Trade Bill (Eighth sitting)

Gareth Thomas Excerpts

Committee stage & Committee Debate: 8th sitting: House of Commons
Thursday 25th June 2020 Public Bill Committees

Regulations under Part 1

[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International treaties cannot be easily repealed, but domestic legislation can be repealed much more easily.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.

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[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.

[Gareth Thomas]

rose—

[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.

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[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.

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[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.

--- Later in debate ---

[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.

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[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.

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[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.

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Brought up, and read the First time.

[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.

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[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.

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[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.