Trade (Australia and New Zealand) Bill

Debate between Geraint Davies and Gareth Thomas

Report stage
Monday 12th December 2022 Commons Chamber

[Gareth Thomas]

My hon. Friend makes an important point. Equally significantly, Professor Sanchez-Graells, in his evidence to the Bill Committee and to the Select Committee, suggested that the protections for British businesses trying to win Government procurement contracts across CPTPP—comprehensive and progressive agreement for trans-Pacific partnership—countries would be damaged if Ministers continued to negotiate similar provisions to those that are in the Australia procurement chapter. We examined his detailed concerns in Committee. The absence of a cogent and compelling rebuttal from the then Minister was striking. To be fair, shortly after the end of the Committee stage, a further letter from the outgoing Minister of State was sent to me, and a copy was placed in the Library. I shared a copy of that letter with Professor Sanchez-Graells, who reiterated his concerns, noting the lack of clear counter arguments for the assertions in that letter. Indeed, there were not any worked-though, real-life examples of the sort that I raised directly with the Minister in Committee to explain why the concerns articulated by Professor Sanchez-Graells are misplaced.

Given that this Bill is specifically about procurement, and given that Professor Sanchez-Graells was one of only two witnesses asked to comment on procurement by either the Bill Committee, the other place’s International Agreements Committee or this House’s own International Trade Committee, it was a little surprising that there was not better preparation by the Department for consideration of his arguments. I do recognise that the Department was in a degree of chaos at the time, with Ministers coming and going, but one can only hope that the Minister replying to this debate has a little more to offer.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does my hon. Friend agree that this underlines the fact that there is not enough scrutiny and democracy in the process, and that this House should have the opportunity to look at the mandate for future deals and to scrutinise the negotiations as well as the ratifications, so that we do not get a deal that offers a hopeless 0.1% GDP growth over 15 years?

[Gareth Thomas]

Not surprisingly, my hon. Friend leaps ahead of me; I will come on to the issue of parliamentary scrutiny in just a moment.

My last point on the case for new clause 1 is that such an impact assessment would also allow us to explore the extent to which small and medium-sized enterprises were able to take advantage of this trade deal. We know that SMEs need the most support to take advantage of free trade agreements and, given the cuts to the tradeshow access programme, for example, we know that SMEs are likely to face real challenges in exporting. New clause 1 cannot change the way Ministers negotiate future procurement chapters, but it would at least require an honest and detailed assessment of the impact of those chapters on British businesses.

--- Later in debate ---

[Gareth Thomas]

My hon. Friend makes his point well, and I hope he is able to catch Mr Deputy Speaker’s eye later on so that he can draw it out further.

New clause 2 cannot, I am afraid, put right the disregard of those on the Government Front Bench thus far for the vital role that British farmers play in the economic and social fabric of our country, but we can at least learn from that desperate rush to get any deal with Australia, regardless of the price. I hope Ministers will take this opportunity to acknowledge the mistakes made during the negotiations and will back this new clause. If not, I will seek the permission of the House and put it to a vote. I have said I hope Ministers will acknowledge mistakes, but we do not expect any apologies. After all, there have been so many apologies from the Government over the last few months that their worth has devalued more quickly than sterling under the last Chancellor.

New clause 12 and the consequential amendments 6 to 16 are designed to address some of the cross-party concern about the obvious failures on parliamentary scrutiny that my hon. Friend the Member for Swansea West (Geraint Davies) alluded to. In the usual Conservative tradition, having made such enormous errors in her leadership of the negotiations with Australia, there was only one option for the then Secretary of State: she was promoted. Indeed, in the lucky dip that was this summer’s Tory leadership contest, she won the chance to be Prime Minister for the month and, consistent with her achievements on trade, delivered economic chaos, higher mortgage bills and a return to deep austerity.

The following Secretary of State, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), swiftly fell out with her colleagues—a scenario almost too difficult to imagine. Tories falling out with each other? Who on earth would have seen that happening? Instead of the world-leading scrutiny process we were once promised for new free-trade agreements, she adopted a new one: invisibility. On at least eight separate occasions, the previous Secretary of State failed to front up at the International Trade Committee to answer important questions about the new deal. She seemed somewhat keener to tour the TV studios questioning the work ethic of her then ministerial team.

There is, I have to say, a striking consensus outside the House—across business groups of every economic sector, and among trade experts, charities and non-governmental organisations working on trade—that the CRaG process is not fit for purpose post Brexit, and that one of the key lessons from the Australian FTA negotiations is the need for better parliamentary scrutiny. We cannot deliver that better scrutiny for all FTAs today—not least given the narrow context of this legislation—but we can certainly make sure that Parliament considers further the regulations that implement the procurement chapters of the deals. A super-affirmative provision would give Parliament an additional layer of scrutiny for trade deal regulations under the Bill before those regulations can come into force. I hope, again, that Ministers will have the grace to accept the amendment and will not force me to divide the House.

New clause 10 underlines our concern that trade agreements must work for the NHS and not undermine or make even more difficult the task of repairing a great public service after 12 years of callous mismanagement by this Government. On procurement specifically, the last thing that anyone would want in a trade agreement is carelessly drafted provisions that enable a dispute about whether an overseas-owned building firm lost a redevelopment contract fairly, for example, to delay much-needed investment in new NHS hospitals, or vital funds that could have been spent on new doctors and nurses having to be used to compensate overseas firms for not winning a procurement contract. If the independent expert from whom the Select Committee and the Bill Committee heard evidence is correct, the drafting of the procurement chapter in the Australia trade deal—and, I understand, this is also likely to be so in the CPTPP—creates legal uncertainty in the remedies available to overseas businesses bidding for UK Government contracts. It is possible, then, that major public services such as the NHS could see delays to the rebuilding of hospitals and/or money that could have been spent on recruiting doctors and nurses being wasted on compensation for overseas firms that have lost out in a procurement competition.

Take the Queen Elizabeth Hospital in King’s Lynn, for example, which urgently needs replacing. Its roof must be monitored daily, four out of seven operating theatres have had to be shut, and the roof is held up by 3,600 props. That is, I suggest, one powerful example of the neglect and mismanagement of the NHS under the Conservative party. Imagine if funding were committed to and tenders issued for such a rebuilding project, only for building work to be held up because of the legal uncertainties in the Australia deal on remedies for firms that lost out unfairly in procurement processes. Surely, a proper understanding of the impact of trade deals on our public services is essential. If there is nothing to worry about, Ministers should not find it difficult to commit to providing such assessments, should they?

On new clause 11, it is clear that these trade deals are not going to deliver the sustained boost to economic growth that this country desperately needs. Yet in the land of make-believe that the Conservative party now inhabits, the Australia deal was sold to us as the start of a brave and amazing post-Brexit era for British trade. The deal does not look like global Britain; it looks to the world like gullible Britain. On the upside, unlike the Conservative party’s trade deal with Europe, the Australia and New Zealand trade deals did not lead to the value of the pound dropping, but the tendency of Ministers in the Department for International Trade to exaggerate the benefits of the deals they sign underlines the need for a full review of the lessons learned from each negotiation.

We all remember talk of an “oven-ready” trade deal with the EU—it turned out to be anything but. Then there was the promise of 77 of Britain’s most iconic food and drink products, from Shetland wool and Whitstable oysters to Carmarthen ham, getting immediate protection in Japan as a result of the UK-Japan deal. That has yet to happen. We have had the promise of billions more in procurement contracts for British business, but there is little evidence that that will happen.

[Geraint Davies]

My hon. Friend knows that a large of amount of New Zealand and Australian trade is historically in left-hand-drive cars that were made by Japanese companies based in Britain. Those companies are leaving the UK, and the EU has now got a trade deal with Japan and will have one with Australia and New Zealand. It is therefore likely that those Japanese companies will produce left-hand-drive cars and sell them to New Zealand and Australia, but not via Britain. In other words, the deal will prove negative rather than marginally positive.

[Gareth Thomas]

I hope my hon. Friend accepts that the case I am making for providing serious and detailed impact assessments for future trade deals will help to ensure that his point gets proper consideration in future.

I hope that new clauses 13 and 14 remind Ministers of the significance of trade for working people and of the need for trade to play its part in helping to tackle climate change and accelerate progress towards net zero. When the Australia deal was negotiated, two Conservative Governments, both with distinctly underwhelming records on climate and workers’ rights, were in the negotiating room. In this country, the Conservative party has consistently sought to exclude representatives of working people in the trade unions from all significant consultation on trade deals. The trade deals that we as a country sign should raise standards, support better employment and help to tackle climate change instead of, as the Conservative party seems to want, heralding a race to the bottom.

We have tabled amendment 1 to stimulate serious and sustained detailed consultation with all the nations and regions of the United Kingdom on the details of the chapters of the trade deals. It is a reminder to Ministers of the need to step up and improve further their discussions with the devolved Administrations and with the regions of England about the impact of deals on specific communities and economic sectors. My hon. Friend the Member for Llanelli (Dame Nia Griffith) gave the example in Committee of farmers in Wales, where 85% of the beef and 60% to 65% of the sheepmeat produced are consumed in the UK. There is genuine concern about the impact of a huge hike in tariff-free quotas of meat from Australia and New Zealand on our farmers’ ability to sell into our markets, with all the obvious implications for rural communities, family farms and economic, social and cultural life.

There are similar concerns across the regions of England, in Scotland and in Northern Ireland. The Select Committee on International Trade heard evidence that the Department cannot yet model fully the impact of trade deals on the nations and regions of the UK. That is all the more reason for better consultation before new trade regulations come into force.

Debate on the Address

Debate between Geraint Davies and Gareth Thomas

Wednesday 27th May 2015 Commons Chamber

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

It is, as ever, a pleasure to follow the hon. Member for North East Somerset (Mr Rees-Mogg), who is a provocative parliamentarian in the best of senses. I join him in congratulating the hon. Member for Argyll and Bute (Brendan O’Hara) on his excellent maiden speech. Given its quality, I suspect that he will prove to be a shrewd ally on one or two issues on which the Scottish nationalist and Labour parties will make common cause in the House, but a difficult opponent on many others.

I believe that Britain’s future is as a federal Britain, and I believe that we are heading for that destiny now. The journey is happening in a very British way, by means of evolution, and it will look very different in different parts of the United Kingdom; but we must master the route to a federal state, rather than being buffeted by events along the way. I believe strongly that London must be part of that journey, that it must have its own compass, and that Londoners’ voices must be heard. I welcome the plans in the Queen’s Speech for the devolution of more powers to Scotland, and also the plans to give Britain’s northern cities stronger powers to shape their citizens’ own destiny.

We have traditionally seen the Union as consisting of England, Scotland, Northern Ireland and Wales. It is time that we recognised that London is a very specific part of that Union. Yes, there are England, Scotland, Wales and Northern Ireland, but there is the city state of London as well. London is the centre of wealth creation in the United Kingdom. I recognise that Britain’s wealth has many sources, but London makes proportionally bigger contributions to the UK’s economy than any other UK region or nation.

Much of the wealth that is created in London is rightly redistributed to other regions and nations. I agree with that in principle, but I also believe that London deserves more in return, and that Londoners deserve a better quality of life. We have the highest cost of living in the UK. The housing crisis is at its most acute in London. We have the highest rents and the most expensive homes to buy. In 2005, the average home in London cost £274,000. Ten years on, it is £465,000. Earnings have not doubled, but costs almost have. That is the reality for Londoners. The ratio of rents to earnings is higher in London than in any other region or nation of the UK. Owning property is now out of reach for most Londoners.

In the next decade, London will see an additional 1 million citizens needing somewhere to live, needing to use public services—schools, GPs and hospitals—and looking for work. Our transport system needs significant investment now, never mind in future years. Those pressures demand increased public investment and of course private sector investment, too. Inequality and poverty are starker in London than in any other region or nation of the UK. I say that not to diminish the scale of both in other parts of the UK, but merely to underline the seriousness of the challenges in London.

I supported the recommendations of the London Finance Commission. It concluded that London needs fewer borrowing constraints and greater devolved tax powers. At the moment, London retains little more than 7% of all the tax paid by London residents and businesses. In New York, more than 50% is retained by New York’s mayor. Other cities of comparable size to London can set their own taxes, yet London cannot. Madrid, Paris, Tokyo, Berlin, Frankfurt and New York can all set property taxes. Paris, for example, can set a property tax on developed and undeveloped land. New York can determine land taxes, a hotel occupancy tax and a commercial business tax. The London Finance Commission made the powerful point that, if London has more control over its taxes and the ability to borrow, it will be better able to tackle impediments to further economic growth, never mind to tackle other key issues in our city.

Crossrail was first suggested in the 1940s. It was first formally proposed after an inquiry in 1974, but it has taken more than 40 years since then to start serious building work. We simply cannot take that length of time to decide whether Crossrail 2 should go ahead. London needs to be able to respond more quickly to the infrastructure challenges our city faces if we are to secure its continued prosperity and status as the greatest city on earth.

I share the view that London’s property taxes should be devolved to London’s government. Indeed, London generates a higher percentage of total income from property taxes than any other region of the UK. The House will be aware that London would still be making a greater than proportionate contribution to the Exchequer via corporation tax revenues, VAT revenues and other crucial areas of national income. Devolving property taxes would be a first step towards what should be a radical devolution package for London.

[Geraint Davies]

Given that Camden has greater asset value than Wales, the idea of devolving property tax, air passenger duty from Heathrow and all these other taxes to London would be a threat to the coherence of the Union.

[Mr Thomas]

I say gently to my hon. Friend, for whom I have considerable respect, that I profoundly disagree. Never mind the Scottish question, the Welsh question or indeed the English question, there is a London question that demands an answer: when will London be able to shape its destiny without always having to go to the man in Whitehall and the man in Downing Street to sort out our great city’s challenges?