Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)(2 years, 2 months ago)
Public Bill CommitteesThank you, Mr Twigg, for the opportunity to resume my speech in this debate that was opened by the hon. Member for Airdrie and Shotts. I will speak in particular to amendments 5, 7, 20 and 22.
It is a particular joy that you are chairing the afternoon sitting, Mr Twigg, because you will know, having been both a Minister and a shadow Minister, just how much the odds are stacked against a shadow Minister in a Bill Committee, with 1,000-plus civil servants backing up the Minister versus just one researcher and, fortunately, some very high-quality Labour colleagues. The odds are very uneven.
When this morning’s sitting ended, I had begun some preliminary remarks on the case for amendment 5. I was about to highlight some of the issues around the differences between the New Zealand free trade agreement procurement chapter and the Australia FTA procurement chapter. I suspect that businesses will need some help to navigate those differences, so consultation with interested businesses across the UK would seem sensible.
It is tempting to think that the differences are so marginal that they can be ignored and that any flaws in the procurement chapters can be swept away by the upcoming procurement Bill or our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As the Minister briefly alluded to, with the CPTPP not yet on the statute book and with plenty of issues to be addressed before it gets there—if it does—we have to get the trade deal procurement chapters and their implementation right, as they will, without question, affect the legal landscape in which businesses bid for contracts here in the UK and in which British businesses bid for contracts in Australia and New Zealand.
Not only are there subtle and important differences between the New Zealand and Australia deal procurement chapters, but they are not the only such chapters that we have signed up to since our departure from the European Union; of course, we have the procurement chapter in the deal that the previous Prime Minister negotiated with the European Union. Again, there are subtle but none the less significant differences between the EU procurement chapter and the Australia and New Zealand chapters. It would seem an obvious and sensible thing for Ministers to embrace some help to navigate those differences, and amendment 5 would help them to do that.
Where do the differences lie? It is important to remember that the Government procurement agreement is the foundation text for procurement negotiations. The procurement chapter in the EU deal—the first we signed—keeps the GPA text and builds upwards from it. I hope to come to the evidence of the procurement expert Professor Sanchez-Graells in a little bit. He argues that the text of the procurement chapter in the Australia deal not only replicates but, crucially, modifies the text of the GPA. That creates a GPA-minus agreement and risks all sorts of complications and legal problems when bidding for contracts, both here in the UK for Australian and New Zealand businesses, and in Australia and New Zealand for British businesses.
Another reason that we should perhaps consult firms is that, as I understand it from the evidence that Professor Sanchez-Graells gave us, a UK firm could be barred from all remedies—the interim relief remedy, judicial review, as well as full redress, compensation—if they felt they were being unfairly treated in an Australian Government tender process, on public interest grounds. In a similar process in Australia, a French firm could be barred from interim relief but not from a redress claim. So the French firm could potentially secure compensation if it was treated unfairly if the contract was moved forward on public interest grounds, but the British firm could not. Apparently, that is because the UK firm’s rights are considered under the UK-Australia FTA, while the French firm’s rights would be governed by France’s membership of the Government procurement agreement.
Is not this another worrying sign that the trade deals and the Bill often sell British businesses short? British businesses are being deprived of rights that they currently have. I am sure my hon. Friend will confirm that, if we pass the Bill without amendment, it will mean that British businesses have less access and security in the Australian and New Zealand markets than they currently do under the GPA rules that extend to everyone already.
That is certainly my understanding of the evidence that Professor Sanchez-Graells gave this Committee, the Select Committee on International Trade in this place, and the International Agreements Committee in the other place.
Let me spell out for the Committee where the problem lies. As I understand it, the Government procurement agreement allows countries to bar access to some but not all remedies, on public interest grounds, for companies that are unhappy with Government procurement decisions, but, crucially, it does not allow a ban on remedies involving compensation. That is the difference with the Australia FTA procurement chapter, which does allow a ban on remedies involving compensation.
Potentially, the firms of other GPA countries will have more comfort and ability to risk tendering for big Australian Government contracts, because they will know that they have some access to remedies if things go wrong in the procurement process and they want to try to get compensation. As my hon. Friend the Member for Brighton, Kemptown rightly says, it takes some skill to negotiate a worse position for British businesses in terms of access to remedies than the situation we have now. That is probably not the biggest mistake that the now Prime Minister has made in her time in office, but it feels like a significant issue, and I look forward to the Minister addressing it.
Government procurement matters enormously. We have touched a little on some of the reasons for that. It helps if Government procurement is done well. One of the reasons why amendment 5 is necessary is to ensure that we do not make the current set-up for Government procurement in the UK worse but, instead, enhance it. Done well, Government procurement can help to build supply chain resilience. We saw the significance of that during the covid lockdowns, when our dependence on China became ever clearer and the need to re-onshore some of our supply chains became a topic for discussion by business and, I suspect, in Whitehall.
We are all too familiar with the horror stories about some of the dodgy personal protective equipment that was procured. We understand the context in which some of those decisions were made, but it is striking that Transparency International, with which I worked when I was a development Minister trying to tackle corruption in developing countries, felt the need to investigate the Government procurement market for PPE. It identified some 73 contracts, worth 20% of all the contracts, that it said raised one or more red flags for possible corruption. That suggests there is work to be done to improve the quality of Government procurement. The National Audit Office also highlighted concerns, where the Government admitted that they were not getting full value for money on PPE.
We also know that good conditions for Government procurement can create more choice and more scope for innovation, and can achieve better value for money. One thinks about the digital procurement expertise that we need, and the potential for artificial intelligence to help revolutionise public services. We need to make sure that the framework under which Government procurement contracts are being offered works well, and that this new injection of uncertainty—but also, potentially, enhanced opportunities for other firms to come into the Government procurement market—does not destabilise the UK procurement market but improves things. A bit of consultation might help in that regard.
I touched on some issues around levelling up, which, to my surprise, prompted murmurs of disagreement from Government Members. I understood from their chuntering that they think everything is rosy with Government procurement outside London and the south-east. However, some figures I have seen from the House of Commons Library suggest that at the moment, there is a clear bias in the Government procurement market towards businesses operating in London and the south-east. The last thing we would want is for the procurement chapters of the Australia and New Zealand trade agreements to exacerbate the difficulties for businesses, not only in London and the south-east but in the west midlands, the north-west, the north-east or the east of England, that are trying to get into the Government procurement market.
House of Commons Library data demonstrates that of the 445 most lucrative contracts awarded by central Government in 2019, 202 went to companies in London or the south-east. That does not suggest that Ministers are using Government procurement to level up. We know they are not doing much else on levelling up, so one would hope that they would take the opportunity to consult more, as our amendment 5 would require them to, in order to ensure that the Government procurement market is not being made worse for businesses outside London and the south-east that want to get involved. It might be an opportunity to look at reforms and think about how businesses outside London and the south-east can be encouraged to do so.
Would the hon. Gentleman concede that it is possible that the reason those figures are so weighted towards London is that that is where a lot of headquarters are, yet some of those services are delivered from around the United Kingdom and, indeed, from the devolved Administrations?
I absolutely concede that point—that is possible, without a doubt—but I gently suggest to the Minister that there are real concerns that, unless there is proper consultation, the procurement chapters of the Australia and New Zealand FTAs could make the situation worse for businesses that are not headquartered in London and the south-east.
Nevertheless, it seems a reasonable question to pose. A bit of better consultation might allow us to think about how we encourage more British businesses to secure Government contracts. The Minister rightly said that there is a good argument for extending the contracts covered by this legislation—he was thinking of contracts of unknown value and length—on the grounds that it would encourage more competition and better value for money, but we need to ensure that that does not put off good British businesses, particularly small and medium-sized ones in the local area, from getting contracts. I am yet to hear any convincing story from this Minister or, indeed, Business Ministers or Cabinet Office Ministers about what they are doing in that space to shift things forward.
Let me come to some of the specific concerns that Professor Sanchez-Graells raised, which are the most troubling of the many issues raised in the evidence sessions last Wednesday. It is worth highlighting Professor Sanchez-Graells’s experience. He is a professor of economic law at the University of Bristol Law School and co-director of the Centre for Global Law and Innovation. He has done a lot of research on economic law, particularly competition law and procurement, and his research concentrates on the way the public sector interacts with the market and how it organises the delivery of public services, especially healthcare. He is a significant witness. He was clearly taken seriously by the International Trade Committee and by the International Agreements Committee in the House of Lords.
Professor Sanchez-Graells argued that there are a series of problems with the way in which the procurement chapter has been written that, in effect, create the GPA-minus problem, which could have a chilling impact on the appetite of British businesses to bid in Australia and New Zealand, unless Ministers can rectify those problems and provide comprehensive reassurance that Professor Sanchez-Graells may not have considered the whole picture. He has been explicit in saying that he wants the procurement chapters of both the New Zealand and Australia deals renegotiated and only then put into law, so it is important that we hear the Minister’s reaction to those concerns.
I had thought that the biggest problems with the Bill were the huge giveaway to Australian farmers, the lack of protection for British agricultural goods, the lack of progress on geographical indications and the shocking levels of scrutiny, but Professor Sanchez-Graells appears to suggest that there are serious issues with procurement and whether the procurement chapters present the huge opportunity that Ministers have been keen to big up. He says that the legal uncertainties in the chapter that the Bill would write into law ensure that the rules clash with the World Trade Organisation’s rules on procurement, and we would then risk breaching international law, be it the GPA or the two trade deals.
We know that Ministers have a record of not being bothered about breaking international law—one thinks of the Northern Ireland protocol or other aspects of the trade agreement with Europe—but if Britain’s reputation for international lawbreaking gathers ground, that could have a chilling effect on our ability to negotiate other trade agreements and implications for the confidence of the markets, which is particularly worrying.
The GPA is the baseline for opening up access to procurement contracts. I commend Ministers for the objective of creating a GPA-plus regime, and the Australia deal secures some more substantive obligations that point in the direction of such a regime, such as the electronic publication of contracts by authorities, the inclusion of a clause on environmental, social and labour considerations and a clause on SME access to procurement opportunities, the expansion of economic coverage through the inclusion of concession and build-operate-transfer contracts, and so on. However, it also deviates in ways that alter or reduce substantive obligations, so we have the creation of a GPA-minus regime instead.
The scope for legal uncertainty risks having a chilling effect in terms of British businesses wanting to bid for Australian and New Zealand contracts, and vice versa. Amendment 5 makes it clear that consultation is key, and amendment 22 would give us the chance to understand fully the impact of these GPA-minus changes. Both would be helpful additions to the legislation and would allow us to address some of the concerns.
The concerns Professor Sanchez-Graells expressed in evidence to the Select Committee were very technical and challenged members of the Committee—they certainly challenged me when I read back over them to fully understand their scope. To bring them to life at our witness session last week, I asked him to give some examples of where his concerns might have played out. One example I asked him to think about was a British construction business bidding for a contract to help build the Melbourne airport link, which the Australian authorities are tendering. He said:
“Let us imagine that an innovative British company that wants to sell low emissions rolling stock for that metro link in Melbourne airport goes and tenders in Australia. It is excluded for any number of reasons and it wants to challenge the decision. It could also be barred from access to remedies in Australia, which means that the UK tenderer has lost its time and probably made a loss on the project.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 42, Q52.]
That business could lose its access to remedies if the Australian courts embraced the decision of the contracting authority on public interest grounds—that the contract could not be delayed and the compensation not offered, because it was so important that the Melbourne airport link got built on time.
If the UK tenderer had spent substantial amounts to get that contract and then could not get any compensation for all that money, that would create a big disincentive for anyone from the UK thinking of trying to tender for future projects in Australia. It is important that the Minister and the Department for International Trade explain what steps they will take to prevent that risk from coming to fruition.
Is there not also a danger that an international company could choose which of its subsidiaries a bid should come from? Rather than choosing the British company and channelling the money through it, it might consider that the protection offered would be marginally better should the bid come from the French or German company. The multinational company will choose to channel its bids through their other subsidiary companies outside the UK, which could deprive UK taxpayers of money and British workers of the contract, when the British company has done some of the necessary paperwork and processing. There does not need to be a material change; there only needs to be a theoretical risk that that could happen.
Unfortunately, that is absolutely right, as Professor Sanchez-Graells argued. That is a real risk. There are potentially chilling impacts on British authorities that want to issue contracts, should New Zealand companies, and particularly Australian companies, bid.
On the possible GPA-minus provisions, a broader issue is relevant to the argument for amendments 5 and 22. Is the GPA being undermined? The GPA-minus provisions are not just an issue for the UK-Australia FTA, but are likely to be an issue under the CPTPP. Given how difficult it was to negotiate the GPA and how long it can take to secure improvements, enhancements and modernisation, one has to ask whether Ministers have given up a little on that multilateral process. Have they decided that it is so important to get individual procurement chapters agreed under trade deals with potential allies that we will give up on the process of modernising the GPA? Surely it needs to be a living document, because it dates quickly; the current version was negotiated more than 10 years ago and is already out of date on digital procurement and sustainability. The more GPA-minus provisions there are in trade agreements negotiated around the world, the more difficult it will be for the World Trade Organisation to negotiate an enhanced, modernised GPA. It would be good to hear what plans the Minister and the new Secretary of State have to prevent the UK-Australia chapter, with its GPA-minus provisions, from stopping any effort to modernise the GPA. One hopes that Britain would seek to lead that process at the WTO.
The second major concern of Professor Sanchez-Graells is why we are putting the two procurement chapters into law if we plan to accede to the CPTPP? It has its own procurement chapters, and both Australia and New Zealand are members of it. Those chapters are very similar to the Australia and New Zealand FTA chapters, so there is similar scope for uncertainty. We have been led to believe by the current Prime Minister and the previous Secretary of State for International Trade—presumably the present Secretary of State will tell us something similar—that CPTPP remains the top trade priority for Ministers. Professor Sanchez-Graells is concerned about the Government’s rush to get two procurement chapters on to the statute book when there is scope for future uncertainty. I am not sure what I think about that particular argument, but I would be interested to hear what the Minister has to say.
We know that Conservative Ministers have become enthusiasts for red tape—that was the reality of the deal the previous Prime Minister negotiated with the European Union. I gently suggest that my hon. Friend should not be too surprised that Ministers do not seem bothered about more legal uncertainty for businesses interested in Government procurement contracts.
Either way, a bit more consultation, which amendment 5 would lock in, and a bit more thought as a result of an impact assessment under amendment 22, might help to encourage debate and consultation about how serious the problems are and how to resolve them. That might help to advertise the many apparent benefits of these agreements, which the Government’s impact assessment mentioned. However, I caution Committee members to hold on a second, because the third argument that Professor Sanchez-Graells advanced in public was that the procurement chapters will not lead to the huge benefits for British businesses that Ministers have claimed they will and that the impact assessment Ministers published over-eggs all of those benefits. For example, Ministers say there will be lots of new opportunities for transport firms to run transport contracts in Australia, despite there being many transport networks in the UK that are run by foreign companies. I hope to pick up that issue in the Committee’s discussions on new clause 4, but it would be interesting to hear which companies have indicated to the Minister that they are interested in the procurement opportunities in Australia and New Zealand that he and his colleagues have alluded to.
Professor Sanchez-Graells also noted the consequences of clauses 1(2) and (3), which we debated this morning. He noted that contracts of unknown length and tenure would be extended by regulations to cover more than just Australian and New Zealand firms, with no reciprocity in mind. If only the Secretary of State had given evidence in good time to the International Trade Committee, which my hon. Friend the Member for Brighton, Kemptown sits on, some of those concerns could have been addressed.
To help me understand Professor Sanchez-Graells’s arguments, I asked him to explain them in the context of the Elizabeth line—Crossrail, as it was known—and of the need to rebuild a hospital. Members will remember the significance of the Elizabeth line, stretching as it does from Paddington in west London through to Abbey Wood and Stratford in east London. Its cost to date is almost £19 billion, and it will be fully operational this year. It is a huge public procurement exercise—that £19 billion does not include new trains or a number of other things. It has been a huge success story for the UK and London. It has generated 14,000 jobs, it comprises 42 km of tunnels and it has used 13,500 cubic metres of concrete. In short—
Order. I understand the argument the hon. Gentleman is making, but I think we get the point about Crossrail. He needs to move on to the relevant argument.
The argument I am making is that Professor Sanchez-Graells highlighted the risk of a chilling effect on the progress of the Elizabeth line had the Australian and New Zealand procurement chapters been in force. Let me set out how it might have played out—fortunately, neither agreement was in place, so there was not the same legal uncertainty and we have not had such a delay.
Let us suppose for a second that both procurement chapters had been in force. To slightly simplify it, the Elizabeth line offered three contracts—one for the construction of Crossrail, one for the supply and maintenance of the rolling stock and one for the operation of the line, which was a services concession. That services concession would not have been covered by the UK-Australia free trade agreement, but the construction contract and the rolling stock contract would have been covered under both the WTO’s Government procurement agreement and, crucially, the UK-Australia FTA. There would effectively have been dual regulation contracts.
There could have been a real, substantive clash of provisions between the GPA and the FTA. The crucial issue of access to remedies could then have played out. If an Australian company had expressed an interest in the relevant tender—for construction or for supply of the rolling stock—and had ended up not getting the contract, it could have been barred from access to remedies under the UK-Australia FTA on grounds of public interest. Why would we have wanted to delay the completion of the Elizabeth line?
The Australian company would have missed out on compensation and scope for judicial—
This is relevant to clause 5. If we had consulted better with firms across the UK that benefited from the supply chain of the Elizabeth line, they might have been able to highlight their concerns at an early stage, preventing any problems going forward.
If you, Mr Twigg, are not convinced of the relevance of an argument that looks back, let me put to you an argument that looks forward and give the example of a hospital that needs to be rebuilt. Let us say it is the Queen Elizabeth Hospital in King’s Lynn, which we know needs rebuilding. The Australian and New Zealand free trade agreements, and the procurement chapters of both, will be in play at this point, assuming the Bill becomes law. If they are, and an Australian company bids for the contract to rebuild the Queen Elizabeth Hospital, there could be a chilling effect.
Let us say the company is denied access to the contracts, for whatever reason, thinks it has been treated unfairly, tries to put in a bid for judicial review to stop the contract being won and started by the relevant British company, and cannot get judicial review to stop it, because of public interest grounds—because the hospital is falling down. The court might say, “We’ve got to crack on with this.” The Australian company would miss out on judicial review, also on public interest grounds, and the court would be open to rule against giving it compensation. Australian companies would now look askance at the NHS procurement market and think, “We won’t take the risk of bidding for contracts there. We may well miss out because of the terms that have been agreed under the procurement chapter of the UK-Australia agreement.”
It does not just go one way. That same risk is potentially in play in Australia for British firms bidding to rebuild Australian hospitals. If one were falling down and a British company bid and lost out and then thought it had been treated unfairly, it might initially turn to its lawyers and say, “Let’s put in a judicial review bid to stop the contract going ahead while we try to persuade the court to restart the tender process. Let’s at least try to secure compensation for all the money it’s cost us to put the bid together.” In my understanding of the arguments advanced by Professor Sanchez-Graells, under the terms of the UK-Australia free trade agreement, if the contract is not awarded to the UK firm but to an Australian one, and the court decides on public interest grounds that that is fine, the British business would lose an awful lot of money that it might have invested in bidding for the contract.
The irony is that if a French firm bid for the same contract, it might not be able to stop the contract or get judicial review, but under the terms of the GPA, it could argue for compensation. The British firm would not even be able to apply for compensation, but firms from other GPA jurisdictions could. In those circumstances, British firms that specialise in overseas procurement may be tempted to look not at the Australian or New Zealand markets, but at other markets in which they have better protection if future contracts go wrong.
That is a substantive and serious concern, and it would be good to hear the scale of the Minister’s concern about such risk. Ministers and Committee members may still think that companies take risks all the time, so if a contract does not go their way and they cannot secure compensation or judicial review, then tough luck. However, it is also worth considering the effect on the bit of Government that is trying to issue the contract.
I pray in aid the case of Draeger Safety UK v. the London Fire Commissioner, which has been substantially protracted. The London Fire Commissioner wants to upgrade the quality of equipment available for its firemen and women—quite understandably, it wants the best, most modern equipment. Draeger Safety UK lost the contract, thought the contract was unfair, and is trying to secure compensation. That is not an isolated case; similar cases are going through the UK courts.
Adding to the process the complex GPA-minus provisions of the UK-Australia and the UK-New Zealand FTAs could have a chilling—or certainly a delaying—effect on the issuing of tenders. For that reason, I hope that a little more consultation by Ministers with each part of Government around the UK that might want to issue a contract, and a little more thought—perhaps through an impact assessment—about the impact of the GPA-minus provisions that Professor Sanchez-Graells set out, might help to avoid those sorts of problems, and that the procurement chapters of both FTAs could actually be really useful.
I look forward to hearing what the Minister has to say about Professor Sanchez-Graells’s concerns, and I strongly encourage the Minister to support amendments 5 and 22.
During long interventions, sometimes Ministers jokingly ask to intervene, but I had been sitting down for so long that I genuinely thought I was listening to a speech.
Relations with the International Trade Committee have not been as good as the Government, the Committee or the House want. That is going to change. We will make ourselves fully available. I know the Secretary of State has already started having those meetings with the Committee. Her diary obviously shifts quite quickly, so I cannot say where she will be, when. I know there is a whole series of activities planned. I am looking at the Public Gallery; there are civil servants looking into how we can link better with members of the Committee. I will play my part as Minister of State at the Department, and will always make myself available to the Committee, if at all possible. It will be my top priority, over and above speaking to the House or taking part in other Committee processes.
The hon. Gentleman said, “You just publish reports. That’s not enough.” If that is all we did, it would not be enough, but it is not all we have done. There are inter-ministerial groups on these issues, which are attended by Ministers from the devolved Administrations, particularly those with responsibility for trade. The forum that we are discussing was established to consider all trade policy, and its effective implementation, and will be able to review and evaluate that policy’s impact.
The hon. Member for Harrow West seems incapable of using the word “effect” or “impact” without prefacing it with the word “chilling”, as if these were haunting issues. We want to evaluate policies, to look at the impact assessment, and to improve all the time. As has been said, the agreements are evolving. They get built on and improved. The forum has met eight times since its inception in 2020. It provides for open discussion about negotiation, and allows Ministers from devolved Administrations to contribute their views directly, both formally and, in the sidings, informally.
I have absolutely no idea. As the hon. Gentleman said early on, procurement is a very small section of these matters. Most, if not all, of these meetings were probably open, so I could check the minutes, but I suspect that not every nuance is captured in them. Also, sometimes trade issues can be looked at through lots of lenses. For example, one issue might relate to the motor industry, procurement and Wales.
There are bilateral meetings with counterparts from the devolved Administrations, and there is weekly engagement by UK Government officials. That all helps to build a better relationship. The hon. Member for Llanelli asked whether the relationship could be better. I am unsure of how well sighted she and the Committee can be of the details of that—I think that is what the hon. Member for Harrow West is alluding to—but it would be interesting to look at the Welsh example, in particular; there have been a lot of compliments, with people saying that engagement has increased and is better. That is not to say that it cannot be even better, but let us give credit where credit is due—not to Ministers, but to the Department.
Absolutely. On unions—I mean unions in the broadest sense; I am not trying to pull a fast one by referring to four regional national farmers unions—my understanding is that six unions, as the hon. Gentleman would understand the term “union”, as opposed to the Conservative and Unionist party, for argument’s sake, are genuinely involved in the trade advisory groups. That is what we would want.
That is on the record. If I am wrong and if I have misread my brief, I will correct the record later and write to the hon. Gentleman with the details of the unions, and perhaps with more information around the issue of the union being invited to something and there being some type of deal, if it is in the public interest to put that out. I want to encourage the unions to come and be part of the process, and I want us to make decisions.
To be clear, is the Minister saying that if the TUC, as the representative of the trade union movement, is not on any of the relevant trade advisory committees, he is committing himself to inviting the TUC?
The Minister did not commit to that. I think the question is, will I commit to that? The answer is no. I will commit myself to ensuring that unions are on those trade advisory groups. I think they are on the trade advisory groups—
Because there are many unions out there. That is not part of the Bill—
This is an interesting question, but the hon. Gentleman, who was an able Minister, would not have made such an on-the-hoof commitment when he was sitting on this side of the Committee without consulting and without thinking about the implications for other unions. However, I am more than happy to go away and look at the issue if that makes him happy. I am picking up the gauntlet to try to bring him onside and get the Bill through, so perhaps that is a nice suggestion.
Almost nice. All I would say to the Minister is that I would have known the question was coming.
There were no telepathic Ministers available, so the hon. Gentleman is stuck—
If the Minister cannot elaborate on this now, will he commit to write to the Committee with a more detailed respond to Professor Sanchez-Graells’s analysis? He had substantial concerns, which the International Trade Committee and the International Agreements Committee accepted, and nobody challenged it in the evidence he gave last week. I understand that the Minister may not have access to all the information he needs, but I wonder whether he would be good enough to write to us. I hope he is right—I really do—that the provisions negotiated are GPA-plus, but there seems to be doubt that some of the tweaks that have been made might make them GPA-minus, and that needs to be ironed out as a matter of urgency for British business.
I am happy to iron it out. The departmental advisers respectfully disagree with the professor, and I am more than happy to write with their analysis of why they disagree. Clearly, we cannot take evidence from 30 academics and say, “This is an outlier out of 30,” but I will send the Committee that letter.
On the unions, it is slightly more complicated than what the hon. Gentleman asks and what I said. The TUC has already been offered roles on the advisory groups but unfortunately has not taken them up so far. The TUC has been represented on the Department’s Strategic Trade Advisory Group, and in 2021 we offered six unions—that is where the figure six came from—roles on the group. I assumed incorrectly that they had taken us up on that offer. I do not know why, but they have not. They are still welcome, and I am more than happy to write again making that offer, to try to understand why they have not taken it up. We are saying that we want to consult more widely. We have offered the unions a consultation role, and Members say that unions want to have an even bigger role, but they have not come to the table. I am sure that there are complicated, good reasons for that, and we will try to work through those.
Hopefully I have answered the questions sufficiently and have only failed in my lack of telepathic skills to know which questions would come up. I will try harder next time and get the best brains on providing said facility to the hon. Gentleman.
I am grateful to you, Mr Twigg, for allowing me briefly to respond. I am grateful for the Minister’s willingness to write to the Committee with a more detailed response to the concerns that Professor Sanchez-Graells raised. I am happy not to press amendments 7 and 20. However, tempting as it is to think that the Minister has given comprehensive answers, he was almost comprehensive but did not give quite enough for us not to press amendments 5 and 22. We will press them to the vote.
The legislation does not reflect the values that Scotland stands for, and it does not adequately safeguard food and farming standards in Scotland.
The powers in the Bill should not be exercisable by UK Ministers in relation to Scotland without a requirement for them to secure the consent of Scottish Ministers. That is what amendments 3 and 4 propose. While negotiation of international agreements is a reserved matter, the implementation of such agreements in devolved areas such as public procurement is devolved. There is no reason for UK Ministers to hold such powers in relation to Scotland.
The Scottish Government have consistently and successfully implemented international obligations on procurement since 2006, when they first transposed the EU directives, and they have been consistent in their commitment to upholding international law. The Scottish Government continue to engage with the UK Government on the issue, and I understand that officials are in continual contact with counterparts in the Cabinet Office and the Department for International Trade.
It might be better to make provision in the Bill for the implementation of those agreements, rather than using a delegated power. The Minister mentioned the issue, although I still do not understand why that is not possible and there appears to be no particular reason for powers needing to be provided. Such agreements are signed and there is common understanding of the amendments that need to be made to procurement legislation in order to implement them. That could be done in the Bill, which in turn could provide for commencement regulations to ensure that the amendments took effect at the desired moment.
I thank the shadow Minister, the hon. Member for Harrow West, for his sympathy, as he put it, towards amendments 3 and 4. Those amendments are specific to discussion and dialogue between the UK Government and the Scottish Government, and I would argue that amendment 5 is not as strong as our amendments. However, we do support Labour amendments 7 and 22.
Question put, That the amendment be made.
Before we come to the question that clause 1 stand part of the Bill, I note that I was quite lenient in the previous sitting about interventions. I would like to remind Members that interventions should be short and to the point.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
Schedule 1 agreed to.
Schedule 2
Regulations under section 1
I beg to move amendment 9, in schedule 2, page 9, line 5, leave out from “section 1” to end of line 6 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”
With this it will be convenient to discuss the following:
Amendment 10, in schedule 2, page 9, line 8, leave out “negative” and insert “affirmative”.
Amendment 11, in schedule 2, page 9, line 11, leave out from “section 1” to end of line 12 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by a resolution of Senedd Cymru.”
Amendment 12, in schedule 2, page 9, line 13, leave out from “section 1” to end of line 16 and insert—
“may not be made under this Act unless a draft of the regulations has been laid before and approved by a resolution of the Northern Ireland Assembly.”
Amendment 13, in schedule 2, page 9, line 25, leave out from “applies” to end of line 26 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”
Amendment 14, in schedule 2, page 9, line 28, leave out “negative” and insert “affirmative”.
Amendment 15, in schedule 2, page 9, line 29, leave out sub-paragraphs (5) and (6).
Amendment 16, in schedule 2, page 10, line 2, leave out from “Ministers” to end of line 3 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by a resolution of Senedd Cymru.”
Amendment 17, in schedule 2, page 10, line 5, leave out from “department” to end of line 7 and insert—
“may not be made under this Act unless a draft of the regulations has been laid before and approved by a resolution of the Northern Ireland Assembly.”
Amendment 18, in schedule 2, page 10, line 9, leave out sub-paragraphs (9) to (12).
Thank you, Mr Twigg. You will understand the frustration of Labour Members present that Ministers are once again seeking to get through a whole bunch of regulations using the negative procedure, rather than the affirmative resolution procedure. Amendments 9 to 18 seek to make it a requirement that the affirmative resolution procedure be used for every set of regulations that Ministers want to propose under the procurement chapters of these two free trade agreements.
In making the case, I note that the affirmative resolution procedure is by no means a perfect process. However, it is better than the negative procedure. Without the affirmative process, Ministers would have carte blanche to introduce regulations based on these procurement chapters without the slightest hint of anything resembling parliamentary scrutiny. The negative resolution procedure that the Government propose is the least rigorous of all parliamentary procedures available to the House for scrutiny.
Having served in government, I can understand the Minister’s appetite to avoid scrutiny. There is very little to be gained for a Minister of State or an Under-Secretary of State in having to come and justify to a parliamentary Committee why particular regulations should be introduced. However, it is none the less important that Parliament has the opportunity to ask questions about regulations that are being introduced and to consider whether they fit with the objectives that were set out for the trade negotiations and actually seek to achieve those objectives.
It is worth remembering that the last negative instrument to be successfully annulled, as I understand it, was the Paraffin (Maximum Retail Prices) (Revocation) (No. 3) Order 1979. With such a small chance of a negative instrument being successfully annulled, I can well understand the appetite of Ministers to use this process.
Does not the evidence that the hon. Gentleman has brought forward actually negate his case? If there was a genuine problem and there had been some error, the Committee would have voted against it or, indeed, the Government would have withdrawn the measure.
I gently suggest to the Minister that it is much better not to get ourselves into the position where we have to persuade Members from all parts of the House to vote down an order. One swallow does not make a summer. Just because there is an example in the far distant past that we should endorse negative instrument, a little bit of parliamentary scrutiny and pressure on the Minister, and a few nerves to make the Minister check their brief in more detail before signing off on a set of regulations, would seem sensible. The scrutiny arrangements for the Australia FTA to date have been poor, and we have had no debate on the Floor of the House on the New Zealand FTA, apart from the Second Reading of this Bill. Given that, we should switch from the negative to the affirmative process, and I gently encourage him to adopt an even more reasonable tone than he has adopted up until now.
I am sure the Whips will note with criticism the hon. Gentleman saying that I have been reasonable. In all seriousness, I thank hon. Members for the amendments and I hope to provide reassurance as to why the measures are necessary. The hon. Gentleman says he wants to hold my feet to the fire. He suggested that I may not read the brief quite as closely if I do not have to defend it in Parliament, but I will ensure that I do that anyway. I will regularly check my brief.
It is worth remembering that the amendments would not be a vote on the agreements. They would be a vote on the secondary legislation of a trade agreement. By the time these agreements enter into force, Parliament will already have had the opportunity to scrutinise the obligations of the procurement chapter in these agreements through the process set out in the Constitutional Reform and Governance Act 2010. The Government are certainly committed to transparency in our trading arrangements, and we have put in place a suite of enhanced transparency and scrutiny arrangements that go well beyond our statutory obligations, and we will continue to do so. That includes providing the International Trade Committee and the Lords International Agreements Committee with at least three months to report on the agreements before Parliament scrutinises them more formally through the process set out in the Constitutional Reform and Governance Act, which comes later.
For the Australia agreement, the period was triggered after Parliament had had the deal available to scrutinise for over six months, and it has already been subject to scrutiny through the Trade and Agriculture Commission, which published its report in April 2022. The Department has since responded with the publication of the Australia agreement report under section 42 of the Agriculture Act 2020. In addition, future changes in the procurement chapters will relate mostly to machinery of government changes and the subsequent updating of lists.
This is not a novel procedure. Section 1 of the Trade Act 2021 enabled the implementation of the UK’s membership of the World Trade Organisation agreement on government procurement to operate in a similar way. This approach was acceptable to Parliament, and we received no negative comments from the Delegated Powers and Regulatory Reform Committee. These sessions and holding Ministers to account are useful, but Ministers are a limited resource. We are not an infinite number, and we should perhaps focus on the more critical pieces of legislation rather than just statutory instruments. I therefore ask the hon. Member to withdraw his amendment.
I am grateful to the Minister for his response, but I gently suggest that we have not been deluged with regulations from the Department for International Trade, so I do not buy his argument that Ministers or shadow Ministers are so busy that there is no time to discuss regulations. If our amendment is accepted, it may well be that our debates would be relatively short, and they would provide the opportunity to ask questions and raise issues that are slightly outwith this debate but important to a range of stakeholders outside the House. It would make sense to switch from the negative to the affirmative process, so I intend to press the amendment to a vote.
Question put, That the amendment be made.
I beg to move amendment 6, in schedule 2, page 10, leave out lines 31 to 38.
Amendment 6 would delete part 3 of schedule 2. I want to focus on what that would mean. Part 3 says:
“The power to make regulations under section 1 in relation to”
both Government procurement chapters, or
“any modification of either Chapter which requires ratification, is capable of being exercised before the agreement or (as the case may be) modification concerned is ratified.”
The Minister seems to be asking for carte blanche to be able to make any change to the procurement chapters without proper parliamentary scrutiny, and certainly before the UK-New Zealand FTA has been ratified. I am open to persuasion as to why such a requirement is necessary, but I wonder whether Ministers are again seeking to avoid serious parliamentary scrutiny, specifically on the terms of the UK-New Zealand FTA. The Minister will know that there has not been any sustained debate in the Chamber on the whole of that free trade agreement. I look forward to hearing his justification for this particular part of schedule 2.
I hope to be able to provide that assurance. This part of the Bill is there not at the request of Ministers, but at the request of lawyers, to give legal certainty and predictability. It is a necessary part of the process of implementing trade agreements to make the legislation before ratifying.
The amendment would create legal uncertainty regarding the process of implementing the two agreements. Several steps need to be taken to get agreements into force and allow UK businesses and, indeed, consumers to benefit from the significant economic advantages that they provide. Entry into force is the final step. However, the UK can proceed to enter into force only after it has ratified the agreements. In turn, ratification may only be agreed to once all the necessary domestic legislation is in place. Without the provision that the amendment seeks to change, there would be legal uncertainty about whether domestic legislation could be made before ratification. That is the reason behind it. I hope that the hon. Gentleman, having heard my response, will withdraw what I hope will turn out to be a probing amendment.
I am grateful to the Minister for his explanation. I now understand a little better the reason for the provision. I will reflect on his remarks, but for now I will not press this to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clause 3 ordered to stand part of the Bill.
Clause 4
Extent, commencement and short title
The UK Government are negotiating trade deals for the first time in more than 30 years, and that is not an easy task. Trade deals in matters of procurement are not just for Government photo ops; they impact on every fibre of our and our constituents’ being. Therefore, we must have high levels of security at the start, during and at the end of discussion about the legislation. I appreciate that we have the CRaG—Constitutional Reform and Governance Act 2010—process during the drafting of legislation, but as has been said this afternoon, it does not guarantee a debate or any votes in Parliament. It is a poor scrutiny tool from the outset.
In setting an expiration date, our amendment would allow for scrutiny at the end. That would enable Parliament to judge the legislation’s effectiveness on the proposed date of December 2027. That would also allow our constituents to examine the usefulness of the legislation in matters of procurement that have arisen over the years. We must also consider the potential of traders across the country getting locked into agreements that do not work for them. Consumer group Which? has already found that 72% of people in the UK do not want food that does not meet current standards coming in through trade deals. The majority of survey respondents—67%—also felt that the UK Government provide a poor level of information about new trade deals. The amendment would ensure that we bring public and parliamentary scrutiny to the forefront. I urge colleagues to support the amendment.
Amendments 8 and 21 are probing amendments, to understand better how the Procurement Bill and potential accession to the CPTPP might affect the provisions in the procurement chapters of the Australia and New Zealand free trade agreements.
As I understand it, the Minister has touched on some of the reasons why the New Zealand and Australia free trade agreements need to stay on the statute book for considerable time to come, but I want to understand whether the Procurement Bill will provide the opportunity to sweep up the measures proposed by the two amendments, so that this Bill can be taken off the statute book to avoid any legal uncertainty. Clarity on that would be helpful. If there is a chance that the legislation will not be necessary, because the Procurement Bill would take the matter forward, that creates additional opportunities for Members to consider the impact of the trade legislation going forward.
I wonder whether Ministers might be tempted to think, “Let us stick with the Trade (Australia and New Zealand) Bill because we have no idea whether the Procurement Bill will survive in its current iteration.” I say gently that, given the chaos in the Minister’s party, one does not know which legislation will survive if there are further ministerial changes. He will understand that there has been considerable criticism of the Procurement Bill. Clearly, it would not be appropriate to dive into that now, but it would be helpful to understand the interplay between that crucial piece of UK domestic legislation and the two procurement chapters. If the experts in his Department are wrong about the concerns that Professor Sanchez-Graells outlined about possible GPA-minus provisions now being the problem for British exporters to Australia and Australian exporters coming here, the Procurement Bill might provide an opportunity to sort those problems out.
Amendment 21 refers to the CPTPP and the potential accession of the UK to it. It would be good to hear from the Minister how the negotiations are going and what might be a reasonable timeline for the House to have the chance to consider the accession documents to the CPTPP. I ask that because the provisions in the procurement chapter of the Australia free trade agreement appear to largely mirror the provisions in the procurement chapter of the CPTPP. Everything that has been written about the CPTPP suggests that we will be rule takers and will not be able to shape in any significant way the procurement chapter of the CPTPP that we might wish to join. Was that part of the motivation for Ministers deciding to just roll over and accept the request of the Australians for the GPA-minus provisions in the procurement chapter of the Australia FTA? We would simply have to accept them on joining the CPTPP.
The Minister will know that a series of trade experts have suggested that we will be rule takers if the CPTPP comes into force. We will not have much opportunity to influence the negotiations, and that is a considerable concern given that the idea of Britain being a rule taker was a motivation for many to vote for leaving the European Union. I look forward to the Minister explaining the interplay between provisions in the Trade (Australia and New Zealand) Bill and those in the Procurement Bill and the CPTPP.
I welcome the probing amendments tabled by the official Opposition and the amendment tabled by the Scottish National—or nationalist—party. Forgive me, but I forget which word it is. [Interruption.] I will do my homework better next time.
Amendments 2, 8 and 21 would ensure that the power in the Bill expired, even if provision under it was still required. The Bill is about implementing and maintaining our commitments in the procurement chapters of the agreements. That means that we need to ensure day one compliance as well as compliance beyond that. That is why the amendments that would remove the power are inappropriate. Although the amendments would permit the procurement chapters to be implemented, they would remove the power when it might be needed for modifications, and that would not be a satisfactory position to be in. Future modifications in the procurement chapters may relate to machinery of government changes and updating of lists. An example is when the Department for Culture, Media and Sport added digital. I do not think that we would want to come back to this Committee to make such a change.
Let me deal with amendments 8 and 21, tabled by the hon. Member for Harrow West. Bilateral trade agreements, like the ones dealt with in this Bill, sit alongside agreements like the comprehensive and progressive agreement for trans-Pacific partnership and the World Trade Organisation agreement on Government procurement. The procurement chapters of these deals will not be superseded by the accession to the trans-Pacific partnership. Accordingly, the powers in this Bill will still be needed after the accession in order to implement future modifications to both these agreements.
I will, but I suspect I am coming to the hon. Gentleman’s point.
The Minister mentioned the GPA, which provides me with the opportunity to intervene and press him on it. Presumably the Government are still significant supporters of the GPA, but I hope that the Minister accepts my point about the need for the GPA to be a dynamic and more modernised agreement. If he does accept that, what are Ministers doing to try to convene signatories to the GPA in order to start the process of modernising that agreement?
I agree that the GPA should be dynamic. In terms of what Ministers are doing, I can speak for myself: at G20, I met Dr Bright Okogu, Professor Ngozi’s right-hand man in the WTO, and I agreed that I would go to Geneva for probably a week and meet all the officials there to get up to speed with the detail at a quiet time, rather than the busy time of a multilateral agreement, to raise exactly these types of issues, because we believe in a free trading system globally and the value of promoting that for all UK equity—it is not just exports, but the cost of living and also development, which both of us care massively about.
I think that I have covered the issue about the CPTPP. I cannot give a running commentary on negotiations there. It is a high priority for the Government. At my most recent meetings with internationals, I raised it, both bilaterally and multilaterally, and I will continue to do so, as will other Ministers. The Australia deal and this Bill are a stepping stone to get there. As a precondition, we want to get this done so that we are on a firmer footing for the next transition.
The hon. Gentleman will be well aware, I suspect, that one of the big concerns about the CPTPP relates to investor-state dispute settlement. One of the mildly reassuring things about the procurement chapters of the Australia and New Zealand FTAs is that they do not allow for investor-state dispute settlement to kick in in a very obvious way. The CPTPP appears to be much more explicitly in favour of ISDS. It would be helpful to understand from the Minister, at a time of his convenience, whether the Government are accepting the principles of ISDS, locked as they are into the CPTPP, or whether he is actively pushing for them to be deleted from the requirements that Britain has to sign up to in order to accede to the CPTPP.
I really cannot, as part of this Bill, give any more to the hon. Gentleman than I have done on my discussions in international forums and my intention to go out to Geneva. I want to go out there open-minded. A number of issues will be discussed in Geneva above and beyond this one, and I want to have an open discussion. I do not want to prioritise the hon. Gentleman’s equities and desires, or anything else; I want to listen openly to what Dr Ngozi says, and talk about how her priorities fit with the Government’s and how we can move forward together. That is the nature of multilateralism: because every member has a vote, the process can easily be held up, so I am resistant to being too strong in accepting what the hon. Gentleman has said. However, I am very sympathetic to it.
I am grateful to the Minister for his explanation about his upcoming meeting with the staff of Professor Ngozi, who is a great figure internationally. The Minister—I do not chastise him in any way for this—had to have a discussion with his Whip, the hon. Member for Workington, but the question I asked was whether ISDS was included in the CPTPP. I wonder whether the Minister might be willing to look at the record and perhaps drop me a note about the question I actually asked.
I will certainly do so.
Turning to the question of whether the powers fall away, as ever it is slightly more complicated than yes or no. The powers in clause 1(b) for dealing with matters arising out of, or related to, the FTA chapters will cease to exist for England, Wales and Northern Ireland when the new procurement system becomes law through the Procurement Bill, assuming that all happens; those functions will instead be carried out through the powers in clause 82 of that Bill. It is different for Scotland, because competency for treaty making is at the UK level, but the actual procurement legislation and processes are done by the devolved Assembly. Scotland has separate procurement regulations from the rest of the UK and will retain those regulations after the Procurement Bill comes into effect.
I have made the point that we want to establish a good relationship with the International Trade Committee, and the Secretary of State giving evidence to it is clearly part of that. The hon. Gentleman will know that Ministers sometimes need to deal with matters urgently. I do not know what other matters are going on, but I am sure that the Secretary of State has apologised profusely and looks forward—as I do—to attending that Committee. I am more than happy to update the hon. Gentleman in a bit more detail, informally—perhaps even later today if I have time to go back to the Department.
As part of this new spirit of transparency from the new ministerial team at the Department for International Trade, will the Minister commit to publishing the analysis used to produce the impact assessment that the Government published for the FTAs? As I understand it, Ministers are refusing to publish the modelling used to generate that assessment. That leaves a slightly cynical taste in the mouth. One suspects that the economic model is not being released because the impact assessment was perhaps slightly inflated.
I would like to make it clear that this is not a new plan for transparency. I am being credited, to a degree, with what is just the old order and transparency—[Interruption.]
I am sorry, Mr Twigg. I will stick entirely to new clauses 1, 2 and 3.
I am more than happy to take away the issue of impact assessments, and look at the formula and what was disclosed. I have read the document, but it is very big. I will probe and look at what has already been disclosed before asking the Department to disclose further information.
I suggest to the Minister that he should approach that discussion with his officials in a slightly different way. Why does he not go to his officials and ask, “Is there any reason why we cannot publish all the economic modelling behind the impact assessment?”
I thank the hon. Gentleman for his suggestions but, with respect, I will do things my way if that is okay.
We published impact assessments within the agreements—we have spoken about that already. In the reports, the Department provides analytical evidence as a base, but we will do more. I have already spoken about the five-year and two-year assessments.
On UK suppliers competing for procurements, there is a designated team in the Department—complemented by staff from Australia and New Zealand—who will support UK businesses across the country. I have already seen a bit of that.
May I point out gently to the Minister that the point on GIs is that Ministers secured nothing in terms of protection for British GIs in the Australia deal. That comes on top of a very lengthy delay to get any GIs agreed with Japan. There is a worrying pattern of British businesses and good British products not getting the protection they deserve.
This is not an adverse change. It is just the start of an agreement and not everything can be done on day one.
I have further good news for the Scottish National party. It is slightly outside the scope of procurement, but there will be big benefits from the financial services industry, particularly in Edinburgh. Exporters were very keen, when the Secretary of State went there, to explain that they were happy about tariffs being reduced. That will reduce prices and increase profit. There is good news for Scottish salmon—not for the salmon themselves, as they will be dead—because they are guaranteed to clear customs in six hours. Hon. Members will know that time is an issue with fresh products. Scotland’s services firms, of which there are many, will benefit from access to millions of pounds worth of extra Government contracts. That is good news for the United Kingdom and good news for Scotland.
Further to that point of order, Mr Twigg. On behalf of the official Opposition, I add my thanks to you and to Mr Pritchard for the generous way in which you have chaired proceedings. I must also thank the Clerks for their assistance with drafting, the Hansard staff for the challenging job that they will have to do to understand my notes in particular, and the Doorkeepers for keeping order. I can well understand why the Minister praises his officials; I hope others will understand if I take the opportunity to praise my one member of staff, who has assisted me in preparing for the Committee.
We have had a lively and provocative debate, in which a whole series of serious issues were raised by hon. Members from the Scottish National party and from the Labour party. I am grateful to my hon. Friends the Members for Llanelli, for Nottingham South, for Brighton, Kemptown, and for Sefton Central for their support.
I note that not one Conservative Back Bencher took the opportunity to praise the person who negotiated the Australia and New Zealand deals today—
Further to that point of order, Mr Twigg. I will not keep the Committee much longer. I echo the thanks to the Clerks and the Doorkeepers, who are the backbone of this place. Somehow, I seem to have had more help than the official Opposition: Katie, Clo and Calum have been fantastic on the research and background. I am sure that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey and I, and others in the SNP, will be knocking on the Minister’s door in coming weeks, championing Scotland, Scottish farmers and Scottish products.
Bill to be reported, without amendment.