspapers such as The Daily Telegraph and the Daily Mail, and maybe even the Daily Mirror and The Guardian, which will provide all sorts of photo opportunities for Members of Parliament. That desperation to get a deal, however, might sometimes take ministerial eyes off the downsides of a deal. It is surely the job of the House to look in the round at whether a trade agreement is genuinely in the interests of the country.
Surely Ministers having to work a bit harder to convince us that they have a genuinely good deal can be only a good thing in law. Giving the British people back control through a series of votes in this House and the other place on future free trade agreements will help to lock in high standards of deal making. Ministers seem to be taking the George Bush approach—the “Read my lips: taxes won’t rise” approach to trade. They are saying, “Trust us, we won’t reduce standards; we will protect the NHS and we will deliver the most amazing opportunities for British business.”
Let us pretend for a minute that I am willing to believe such a message from this particular Minister and this particular Secretary of State. The trouble is, Ministers change. Governments change. A commitment may not outlast the next Minister or Secretary of State who comes along. That is why it is essential to underpin in law a right for the British people, through the people they have chosen to represent them in the House of Commons, to agree to start negotiations and to vote on the final result of those negotiations.
Even over the last three years, ministerial attitudes to trade have shifted back and forth, as we shall discuss in debates on other amendments. One moment, the Government are opposing the idea that they should produce a report on a proposed free trade agreement, then they agree to do it voluntarily but oppose the idea of having that written into law; and then they agree, on Report on the 2017-2019 Trade Bill, to write it into the Bill. Today, we are back to a voluntary process—a commitment given by a Minister who is no longer Trade Minister. If the Executive’s line can change on such a simple point in so short a time, it is essential that the interests of the British people are protected by a lasting lock in law on a clear and sensible process to give the people through their representatives in the House of Commons a direct say on trade agreements that will have a lasting significance for their lives.
Ministers have a record of promising the earth on trade deals. Who can forget the last Secretary of State, who said in October 2017:
“I hear people saying, ‘Oh we won't have any free trade agreements before we leave’. Well believe me we’ll have up to 40 ready for one second after midnight in March 2019”?
Sadly, as the Minister knows only too well, the reality is very different. One of my favourite trade quotes has to be from the Chancellor of the Duchy of Lancaster, then the Secretary of State for Agriculture I think, who said:
“There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU. After we vote to leave we will remain in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would remain part of this free trade area—and Britain would be on the outside with just Belarus—is as credible as Jean-Claude Juncker joining UKIP.”
We all know what has happened since.
My final quote demonstrating what Ministers have said on free trade agreements is from the now Foreign Secretary, who said:
“I hadn’t quite understood the full extent of this, but…we are particularly reliant…on the Dover-Calais crossing”.
If Ministers do not understand the basics about the nature of British trade, it is even more essential that we lock into law a process for giving Parliament the right to scrutinise free trade agreements.
Governments make mistakes. Ministers make mistakes. Let us think about this Government: too late to the lockdown, a failure to protect care homes, a failure to stockpile personal protective equipment, the chaos over schools reopening and now the test-and-trace app fiasco. Ministers make mistakes. Scrutiny in the House of Commons helps to minimise the damage that those mistakes can have. Given the long-term significance of trade agreements, and to help to prevent mistakes being made, we need to lock in a tighter, stronger process of parliamentary scrutiny.
Matt Western
To amplify that point, irrespective of where we currently sit in the House—whether on the Front Bench or the Back Bench, or on the Government or Opposition Benches—it is important that we have some say. That is not simply about scrutiny and holding the Government to account; it is about asking the questions that ultimately lead to better governance. Surely that is what this place is all about.
Gareth Thomas
My hon. Friend is right. I recognise the temptation, having been a Minister for Trade, to fear scrutiny—to fear being asked detailed questions about rules of origin and things like that. However, that fear helps to make Ministers and officials get over the detail of those hugely important technical questions on trade agreements, which as a result helps to make government better, helping to make trade deals much better as a result.
As I indicated, Ministers had to be dragged kicking and screaming to publish the February 2019 Command Paper on future scrutiny of free trade agreements. A series of commitments were implicit in that Command Paper, but we have heard in recent times that some of those commitments may no longer enjoy ministerial support. Indeed, there seems to be some suggestion that Ministers will no longer publish reports at the end of negotiating rounds. Perhaps the Minister can clarify that point in his wind-up remarks.
Certainly, there has been zero progress on agreeing to give a Committee of this House access to confidential information and briefing from negotiators. If ministerial views on parliamentary scrutiny of new FTAs have changed since the publication of that Command Paper, surely the British people have a further justified claim for ensuring that a process for scrutinising all trade agreements be locked in to law. If Ministers are determined to row back on that commitment to work with a dedicated Committee in both Houses, providing confidential information and private briefings from the negotiating teams, there is even more need to lock into law new powers for Parliament to have more leverage over Ministers regarding those trade agreements.
The amendments would also widen the scrutiny requirements for continuity trade agreements that Ministers are negotiating with countries that already have a trade agreement with the European Union. Many agreements already notionally negotiated have small but significant differences from the original EU agreement on which they are based. At the moment, the British people do not have a say, through their representatives in the House, on whether those changes were appropriate.
It is slowly becoming clear, from the little we are able to glean from those negotiations on continuity trade agreements, that the agreements that have been signed, and indeed being negotiated, are slowly making the terms of trade for British businesses and our existing partners and allies worse. As Professor Winters made clear in his evidence last Tuesday, in conversations about how negotiations on the so-called roll-over agreement with Japan were going, Ministers and negotiators were being studiously vague about what was really going on.
The detail of concerns expressed about what has been negotiated only underlines the need for increased scrutiny—not only of all future FTAs but, crucially, of existing continuity deals. Nick Ashton-Hart of the Digital Trade Network noted that the UK-Swiss deal that has been negotiated has only three mutual recognition chapters, compared with the EU-Swiss deal, which has some 20. It will be interesting to know from Ministers why the UK-Swiss deal had just three mutual recognition chapters whereas its predecessor, the EU-Swiss deal, had 20. Apparently, there are similar problems with customs arrangements. In the case of Norway, only a goods arrangement was rolled over, so British companies have no idea at the moment what they will be able to access in terms of services markets in Norway from 1 January next year. There is a similar position with Switzerland—much has not been rolled over. Companies operating in services markets will have little idea at the moment what access to those markets in Switzerland they will have from 1 January.
Matt Western
My hon. Friend is quite right to highlight the vulnerability of UK automotive manufacturing, particularly with Japanese plants, and the consequences of that throughout the entire sector. The Japanese clearly want to hold off on any negotiation with the UK until there is clarity on our future position with the EU. I recall attending a Japanese ambassador’s event two and a half years ago, at which the Japanese chamber of commerce said, “We will be watching you very closely to see what you decide to do, particularly in relation to your arrangements with the EU. If you get it wrong, watch this space.” The UK is incredibly vulnerable. That is why the Japanese are treading very carefully around any trade deal with us and why they will only come to high-line arrangements; they are going to hold off until they can see what happens with the EU.
Gareth Thomas
That is a very good point. Specific Japanese automotive manufacturers such as Nissan have been very public with their concerns about the way trade negotiations are going. In that sense, they amplify the case for proper parliamentary scrutiny of our future trade agreements.
A series of witnesses, as my hon. Friend the Member for Putney mentioned, made clear the lack of proper parliamentary scrutiny of trade agreements. Indeed, it would be fair to say that a majority of the witnesses who appeared before us in the three evidence sessions we had last week noted the lack of proper parliamentary scrutiny for free trade agreements and expressed serious concerns about it.
I remember that Sam Lowe from the Centre for European Reform suggested that our scrutiny of trade is very poor and not particularly democratic when compared with the US and the European Union, and he gave the UK parliamentary process for trade treaty scrutiny less than five out of 10. He made it clear that some agreements that Ministers have negotiated are purely continuity agreements and alluded to those with the Faroe Islands, Chile and Jordan. He thought there would be substantially different trade agreements with Turkey, Norway, Switzerland and Ukraine, and in effect fundamentally new agreements—surely they are not within the terms of the Bill, if it is limited merely to agreements we have through the EU with existing trade allies—with Japan, Canada and the stage 2 deal with South Korea, which will merit a different, more robust parliamentary process.
David Lawrence from Trade Justice Movement said he has heard “nothing new” billed by Ministers on scrutiny of trade agreements. He described the process as archaic, dating back to the first world war when it was used for secret defence treaties. It has not changed in about 100 years. Trade Justice Movement made clear that it has relied on reports from Washington and Brussels to find out what is going on in trade talks that the UK is a part of, which again underlines the point that surely the British people, through their representatives in the House of Commons, should have access to much more detail.
The principal justification that Ministers have deployed and hidden behind to resist giving the British people more control over such agreements is a decades-old convention first articulated, I believe, by Arthur Ponsonby in 1924. One can understand why Ministers look to Mr Ponsonby for inspiration as he was a Labour Member of Parliament, from whom Ministers get their best advice. Trade then was very much with the different parts of the empire; it looks completely different now, with the drastic changes we have seen to world trade and, of course, our exit from the European Union.
That convention was formalised in part 2 of the Constitutional Reform and Governance Act 2010, which no one conceived would still be in use should Britain exit from the European Union and need to negotiate all sorts of future free trade agreements on our own, without our EU allies. CRAG does not require Parliament’s approval for the Government to ratify treaties. Indeed, as a House of Commons Library briefing helps to make painfully clear,
“it gives any parliamentary objection to ratification (or similar processes like accession) a limited”—
limited is crucial—“statutory effect”. There is a theoretical power for the House of Commons to block ratification, but in practice that power does not amount to much. The briefing continues:
“Parliament does not have to debate or vote on the treaty, and indeed time to do so is hard to secure given the Government’s control over the timetable of the House of Commons.”
That the Conservative Government have a large majority underlines how it is entirely in No. 10’s gift whether a debate and a vote takes place on a UK-US deal, a UK-China deal, UK membership of the transatlantic partnership or on a deal with Australia or New Zealand. Why should not Members of Parliament have a vote on those free trade agreements?
It is worth underlining that Parliament cannot make amendments to a trade treaty under the CRAG process as the treaty will have already been signed. Parliament can only object to ratification of an entire treaty, and that is very much a theoretical power—it is fantasy. There is also the slightly less than theoretical option of Parliament refusing to put into domestic law the different elements of a new trade agreement. Again, with a Government with an 80-seat majority, it is difficult to see how that, in any way, could be anything other than a fantastical possibility.
Bill Esterson
It is appropriate to pause and reflect at this time to remember that terrible attack. The thoughts of all present in the Committee are with those affected—the victims, their families and the emergency services and civilians who intervened.
I was referring to the processes of scrutiny on trade agreements, as the Minister might describe them. The statements that we have had—statements in general—permit him to say what the Government are going to do. They allow for a five-minute response from the Opposition, a three-minute response from the SNP and individual questions from Back Benchers. That is not thorough scrutiny. It does not allow cross-examination. It does not allow scrutiny beyond the Chamber.
There is a limit to what a parliamentary statement can achieve and what it does achieve, and the idea that written parliamentary questions deliver very much other than a stonewall from Ministers—this Minister is very good at that—would be laughable, if that were to be used as an example of detailed scrutiny. Questions in the Chamber are invariably met with an ability by Ministers to avoid answering them, rather than shedding very much light. The Government control the timetable, so the ability to debate in detail is limited. Of course, we have Opposition day debates, but we are competing for time with so many other urgent and important topics, which limits our ability to scrutinise.
Committees are important and they can carry out scrutiny, but without access to negotiating texts and without detailed engagement in the development of mandates, all these processes are limited by definition. At this time, when other countries are looking to expand—whether that is Canada, Australia, New Zealand or the United States—in all those countries there is far greater access throughout the process of the development of mandates and in the scrutiny of negotiating texts, and greater engagement of industry, trade unions, civil society, environmental groups and elected representatives.
There is a lack of continuity in scrutiny from what we have now, but, as the Library note sets out, there are at least four possible ways for Parliaments to be involved in treaties: first, by setting the negotiating mandate; secondly, by scrutinising negotiations; thirdly, by approving or objecting to ratification; and fourthly, by passing implementing legislation for treaties that need changes to domestic law. All those are covered by amendments. All those are what my hon. Friend the Member for Harrow West has covered in great detail, so I shall not go into that same detail on the amendments. That is set out for us in the Library note and covered by these proposals.
International trade agreements cover so much now that they deserve that level of domestic scrutiny. I thought the example of HS2 and the way its development has been subjected to massive scrutiny, compared with the minimal scrutiny of international trade agreements, made a pretty good argument about what is wrong and why there is the need to put this right. If not in the Bill, when?
Gareth Thomas
There is perhaps an even better example to use in comparing the lack of parliamentary scrutiny of a potential UK-US deal, or any other free trade agreement deal, with existing legislation. The Minister, as a London Member of Parliament, will remember that Transport for London sought additional powers in a private Bill and there was substantial scrutiny of that private Bill on the Floor of the House of Commons. That is vastly more than Ministers are planning for a UK-US deal or, indeed, any other free trade agreement.
Bill Esterson
That is another good example. I thought for a minute my hon. Friend was going to mention Heathrow, because the Minister, last time he was in this job, had to resign from it to vote against the Government. However, I think we are in different territory and the current Prime Minister and he were in the same place there, although I do not know whether the Prime Minister is talking of lying down in front of bulldozers these days—[Interruption.] I do not know whether the Minister will want to respond to that.
The Library note also mentions the Constitutional Reform and Governance Act 2010, or CRAG, provisions. The point about CRAG is that it does not require Parliament’s approval for the Government to ratify treaties. That is the point my hon. Friend the Member for Harrow West made. There is such a democratic deficit here, which is why these matters need to be set straight. In the previous debate on this in Committee, the point was made that Labour introduced CRAG. Yes, we did, but we introduced CRAG in the context of being members of the European Union and in the context of the scrutiny system that I described a few minutes ago.
CRAG is no longer suitable precisely because we are no longer party to that European Union system of scrutiny—which, by the way, we were entirely able to contribute to and to access as much as any other nation, and which was far ahead of what is being offered now, albeit concerns were raised about the level of engagement over the Transatlantic Trade and Investment Partnership under that system. That is why we should be pushing for a better system than that of the European Union and the one we have just left. TTIP showed that we need to continue to improve the level of scrutiny and engagement, and the involvement of wider society.
There is no continuity in scrutiny, whatever the degree of continuity may be in the agreements being considered. The House of Lords amended the previous Bill to give Parliament a role in setting the mandate for trade negotiations and approving the final agreement, which goes to the point made in the Library note. The Command Paper that my hon. Friend referred to was produced in time for the Report stage in the House of Lords. Although the Lords felt that the Command Paper did not go far enough, it started to make progress, so I am keen to hear the Minister’s response to my hon. Friend’s question about what has happened to the recommendations in the Command Paper.
There is quite a lot of support on the question of what good scrutiny looks like, as set out in the House of Commons Library paper and as in the evidence from David Lawrence, who described broadly similar points. The written submissions from a number of organisations make the same point about debates and votes on objectives; reports back to Parliament on progress; ideally, the publication of texts from each round; a debate and vote on the deal after negotiations; a public consultation; and an independent impact assessment that looks at social and environmental factors, which is why we tabled new clause 6.
As my hon. Friend said, we have scrutiny measures from world war two that are completely inappropriate. There is no way, as David Lawrence told us on Thursday, that trade deals can meet high standards without more scrutiny. As to future trade agreements, he told us that unless we get this right now, there will not be an opportunity to revisit how we approach scrutiny.
David Lawrence said on Thursday that sequencing issues are not being addressed in the Bill and that there should be priorities in respect of when we legislate. That goes back to my hon. Friend’s point about the response from Japan, South Korea and Canada. They want to know what is in the EU deal before they reach an agreement with us. The EU deal, because of its impact on the agreements that we were party to through our EU membership, should come first before the US deal.
We need a level of scrutiny in place for those agreements and for the US deal, which will concern public services, digital services and regulations on health and food standards, which are the subject of a series of amendments that I imagine we will reach this afternoon. There are similar concerns about Canada, which is why greater scrutiny needs to be agreed to in the Bill. We should be able to consider the exact consequences of that deal. The scrutiny should be of the same degree and nature as that described by my hon. Friend earlier.
My hon. Friend mentioned Sam Lowe’s evidence and his three boxes. The problem deals are in box 3: Japan, Canada, Mexico and Ukraine. Those countries want the certainty of an EU-UK deal before they negotiate with us, for reasons related to future arrangements for mutual recognition or rules of origin. The examples that my hon. Friend gave of what has already been agreed in the deals with South Korea and Switzerland show what those concerns might be.
Gareth Thomas
My hon. Friend will remember that Professor Winters described the information he got back from negotiators about how the UK-Japan talks were going as “studiously” vague. Is that not a fair description of all the information we have had back from Ministers thus far about the progress on free trade agreements? That is all the more reason why this group of amendments needs to be in the Bill.
Bill Esterson
The arguments set out by my hon. Friend were extremely well made by our hon. Friend the Member for Brent North two years ago. My hon. Friend the Member for Harrow West has surpassed the formidable nature of the arguments made on that occasion.
Bill Esterson
Having sat and listened to both speeches—as did the Minister—my hon. Friend’s contribution has taken us to a whole new level, and the point he just made is exactly right.
George Peretz, QC made the point that scrutiny can help negotiators. Parliament just will not accept that point in this country, but the US uses that tactic. It is a strength to have the buy-in of Congress for the US trade negotiators, because they can say “I cannot agree that because Congress will not support it.” That is a standard negotiating tactic used across the world. It is used by trade unions that go back to their members. It is how good negotiators operate. They do it by having engagement, by building trust from their stakeholders and by using the strength of that engagement, trust and support as a negotiating tactic. There are many good examples around the world. We should be seeking to emulate them. These amendments give a good guiding light on how to do so, and I suggest to Members and to the Government that they seriously consider taking them on board in the same way as the House of Lords did last time.
Gareth Thomas
I draw my hon. Friend’s attention to the document that he briefly referred to: the Command Paper, “Processes for making free trade agreements after the United Kingdom has left the European Union”. He will remember from that Command Paper Ministers’ commitment to have a close relationship with a specific parliamentary Committee in each House. They proposed
“to work with the House Authorities to establish which committee”
it should be,
“including the possibility of creating a new one”.
They go on to say that the Committee
“could have access to sensitive information”
that would not be more widely available. Has my hon. Friend heard of any update on the progress of establishing such a—
Trade Bill (Sixth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Department Debates - View all Gareth Thomas's debates with the Department for International Trade
Trade Bill (Sixth sitting)
Gareth Thomas ExcerptsTuesday 23rd June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Sir Graham. By the way, it is very nice to have you back. During the interval, I have come under pressure from a Government Member to speak again at length. To do so comfortably, it would be appreciated if you allowed us to take off our jackets.
The Chair
I was minded, given the forecast of a warm week, to allow Members to remove their jackets, but the way the argument has been advanced is making me wonder. I think, on balance, that Members may remove their jackets if that makes them more comfortable. I gather that we had this morning a thorough examination of the topics, so I anticipate that we may be poised to make progress at this point, but I also understand that Mr Thomas had just come to the conclusion of an intervention and has been eagerly anticipating in the intervening hours the response from Mr Esterson.
Bill Esterson
I think that we will be in a rather worse position if we do not sort out our agreements in this country, where we would face a 10% tariff, with rather more devastating consequences for the car industry here. Anyway, we dealt with the car industry at some length this morning; I do not anticipate spending longer on it.
Gareth Thomas
Is not the significance of the intervention from the hon. Member for Witney the fact that it underlines the need for a proper opportunity for the House to consider the impacts of free trade agreements and all their tariffs—10%, 5% or whatever—on British industry?
Bill Esterson
My hon. Friend is quite right. That was the point he was making this morning at slightly greater length. If we want to get these things right and avoid unintended or adverse consequences, scrutiny is the answer. I thank my hon. Friend for pointing that out again.
I want to remind the Committee of the work of the International Chamber of Commerce UK. Its coalition of business groups, trade unions, consumer groups, environmentalists, other non-governmental organisations and civil society more widely produced a paper in 2017, “A Trade Model That Works for Everyone”, in which there was consensus about the need for proper scrutiny from elected representatives and wider stakeholders. It is a point made right across society. In its written evidence to the Committee, the ICC UK points out:
“The Bill ignores the seriousness of the situation we face regarding trade. Public trust in the system is at an all-time low—this is an opportunity to acknowledge the failures and get it right if the UK wants to set new global standards, ensure everyone benefits and future proof trade governance.”
The Bill is the chance for this country to set new global standards—to lead the way and show the rest of the world what is possible, by creating a new gold standard.
As George Riddell from Ernst and Young told us last week, business wants certainty, political security and support across the board, so they know trade deals will last. That means proper parliamentary and non-parliamentary scrutiny. That is how we can achieve the new global standards that the ICC recommends.
The Minister for Trade Policy (Greg Hands)
May I start by welcoming you again to the Chair this afternoon, Sir Graham? In an oversight, I was not able to welcome Mrs Cummins this morning, because there had yet to be a contribution from the Government Front Bench, thanks to the expansive efforts of the two chief Opposition spokesmen, the hon. Members for Harrow West and for Sefton Central.
Let me start by being in complete accordance with the words the hon. Member for Sefton Central said at the end of our minute’s silence, in paying tribute to the first responders and the emergency services in Reading at the weekend. We owe them all a debt of gratitude for the public response that took place.
Amendment 4 would mean that, before regulations were made under clause 2, the process of parliamentary scrutiny set out by the Opposition in new clause 5 or amendments 6 or 7, as appropriate, would need to be completed. I take this opportunity to remind hon. Members that the power in clause 2 is needed to provide for the continuity of existing trading relationships, not to implement free trade agreements with new trading partners. It will ensure that the UK continues to benefit from the EU-third country agreements to which we were a signatory before exit day.
During the evidence sessions, we heard from a very diverse group of witnesses, ranging as widely as the Institute of Directors, the CBI and ClientEarth, that the Government’s continuity programme was sensible and reasonable. Indeed, Parliament has so far ratified 20 continuity agreements with 48 countries. That accounts for £110 billion-worth of UK trade in 2018, which represents 74% of the trade with countries with which we were seeking continuity before the withdrawal agreement was signed. Those agreements were, of course, subject to extensive scrutiny in their original form as EU agreements. The main purpose of the power in clause 2 is to replicate existing obligations in current agreements. Additional new scrutiny, on top of what we already have in place, would not be a proportionate use of parliamentary time for existing agreements.
To reassure Parliament, we are going further and providing additional measures to constrain the power in clause 2 and provide extra scrutiny for any resulting legislation. All regulations made to implement obligations under these arrangements will be subject to the affirmative procedure, and the power is also subject to a five-year sunset period, which can be extended only with the consent of both Houses. We will discuss the sunset clause under a later group of amendments. Moreover, we have voluntarily published parliamentary reports—alongside continuity agreements—outlining any significant differences between our signed agreements and the underlying EU agreement.
Gareth Thomas
The Minister is referring to the voluntary tabling of reports. At Report stage of the last Trade Bill, Ministers were going to put that on the statute book. Why the change this time?
Greg Hands
I will come on to that shortly, but in brief, the proof has been in the pudding. For each of those 20 agreements, we have published the report. The reports have been available for Members of both Houses to study. A few of the reports have been made subject to a debate in the Lords. None of those Lords debates resulted in a motion to regret on the ensuing agreements. I would say this: rather than trusting in our word, trust in our deeds. We have published those reports and we will continue to do so.
Gareth Thomas
I simply make the point that the most significant of the so-called continuity trade agreements—with the exception of Singapore and what Sam Lowe described as phase 1 of the South Korea agreement—have yet to be rolled over. Locking into law reports on the significance of those agreements would, I suspect, attract substantially more interest than the other reports have attracted so far.
Greg Hands
I thank the hon. Gentleman for that intervention, and I plan to come to constraints on that power shortly. He rightly said that on the face of it, the power is broad, but there are significant constraints on its use. We must not forget that the continuity agreements are already in effect, and have already been scrutinised through previous processes in both the Commons and the Lords.
I draw the Committee’s attention to our track record. Of the 20 signed continuity agreements passed through CRAG, their lordships have recommended six for the attention of Parliament, most recently the UK-Morocco association agreement on 9 March 2020. As I have said, not a single one of those debates carried a motion of regret. Due to the limited scope of the continuity agreements for which we intend to use the clause 2 power and the existing opportunities for parliamentary scrutiny, the scrutiny procedure set out by the Opposition in new clause 5, to which I will turn in due course, would be disproportionate and unnecessary. That consequently means that amendment 4 is unnecessary.
I will now turn to amendment 5, which would seek to bring new FTAs within the scope of the Bill. The Government are only seeking a power in this Bill to ensure the continuity of trading relations with our existing partners, with whom we previously traded as a member of the EU. The Bill is not, and never was in its previous form, a vehicle to implement agreements with partners, such as the USA, that did not have a trade agreement with the EU before 31 January 2020.
Gareth Thomas
In relation to amendment 5, will the Minister confirm that there is no current legislative requirement for the Government to hold either a debate or a vote on any UK-US deal they negotiate?
Greg Hands
We have been absolutely clear in the process we have laid out. The publication of the negotiation objectives and the economic impact assessment, the fact that we have reported back at the end of the first round with a written ministerial statement, and the fact that we will publish an impact assessment at the end of the deal all show our commitment to parliamentary scrutiny of deals as we go forward.
Then, of course, there is the procedure under the Constitutional Reform and Governance Act 2010. I would have thought that the hon. Member for Harrow West would be rather more proud of that procedure, because I had a look around at the members of this Committee and studied their dates of arrival in this place quite carefully. I worked out that two members of this Committee voted for that procedure in 2010: myself and him. The only member of this Committee who was here in 2010 and did not vote in favour of CRAG is the hon. Member for Dundee East. Not only that: the hon. Member for Harrow West was a member of the Government at the time, in an international-facing Department to which CRAG was highly relevant, so he would have been part of the team that put forward CRAG 10 years ago. Miraculously, he is now against it. Perhaps he could explain that.
Gareth Thomas
What the Minister’s brief may not have told him was that the provisions that implemented the relevant CRAG power came into force as a result of his Government’s decision in November 2010, but that is by the bye.
The Minister gave a skilful and studious non-answer to the direct question I posed. Let me give him another opportunity to confirm that there is nothing in legislation at the moment that requires a debate or a vote on any future UK-US deal that his Government may negotiate.
Greg Hands
Sir Graham, you will know that under CRAG it is up to Parliament to determine whether to have that debate. Parliament’s ability to scrutinise the agreement and its ability to study the economic impact of that agreement are absolutely clear. On top of that, any legislative changes that would need to be made as a result of any future trade agreement would have to go through both Houses of Parliament in the usual way.
It is understandable that colleagues are keen to make their voices heard on new FTAs, and as a result the Government have said repeatedly that we will introduce primary legislation to implement new FTAs where necessary. As I have just said, that primary legislation will be debated and scrutinised by Parliament in the usual way, and I can assure Members that Government will draw on the expertise and experience in Parliament when delivering our trade agenda.
Those are not just warm words; I invite the Committee to look at our track record. If we take the current negotiations with the USA as an example, before negotiations began, we launched a public bundle, including our negotiating mandate and a response to the public consultation that we had conducted as well as an initial scoping assessment. My right hon. Friend the Secretary of State made a statement in the House, and she and I have engaged with colleagues intensively. During negotiations, we have committed to keeping Parliament updated. Indeed, the Secretary of State provided a statement to Parliament on 18 May with a comprehensive update on progress in the US talks. These updates will continue as the negotiations proceed. We have said that once negotiations conclude, we will introduce implementing legislation, if it is required. Any agreement will also be subject to CRAG, which will provide further opportunities for parliamentary scrutiny.
I must stress that scrutiny of FTAs with new countries is a conversation that must take place separately from consideration of the Bill. Hon. Members such as the hon. Members for Harrow West, for Sefton Central and for Dundee East have expressed valid concerns about what will happen, and my door remains open to discuss such concerns at a future date. Nevertheless, we must not threaten this essential piece of continuity legislation by having discussions about the future.
Gareth Thomas
In the spirit of openness about future free trade agreements to which the Minister says he is committed, can he confirm to the Committee, given the concerns that exist about a potential UK-US deal, that there will not be any investor-state dispute settlement provisions in a future UK-US deal?
Greg Hands
I was being very generous in saying that my door was open, but it is not open to discuss the content of the current negotiations with the US. That, of course, is a matter—in the proper way—for statements to Parliament, but that is a live negotiation, so what may or may not be in that negotiation is probably a matter for that negotiation.
We laid out our negotiation objectives, in a document that I commend to the hon. Gentleman, on 2 March. It lays out our objectives in the talks, which are live at the moment, so it would be inappropriate for me to go down that road. However, my door remains open to having further discussions with all the Opposition parties about the scrutiny of future free trade agreements.
Greg Hands
Sir Graham, I think a comparison of how the UK and European Union do international treaties is a debate for another day. I do not think the two political systems are comparable. The approach proposed by the UK has greater parliamentary scrutiny than that of many Commonwealth counterparts that use the Westminster system—it is more extensive than that of Canada, Australia and New Zealand.
Gareth Thomas
The Command Paper that the Minister’s colleagues published last February committed the Government to publishing reports at the end of each negotiating round. Is that still a commitment and practice that the Minister recognises, or has his Department and new Secretary of State gone back on that?
Greg Hands
I was going to return to the Command Paper, because the hon. Member for Sefton Central asked me a direct question about it. If the hon. Gentlemen will bear with me, I will return to the status of the Command Paper in due course. I want to make a bit more progress in setting out why we think this approach is not right overall for the Bill.
The Bill focuses on ensuring continuity of trading relationships with existing partners. Businesses and consumers are relying on the consistency that the Bill provides. Amendment 6 would disapply CRAG to international trade agreements and instead seek to apply a super-affirmative procedure to scrutiny of continuity agreements before regulations could be made under clause 2. Like other Opposition amendments, that would undermine the constitutional balance and upset an established, well-functioning system of scrutiny. It would also create a two-tier system of scrutiny for international agreements, whereby trade agreements on the one hand, and other important international agreements on the other, are scrutinised in an entirely inconsistent way. It is worth reminding ourselves that CRAG was designed to cover international treaties of all the types we would expect.
Greg Hands
Again, we are talking about continuity agreements that have already gone through a process of scrutiny in the House. I was a member of the European Scrutiny Committee pretty much exactly when the hon. Member for Harrow West was a member of the Government. There was an established process by which treaties were recommended by the European Scrutiny Committee for scrutiny in this House. Most have already been through an established process of European scrutiny.
On future trade policies, I would say that the EU has a fundamentally different constitutional set-up from the United Kingdom. Our most similar constitutional set-ups are in countries such as Canada, Australia or New Zealand, which have very successful independent trade policies, and have done for a number of decades. I am confident that our scrutiny system, as proposed, stacks up well—in fact, it exceeds those, and stacks up very favourably—against those systems in making sure that our Parliament can have its say on future trade agreements.
I stress again, however, that this Bill is not about future trade agreements; it is about the continuity of our existing arrangements. Such an extensive change as proposed in the amendment would add significant and unnecessary risk to the Government’s ability to secure and bring into effect the remaining continuity agreements by the start of 2021. That situation was not advocated by any of the witnesses we heard from. None of them said, “We want to junk all those 40 agreements and pretend that we have never had them”, from ClientEarth right the way across to the Institute of Directors. Only the Opposition seem to want to junk those agreements by voting against Second Reading of the Bill and by not having the continuity agreements in place.
Gareth Thomas
I am sure that the Minister would not wish to imply that the majority of witnesses simply supported the existing parliamentary scrutiny processes for trade agreements in general. It was clear that we heard a majority saying that, for new free trade agreements, the current parliamentary scrutiny set-up was not good enough.
Greg Hands
I am not saying that; I am clearly saying that the witnesses we heard from were, I think, unanimous in saying that the continuity agreements were important for the UK economy and trade. They would share my surprise at the opposition of the Labour party to rolling over those agreements, many of which were negotiated when Labour was in government, including the hon. Member for Harrow West. He was the Trade Minister when two of the agreements were negotiated by the European Union. I would love him to tell us what he was doing at the time. If he finds the agreements so objectionable in 2020, what on earth was he doing in 2008 or 2009 being party to the negotiations that led to those agreements being put in place in the first place? Perhaps he will tell us, or write to the Committee to explain.
Gareth Thomas
What we find objectionable is the lack of proper scrutiny in the process. That is the significant issue. I gently say to the Minister, he has not so far advanced an answer—I am agog to hear it—to the criticisms of a whole series of witnesses, from the business community and the trade union movement to trade exporters, about the failure of the Government to give Parliament a proper debating and voting opportunity on big new free trade agreements, such as a UK-US deal.
Greg Hands
We are going slightly around in circles, conflating the continuity arrangements and future free trade agreements. I will happily debate with the hon. Gentleman the merits of our proposals for future free trade agreements. I reiterate that my door remains open to his suggestions as to how we might scrutinise future free trade agreements. However, the Bill is about continuity arrangements for the 40 or more EU agreements that we currently have. Many of the witnesses, whatever they said about future trade agreements, were unanimous in talking about the importance of the continuity agreements.
Greg Hands
My hon. Friend is absolutely correct. I was going to come on to describe the Opposition’s panoply of amendments taken in their entirety; at the moment, I am still going through the deficiencies in each of the amendments. When we put them all together, they seek fundamentally to rewrite the constitutional balance in this country in terms of international agreements. That is properly a matter for the Executive and for royal prerogative, as scrutinised by Parliament.
Once again, I remind colleagues that continuity agreements have already been subject to significant scrutiny as underlying EU agreements. I say again that we believe that the existing constraints in the Bill are proportionate and provide Parliament with sufficient opportunities to scrutinise agreements. I have drawn Members’ attention to the 33rd report of the Delegated Powers and Regulatory Reform Committee on the 2017-2019 Trade Bill, which raised no concerns about the delegated powers of the Bill and welcomed our move to introduce the affirmative procedure for any regulations.
I turn to amendment 7, which seeks to apply the super-affirmative procedure to any regulations made under clause 2 to implement FTAs with new countries, if the other amendments were to be carried. I will not recap why new FTAs are not included in the application of the Bill. However, I reiterate that we will introduce implementing legislation for new FTAs, if required, which would mean the proposals in the amendment are unnecessary.
Amendment 19 would extend the aforementioned procedures to any regulations made jointly with the devolved authorities. I have outlined the reasons why we do not believe those procedures are necessary. I can also assure colleagues that our approach with the devolved Governments is based on regular dialogue and consultation.
I thank Opposition Members for tabling new clause 5, which outlines in some detail the Opposition’s proposal for how current and future trade agreements might be scrutinised. I have already remarked that this is a continuity Bill and therefore not the place for discussing our wider priority FTA programme or our approach hereto. However, I am happy to reiterate to hon. Members the Government’s commitment to appropriate parliamentary involvement.
I believe we share common ground, insofar as we agree that Parliament should be able properly to scrutinise trade agreements and have sufficient information available to it in order to do so. The Government have ensured that that information is provided through sharing negotiating objectives, responses to public consultations and economic assessments. The amendments go beyond what is needed and, as hon. Members will be aware and as my hon. Friend the Member for Witney pointed out, cross the line that separates the powers of Parliament and the Executive.
We must respect that initiating, negotiating and signing international agreements are functions of the Executive, exercised under the royal prerogative. New clause 5 would have serious consequences. It would both undermine that cornerstone of our constitution and limit the Government’s ability to negotiate effectively and in the best interests of UK businesses, consumers and citizens.
To be clear, the prerogative power is not just a historical throwback or a constitutional quirk. It serves an important purpose in enabling the UK to speak with a single voice as a unitary actor under international law. It ensures that our partners can trust in the position presented during negotiations. It is the same principle that applies in similar Westminster-style democracies with sophisticated trade negotiating functions, such as Canada, Australia and New Zealand.
Setting aside for a moment the significant constitutional issues that we have just examined, the proposals are also unworkable in a practical sense. First, treaty texts are liable to change significantly right up to point of signature. As they say, “Nothing is agreed until everything is agreed.” Sharing texts as we go might be a waste of parliamentary time, as they could quickly be made redundant. It is also not in line with the practice of our FTA partners, including the US, let alone Australia or New Zealand. Those countries will have legitimate expectations of confidentiality around key negotiating texts in our trade negotiations with them.
Final texts of agreements—which, after all, are what matters—are already laid in Parliament for 21 days under the CRAG process, and the Commons has an option to restart CRAG, potentially indefinitely. The Government have gone well beyond the requirements of CRAG and its statutory obligations, in line with our commitment to transparency and scrutiny, by providing Parliament with extensive information on negotiations. For the trade talks with the US on a new FTA and with Japan on an enhanced FTA, the Government have set out their negotiating objectives alongside a response to the public consultation, as well as an initial economic assessment prior to the start of the talks. Ministers have also held open briefings for MPs and peers both at the launch of the US talks—I held one myself—and after the conclusion of the first round.
We will continue to keep Parliament updated on negotiations as they progress, including close engagement with the International Trade Committee in the House of Commons and the EU International Agreements Sub-Committee in the other place. We are committed to publishing full impact assessments prior to the implementation of the agreements. That provides Parliament with more than sufficient information to scrutinise the Government’s trade agenda properly.
Turning to new clause 6, I hope that on the issue of consultation, the Opposition will note the Government’s strong record of consulting widely with the public and key stakeholders on our trade agenda. The Government’s consultation on our priority FTA programme attracted 600,000 responses, making it one of the largest consultations ever undertaken by Government.
Gareth Thomas
I want to press the Minister on the proposals that were in the Command Paper last year. He has not quite answered us on that. The Command Paper said clearly that the Government would work with a Committee and give it access to sensitive information that is not suitable for wider publication, including private briefings from negotiating teams. On the record, is the Minister willing to confirm that they will do that with the International Trade Committee and the relevant Lords Committee, or not?
Greg Hands
I should be clear that the Command Paper was published by a previous Government in a different parliamentary context. However, we have in our approach so far followed what was set out in the Command Paper in relation to publishing negotiation objectives and impact assessments, and reporting back after the first round. I would again ask for confidence in our deeds, in terms of our overall commitment to parliamentary scrutiny.
In line with our commitment, we have published the Government’s response to the consultations on FTAs with the US, Australia and New Zealand, and on an enhanced FTA with Japan. In relation to sustainability impact assessments, as the EU calls them, the Department has published, and will continue to publish, our own scoping assessments for each of our new free trade agreements, prior to negotiations commencing. As with the published UK-US, UK-Japan, UK-Australia and UK-New Zealand scoping assessments, those include preliminary assessment of the potential economic impacts, the implications for UK nations and regions, the impact on small and medium-sized enterprises, the environmental impacts, and the effects on different groups in the labour market, including whether there are any disproportionate impacts on groups with protected characteristics, arising from an FTA with the partner country.
The scoping assessments attracted quite a bit of attention, not least because of all the nations and regions of the UK that would benefit from the US trade agreement, Scotland would benefit the most, followed by the west midlands and then the north-east of England. Those are good things. We are proud of that, and of the fact that we published the assessment.
We are committed to publishing full impact assessments once negotiations have concluded and prior to the implementation of the agreements, when the effects of an agreement can be better understood.
On the point about standards raised in new clause 6, I encourage hon. Members to look at our record on negotiating agreements. We said we would not lower standards, and we have not, as can be seen from the parliamentary reports we published on each of the 20 agreements. None of the 20 agreements that have been signed to date involved any reduction in standards.
Gareth Thomas
In the Command Paper published in February last year, the Government committed during negotiations to publish and lay before Parliament a round report following each substantive round of negotiations. Does that commitment still stand or has it been axed, like the commitment to give sensitive information to a Select Committee of the House of Commons?
Greg Hands
Nothing has been axed; all I am saying is that the Command Paper was produced at a different time. What we have done is to follow the Command Paper in publishing, for example, the written ministerial statement at the end of round one of the talks with the US. That has greatly enhanced parliamentary scrutiny, as has publishing the negotiation objectives and the scoping assessment of who would be most likely to benefit from the agreement.
Greg Hands
I will make a bit more progress.
As with new clause 5, new clause 8 contains a number of practical flaws in the proposed system. Those flaws would undermine negotiations and disadvantage the UK. I understand that colleagues are keen to remain abreast of negotiations, and the Government are supportive of that endeavour, as I have outlined. I point hon. Members not just towards our commitments to share information but towards our record on the recent US negotiations, which I have mentioned.
Ultimately, this debate boils down to whether we believe that it is right that the UK Government, supported by experts, civil service negotiating teams and advisers, are able to negotiate international agreements on behalf of those who elected them, drawing on the expertise and views of Parliament and of the devolved authorities, via strong scrutiny mechanisms. Or do we believe that Parliament itself should be in control of the negotiations, determining who we negotiate with and how, and within what timeframes?
It seems clear to me that in the national interest, the former scenario must be right. It ensures that when our partners face the UK around the negotiating table, they know that it has a credible single voice—one that is represented by the UK Government alone, after they have consulted with the devolved Administrations and drawn on the extensive expertise in this House and the other place, via close engagement and scrutiny processes, such as those we have here for international agreements.
Gareth Thomas
At the risk of disappointing the Government Whip, I shall be brief in my concluding remarks. We had a very strong contribution from my hon. Friend the Member for Sefton Central, who underlined that, at present, we will find out more on a UK-US deal from Congress than from anywhere else. My hon. Friend the Member for Warwick and Leamington rightly raised, among a series of other points, concerns about our ability to scrutinise the impact of a new free trade agreement on the automotive sector. My hon. Friend the Member for Putney rightly drew attention to the significance of scrutiny, or otherwise, of the roll-over agreements, given that some 39% of jobs in her constituency depend on trade with countries where there are roll-over agreements.
We also heard interesting interventions from the hon. Member for North East Derbyshire, who I hope has used the lunchtime adjournment to look up the reference in the Queen’s Speech to the Trade Bill. It makes it very clear that the Trade Bill’s purpose is to put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy on exit from the European Union. I appreciate that the Minister has sought to somewhat change the stated purpose of the Trade Bill, to provide some cover for not being willing to give Parliament proper scrutiny arrangements for future free trade agreements, but that is what the Queen’s Speech said.
Other interventions included that from the hon. Member for Witney on Australian cars. In their own different ways, hon. Members supplemented the arguments that we were making for greater scrutiny of free trade agreements.
Perhaps the most striking revelations were in the Minister’s winding-up contribution. In the previous Parliament, the Government committed to make limited improvements to the Bill by allowing parliamentary scrutiny in the form of reports and sunset clauses. Having witnessed them backslide on those commitments, we have now heard the Minister step back from commitments made in the Command Paper less than 15 months ago on scrutiny of free trade agreements. The Minister appeared to be clear that Parliament, including the International Trade Committee, will not have the opportunity to scrutinise the negotiators, receive private briefings from them, or access sensitive information, as was promised in the Command Paper. He was also studiously vague as to whether the commitment in the Command Paper to publish and lay before Parliament a round report following each substantive round of negotiations will be maintained or not. One can only conclude from his answer that that commitment is not being maintained, albeit one report, on the UK-US deal, has already been published.
This Bill is lamentable in the lack of proper opportunities it offers to scrutinise the continuity agreements, in particular the bigger ones, which have yet to be negotiated, on Canada, Japan and Turkey. It is also lamentable, as a series of witnesses and hon. Members have stated, in the arrangements for scrutinising new free trade agreements. On that basis, I intend to press the amendments to a Division.
Bill Esterson
On a point of order, Sir Graham. Is it in order to make a further speech at this stage? I understand that it is, but I stand to be corrected.
Gareth Thomas
I beg to move amendment 9, in clause 2, page 2, line 15, leave out subsections (3) and (4) and insert—
“(3) 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 had ratified a free trade agreement with each other immediately before exit day.
(4) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement other than a free trade agreement only if the other signatory (or each other signatory) and the European Union had ratified an international trade agreement with each other immediately before exit day.”
This amendment would require previous ratification of a trade agreement before regulations could be made to implement it.
Amendment 9 excludes from the scope of clause 2(1) those international trade agreements agreed between the UK and a third country where the corresponding agreement between the EU and that third country has been signed, but not ratified, as of 31 January this year. My understanding is that this would apply to the EU-Vietnam free trade agreement and the EU-Canada comprehensive economic and trade agreement, or CETA. Both agreements merit further detailed scrutiny, even if only through the CRAG process.
The new UK-Vietnam agreement would be a treaty in its own right, legally distinct, and therefore should surely face proper scrutiny. Under the Bill’s terms, any future UK-Vietnam agreement would be counted as a roll-over agreement, because the EU signed an agreement with Vietnam shortly before we left the EU on 31 January this year. That EU-Vietnam agreement has not been ratified, and indeed the scrutiny processes in this House had not been completed by 31 January. A future UK-Vietnam deal could be hugely different from the EU deal, but it would none the less be covered by this Bill, with its minimal scrutiny arrangements.
Greg Hands
No, I am not going to give way.
I think that a Member with quite a big Caribbean community in his constituency has quite a lot of explaining to do about why he is now opposed to the CARIFORUM agreement. It is a great agreement that does major good work for international development in Caribbean countries. I represent a quite substantial Caribbean community. I think its members would be alarmed if they were to learn that the Labour party is opposed to that international development agreement, which does great work among our Caribbean friends.
Gareth Thomas
On a point of order, Sir Graham. As the Minister knows full well, we are not opposed to the agreement. We simply want better scrutiny arrangements. What arrangements are there for me to correct the record in that respect?
Greg Hands
I thank the hon. Lady for her intervention, because I thought the Opposition were opposed to the Canada deal, so if we were to fall outside the Canada deal, they should be celebrating that. The Labour Front Bench opposed Canada in 2017, and I think they have opposed it again today. We are in discussions with Canada and we believe that there is time to do a roll-over agreement, but to do that we need the powers in the Bill. Amendment 9, which I think the hon. Lady has co-sponsored, would delete Canada from the list of agreements subject to the power, so if she votes for this amendment—if indeed there is a vote on it—she will effectively be preventing the roll-over of the Canada deal.
I will come to a conclusion. I was very surprised by this amendment. I praised the shadow Minister, the hon. Member for Sefton Central, last week for the attention he had given to oral questions earlier that day, but now I am not sure whether he really paid enough attention. He may have missed hearing the shadow Secretary of State, the right hon. Member for Islington South and Finsbury (Emily Thornberry), say from a sedentary position that she is in favour of CETA, the Canada agreement, and that she voted for it at the time.
The right hon. Lady is absolutely right: she did vote for it at the time, and that is obviously the Labour party’s new position. We know that sometimes in political parties, particularly when we are in opposition, there can be a new position and it takes a while for that new position to filter out across the whole party, but I am a little bit surprised that the new position has not filtered down to her own Front-Bench team, let alone the whole party, because they are trying to say they do not want to roll over the Canada agreement for an agreement that their shadow Secretary of State was praising only last Thursday. I find that approach absolutely bizarre.
If amendment 9 were to be accepted, there would be no UK-Canada trade agreement to roll over in the scope of clause 2. Labour said one thing in the Chamber last Thursday, but is saying precisely the opposite in Committee. Our Canadian friends will look on askance, as will our friends from the Caribbean, Kenya, South Africa, Mozambique, Ghana, Cameroon, Ivory Coast and so on.
This is a continuity Bill. There is certainly continuity in the Labour party’s confusion on trade. When it came to the original Canada agreement in the vote of February 2017, Labour split three ways: 68 of its members followed the right hon. Member for Islington North (Jeremy Corbyn) in voting for the CT agreement; 86 broke with the right hon. Member for Islington North and voted with the right hon. Member for Islington South and Finsbury in favour of the agreement; and the rest abstained.
I think I heard the hon. Member for Harrow West then say that he regretted the fact that there had not been a debate about the Canada agreement on the Floor of the House. I spent a few years in the Whips Office. One of the first rules of being a Whip in Opposition is never bring a debate on which your own party is divided to the Floor of the House, let alone something where you are divided three ways and your leader is in the minority view. Now he is saying that he regrets that it was not brought to the Floor of the House.
We should vote down amendment 9, because it would rule out of scope Canada, the Caribbean and many other important trade agreements that the EU has negotiated. The UK was part of that negotiating team. They are very important trade agreements. We would like to see the continuity of those trade agreements, as do our constituents and UK businesses. I urge hon. Members to vote against amendment 9. Indeed, I hope the Opposition withdraw the amendment.
Gareth Thomas
The Minister has been at his most diversionary with that characteristically chutzpah-led speech. As he knows only too well, constitutionally, the Government are able to sign and ratify international agreements. He went on at some length in his winding-up speech on the previous group of amendments about how wonderful that process was.
The Minister does not need the Trade Bill to sign agreements with CARIFORUM, Canada or Vietnam. The powers are already there for the Government to do so. If Ministers think the provisions in the Bill relating to those clauses are so important, one wonders why they did not bring the Trade Bill back in the last Parliament. It fell because Ministers chose not to bring it back, not because of opposition from the Labour party.
There were genuine concerns about the future of a UK-Canada trade pattern. On this side of the House, we repeat our concern that if Ministers cannot agree to roll over a deal with one of our oldest allies where the Queen is Head of State, it prompts questions about the effectiveness of the Department for International Trade. This was a probing amendment, which we will not push to a vote. The point about scrutiny remains on the record. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 10, in clause 2, page 2, line 23, 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;
(f) 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;
(g) 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; and
(h) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
I will give my hon. Friend the Member for Harrow West a chance to rest his vocal cords. Amendment 10 is part of a run of amendments that get into the implications of domestic and international policy on everyday life here and abroad. Amendment 10 would ensure that regulations on an international trade agreement can only be made if the provisions
“do not conflict with, and are consistent with…Sustainable Development Goals…the primacy of human rights law…international human rights law and international humanitarian law;…obligations on workers’ rights and labour standards as established by but not limited to…the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions; and…the fundamental principles and rights at work inherent in membership of the International Labour Organisation;…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;…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; and…the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.”
There are some things in there that sound very much like taking back control to me. They are very much about the rights of human beings here and abroad, whether workers, women or children. What is not to like? What is there not to support in the amendment? What is there not to support in getting behind sustainable development goals at every available opportunity?
In the previous debate, my hon. Friend the Member for Harrow West mentioned the difficulties in Vietnam. Trade unions and workers in Vietnam face a very difficult time. They face persecution and exploitation. A trade agreement with Vietnam should include labour provisions under the ILO, consistent with amendment 10. The measures in amendment 10 also protect UK businesses by avoiding undercutting.
For the sake of posterity, Sir Graham—I think that is the right way of describing it—I checked that the amendment is similar to one moved by your co-Chair two years ago. At the time, my hon. Friend the Member for Bradford South (Judith Cummins) spoke about the human rights of the Sahrawi people and Morocco’s attempts to include them in international trade agreements. She set out the need for the ethical dimension in international trade agreements and talked about how poorest are left behind. She quoted Paul Collier’s work on the bottom billion and described how international trade agreements all too often lock the poorest in the world into the natural resource trap rather than benefiting them through export diversification, as is sometimes claimed.
It was a good speech then, and the points that my hon. Friend made remain good points now. That is backed up by what we were told in written briefings from Amnesty, which makes the point about the current Bill’s lack of provision in those areas, saying that
“the Bill as currently framed, makes it possible to alter human rights and equality protections using secondary legislation, in order to comply with renegotiated trade deals.”
Here we are again with the problem of Ministers’ use of secondary legislation because of the inadequate provisions in the Bill. The briefing goes on:
“Such powers should not be necessary if existing EU trade agreements, which are the subject of the Trade Bill, are to be rolled over primarily to ensure continuity, as claimed by the government.”
As such, the Government should not object to amendment 10.
The briefing states that the Bill grants
“extraordinarily wide powers to Ministers to amend retained EU law - including the Equality Act 2010, the Modern Slavery Act 2015 and the Data Protection Act 2018 - leaving domestic rights protections open to alteration”
and that it lacks
“real parliamentary scrutiny and accountability throughout negotiations. This is essential because of the complexity and far-reaching implications of trade agreements for business and public policy”
in the areas of human rights. The briefing continues:
“Unlike the US and the EU, the UK looks set to conduct major elements of trade negotiations without any oversight role or negotiating mandate from Parliament.”
After the debates and votes that we have already had in this Committee, I think we can safely say that that is true.
Gareth Thomas
Does my hon. Friend agree that it would be sensible to include in the Bill a commitment to trying to achieve the sustainable development goals, as this amendment seeks to do, not least because with their decision to abolish the Department for International Development, Ministers have thrown away some of their soft power and global reputation for being good on development?
Bill Esterson
That is an incredibly important point. Given the Government’s previous apparent commitment to SDGs, one might have thought they would be open to such a suggestion. The EU conducts sustainability impact assessments of all new trade agreements to assess their the economic, environmental and social impact, including their impact on human rights and labour standards. That is a similar point to the one my hon. Friend just made.
Once in force, EU agreements include a commitment to assess the effects of the agreement on sustainable development. Although those sustainability impact assessments could go further in terms of detail, with sector-specific impact assessments on human rights or labour standards, they nevertheless provide a clear commitment to human rights and labour standards that the UK should replicate and improve on. I thought this was a continuity Bill—the Minister has told us that enough times—so why are the Government not doing the same thing with sustainability impact assessments?
There is no provision in the Bill for undertaking social and environmental assessments of prospective trade agreements, or for conducting related studies and surveys. Decision makers will be operating without the evidence base to take full decisions on complex instruments that will bind the UK for many years. Methodologies for this are well developed, and the Government should commit to undertake them in legislation and to make them public. If not now, when?
Gareth Thomas
One concern that led me to want the Bill to refer to the sustainable development goals is the fact that both Ghana and Kenya have not yet felt able to sign a continuity agreement with the UK. As I understand it, that is because of their concern that the tariff regime that Ministers are suggesting under such a continuity agreement would hinder the scope for regional integration in eastern and western Africa. Although I do not expect my hon. Friend to comment on it, perhaps my intervention might encourage the Minister to give some clarity on my genuine concern about those two continuity agreements.
Bill Esterson
I am glad my hon. Friend has raised the issue, and I hope the Minister can give clarity on those two continuity agreements. If the Minister missed the names of the agreements, I am sure my hon. Friend will repeat them for him. It appears that that may be necessary.
I turn to what the TUC has said to us. It has particular concerns about trade unionists. In its briefing for the Committee, the TUC refers to the lack of consultation on the text of the 19 continuity agreements that have been finalised so far. That has been a concern, because many of the deals that have already been signed are with countries where labour and human rights abuses are widespread. The TUC refers to Colombia and South Korea:
“In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights. Colombia, meanwhile, remains the most dangerous country in the world for trade unionists with around two thirds of murders of trade unionists taking place in Colombia.”
That is according to an ITUC report from last year entitled, “The World’s Worst Countries for Workers”. The TUC continues:
“Whilst the UK’s trade deals with South Korea and Colombia have commitments on paper to uphold ILO standards, similar commitments in EU trade deals with South Korea and Colombia have not been effective in improving rights as they have no mechanism for effective enforcement.”
We had that discussion with Rosa Crawford in the evidence session last week, and that is what she confirmed to me.
Compare that with what goes on elsewhere. The TUC states:
“Trade unions in a number of other countries are consulted routinely by their governments in the process of trade negotiations, such as the US, Austria and Sweden…The TUC believes it is crucial for trade unions to be consulted on the text of trade negotiations in order to ensure they have adequate provisions to ensure labour rights commitments are upheld, contain effective protections for public services as well as other social standards and do not contain Investor-State Dispute Settlement Courts that would allow foreign investors to sue governments for enacting policies for the public good”,
including in the areas of workers’ rights and human rights. The TUC continues:
“The TUC believes it is also crucial for MPs to be able to see and comment on the text of continuity deals so that negotiations are subject to proper democratic scrutiny.”
All that brings us back to the text of the amendment. If the Government are committed to upholding sustainable development goals and to supporting human rights, workers’ rights, women’s rights and the rights of the child, the amendment is an opportunity. If the Government do not support this amendment, they might, as I suggested to the Minister on another occasion, want to bring back their own drafting that civil servants can tell them is appropriate to deliver the goals that I have just set out.
Greg Hands
As we have heard, amendment 10 intends to prevent the clause 2 power from being used to implement agreements that do not comply with existing international obligations on human rights, the environment and labour rights. Let me be absolutely clear: our continuity programme is coherent with existing international obligations as it seeks to replicate existing EU agreements, which are, of course, fully compliant with such obligations. By transitioning these agreements, we reaffirm the UK’s commitment to those international obligations.
I have said it before, but I am happy to repeat it as often as the Committee would like: we seek to provide certainty and stability in trading relationships for UK businesses and consumers, not to modify or dilute standards. None of the 20 agreements already signed has reduced EU standards in any area. Committee members can consult the parliamentary reports that we publish alongside continuity agreements detailing any changes required to transition the agreement to the UK context. These will confirm precisely what I have said. We will continue to publish these reports for remaining continuity agreements, so that hon. Members can satisfy themselves that we have not defaulted on our commitment not to reduce standards. That includes the agreement with Vietnam.
I am happy to look into the specific complaints that some Opposition Members have made on labour rights, but it would be helpful for me to understand whether they are in favour of the EU-Vietnam agreement. That was not really clear to me. The Opposition keep wanting to have their cake and eat it, saying that they like EU agreements but then trying to pick holes in them and saying that we should not roll them over because of some of the arrangements within them. The EU-Vietnam agreement is scheduled to come into effect on 1 August, so UK businesses will be able to take advantage of that agreement from 1 August.
As the Prime Minister outlined in his Greenwich speech, the UK has a strong history of protecting human rights and promoting our values globally. We will continue to encourage all states to uphold international human rights obligations. The hon. Member for Harrow West asked for examples of primary EU law that will be transitioned as a result of using these powers. To be clear, we intend to use the powers only for a limited number of obligations, most principally in relation to fully implementing conformity assessments and procurement matters in domestic law via secondary legislation.
To be clear, the human rights commitments in the joint statement that we made with South Korea do not enable the suspension of any of those human rights dialogues that are under way. The Colombia agreement, which is part of the EU-Andean agreement that has also been signed, has seen no weakening of labour rights; there have been some technical changes to that agreement, but none relating to labour rights, so far as I am aware. The continuity agreements signed have not changed those in any way.
The hon. Member for Warrington North mentioned action against the far right and other hate groups preaching violence. I can tell her that the Government are wholly united in our approach to making sure that that is exactly the case, but it is worth reminding ourselves that we are talking about existing trade agreements with those counterparts, not a new agreement as such.
The hon. Member for Putney talked about the commitment to the sustainable development goals. The Government are absolutely committed to the SDGs, but again we are talking about existing trade agreements. I will plough on, because we do not have an awful lot of time. The hon. Lady and her colleagues need to work out what it is that they want. On the one hand they seem to strongly support the EU and perhaps want the UK to rejoin, but on the other she seems, by the sound of it, to oppose the detail of virtually every one of the EU’s trade agreements. Opposition Members need to get clear in their minds whether they are pro-EU—in which case they might be in favour of the EU’s trade agreements—or anti-EU. That was not clear to me at all.
The hon. Member for Putney rightly says that human rights clauses in international trade deals are very important. We agree, which is why we are preserving their effects in these roll-over agreements. The Government have been clear that any future trade deals must work for UK consumers and businesses, upholding our high regulatory standards. The UK will remain committed to world-class environmental product and labour standards. We will not weaken these protections after the transition period ends. Our continuity agreements will safeguard, not undermine, our international obligations. I therefore ask the hon. Member for Sefton Central to withdraw his amendment.
Gareth Thomas
I had not intended to speak and I will be brief. I wish to amplify and expand on the concern that I raised in an intervention on my hon. Friend the Member for Sefton Central regarding the continuity agreements for Kenya and Ghana. If those agreements are got wrong, they threaten the progress that both countries have made, and potentially that of other countries around them, in trying to achieve the sustainable development goals.
The concern is that what is currently being put to those countries by UK negotiators is a continuity agreement that requires them to sign up to something that risks regional integration in east and west Africa. Kenya and Ghana seek to work closely with the least developed countries that surround them as part of the trading blocs. Those LDCs want to continue to be part of a preference scheme, so Kenya and Ghana are caught in a trap between their desire to work very closely with their neighbouring countries and wanting to ensure that they can still trade on very good terms with the UK in, for example, bananas and cocoa.
Why is working with regional blocs so important? Because it is trade at a regional level in Africa that is likely to lead to faster development, more jobs being created, and, crucially, the development of more manufacturing jobs at a local level. When a no deal was about the happen last October, the UK Government proposed a transitional protection mechanism that would have included Ghana, Kenya and others in a similar position.
Greg Hands
I should apologise; I had not realised that the hon. Gentleman wanted to intervene on me on this issue. I undertake to write to him about Ghana and Kenya, and to copy in members of the Committee. The situation involving both those counterparts is complicated and would be best served not by a debate about this particular amendment, but more broadly were I to contact the hon. Gentleman.
Gareth Thomas
The Minister has made a gracious intervention and offer, which I am happy to accept. On that basis, I am happy to conclude my speech.
Bill Esterson
We had an excellent contribution from my hon. Friend the Member for Warrington North, whose points about safeguards were well made. It is entirely common sense that we support the provisions of the amendment, but they need to be explicit. The Minister confirmed why in his remarks. The use of trade provisions to promote online hate is, sadly, all too familiar to my hon. Friend and to many other people in this country, including some in this Parliament. She described that extremely well.
My hon. Friend the Member for Putney rightly made the case for the sustainable development goals and ensuring that we deliver on them. The fact is that they are tied directly to trade. That point was reinforced by my hon. Friend the Member for Harrow West, who spoke on the importance of the Kenya and Ghana continuity agreements and the impact that they have on the LDCs. It reminded me of the reference, which I quoted in my remarks, that my hon. Friend the Member for Bradford South made to Paul Collier’s book “The Bottom Billion”. I am glad that the Minister has offered to write to members of the Committee about those concerns.
I think the Minister used the word “replicate” regarding how the agreements are carried over from the EU. Unfortunately, the Bill allows for dilution and for weaknesses, such as those that I set out in the South Korean and Colombian agreements, to continue. Such weaknesses will not be addressed, and the question is: if not now, when? In the case of South Korea and Colombia, it is: if not then, when? Of course, we will have another go at South Korea, because it wants to renegotiate what has been passed already.
I am afraid that the Minister’s points about Colombia rather miss the point. The point I made, in reference to the International Trade Union Confederation report from last year, is that it is the most dangerous country in the world for workers. We cannot simply accept continuity without doing something about that situation. Such things need to be dealt with in international trade, as well as through the Foreign Office and other mechanisms of Government; otherwise the abuses will continue.
Bill Esterson
What is interesting about that intervention is that the hon. Member is right to say there are prosecutions above those thresholds, because it is illegal to cross them. However, US producers are legally allowed up to those thresholds, which is one of the reasons why food poisoning is such a problem in the United States. The difference between the United States, the EU and the UK is that we do not allow any of them. We have zero thresholds in this country, and I want that to continue. I am sure that everybody in the Committee wants that to continue, but unless we take action to provide safeguards in the event of international trade negotiations, there is a threat that such changes can be implemented.
We heard oral evidence from the NFU and have received written evidence from the RSPCA and the British Poultry Council to back up what I have just said. British and European standards are the highest in the world.
Gareth Thomas
Is not the broader significance of the intervention by the hon. Member for North East Derbyshire, when he asked whether the Labour party wants a mature and open discussion about trade, that we absolutely do want that? It is his ministerial colleagues and his Government who are preventing that from happening by denying a proper scrutiny process of future free trade agreements, including with the US.
Bill Esterson
A number of times, my hon. Friend has effectively reminded the Committee, in response to interventions from Government Members, that scrutiny will ensure that we do not have those sorts of problems. They would do well to take on board his advice and expertise, which is driven by his experience in government of looking at such matters. I daresay that when the Bill goes to the Lords, their Lordships will do just that. We might end with some changes to the Bill, even if we do not make any changes in Committee or on Report in the Commons.
We would do well to look at the evidence that was given to us. We would do well to look at what was said during the proceedings on the Agriculture Bill. We would do well to remember that some Government Members were led to believe that there would be an amendment to the Trade Bill that gave protections against the sorts of problems that I have just set out. That is why we have tabled an amendment later in proceedings to ensure that we deliver exactly that.
For now, the Paymaster General wants to leave it to the consumer. I want to ensure that the consumer is not put in a difficult position because, whereas in this country and in the EU we require labelling on meat about where it was hatched, reared and slaughtered, the US repealed similar legislation in 2015. If we do not want to have problems over the safety of our food—I will mention GM and some of the problems with vegetables as well—I suggest we attach an amendment such as this one to the Bill, or do as Ministers told their hon. Friends on the Agriculture Bill, and pass that amendment when we get there, probably, on Thursday.
Gareth Thomas
I beg to move amendment 14, in clause 2, page 2, leave out lines 27 and 28.
The amendment is designed to remove the Henry VIII powers from the Bill. In its write up of the Trade Bill, Linklaters noted that constitutionally, the Government are already able to sign and ratify trade agreements with minimal reference to Parliament. The Trade Bill is designed to shortcut this process and to authorise the Government to implement the new agreements directly, by Executive act. To help them to do that, the Government seek to use Henry VIII powers to enable them to amend various bits of EU legislation, as they think appropriate, using regulations.
Liberty and others have argued that that represents a fundamental breach of Parliamentary sovereignty. The Committee has already debated the considerable weaknesses in the Bill in terms of opportunities for scrutiny. It is true that in comparison with the previous Trade Bill, Ministers have made a minor concession and agreed to the use of the affirmative process, but we can see no reason for the scale of the power grab represented by the Henry VIII powers in subsection (6)(a), and our amendment seeks to take them out.
Greg Hands
I will now address amendment 14. As the hon. Gentleman has pointed out, the amendment would remove the power to modify direct principal EU legislation, or primary legislation that is retained EU law, in order to implement obligations arising from continuity agreements.
It is important for Members to understand that without this power, we would, unfortunately, be unable to implement our obligations and we would risk being in breach of international law. It would also mean that our agreements were inoperable, adversely impacting upon UK businesses and consumers. I feel reasonably sure, Sir Graham, that that is not something that any Member of this Committee would support.
In addition, not only is this power necessary, but it is proportionate and constrained, because it only allows for the amendment of primary legislation that is retained EU law. Since trade continuity agreements will have been implemented substantially through EU law, the power is necessary to implement any technical changes that keep the agreements operable beyond the end of the transition period.
The Government have constrained the power as much as possible while ensuring that it is still capable of delivering continuity in our current trading relationships, which benefit businesses and consumers in every constituency represented by members of this Committee. To provide reassurance to Parliament, we have added a five-year sunset provision, which we will turn to shortly, and any regulations made under the clause 2 power will be subject to the affirmative procedure.
I ask Members not to take my word for it, but to take the word of the Delegated Powers and Regulatory Reform Committee, who raised no issues with the delegated powers in this Bill, gave it a clean bill of health and praised the introduction of the draft affirmative procedure for any regulations made. I hope that, in the light of the explanation that I have given, the Committee is reassured that not only is this power necessary, but it is proportionate and constrained. As such, I ask the hon. Gentleman to withdraw the amendment.
Gareth Thomas
I do not intend to press the matter to a vote, in the interests of time. I am not convinced by the Government’s argument, and we may return to the matter at Report stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stewart Hosie
I beg to move amendment 8, in clause 2, page 2, line 33, at end insert—
“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.
(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.
(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.”
This amendment would ensure that the consent of a devolved government is required for regulations under section 2(1) if those regulations contain matters which are within the remit of the devolved government.
Gareth Thomas
New clause 16 would put on the face of the Bill a joint ministerial committee, and give it powers to discuss international trade issues with the devolved Administrations. The Labour party brought the devolution settlements into effect. It has continued to champion the rights of the people of Wales, Scotland and Northern Ireland, through the devolved Administrations, to use to good effect the rights and powers devolved to them under the settlements.
In the new world, post-Brexit, we need the devolution settlements to be slightly updated to reflect the significance of the international trade agreements that will be negotiated. Putting into statute the joint ministerial committee and effectively establishing a ministerial forum for international trade seems to us to be the most sensible way to lock in proper consultation between Whitehall and each of the devolved Administrations.
One area of potential future negotiations where discussions on trade at joint ministerial committee level might well be needed is that of geographical indications, given the significance to the Welsh economy of Welsh lamb, for example, and to the Scottish economy of Scottish salmon and Scotch whisky. One recognises that the Administrations will understandably want to make sure that those industries are properly taken into account in future trade agreements, given the considerable number of jobs dependent on them in those countries.
GIs raise a further issue—the question of who has the power to legislate on them during the implementation of a trade agreement. My understanding is that that remains an issue. The most recent Cabinet Office revised framework analysis, published in April last year, stated that Ministers believed there were four areas that were reserved but subject to continued discussion. Two of those seem to me to have strong relevance to international trade. One is state aid and one is food GIs. If the question of who has power to legislate on those issues has not yet been fully resolved, it is surely all the more important to establish a formal forum for serious discussions between Ministers in the devolved Administrations and the UK Government on what should or should not be in a future trade agreement.
I have some sympathy with the argument that the hon. Member for Dundee East has advanced, but one of the problems with his amendment was encapsulated in an exchange in the fourth sitting of the Committee on the previous Trade Bill, between the former Trade Minister Mark Prisk and the then Trade spokesman for the hon. Gentleman’s party—I believe that that was the hon. Member for Livingston (Hannah Bardell). In column 116 of that sitting, the then Minister asked whether the hon. Lady thought that Welsh Ministers should have the power to veto a deal that was hugely in the interest of Scottish whisky. As a result, I gently suggest to the hon. Member for Dundee East that when we seek to press new clause 16 to a vote—perhaps on Thursday—he may be open to supporting that as a sensible route to managing the inevitable slightly differing priorities of each of the devolved Administrations and, potentially, the UK Government too.
Trade Bill (Seventh sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Department Debates - View all Gareth Thomas's debates with the Department for International Trade
Trade Bill (Seventh sitting)
Gareth Thomas ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
The Chair
Good morning, everyone. Before we start, I remind everyone that the Hansard Reporters would be grateful if Members emailed electronic copies of their speaking notes to hansardnotes@parliament.uk.
I am aware that the room is very hot. Please do not hesitate to remove your jackets. We are getting somebody to come and open the windows. Please bear with us and try to make yourselves as comfortable as possible.
Clause 2
Implementation of international trade agreements
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 16, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of the period of five years beginning with IP completion day.”
This amendment would bar any extension to the five-year window for making regulations to implement EU rollover agreements.
The Chair
With this it will be convenient to discuss the following:
Amendment 17, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—
“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—
(a) the period of five years beginning with IP completion day (“the initial five year period”), or
(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (8).
(8) Regulations under subsection (7)(b) may not extend the initial five year period or any subsequent period beyond the day which falls ten years after IP completion day.”
This amendment would limit any extension of the window to a maximum of ten years.
Amendment 20, in clause 2, page 2, line 35, leave out “five” and insert “three”.
Amendment 21, in clause 2, page 2, line 36, leave out “five” and insert “three”.
Amendment 22, in clause 2, page 2, line 39, leave out “five” and insert “three”.
Amendment 23, in clause 2, page 2, line 41, leave out “five” and insert “three”.
Gareth Thomas
It is good to have you back in the Chair, Mrs Cummins. On Thursday afternoon, when you were not with us, we had one or two moments of light. The hon. Member for Stafford clearly began to feel nervous about whether the Bill was properly drafted, asking me to go into further detail about what was wrong with the Bill. The Minister helpfully confirmed that Command Papers published by his Department are not worth the paper they are written on once 12 months have passed and that there is absolutely no guarantee that the House will get either a debate or a vote on any future UK-US deal.
It is therefore a particular pleasure to have the chance to return to the subject of continuity or roll-over agreements and to speak to these amendments. As you will remember, Mrs Cummins, the Minister and his colleagues have presented the Bill as being purely about rolling over agreements already long since negotiated with the European Union. Effectively, they say, it is just a matter of changing “EU” to “UK”, putting a comma in a different place, dotting the odd i or crossing the odd t, or making some other little tweak—in practice, minor changes to deals that have already been done. Indeed, so confident was the former Secretary of State for International Trade about that, that he committed to get all 40 trade agreements with the European Union rolled over into UK-specific trade deals by March last year.
Imagine our surprise on seeing in the Bill clause 2(7), which suggests that a period of five years might be needed after implementation day, with the option to extend by another five years, to conclude those roll-over agreements. Bear in mind that we were told that deals such as the South Korea, Japan and Canada deals were going to be easy to complete and should be done by Brexit day—certainly, we were led to believe, by implementation day.
Matt Western (Warwick and Leamington) (Lab)
To elaborate on that very simple point, I recall very well that Lord Price even tweeted about this—it would be just a simple cut-and-paste job. We have all been misled, haven’t we?
Gareth Thomas
I am relatively new to the Trade Bill and am only catching up with the discussions that my hon. Friend and others have had about these continuity agreements. Something odd certainly seems to have happened. It is true that the Minister has managed to get a deal done with the Faroe Islands.
The Minister for Trade Policy (Greg Hands)
On a point of order, Mrs Cummins. I think that the hon. Member for Warwick and Leamington just accused Lord Price, a Member of the other House, of misleading people. I do not think that that is a permissible term to use in our debates. I invite the hon. Gentleman to withdraw that term.
Matt Western
I will certainly withdraw it; I recall that I used the word, now that the Minister mentions it. What I was trying to say was that Lord Price was suggesting that there was a simple procedure of cutting and pasting, and that was clearly not the case.
Gareth Thomas
It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.
Bill Esterson (Sefton Central) (Lab)
The point about Lord Price is that what he said has turned out not to be true; that is the reality. My hon. Friend mentions the agreements that have been concluded, but the one with South Korea, for example, is only a temporary agreement with notice for a renegotiation. Listening to what my hon. Friend is saying, I wonder whether the Government have reverted to the five-year period because they realise that they would quite like these provisions still to be in place for the South Korea deal when it comes back for the renegotiation.
Gareth Thomas
If my hon. Friend will forgive me, I will come to South Korea in due course.
The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.
The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:
“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.
Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:
“Turkey…probably will not be carried over, regardless of the Bill.”
He went on to say that the Bill would allow the continuity and trade agreement to happen,
“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”
He went on to underline a similarly important point:
“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]
We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.
Let us take the UK-Japan continuity agreement. Again, we are led to believe that this is simply a matter of two very close allies sitting down together briefly and changing the words “EU-Japan” to “UK-Japan”, as well as perhaps changing the odd comma here or there, and dotting the odd i and crossing the odd t. In practice, however, something very different appears to be taking place. Just on Tuesday, the Financial Times carried a story saying that Japanese negotiators have given Britain an ultimatum: “Do the deal with us in six weeks, or we will not be able to get it through our Parliament and there will be no continuity trade agreement in place by 31 December.”
Bear in mind that Professor Winters, in his evidence to the Committee on Tuesday 16 June, at Question 31, said in response to the probing of my hon. Friend the Member for Sefton Central that
“with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 26, Q31.]
Again, when the Minister gets to his feet, it would be helpful if he gave us a little more detail on the substance of what is going on in those negotiations. I thought we were told that when we left the European Union, we would stop being a rule taker any longer, and here it appears that Japanese negotiators are telling us: “Do a deal or you don’t get your trade agreement in time.”
Matt Western
My hon. Friend is making an extremely important point. Hiroshi Matsuura, the Japanese lead negotiator, is saying that their only focus for the next six weeks is the UK, whereas the UK is trying to negotiate with the US, the EU, Australia, New Zealand and so on. Yet we do not even have the full complement of Department for International Trade trade negotiators in the policy group: we are about 10% down on where we should be.
Gareth Thomas
My hon. Friend is right. Let us bear in mind another point before I come on to Canada. Negotiations are going on not only with the US in relation to the transatlantic partnership with the EU, but we still have not concluded a continuity trade agreement with Andorra, as I understand it. Presumably, one of the Minister’s civil servants is sitting in a room somewhere, worrying about what will be in the UK-Andorra agreement, when they could be properly deployed to trying to sort out whatever the problems are in the UK-Japan agreement. Again, I remind the Committee that we were told that that agreement would be incredibly simple to sort out. I think the Minister said it was just a continuity trade agreement or just a roll-over agreement.
Let us come to the UK-Canada talks—one of the great favourites of the Minister. He had a little fun with us, it would be fair to say, on Tuesday afternoon. Again, however, there does not seem to be any sign of the UK-Canada talks being completed by 31 December. The Minister has been at pains to sell us the great virtues of the EU-Canada deal, and presumably—I would ask him this—there will be similar virtues from a UK-Canada deal, but why is there no obvious sign of any progress towards a signing ceremony for a UK-Canada deal?
In the quote from the Canadian Government regarding why negotiations have not advanced at a more rapid pace, they made it very clear that they were waiting to see how EU-UK talks got on. One got the strong sense that Canadian negotiators are sitting out in the garden smoking a cigar and planning their holidays. They are in no rush whatever to complete a trade deal with the UK, notwithstanding the studiously unspecific comments the Secretary of State gave us at questions last Thursday about how good natured the conversations had been with whoever she had spoken to in the Canadian Government.
Bill Esterson
My hon. Friend is developing his point extremely well. I think it is fair to remind him that it is not just Canada that puts our deal with the EU ahead of its deal with us; Japan and Turkey want us to do a deal with the EU so that they can base their deal with us on the terms of trade that we have with the EU. That is a whole other set of complexities that go way beyond this being a simple matter of continuity and of changing the letters “EU” to the letters “UK”.
Gareth Thomas
Let me chide my hon. Friend for his negativity. We were told at the last general election that an oven-ready Brexit deal would come before us, with a wonderful new free trade agreement, easy to sign, with the European Union. Presumably the scepticism that I have allowed to creep into my remarks about whether the roll-over agreements will be signed by 31 December are entirely unreasonable, and the Minister will say that all the other 20, even the one with Andorra, will be done by 31 December.
I know that the South Koreans want to start completely fresh talks in about 18 months’ time, but surely that will not take five years, or 10 years to complete—or will it? I am an optimist. I take the Minister at his word. He has repeatedly said that roll-over agreements will be simply a matter of rolling over the EU agreements into UK agreements, changing some tiny details, and that they will all be done on time. One wonders, then, why we need the flexibility set out in subsection (7).
Let us remember when the previous Trade Bill was prepared and developed. It probably happened at around the time the right hon. Member for Maidenhead (Mrs May) took over as Prime Minister. Members of the Committee will remember that she decided to sack George Osborne, the then Chancellor of the Exchequer, for gross incompetence. One can imagine that the Cabinet Secretary got on the phone to the permanent secretary at the Department for International Trade and said, “There’s good news and there’s bad news. The good news is that the man who introduced austerity, destroyed our economy and damaged public services has finally left the Government. The bad news is that one of his chief cheerleaders is moving into your Department. Whatever you do, given the way in which they have messed up the economy, don’t let them mess up trade agreements. Write into the Bill a bit of extra time—five or 10 years, or perhaps even longer—so that we can get these trade agreements done.” The Minister may not share my assessment of how this provision got written into the Bill.
Bill Esterson
I have to take the opportunity to congratulate my hon. Friend on the moment in our deliberations. The lines he just delivered cannot be improved on, and I would not wish to do so. Does he remember Nick Ashton-Hart, in giving evidence to us this time, reminding us of his evidence to us last time that trade agreements inevitably take a lot longer than expected, and that trade agreements between parties fall in favour of the bigger party? We are now a smaller party than when, as part of the EU, we made agreements with all the countries he mentions. That is one reason why these things will take a lot longer—those countries want to renegotiate a better deal, which they think they can get because of the power they have.
Gareth Thomas
My hon. Friend has always grounded his remarks in reality. Let us remember that Conservative Ministers and Members have always wanted to present trade negotiations as a Christmas sale, where one just turns up and gets a shedload of lovely bargains. They have not, as yet, been open and honest with the British people about the trade-offs that trade negotiations inevitably bring, on which—I suspect this afternoon—more anon.
I gently suggest to my hon. Friend that we are likely to hear the Minister, in his wind-up speech, chastising us again for our lack of belief in the calibre of the Secretary of State himself and the Department to complete these UK-specific trade agreements. If the Committee remembers when the last Trade Bill was discussed, so confident were the previous ministerial team that this power was actually not quite as necessary as first appeared, they agreed to reduce the sunset period from five years to three years. One can only assume that the Cabinet Secretary got back on the phone after the current Prime Minister was selected and said, “I’m really sorry to bring you bad news, but one of the chief acolytes of the little-lamented George Osborne is back in your Department—”
Maria Caulfield (Lewes) (Con)
On a point of order, Mrs Cummins. While this is very entertaining, I am quite conscious that we are still not even past considering clause 2. We must get through the whole of the rest of the Bill this afternoon—there are 12 more clauses. May I ask your advice, Mrs Cummins, on how we can get through that when speeches are not necessarily referring to the Bill itself?
The Chair
I hear that point of order, and I am sure that Mr Thomas also heard it. I encourage him to perhaps drift closer towards the subject of the amendment.
Gareth Thomas
As ever, Mrs Cummins, I am grateful for your guidance. It will come as no surprise to you or the Committee that Labour Members are disappointed that the Minister has not at least stuck to the terms of the deal that he and the then Minister of State made with the hon. Member for Huntingdon (Mr Djanogly) to reduce the sunset clause from five years to three years, which is specifically relevant to amendments 20 to 23—just to help the Government Whip.
Again, one wonders if, by that point, there was growing fear in the Department that, despite the rhetoric of the Minister, there would be a series of challenges in completing these roll-over agreements. It is a surprise to us to see that sunset provision not included. What my hon. Friends and I have done—in a very generous way, I think—is provide a menu of options to the Minister to demonstrate his and his Department’s faith in their ability to complete these roll-over agreements. Surely, if it is that easy to get the roll-over agreements completed, they will not need to go beyond five years, which is the purpose of amendment 16. Perhaps, if they are feeling a little nervous, they might want to go for amendment 17 and have a limit of 10 years on the face of the Bill. If they are feeling very nervous that they will not get negotiations done with South Korea, Canada, Andorra, Japan or Turkey by the end of the implementation period on 31 December, perhaps they would want to put back into the Bill their own amendments, as encapsulated in amendments 20 to 23.
In our generosity, we have retabled the amendments 16 and 17 that were tabled to the previous Trade Bill in the names of my hon. Friend the Member for Brent North (Barry Gardiner) and my hon. Friend the Member for Sefton Central and others. We did that to help the Minister demonstrate his confidence in his ability to get all the trade agreements done, with his own wording on a three-year as opposed to a five-year sunset clause.
It might be worth, particularly for the Government Whip’s benefit—thinking about rebellions—to remember what the hon. Member for Huntingdon said. He pushed Ministers to go further to limit the powers in the Bill. He pushed them hard on Second Reading and, clearly, in private negotiations, to table their own amendments on Report, to limit the amount of overreach and potential abuse of the current weak scrutiny arrangements for trade agreements. On Report two years ago the hon. Gentleman advanced an entirely plausible argument, and talked about the possibility of a country where there is an EU trade agreement saying to us:
“‘Yes, we agree that you can roll over, but let’s face it, you are a market of only 50 million people rather than 500 million, so we’ll agree to roll over, but only on condition that we also get 50,000 visas a year.’” —[Official Report, 17 July 2018; Vol. 645, c. 274.]
Under the present Bill, that trade agreement could be pushed through the House of Commons with only a 17-member Committee talking for 90 minutes. That is hardly the sort of robust parliamentary scrutiny that such a trade agreement would deserve. On Second Reading of the present Bill on 20 May the hon. Member for Huntingdon repeated his criticism at column 621 and noted that not only might visas be an issue with respect to trade agreements; the country that wanted to roll over an agreement with us might also want military or intelligence provisions to be added in as part of a package.
Similarly, any slightly amended deals in five or three years’ time could also be covered, and could be used to implement such trade agreements with other wide-ranging implications and with minimal levels of scrutiny. So surely it is a sensible step to limit the Bill’s ability to help Ministers to bypass parliamentary scrutiny of the trade agreements they conclude, even in the small way that Ministers have previously advanced themselves of reducing the sunset period from five years to three years. If they cannot face the embarrassment of backing an amendment that was first tabled by my hon. Friend the Member for Brent North, perhaps they will show a little courage and back the amendments that they brought forward as a result of a deal with Tory Back-Benchers. If they do not vote for amendments 20 to 23, it will be further evidence that when Tory MPs do a deal with Ministers they cannot rely on it until it is written on the face of legislation.
The further we get from the point when the EU signed a deal with a third country, the more likely, surely, a UK-specific deal is to be significantly different from the deal that the EU negotiated. It is true, as my hon. Friend the Member for Sefton Central said, that South Korea has agreed a continuity deal, but only on the proviso that a new deal would be properly negotiated in 18 months’ time. The further away from the signing of the EU-South Korea deal and the UK-South Korea continuity deal, the more likely it is that the new deal will be very different. Therefore, more parliamentary scrutiny—even the limited parliamentary scrutiny that the Constitutional Reform and Governance Act 2010 provides—will be merited. Limiting the length of time that the Bill can be used to push that deal through with the minimal levels of scrutiny as it allows is even more necessary.
Gareth Thomas
Will the Minister support our amendment to reduce the sunset period from five years to three years, as his own Government did in the previous Bill, or is he determined to reject that suggestion?
Greg Hands
I have just explained that we think that five years, not three, is the appropriate time, so we will vote against the hon. Member’s amendment if he has the audacity to push it. Given that the fundamental premise is incorrect, I would be surprised if he were to push it to a vote, because it is based on a misunderstanding of what the power is all about.
The DPRRC report did not indicate any concerns about the Government retaining the power to renew this clause. Amendment 17 proposes to render the clause renewable only once and for not more than a period of 10 years after the end of the transition period, but that is unnecessary. The clause can be extended only with agreement from both Houses of Parliament and only for a period of up to five years at a time. If Parliament judges that our use of the sunset clause has not been appropriate, it has the power to vote against renewal. As I have stressed before, without the ability to renew the clause, we will not have the power to ensure that signed continuity agreements remain operable, which risks the UK’s ability to fulfil its international obligations. If we do not have this power, we will need to put in place other powers. We should not do tomorrow what we can do today.
Amendments 20 to 23 propose to shorten the sunset period from five to three years. I have already explained why we need the power and the changes the power would make. We believe that a five-year period strikes the right balance between flexibility of negotiations and constraints placed on the power. Our signed continuity agreements are evidence that this is a limited, technical exercise to replicate the effects of existing obligations. Seeking parliamentary permission to renew this capability every three years, rather than five, would be disproportionate and places an unnecessary burden on parliamentary time.
I repeat that the amendments, or at least the description of them, are based on a fundamental misunderstanding. The five years are not extra negotiating time. They allow technical changes to regulations on an ongoing basis, to keep operable agreements that have already been signed. I hope that that reassures the Committee, and I ask the hon. Member for Harrow West to withdraw the amendment.
Gareth Thomas
I enjoyed very much the answer that the Minister provided. In particular, it is a relief to hear that the Secretary of State has finally got round to launching negotiations with Turkey. I hope that those negotiations will be completed by 31 December, given the huge and dramatic impact that it could have on jobs and steel businesses in the UK. I gently remind the Minister of the considerable scepticism we heard from representatives of UK Steel that that would be achieved. It would be interesting to hear later in our proceedings whether Ministers have any sort of contingency plan for the steel industry, if negotiations cannot be completed in time to get a UK-Turkey deal through.
Gareth Thomas
I rise to move new clause 18 in my name and that of my hon. Friends, and I hope to say a few words about new clause 22. Clause 2 gives Ministers the authority to make any regulations they consider appropriate for the purpose of implementing an international trade agreement, including regulations that make provision for
“modifying…primary legislation that is retained EU law”.
We have had representations suggesting that “retained EU law” appears to include a very wide range of primary legislation that has an impact, potentially, on measures to improve equality in this country, not least the Equality Act 2010 and the Modern Slavery Act 2015. At the moment, there do not appear to be safeguards on the face of the Bill to prevent Ministers from using the power in clause 2 to erode previous rights on equalities granted by Parliament.
That excellent organisation Liberty has provided an example to the Committee, to give a little colour to this justified concern. The Government could in theory
“reach an agreement with a foreign state on the provision of services, such as transport, and”
make
“changes to the Equality Act”.
That
“could include removing the duty on service providers to make reasonable adjustments for people with disabilities, making access to transport more difficult for 1 in 5 of the UK’s population.”
If such a power were necessary at all, it is surely vital that safeguards are introduced in the Bill to ensure that human rights and equality laws passed by Parliament cannot be amended by Ministers whose key priority is to get a series of trade agreements signed off and locked into law. The way in which the Bill has been drafted does not include any restrictions on the use of delegated powers, as we touched on in a previous discussion.
As a result of those concerns, Members of the other place in particular, as well as a number of Members in this House, raised those points with Ministers. That led to what we Opposition Members thought was a very sensible amendment, tabled by the noble Baroness Fairhead, then a Minister of State in the Department, for the Government on Report in the House of Lords. I assume that she no longer fits the ideological bent of the current Government, and she is no longer there, which may explain why the amendment is no longer in the Bill. It seems to me that that is one further example of how this Bill is even worse in terms of parliamentary scrutiny than the Bill that had completed all its initial Commons and Lords stages in the last Parliament, only to be ditched by the Government.
According to the official record, the Government apparently worked very closely with the Equality and Human Rights Commission to produce the amendment that the Government originally tabled and that we are re-tabling, acknowledging that although they were not anticipating any need to amend equalities legislation, there was a possibility of the type of example that Liberty has advanced to us, and which I have given to the Committee: that trade agreements could potentially weaken protection against unlawful discrimination or lead to the diminution of equality rights.
The new clause provides for a ministerial statement to be made before any regulations are laid to implement a continuity trade agreement. The statement would outline whether those regulations modifying the provisions of the Equality Act 2006 and the Equality Act 2010 are set to happen. That provision was supposed to be in addition to the reports that Parliament would receive setting out the significant differences between continuity agreements and the original agreements. Given that those reports are also no longer guaranteed, it is a further indication that scrutiny—already poor of these trade agreements in a number of ways—is set to get even worse, unless Ministers are willing to put this sensible new clause into the Bill.
When she moved her amendment, which I read it again for the benefit of Members, Baroness Fairhead said:
“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]
What are we to believe now that it is not in the Bill? Inevitably, it is difficult not to feel that the Government do not want to be quite as transparent as they once claimed with Parliament, businesses and the general public about the so-called continuity trade programme. It is therefore not surprising that one comes back to the words of Professor Winters talking about the feedback he had had on how UK-Japan negotiations were going. He was very clear that they were being “studiously” vague. I once again urge Ministers, even at this late stage, to accept new clause 18.
New clause 22 would lock in the need for the consent of both Houses of Parliament, the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly before any trade agreement could be agreed. We on this side of the House have considerable sympathy with the idea that both Houses of Parliament should be required to approve any trade treaty before it takes legal effect. We think that the people of Wales, Scotland and Northern Ireland have as much right as the people of England to expect a say through their representatives in this House on whether trade agreements should be signed into law. We are clear, too, that the devolved Administrations must be properly consulted. Indeed, with new clause 16, which we will no doubt come to vote on this afternoon, we want to lock into law the guaranteed rights of the devolved Administrations to consultation.
Given the significance of trade agreements to the people of Wales, Scotland and Northern Ireland, I can well understand that the Senedd, the Scottish Parliament and the Northern Ireland Executive will at times want to comment on trade matters. One can understand why those who tabled new clause 22 decided to do so in the light of the fact that Ministers have decided to vote down every attempt to improve the scrutiny arrangements for future trade agreements and the so-called continuity trade agreements—many of which, as we know only too well, are not actually set to be continuity trade agreements at all.
Let me give just one example where the Senedd in particular might have concerns about trade agreements, which might have provoked the tabling of new clause 22. The Senedd, like the Welsh Government, will probably understandably have been very concerned about the future of the Port Talbot steelworks. If we had been given more detail about the nature of the UK-Turkey negotiations, rather than the studiously vague description that the Minister read out from the Secretary of State’s Twitter feed, there might not be the concern about the future of steel in Port Talbot and elsewhere in the UK that there understandably will be following Mr Warren’s evidence to the Committee.
Gareth Thomas
One thing the Minister can confirm, surely, is whether parts produced in other European Union countries will still count towards the value of the car or other parts that are being manufactured. That diagonal and horizontal cumulation is a standard feature of the rules of origin, and it might help to give some certainty to British car and car parts manufacturers that that flexibility in rules of origin will not be lost.
Greg Hands
I thank the hon. Gentleman for that; he makes a good point. I refer him to the deal that we have negotiated with South Korea and how it reflects on those rules. That negotiation has been completed. However, here, today, it is not my job to comment on live negotiations or discussions with our counterparts.
The hon. Member for Dundee East talked rightly about sectors that are important in different parts of the UK. He made a very fair point. He talked about the white fish sector being 10 times as important to the Scottish economy overall as it is to the UK. That makes me wonder why—if I understood him correctly—his party’s policy is to rejoin the European Union, where presumably the status of the white fish sector is even smaller than the one tenth it represents in the UK. That baffled me.
It is strongly in the UK Government interest to have good relationships with the devolved authorities on trade, which is a reserved matter, a prerogative matter. None the less, regulations interact with areas that are matters of devolved competence.
It is therefore perfectly proper both for the UK Government to have good relations and discussions with the devolved authorities, and for the UK Government to interact with sectors that are larger—I do not mean to say that they are disproportionately important—for certain devolved Administrations than others. That is one reason why I have gone out of my way since rejoining the Department to have meetings—I am checking my list of engagements—about Scottish smoked salmon, and with the Scotch Whisky Association, the Scottish Beef Association and other bodies in Wales and Northern Ireland, as well as in the English regions.
Hon. Members talked about the unrestricted nature of the power, but it is not quite right to say that this is unrestricted. Any changes made are subject to the affirmative procedure, and the power is only to amend secondary legislation that is direct retained EU law, again subject to the affirmative procedure. It is not as if that is an unrestricted power.
Returning to equalities legislation, I remind colleagues of constraints in the Bill, including the fact that the affirmative procedure is required for any statutory instruments made under the power in the clause. Parliament will rightly make its voice heard on regulations made, but as the Prime Minister outlined in his Greenwich speech, the UK will always be an open, equal and fundamentally fair country. That will remain true regardless of EU membership or any other international agreement. We have not needed the EU to tell us what is appropriate in the field of equalities. For example, the EU provides a minimum of 14 weeks’ paid maternity leave, whereas Britain offers up to a year’s maternity leave, 39 weeks of which are paid, and the option to convert it to shared parental leave. Moreover, UK workers can get statutory sick pay for up to 28 weeks, whereas the EU has no minimum sick leave or sick pay legislation.
Promoting respect for British values, including equality, the rule of law and human rights, is and will remain a core part of our international diplomacy. That is what our continuity programme provides, alongside certainty to business and consumers. It is not, and never will be, about undermining equalities legislation.
I turn to new clause 22, tabled by Plaid Cymru Members. For the benefit of Members who have not sat on a Bill Committee before, it is entirely possible for those who are not members of the Committee to table an amendment—I would not recommend that course of action for Government Members—as we see the hon. Member for Arfon (Hywel Williams) and his colleagues have done. On Tuesday, in a debate on similar issues, I set out that it is an essential principle of the UK constitution that the negotiation of international trade agreements is a prerogative power of the UK Government. The prerogative power serves a crucial role in ensuring that the UK Government can speak with a single voice under international law, providing certainty to our negotiating partners.
Of course, international negotiations are a reserved matter under the devolution settlements—an area in which the UK acts on behalf of all the nations of the UK. These important principles are complemented by the UK’s dualist approach to international law, which provides that international treaties cannot of themselves make changes to domestic law—I think we will return to that this afternoon. This approach ensures that where our agreements require changes to UK domestic law, the UK Parliament will scrutinise and pass that legislation in the normal way. Where that legislation is made by the devolved Governments, the devolved legislatures fulfil that role. It is right that Parliament and the devolved legislatures should have that role, which is why we have provided that regulations made under clause 2 will be subject to the affirmative procedure.
We have also committed ourselves to not normally using the clause 2 power to legislate in devolved areas without the consent of the relevant devolved Administration, and never without consulting them. Combined with the scrutiny mechanisms in the Constitutional Reform and Governance Act 2010, which the hon. Member for Harrow West was so enthusiastic about 10 years ago, those procedures will ensure that the UK Parliament can see exactly what we have negotiated, and if it does not agree with it, can take steps to prevent the Government from implementing and ratifying the deal. There are therefore already rigorous checks and balances on the Government’s power to negotiate and ratify a new agreement.
By giving Parliament an automatic veto over trade agreements, the new clause would cut across those procedures and undermine the important constitutional principle that it is for the Executive to negotiate and enter into deals, and for Parliament to scrutinise them. The new clause would also give the devolved legislatures an automatic veto over our agreement, which would be wholly inappropriate given that this is a reserved matter. On a practical level, a veto for the devolved legislatures would also lead to a situation in which one part of the UK could prevent the rest from benefiting from an agreement.
The Government recognise the important role that the devolved Administrations and the UK Parliament can and should play in our trade agreements, and I welcome the opportunity to put that on the record again. My Department works closely, as I have outlined, with the devolved Administrations and Parliament to deliver trade policy and trade agreements that reflect the interests of the UK as a whole, but we should do so in accordance with the long-standing principles enshrined in our constitution, rather than seeking to undermine them. I hope that reassures the Committee. I ask hon. Members not to press their new clauses, and to agree to clause 2 standing part of the Bill.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Maria Caulfield.)
Trade Bill (Eighth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Department Debates - View all Gareth Thomas's debates with the Department for International Trade
Trade Bill (Eighth sitting)
Gareth Thomas ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 18, in schedule 2, page 11, line 26, leave out from “section 1(1)” to the end of line 27 and insert
“may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
This amendment would specify an affirmative resolution procedure for regulations under section 1(1).
I am grateful for the opportunity to speak to the amendment in my name and those of my hon. Friends. Let me make it clear that we have tabled this amendment recognising that the affirmative resolution procedure is not a perfect process by any means. It is, nevertheless, better than the annulment procedure, which Ministers currently have locked into the Bill. An affirmative process is vital, as without it the Government will have carte blanche to introduce regulations to implement the obligations arising from our independent membership of the GPA—the agreement on government procurement—without the slightest hint of anything resembling parliamentary scrutiny.
The negative resolution procedure the Government propose for regulations under clause 1(1) is the least rigorous of all the parliamentary procedures for scrutiny available to the House. The main point of the negative resolution procedure is to allow the Government to have their way without any need to bother with parliamentary democracy. Indeed, I am told that the last time a negative instrument was successfully annulled in the House of Commons was the Paraffin (Maximum Retail Prices) (Revocation) (No. 3) Order 1979.
International treaties cannot be easily repealed, but domestic legislation can be repealed much more easily. If ever there were an example of secondary legislation crying out for proper parliamentary scrutiny and oversight, surely this is it. I remind the Committee of the evidence we heard from Rosa Crawford of the Trades Union Congress. In response to Question 70 from my hon. Friend the Member for Sefton Central, she pointed out:
“The GPA as it stands has no requirement for members to promote social standards in their tendering process.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 49, Q70.]
The TUC is worried that, once we leave any kind of relationship with the European Union and no longer have to rely on the EU’s contract regulations, the UK Government may well roll back on those commitments to promote social standards through the tendering process that are currently locked into our law by EU directives.
Opposition Members remember—indeed, Rosa Crawford reminded us all as a Committee—that the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights on working time and agency workers, and other important protections for workers’ rights. Not surprisingly, the TUC is worried that that may well be the direction of travel with procurement regulations in the future.
It is therefore sensible to make sure we have a proper parliamentary process that allows us to explore whether, under the cover of minor technical changes to the GPA—no doubt the Minister will suggest to the Committee that that is all he intends this process for—our contract regulations and the standards associated with them are gradually being undermined and a race to the bottom on standards is under way. We consider the affirmative resolution procedure to be more appropriate than the annulment process in the Bill. However imperfect the affirmative resolution process, it at least provides Members with the possibility of a debate and a vote, and it is then of course up to us to make proper use of that opportunity. That is the spirit of amendment 18.
The Minister for Trade Policy (Greg Hands)
I begin by welcoming you to the Chair this afternoon, Sir Graham. I appreciate the concerns that there should be adequate parliamentary scrutiny of regulations made under the clause 1 power. I am satisfied that that is the case, and let me explain why.
As I have said, the power is intended to allow the UK to make technical changes—for example, to reflect new parties joining the government procurement agreement or existing parties withdrawing from it. In the case of a new or withdrawing party, it is important that the UK is able to respond quickly and flexibly. Once a new party deposits its instrument of accession, there is, under the rules of the World Trade Organisation GPA, a period of only 30 days before that accession comes into force. The UK will then be under an immediate obligation to provide that new party with guaranteed procurement opportunities covered by the GPA, and of course vice versa. If the UK failed to offer the new party this guaranteed access, we would be in breach of our GPA commitments. Equally, a party to the GPA can decide to withdraw unilaterally. When a party notifies the Committee on Government Procurement that it intends to withdraw, it will cease to be a GPA member just 60 days later. It is therefore vital that we are able to react quickly to such a notification, either to join or to withdraw.
If the power to amend UK legislation to reflect a party’s withdrawing from the GPA were subject to the affirmative resolution procedure, we might not be able to legislate in time to remove the party within the 60-day time limit. This could result in UK contracting authorities continuing to give a party that has left the GPA—companies from that country—guaranteed access to the UK’s procurement market that it is no longer entitled to have. Furthermore, the former party would have no obligation at the same time to give UK businesses reciprocal access to its procurement markets. I am confident that Members will agree on the need to regulate quickly in these instances, both practically so that UK businesses are not disadvantaged and to show good faith to the other party.
Greg Hands
The hon. Gentleman makes a fair point. In fact, accession to the GPA typically take some years, so in that sense it would have been telegraphed quite far in advance—the most recent party to join is Australia. But it would be inappropriate for us to ratify someone joining the GPA in advance of them actually depositing the papers, so although joining is a lengthy process, the actual ratification process is very short. That is the key difference in this case.
The Delegated Powers and Regulatory Reform Committee’s report on the Trade Bill 2017-19 raised no concerns, nor made any recommendations, about the use of the negative procedure in relation to this power. However, let me clear: when new parties are seeking to accede to the GPA, we will ensure that Parliament is kept informed. Parliamentary scrutiny is more effective before an accession is agreed, because that is when the views of Parliament can be taken into account.
Where a WTO member is seeking to join the GPA, it is our intention to notify Parliament, to keep the relevant Committee—in this case, the International Trade Committee—informed as the negotiations proceed, and to allow further discussion where desired. That is the right time for Parliament to be actively involved in a debate, for example, on Australia’s accession to the GPA—although the case of Australia is backward looking, of course, to when we were covered by the GPA through our EU membership. If there were such a case going forward, the right time would be during the discussions to the accession, not after the accession had been agreed.
I remind Members that there has already been parliamentary scrutiny of the UK’s market access schedules and the text of the GPA, which were laid before Parliament in line with the Constitutional Reform and Governance Act 2010. That process concluded without objection in 2019. Any further changes to the GPA, including the UK schedules prior to our accession, will again be scrutinised in line with CRAG.
I hope my comments provide reassurance to the Committee. I ask the hon. Gentleman to withdraw the amendment and commend schedule 2 to the Committee.
Gareth Thomas
I was toying with being persuaded by the Minister until the intervention from my hon. Friend the Member for Sefton Central. Given what he said about the amount of telegraphing that Ministers will have about the changes and given the scale of scrutiny provisions that were included in the last Bill come the end of Report stage in the Lords and the Commons, which have now been taken out of the current Bill, I fear that on this occasion, I need to press the amendment to a vote.
Question put, That the amendment be made.
Bill Esterson
I beg to move amendment 1, in schedule 4, page 15, leave out line 14 and insert—
“(a) a member to chair it, appointed by the Secretary of State with the consent of the International Trade Committee of the House of Commons,”.
This amendment would establish the requirement for Parliament, through the relevant committee, to give its consent to the Secretary of State’s recommendation for appointment to the Chair of the Trade Remedies Authority.
It is a pleasure to see you back for the final sitting of the Committee, Sir Graham.
I know that the Minister sometimes forgets what we said in our reasoned amendment, so in case he has forgotten again, I remind him that we recognised the desirability of—indeed, the need for—the UK to pass
“effective legislation to implement agreements”
and
“to set out the basis of a Trade Remedies Authority to deliver the new UK trade remedies framework”.
Yes, we do indeed support the creation of the Trade Remedies Authority. There it is again, for the avoidance of doubt, on the record. No doubt the Minister will claim otherwise, as he has done numerous times in the past two years.
Schedule 4 states that the Secretary of State will appoint the chair, who will in turn appoint the chief executive and non-executive members of the Trade Remedies Authority. The amendment is about how the appointment of the chair is carried out. The chair is appointed by the Secretary of State and in that process there is no recourse to Parliament or to other scrutiny of the appointment. The Secretary of State is therefore free to appoint someone in their own image, with the same political leanings and economic opinion—which is the more important point.
Indeed, although I have no idea of his politics, when Simon Walker gave evidence he gave every indication that he entirely agrees with the approach of the Secretary of State to trade remedies. I do not say that to denigrate Mr Walker. I have known him for a number of years and he is a well-travelled representative of business, who has had a number of different roles. The amendment is about not him as an individual, but the principle. It is about the opportunity to appoint someone with a particular approach to trade remedies and the appointment, in turn, of an unbalanced Trade Remedies Authority that looks only at the approach favoured by the Government.
The previous Secretary of State had advisers from Legatum and the Initiative for Free Trade. The current Secretary of State has an adviser from the Adam Smith Institute. It is clear what the main thrust of Government advice is on those matters.
Gareth Thomas
Has my hon. Friend seen the evidence from the British Ceramic Confederation, which thought there was already a very strong ideological view on tariffs, protectionism and dumping? It highlighted, for example, the recent UK global tariff announcement and suggested that the Government’s pre-eminent view was that all tariffs are protectionist.
Bill Esterson
I am familiar with the evidence that my hon. Friend cites. It reminded us that the Minister has previously said in meetings—I believe he has put it in writing, too—that experts on trade would be appointed to these roles on a non-ideological basis. Yet the evidence on how the people are appointed to the roles suggests that the Government have one single approach, which is as my hon. Friend indicated.
The British Ceramic Confederation has set out concerns that include how global tariffs have been implemented. The way in which the Government tariff schedules have been set out causes a problem for many of the confederation’s members because of the small margins involved in the industry and because even small differences in tariffs between different countries creates a difficult problem for competitiveness.
The Government’s ideological direction of travel is about supporting consumers. The Minister will probably say that the Opposition are against the consumer interest, that we do not support consumers and that we do not think they should have access to good quality low-price imports. But that misses the point. Of course consumers are one of the interests and should be supported. Of course they have every right to be included, but they are one—not the only—consideration in these matters.
Gareth Thomas
It is obviously important that we have the Trade Remedies Authority. Two industries particularly concerned to have it are steel and ceramics. Have there not been consistent concerns in the past about China and one or two other countries trying to dump steel products and ceramics into Europe for UK markets? We need someone robust enough to stand up to such practice, and perhaps only parliamentary scrutiny of that person will help tease that out.
Bill Esterson
My hon. Friend is right. We have discussed ceramics, and he has spoken in other debates about steel and how not having an international trade agreement with Turkey runs the risk, as we were told by UK Steel, of 15% tariffs being levied in one direction and creating a very uncompetitive situation in the streel industry.
However, this is a slightly different point. The point is about trade remedies and the example of steel. In the 2015 steel crisis, cheap imports of Chinese steel flooded the European market, often not of the same quality or standard, and our steel industry was in crisis. The steelworks at Redcar closed, despite the fact that it had world leading carbon capture and storage technology, which was lost for good. The international competitive advantage in that emerging technology has gone from this country, and the rest of our steel industry faced a very difficult time. There are difficult times again now, partly because of the covid crisis and because the Chinese economy has emerged more quickly. The Chinese went into it first and have come out of it first.
In the 2015 crisis, David Cameron’s Conservative Government were resistant to the use of trade defensive measures as part of the European Union. This country delayed the introduction of those measures and the lifting of the lesser duty rule, with the effect that we were very late to take the action needed. The loss of SSI at Redcar was one consequence. We took action too late and we did not take the same action as other countries, which were in a much stronger position to resist the dumping of Chinese steel as a result.
The Chair
Order. Before you make your intervention, Mr Thomas, I remind you that last time you very helpfully tried to bring your colleague back to the very narrow terms of the amendment, by reference to parliamentary approval for the appointment. I hope that you will do so again.
Gareth Thomas
Absolutely, Sir Graham. I was merely going to say that the need for parliamentary scrutiny of the chair of the TRA is surely even greater given the point my hon. Friend made about the risk of China perhaps again trying to dump steel or ceramic products into our markets. The Government have an appetite for joining the transatlantic partnership, which China also wishes to join—it has made that wish very clear. Does my hon. Friend not think that amplifies his point about the need for robust parliamentary scrutiny to check that we have a genuinely robust chair of the TRA?
Bill Esterson
Yes, that is absolutely right, and of course there must be a chair who balances interests in exactly the right way to do these things; in his evidence, Simon Walker said he hoped that would be the nature of the make-up of the Trade Remedies Authority.
However, hope is not a recipe for success and there must be parliamentary involvement to ensure that, whoever the chair is, they take measures when they are appointed, including receiving representations from across industry, employers and unions, consumer groups—I say to the Minister that we recognise the importance of consumers in these matters—and the devolved nations. My hon. Friend was right to raise this issue. That is why parliamentary scrutiny of the appointment of the chair matters; it is so that these points are picked up.
I will talk about the economic interest test: further evidence given to us by the British Ceramic Confederation. The confederation made the point to us that there is no explicit presumption in favour of adopting the measures in the European equivalent to the economic interest test. The European equivalent balances the interests of producer, worker, and regional and consumer groups; the problem with the economic interest test is that it looks at only one. The EU is cited:
“The need to eliminate the trade distorting effects of injurious dumping and to restore effective competition shall be given special consideration.”
That is what the EU says. There is the explicit reference to “special consideration”; that is the presumption in the EU model, which is not there in the UK equivalent. Currently, the Bill only infers this, which is why something on—
Bill Esterson
Absolutely, Sir Graham; I do apologise. The point that I am making is that there is this request to go on the record, and the Minister indicated earlier that this was the opportunity to do that. Perhaps he can put something on the record for the British Ceramic Confederation of the nature that they have written to him about and that I have just referred to.
I bring the discussion back to the amendment.
Gareth Thomas
One of the issues that Parliament would surely want to scrutinise is the role of the chair of the TRA in the appointment of the other board members. Some of the evidence presented to us makes clear a fear that some of the trade remedy experts that a putative chair of the TRA might want to bring on board will not be enthusiastic about keeping competition fair. Rather, they might want to turn a blind eye to the dumping of products in the UK, to create unfair competition with British companies.
Bill Esterson
My hon. Friend is right, and that is what the amendment is about. It is about ensuring that, when cross-examined—presumably by the Select Committee—the chair is asked whether they will take a robust approach in their appointments to the Trade Remedies Authority, to protect British industries, including the steel sector, ceramics, dyers, chemicals and pharmaceuticals, all of which trade remedies are likely to be involved in. That is the basis for the amendment. I hope the Minister will deal with the point that the British Ceramic Confederation asked him to deal with. Fundamentally, this is about ensuring that the chair is scrutinised properly, to ensure that there is a balance in the competing interests.
Gareth Thomas
Another concern about trade remedies that it would be useful for Parliament to raise with the chair of the TRA is the chair’s attitude to the international dispute resolution process, because the TRA will not be acting in a vacuum—a case of dumping of products in the UK market might have to go up to the World Trade Organisation dispute resolution process, which is currently not functioning. Would it not be sensible to be able to hear from the putative chair of the TRA their view on the connection between the UK TRA and the WTO’s currently blocked dispute resolution process for dumping cases?
Bill Esterson
That is an excellent example of what a parliamentary hearing would be used for. The model that we seek to emulate is the one used for the Office for Students, although that is not the only example of where parliamentary hearings are used before a chair of a body of this nature is appointed. The Office for Students uses that exact process to ensure that the chair appoints people who have a wide range of interests, rather than a narrow approach. We advocate a model along those lines, with the chair interviewed by the Select Committee.
Gareth Thomas
Were I involved in such a parliamentary scrutiny process for the putative chair of the TRA, I would want to know, as I hope my hon. Friend would, the attitude of the chair to the EU-led multi-party interim appeal arbitration process, which is an attempt to get around Donald Trump’s blocking of the appointment of judges to the WTO dispute resolution process. That is surely a sensible scheme for the UK to join, and we would want to hear that the putative chair was supportive of it. The Minister has, again, been studiously vague on whether the UK would want to be part of such a sensible anti-dumping process.
Bill Esterson
It would be important to ensure that, in the absence of the WTO functioning properly, international alternatives were being considered. Asking the chair their view of those proposed measures and our attitude to international co-operation is extremely valuable. I am glad my hon. Friend raised that point.
Gareth Thomas
I hesitate to test my hon. Friend’s patience. Were I to catch your eye, Sir Graham, when schedule 5, on staff transfer schemes, is being debated, I would be interested to explore the scope for members of staff moving from the Department for International Trade to the TRA, to get some experience of both the WTO dispute resolution process and the new multi-party interim appeal arbitration process. Again, does my hon. Friend not think that we should find out the attitude of a putative chair of the UK TRA towards staff transfers so as to get such expertise before they need to deploy it in a UKTI context?
The Chair
Before you respond, Mr Esterson, I gently point out that we have had some wonderful illustrations of some of the questions that might be put to the putative chair of the TRA, should the amendment be passed. We have probably had enough to get an idea of the argument being advanced.
Greg Hands
I would like to start by repeating what I said in 2018 when I first took this clause through a Committee and what I and others have said since: this Government are committed to creating an independent and objective investigation process in which businesses and consumers will have full confidence and to setting up the Trade Remedies Authority with the right pool of skills, qualities and experience.
I recall that broad agreement was evident for the principle of an independent impartial body during the previous debate on the TRA during the Trade Bill’s 2017 to 2019 passage. Without wishing to linger on the point, my startlement that the Opposition are so opposed to this legislation increases, although they claim to support all its parts.
Many will know that the World Trade Organisation allows its members to take action to protect domestic industries against injury caused by unfair trading practices, such as dumping, subsidies or unforeseen surges in imports. Quite to the contrary of what I think the hon. Member for Harrow West said, nobody wants to turn a blind eye to dumping. It is quite the opposite, but we can only do that with a functioning and legally operating Trade Remedies Authority.
Where there is evidence that dumping is happening, countries are permitted to put measures in place to remedy the situation, hence the term “trade remedies”. Measures usually take the form of an increase in duty on imports of specific products following an investigation. Establishing an independent trade remedies function is integral to the UK’s new independent trade policy. We must get it right. Decisions on trade remedies cases can have profound impacts on markets and on jobs, and that is why we need to create an independent, objective investigation process that businesses can trust. We will be appointing the best people.
Gareth Thomas
The Minister is absolutely right. We need a functioning TRA and we need a functioning trade remedies system. However, decisions that the TRA makes can be challenged and taken up to the WTO. As he knows, there is not a functioning dispute settlement process at the WTO at the moment. Why is there still such resistance from the Minister to joining the multi-party system that the EU has proposed to try to get around Donald Trump’s objection to the WTO dispute resolution process?
Greg Hands
I hear what the hon. Gentleman has to say, and I think he is wrong to say that there is resistance, but I gently suggest that the matter is without the scope of the Bill, interesting though that topic and the future of the WTO might be.
We will be appointing the best people to the TRA, including the non-executive members of its board. As with any public appointments, the appointment of non-executive directors will be subject to the well-established rules that govern public appointments of this kind.
Amendment 1 seeks to give the International Trade Committee the statutory power to approve or veto the appointment of the TRA chair. It is established practice that decisions on public appointments are for Ministers who are accountable to Parliament and the public for those decisions. The Cabinet Office “Public Bodies Handbook” explicitly states that Ministers normally appoint the chair and all non-executive members for non-departmental public bodies.
Following the Liaison Committee’s report in 2011, further guidance was issued by the Cabinet Office setting out the tests for determining which non-departmental public body appointments should be subject to pre-appointment scrutiny. That guidance makes it clear that pre-appointment scrutiny should apply only in respect of three types of post:
“i. posts which play a key role in regulation of actions by Government; or
ii. posts which play a key role in protecting and safeguarding the public’s rights and interests in relation to the actions and decisions of Government; or
iii. posts in organisations that have a major impact on public life or the lives of the public where it is vital for the reputation and credibility of that organisation that the post holder acts, and is seen to act, independently of Ministers and the Government.”
In my view, none of those three requirements is met. The TRA is not a regulator, it does not protect or safeguard against the actions and decisions of Government, and, although we believe it is important for business confidence that it is seen as independent of Ministers, it is not an organisation that can be described as having a major impact on public life or the lives of the public.
I turn now to a few other points that cropped up. On EU remedy measures, we have been clear that we will transition appropriate measures into the UK. We have launched transition reviews of those, and we have consulted and will continue to do so. The economic interest test is a matter for the Taxation (Cross-border Trade) Act 2018, but there is of course a presumption in favour of measures in that Act.
On the engagement of trade unions, Simon Walker and the interim body—the Trade Remedies Investigations Directorate—met the Trades Union Congress yesterday and is engaging unions frequently. I remind the Committee that the board are not the decision makers on trade remedies; they set the strategy and hold the chief executive and the executive to account. There is no role for the TRA at the WTO or any involvement with the appellate body. I believe that I have responded to the British Ceramic Confederation letter, but I will study carefully what is in it.
Under the provisions of schedule 4, to which we will turn shortly, the TRA must produce an annual report, which the Secretary of State must lay before Parliament. The TRA will also be subject to the scrutiny of the National Audit Office and parliamentary Committees. In addition, complaints against it can be considered by the Parliamentary and Health Service Ombudsman, who may also share information with Parliament. I hope that that reassures the Committee that the amendment is not appropriate, and I ask the hon. Member for Sefton Central to withdraw it.
Bill Esterson
Inverness, yes. There we are. I knew that inspiration would be with me.
The explanatory statement shows that new clause 11 is entirely consistent with the other new clauses. It is about the protection of
“the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.”
Labour has tabled a new clause 17 on animal sentience. It is important that the Trade Bill is consistent with other pieces of legislation on animal sentience. The Government have agreed to introduce, under an animal welfare and recognition of sentience Bill, a process to ensure that any future legislation or policy is assessed against animal welfare standards. This should be recognised in the Trade Bill as one of the most important areas that could undermine animal welfare standards, and those standards should be outside the ambit of the trade negotiations.
We had a similar debate on Tuesday, but I will spend a few moments on this because a few things have happened since then, such as the Secretary of State appearing at the International Trade Committee yesterday. She said no, but what did she say no to? She did not say no to taking action on food standards, and the Minister did not say no on the same thing on Tuesday. They are very good at making it clear that food safety will not be affected, but they do not talk about food production standards. We have pride in this country in our high standards not only of safety, but of production and animal welfare as well, and those are the elements that have so far been missing in what Ministers have said.
In trade talks the more powerful side wins, and if that more powerful side wants a reduction in our food production standards, it is very difficult to resist if we want a trade agreement with it, and that is the problem. We have tabled a new clause very similar to one on the Agriculture Bill, and we have done so because Ministers told Back-Bench Conservative MPs that the Trade Bill was the place for such an amendment and for this to go into legislation, so we have done what the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Banbury (Victoria Prentis), told us we should do.
I wonder whom British consumers will believe. Will they believe Ministers who will not quite bring themselves to guarantee food production standards or take the action needed on animal welfare, or will they believe the British Standards Institution? Its chair, John Hirst, was quoted in The Times today, expressing fears over a potential American attempt to
“replicate the approach to standards”
agreed in its deal with Canada and Mexico, which President Trump’s officials see as a model for future accords. He says that such an accord would
“undermine our sovereignty over regulation”
by allowing the US to replace UK standards with its own. The Government should perhaps listen to Mr Hirst.
If the Government do not want to listen to Mr Hirst, they could listen to the executive director of Waitrose, James Bailey, who has said that a trade agreement with the US that loosened food standards—production standards—would amount to an “unacceptable backwards step”. He, very commendably, has said that Waitrose will never sell chlorinated chicken, hormone-treated beef or meat from animals subject to extensive use of antibiotics.
Gareth Thomas
Has my hon. Friend has seen the representations to the Committee from the British Poultry Council? That makes it very clear that the UK has multiple pieces of national legislation aimed at various aspects of animal welfare. For chicken alone, that includes on-farm catching, transport and slaughter. By comparison, the US has no national animal welfare legislation, particularly covering farm animal welfare. It is true that some states do have laws, but the three major chicken-producing states of Georgia, Alabama and Arkansas do not. Is that not at the heart of what his new clause seeks to do?
Bill Esterson
It is, and this lack of consistency in the US is one of the problems in doing a trade deal with it, because it has different standards in different states.
While my hon. Friend was speaking, the evidence from Which? came to mind. As we know, it represents consumers in the UK. It has cited consumers’ views on these matters: 79% would be uncomfortable eating beef produced with growth hormones, and 77% would be uncomfortable having milk from cows that have been given growth hormones. Giving antibiotics to healthy farm animals to promote their growth was of concern to 78%. It is not currently allowed in the UK, but it could be under a trade agreement if we give the Americans what they want. Seventy-two per cent. would be concerned about eating chicken treated with chlorine and 93% think it is important that UK food standards be maintained after we leave the EU. Nearly three quarters—72%—think that food from countries with lower standards should not be available.
Bill Esterson
The last Bill became an awful lot more after it was amended in the Lords, and I suspect that things are heading the same way. However, the hon. Member for South Ribble is right. Of course we have the highest food standards in the world. I say it already, and we have pride in those high standards. It is matter of safety, production and welfare, and all three of those have to be retained. I remind you, Sir Graham, that it was the US Secretary of State Mike Pompeo who confirmed that chlorinated chicken must be part of any post-Brexit trade agreement with the UK. That was confirmed by trade representative Lighthizer on many occasions, including when he said that on issues such as agriculture
“this administration is not going to compromise”.
Gareth Thomas
Further to the intervention by the hon. Member for South Ribble, my hon. Friend will be more than aware that a UK-Canada agreement is very much within the scope of the Bill. The Canadians have lower animal welfare standards and lower pesticide protections than we have in the UK. That is perhaps an even stronger rebuttal of the argument that the hon. Lady advanced, that the new clause is not relevant to the Bill. It is very relevant.
Bill Esterson
Of course my hon. Friend is right. It is not a question just about the US. It is about other countries with different food production, safety and animal welfare standards, where agriculture will be part of the agreements. I am grateful to my hon. Friend for reminding us that that is an important part of what we are discussing. You would of course have told me if I had been out of order, Sir Graham, and got me to sit down, but you did not, so I was not.
I remind the Committee again that there are real concerns about the impact on human health of using antibiotics and growth hormones. That is in addition to the impact on animal welfare, and the contribution that things such as antibiotics make to the potential for a growth in problems such as zoonotic diseases, and diseases crossing species—something we should all be extremely concerned about in the middle of a pandemic that probably results from exactly that.
The hon. Member for Tiverton and Honiton (Neil Parish) said in debate on the Agriculture Bill that he had been promised that the issue would be covered in the Trade Bill. He recognised that the Agriculture Minister who made the promise was possibly not in a position to make it. He said:
“We are being led down the garden path—we really are”.—[Official Report, 13 May 2020; Vol. 676, c. 300.]
Will the Minister tell us whether his hon. Friend has been led up the garden path? That is how it looks to most people out there, as well as to us in Committee.
Greg Hands
I thank my hon. Friend for that intervention. In the time she has been in the House, she has been a strong defender and advocate of her farming sector in and around Stafford. I can say that there will be no compromise on our standards on food safety, animal welfare and the environment, exactly as we laid out in the election manifesto that she and I were both elected on just six months ago, both collectively and individually.
This Bill is about ensuring continuity, particularly at this moment of unprecedented economic challenge posed by coronavirus. We need the power in clause 2 to replicate the effects of our current trading relationships and provide certainty to UK businesses. That includes the continuity agreements, including the Canada agreement, which the hon. Member for Harrow West has mentioned again today. I think there has been yet another shift in the Labour party’s position: last Thursday, we heard from the shadow Secretary of State that Labour was in favour of a trade deal with Canada, but now the hon. Member for Harrow West seems to be back to opposing that trade deal. There does seem to be some confusion, but the purpose of this Bill is not to sign new agreements or alter standards in any way. Without the Bill, we risk being unable to implement continuity agreements, resulting in disruption and uncertainty for businesses and consumers.
As the National Farmers Union confirmed to the Committee last week, the EU’s approvals regime for agricultural products is one of the most precautionary in the world. That regime will be transposed onto the UK statute book through the European Union (Withdrawal) Act 2018. I am pleased to say that the NFU has not expressed any concerns about the framework for mutual recognition in continuity agreements that this Bill provides, and I am grateful for the contribution of its expertise through our expert trade advisory group. As I have previously told the Committee, we have now signed 20 continuity agreements with 48 countries, replicating the terms that we had with them under EU trade agreements. Imports under continuity agreements must continue to comply with our existing import standards. None of these agreements has resulted in a lowering of the agricultural or other standards referenced in the agreement.
Gareth Thomas
For the record and for the avoidance of doubt, will the Minister confirm that he can see no way in which chlorinated chicken from the US will be allowed to be sold in British stores?
Greg Hands
That is absolutely correct. It is a point that we have made on numerous occasions, and I am happy to make it again today.
Although this Bill relates to continuity with existing trading partners, I recognise the concerns that colleagues have about future FTAs with new trading partners, as I said during Tuesday’s debate. As the Secretary of State, my DEFRA colleagues and I have told this House and the other place on many occasions, the Government will stand firm in trade negotiations. We will always do right by our farmers and aim to secure new opportunities for the industry. Returning to the point made by my hon. Friend Member for Stafford, we would like Stafford farmers to gain opportunities to sell their high-quality produce abroad by breaking down barriers, reducing or removing tariffs, and so on. That is also very important for our agriculture; in fact, the scoping assessment for the US trade deal showed that UK agriculture would be a net beneficiary of any such deal.
All imports under all trade agreements, whether continuity or future FTAs, will have to comply with our import requirements. In the case of food safety, the Food Standards Agency and Food Standards Scotland will continue to ensure that all food imports comply with the UK’s high safety standards, and that consumers are protected from unsafe food that does not meet those standards. Decisions on those standards are a matter for the UK and will be made separately from any trade agreements.
Stewart Hosie
I have benefited from the national health service; indeed, it has probably saved my life on a number of occasions.
I have no doubt that some of the drugs purchased are still under patent by private companies. Some of the diagnostic testing machinery was made in Germany. Nobody, but nobody, is talking about restricting any of our health services in terms of purchasing. We are talking about marketisation, which has failed when it comes to the health service.
The new clause has a specific carve-out for the NHS and all health-relevant services regulation, making it illegal for the Government to conclude a trade agreement that altered the way NHS services are provided, liberalised further or opened up to foreign investment by dint of a trade agreement—not by a policy change, not by part of the NHS somewhere on these islands saying it would be a good thing to do, but by dint of a trade agreement being forced on us from somewhere else.
On negative listing, these clauses—we know this from other examples—require all industries to be liberalised in trade agreements unless there are specific carve-outs. The reason this is an issue is that it is not always easy to define what services count as health services and what are more general. For example, digital services may seem irrelevant to health, but NHS data management and GP appointments are increasingly digital. Negative lists therefore make it harder for Governments to regulate and provide health services for the common good. No-standstill clauses are ratchet clauses, because these provisions mean that after the trade deal has been signed parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature. That can make it difficult to reverse NHS privatisation.
Let me give an example of where had a standstill or ratchet clause been in effect, it would have caused real harm. In Scotland, cleaning in hospitals was historically carried out by private contractors, and the rate of hospital-acquired infections rose dramatically. The SNP Government took the decision to return it to NHS cleaners, and the rate of those infections fell dramatically. Imagine if an investor-state dispute settlement had been in place, if a ratchet clause had been in place—we would have been unable to do that, and if people had died from hospital-acquired infections because the Government were not allowed to take the public health measure of returning cleaning to the public sector, it would have been an absolute scandal.
I mentioned ISDS. There should be no ISDS clauses in trade agreements which only allow private investors to challenge Government policy when, for example, it affects their profits. Failure to abide by those clauses can result in legal challenge from trade partners or, if there is a separate ISDS clause, a challenge from private investors. I have used a number of examples on a number of occasions, and I will use another today very briefly. It is from April 1997. The Canadian Parliament banned the import and transportation of the petrol additive MMT because of concerns that it posed a significant public health risk. The Ethyl Corporation, the additives manufacturer, sued the Canadian Government under chapter 11 of the North American free trade agreement, an ISDS-type arrangement, for $251 million to cover losses of what it called the expropriation of both its production plant and its good reputation. That was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid that corporation $15 million in compensation. That was over a petrol additive that was deemed to have a negative impact on public health. We believe it is quite wrong for large corporations to use these ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of citizens or for simply enacting public health measures which they believe to be right and for which they may well have an electoral mandate.
The new clause also instructs that there should be no changes to drugs pricing mechanisms. We know that the US, for example, has stated that it wishes to challenge the drug pricing model which keeps prices low for ordinary people in the UK. This could also happen through intellectual property and non-patent exclusivities. We need to be very alive to that. It would be bad news for patients, taxpayers, health boards and trusts around the country. In our judgment, trade agreements should never be used to facilitate that.
Our new clause 13 is an adjunct; we simply sought to add a different degree of protection for the health services in the nations, and to ensure that the Government would not be able to lay before Parliament a trade agreement that would have an impact on the provision of healthcare services without the consent of the devolved Administrations. That is secondary to the substantial points we are trying to make and the protections that we wish to put in place with new clause 12.
Gareth Thomas
Given the extra protections that new clause 12 would lock into law to keep the NHS safe from future trade agreements’ effectively pushing higher pharmaceutical prices or further marketisation of the NHS, we will happily support the new clause tabled by the hon. Member for Dundee East. Indeed, his new clause supplements the protections that amendment 12, had it been agreed to earlier in our proceedings, would have put in place to protect our public services more generally.
We, too, are aware of the leaked documents that the hon. Gentleman referred to, revealing that discussions have already taken place in the UK-US trade talks about possible measures that the American pharmaceutical industry might want, clearly supported by Donald Trump’s chief negotiator, that would effectively push prices up. Given that we have substantially lower pharmaceutical drug costs than the US, the fact that the Americans are continuing to push such measures is profoundly worrying.
Ministers have said that the NHS is not on the table in the UK-US talks and, like the hon. Gentleman, I take that at face value, but it is worth saying that until the text of a trade agreement is published, we will have no way of knowing for sure what is in it. The precedent of the EU-Canada deal does not give reassurance in that respect, as it used the negative list approach to services liberalisation, to which he referred. The Minister will remember the considerable concern that Germany had chosen to add in carve-outs for the whole of its national health service, whereas the UK had not taken such a comprehensive approach.
The NHS Confederation and The BMJ have both published a series of concerns, setting out the ways the NHS could be undermined by a UK-US trade deal. One concern that is highlighted, which again the hon. Member for Dundee East referenced, was the use of ISDS—investor-state dispute settlement—provisions. Again, investor-state dispute settlement provisions were included in the EU-Canada deal, which Ministers count as a roll-over deal.
It would be helpful if the Minister would embrace the spirit of these new clauses, support new clause 12 being added the Bill and, in his wind-up remarks, confirm that he will not push a negative listing approach in a UK-Canada specific deal and that there will not be ISDS provisions in such a deal.
Greg Hands
I start by thanking Opposition Members for tabling new clauses 12 and 13, which provide me another opportunity to stress the Government’s position on the NHS and our trade agenda. The Government have been clear and definitive: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. No trade agreement has ever affected our ability to keep public services public, nor do they require us to open up the NHS to private providers.
We have always protected our right to choose how we would deliver public services in trade agreements, and we will continue to do so. The UK’s public services, including the NHS, are protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. The UK will continue to ensure that the same rigorous protections are included in future trade agreements.
As stated in our published negotiating objectives with the US, to which I referred the hon. Member for Warwick and Leamington, the NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table.
Those commitments are clear and absolute, but new clause 12 is unnecessary, however laudable the intention behind it is. It overlooks the fact that there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements. In particular, and as we discussed on Tuesday, the UK already has scrutiny mechanisms via the Constitutional Reform and Governance Act 2010 procedure that will ensure Parliament can see exactly what we have negotiated, and if it does not agree it can prevent us from ratifying the deal.
Gareth Thomas
I beg to move, That the Clause be read a Second time.
I rise briefly to suggest to the Committee that once a free trade agreement has been signed in the future, it makes sense to have a point at which to assess the effectiveness of that agreement, perhaps to see how it has worked in practice in terms of British exporters being able to take advantage of it.
Labour Members remember only too well the Government’s decision to axe by some 60% the support to British exporters. So it will be interesting, five years down the line from the publication and signing of these continuity agreements, to see whether such a severe cut has actually meant that many British businesses have been unable to take advantage of the opportunities in a free trade agreement.
The new clause would also give us the opportunity, five years hence, to see whether the genuine concerns of many—both in this House and out—about investor-state dispute mechanisms, if they have been incorporated into agreements, have taken effect. We would be able to see the damage done to environmental protections, the health service, labour rights or human rights—any way in which they might have been affected.
Given the concerns expressed clearly to us about how many of the continuity trade agreements might actually work in practice, it is surely sensible to have the opportunity to review whether those concerns have been borne out in practice. One can think of the Norway continuity agreement, which still has no services provisions for British companies wanting to operate in service markets in Norway. That is still in some doubt, as only the goods part has been resolved. The situation is similar with Switzerland. We raised a series of concerns about the South Korea agreement and the extent to which some agricultural products, such as cheddar cheese and honey, have been affected by poor drafting of that agreement.
Given how we have thrown away some of the great advantages that Britain drew in terms of soft power from the Department for International Development being a stand-alone Department, again it will be interesting to see whether the Ghana and Kenya agreements—I thank the Minister for his letter—have been able to serve their purpose and support not only agricultural sales to the UK, but regional integration in west and east Africa.
For all those reasons, and given the huge concerns about some of the potential measures in free trade agreements, it makes sense surely—it certainly makes sense to us—to have a fixed point, five years down the line after a trade agreement has been signed, to have the opportunity for the Government to publish a full review looking at the impact.
Greg Hands
New clause 15 proposes a review, as we have heard, of free trade agreements every five years after entry into force. I have already drawn the Committee’s attention to the parliamentary reports that we have voluntarily published alongside every signed continuity agreement, outlining any significant differences between the signed agreement and the underlying EU agreement. I confirm that we will continue to do so for the remaining continuity agreements.
We have a meaningful and constant dialogue with several Committees in Parliament. Those may provide a more appropriate forum for reviews of our trade agreements and an assessment of the UK’s wider trade environment and relationships. We are keen for Parliament to make its voice heard during the negotiation of our continuity programme in a way that is proportionate and productive. I also draw the Committee’s attention to the fact that six signed continuity agreements have been subject to debate in Parliament without a single one carrying a motion of regret.
As I have said many times before, our objectives for the trade continuity programme are to replicate the effects of existing EU trade agreements, which have all been subject to comprehensive scrutiny at EU level. Given that scrutiny, the parliamentary reports we have committed to publishing and the other constraints contained within the Bill, we do not believe that an additional report in the future would be an efficient use of parliamentary time. Additionally, I argue that looking at each agreement in isolation from the wider trading situation of the UK at an arbitrary point in time risks rendering any such report at best incomplete and at worst meaningless.
As a Department, we have an ongoing obligation to provide meaningful and timely information to the public, businesses and other key stakeholders on our assessment of the UK’s trading relationships. Statutory obligations anchored in specific agreements in the manner proposed by the new clause could in fact act as a constraint to the Department providing that sort of information in a timely and impactful way. As such, I ask the hon. Member to withdraw his new clause.
Gareth Thomas
I have listened to what the Minister has said. He will understand that we remain concerned that this provision was put in the Bill by the Government on Report in the Commons, and it has been taken out. The Minister who gave the assurance in writing that such reports will continue is no longer in the Department. I think we would still prefer to see the commitment in the Bill, and as a result, I intend to press the new clause to a vote.
Question put, That the clause be read a Second time.
Gareth Thomas
I beg to move, That the clause be read a Second time.
We have left the European Union and await the oven-ready Brexit deal that the Prime Minister promised the British people in December—it does feel as though it is in the slow cooker as opposed to the microwave. Nevertheless, our proximity to other European nations inevitably means that our trade, as well as much else, will continue to require significant co-operation with our allies in European capitals and, indeed, in Brussels. Surely, we should not put ideology before common sense but should consider sensibly which EU agencies that impact on trade it is worth maintaining a particularly close relationship with and, indeed, where continued membership is worth seeking. We suggest in the new clause that we should seek continued membership of the European Medicines Agency, the European Chemicals Agency, the European Union Aviation Safety Agency and the European Maritime Safety Agency.
If we are not members of the European system run by the European Chemicals Agency, there is a risk of divergence in chemicals regulation. That may just sound like a concern about red tape. However, if we are not members of the European Chemicals Agency, there is a risk of, for example, the EU27 saying that chemical x is not safe to use but our own new national system telling us not to worry about it and that it is safe. If UK and EU decisions on chemicals start to diverge, that will put pressure on UK chemicals companies to decide whether to stay in the UK or to leave and base themselves in the bigger market of the European Union. I am sure that all Members of the House would want to avoid that.
It is difficult to see how access to the REACH database can be achieved without membership of the European Chemicals Agency. Ian Cranshaw, who spoke to us on behalf of the chemicals trade body when we heard witness statements, made clear how difficult it appeared to be to continue to have access to the REACH database without, effectively, membership of the European Chemicals Agency. He went on to set out how membership of the REACH database is the gold standard for chemicals regulation and how important it was for British firms to continue to have access to it.
The European Medicines Agency is critical to ensuring that medicines for humans and animals are safe. It helps to foster innovation and the development of new medicines across the European Union. By ensuring cross-European collaboration, it has helped to bring down the cost of medicines through its policing role in respect of the single market for medicines. Every month, the UK-EU trade in pharmaceutical products is huge; upwards of 70 million packages move between the UK and the EU every month. The UK pharmaceutical industry is very heavily regulated, and it is heavily regulated because it is an integral part of Europe’s medicines regime. It surely, therefore, makes sense to remain a member of that agency.
The European Union Aviation Safety Agency has responsibility for civil aviation safety across Europe, but it also has a series of critical trade-related roles, including being responsible for much of the airworthiness and environmental certification of all aeronautical products, parts and appliances that are designed, manufactured and maintained in Europe. It negotiates international harmonisation agreements with the rest of the world and concludes technical agreements with other countries, such as with the US Federal Aviation Administration. Continued membership of the European Union Aviation Safety Agency would give the UK access to a global industry leader, in terms of standard setting for trade in aviation. Surely, we should continue to belong to it.
Greg Hands
On new clause 21, regarding the parameters of the UK’s future relationship with the EU, the Government have made it clear that our priority is to ensure that we restore our economic and political independence on 1 January 2021. The approach to the future relationship with the EU has already been extensively discussed not just in the previous Parliament but in this one, particularly during the debates on the European Union (Withdrawal Agreement) Act 2020. During those debates and subsequently, the Government have been clear that we want a relationship with the EU that is based on friendly co-operation between sovereign equals and centred on free trade. That is what Taskforce Europe, working with the Prime Minister, is pursuing.
The UK published its approach to the negotiation of a future relationship with the EU on 27 February 2020. Our approach builds on the EU’s offer of a Canada-style deal. It reflects the type of free trade agreement that should be achievable between sovereign states that respect each other’s independence, as the EU has done in the past. We will discuss with the EU how to manage our friendly relations, but any solution has to respect our legal and political autonomy. Members will be aware that there are very limited options for third-country membership of EU bodies. We have been clear that we will be operating on the basis of existing precedents and no acceptance of the European Court of Justice.
However, I acknowledge that members of the Committee are looking for reassurance about the Government’s approach to negotiations with the EU in relation to the four bodies listed in the new clause. On the European Medicines Agency, we have stated that the UK-EU FTA should include commitments to co-operate on pharma co-vigilance, and to develop a comprehensive confidentiality agreement between regulators, in line with agreements between the European Medicines Agency and Swiss, US and Canadian authorities. The UK’s published response in respect of the European Chemicals Agency states that the UK-EU FTA should include a commitment to develop a memorandum of understanding to enhance co-operation further, similar to the MOUs that the European Chemicals Agency has agreed with Australia and Canada.
On the European Union Aviation Safety Agency, the UK’s published position is that we have proposed a bilateral aviation safety agreement that will facilitate the recognition of aviation safety standards between the UN and the EU, minimising the regulatory burden for industry. On the European Maritime Safety Agency, the UK is discussing with the EU how best to manage our friendly relations, but any solution has to respect our red line of no commitments to follow EU law, and no acceptance of the ECJ.
It is important to be clear that, in our negotiations with the EU, we are not asking for a special, bespoke or unique deal; we are looking for a deal like those that the EU has previously struck with other friendly countries such as Canada. I hope the confirmation of the Government’s approach to the four agencies mentioned in the new clause has reassured the Committee, and I ask the hon. Member for Harrow West to withdraw the new clause.
Gareth Thomas
Although it has been useful to hear the reassurance that the Minister has attempted to provide, we still think that seeking membership of those four specific agencies makes sense. I intend to press the new clause to a vote.
Question put, That the clause be read a Second time.