Trade Bill

Greg Hands Excerpts

Tuesday 9th January 2018 Commons Chamber

[The Minister for Trade Policy (Greg Hands)]

The hon. Gentleman is making some important points, but like his Front-Bench colleague he is conflating future trade agreements with current trade agreements. To the best of my knowledge, no one we are speaking to is seeking significant revision of those trade agreements. They are speaking to us to roll over the existing trade agreements, which has nothing to do with a future free trade agreement, which I think the hon. Gentleman is deliberately conflating.

[Ian Murray]

So the Minister is telling the House that the 65 trade agreements currently between the EU and other countries will be grandfathered across to UK law without any changes. I am sorry, Madam Deputy Speaker, but that is utterly, completely impossible.

[Greg Hands]

I am sorry, but the hon. Gentleman has misquoted me. I am not saying that. What I am saying is that none of those third parties is seeking significant changes to those agreements. I am not saying that we will be successful in rolling over all those agreements. We are seeking to be successful in doing so, and that is a very different matter.

[Ian Murray]

Whether it be mutton flaps, which my hon. Friend the Member for Bristol East (Kerry McCarthy) talked about in the case of Samoa, the Scotch whisky industry, car parts or anything that this country currently exports, the people who have been watching this debate tonight should look at the television, rewind to 5.15 and listen to the Minister’s two responses. His first response was, “Nothing will change.” His second response was, “Nothing significant will change.” Whatever the process is, and whatever does change, this Parliament will get absolutely no say.

The Minister is right, and the Secretary of State hid behind this as well. The Secretary of State says, “Everyone is wrong today because we are talking about current trade deals.” So am I. Let us take South Korea as an example. The South Korea trade deal took a long time to conclude. A significant proportion of the deal affects the Scotch whisky industry—an industry that is doing rather well at the moment. If the South Koreans decide that that part of the agreement is not quite what they want, but this Government decide, “It’s okay; it is an existing trade deal so it is covered by this Bill. We will grandfather it across, but we will renegotiate that part,” this Parliament, I representing my constituents and people who represent the food and drink industry in this country will get no significant say. That is exactly what the Bill does.

[Greg Hands]

rose—

[Ian Murray]

The Minister can maybe clarify when he sums up the debate, and I hope he does, because he has created a bit of confusion.

I say this in the greatest of spirit to my own Front Benchers. I do not disagree with their movement on retaining the customs union and the single market during the transitional phase, but I do disagree with them on this. I say, with all due respect, that is no difference in principle, or even in practice, between a customs union and the customs union. I just hope that at some point, somebody looks at the significant detriment that this country will suffer from ceasing participation in both the single market and the customs union, and realises it is bad for the country.

I do not say that to be rebellious or to undermine the Front Bench. I say it as a constructive comment from someone who disagrees with the current policy of my own Front Benchers. I hope we are able to move on that, because it is not about membership of the single market or the customs union; it is about the participation in them. If the EU decides that the negotiating position should be a certain way for this country, it will fall on future generations to take that burden.

It is beyond my comprehension that the Government have taken off the negotiating table participation in the single market and the customs union. The European Union (Withdrawal) Bill, the customs Bill—the ways and means Bill that we debated yesterday—and the Trade Bill that we are debating today, all boil down to one singular point. We could have extended our Christmas and new year holiday by another week, two weeks or three weeks by staying in the single market and the customs union, because all this legislation would be completely and utterly unnecessary. It would solve the Northern Ireland border problem, so the north-south problems on the island of Ireland would be resolved. It would solve the east-west problem between the island of Ireland and the United Kingdom. It would solve the problem with our having to renegotiate the trade deals between the EU and the UK—the very trade deals that may not have any significant changes, but may have significant changes—and it would take away the unmitigated, unprecedented and unnecessary Executive power grab from this Parliament to Downing Street that, in my view, is completely and utterly unacceptable.

I shall finish by saying why I think the Minister and the Government are on the wrong track. The Secretary of State for Foreign and Commonwealth Affairs, appearing before the Foreign Affairs Committee, talked about 50 new staff to enable us to enhance our embassies across the European Union to create bilateral trade deals when we leave the European Union. That is not 50 new staff at all; it is a reallocation of Foreign Office resources. It is new staff in those particular offices, but they are being reallocated in some way or other from other offices, and therefore our bilateral trade potential with third party countries outwith the EU is diminished because resources are having to be put into bilateral negotiations with individual EU member states. That surely shows that the best way for us to move on is to stay in the customs union.

I tabled my amendment to the Bill yesterday to be published today not in any way to undermine anyone and not in any way to undermine my own Front Bench, but merely to continue to make the point that for the future prosperity of this country, to try to turn a very bad situation of our leaving the EU into not quite such a bad situation, we should continue to participate in the two things that would take away all these issues—the single market and the customs union.

--- Later in debate ---

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

Members have talked about free trade, but Brexit is of course the biggest reversal of free trade in the UK’s history. Margaret Thatcher was a great proponent of the single market, which is the probably the greatest example of free trade in the world. She also did not like referendums and quoted Attlee, who said that they were the instrument of demagogues and dictators because of their use by Hitler. Unfortunately, we now appear to be withdrawing from the customs union and the single market. We are withdrawing from the EU, making ourselves much weaker in negotiations with other countries. We are also making the EU weaker. The EU is currently the biggest market in the world, but that title will go to China after we leave, so there will also be significant impacts on human rights, democracy and the rule of law.

Of course, this Bill is not directly about our relationship with the EU, but we will be reducing our trade with it due to the tariffs that will be imposed if we do not have membership—I hope we will—of the single market and the customs union. This Bill is about our relationship with third parties—the 65 agreements—but it is not fit for purpose in that respect, because it does not do what it says on the can. It claims that it can guarantee the continuation of those 65 agreements on existing terms, but it is intuitively obvious from a business point of view that other countries will see Britain up against the wall, on its own and weaker, and they will demand better terms, whether lower quality, lower standards or lower prices. What is more—

[Greg Hands]

rose—

[Geraint Davies]

I will let the Minister intervene, but he can respond to this as well. The EU has quotas for various countries, but other EU27 countries will want to take some of that business, and we will lose again and again.

[Greg Hands]

I am not sure whether the hon. Gentleman has been listening to the debate or my previous interventions, but that process has already begun. We are in conversations with third parties and none of them is behaving in the manner that he is describing. Let me put his fears to one side: I cannot promise that we will be able to transition every single agreement, but nobody is behaving in that manner.

[Geraint Davies]

The Minister tells us that third parties are not behaving like that at the moment, so he implies that they will not behave like that in the future—what false logic; what naivety.. That is absolutely ridiculous. Any negotiator or country that sees Britain with its back to the wall, turning away from the biggest market in the world, will ask for more. If they did not say that they will give the money to Spain or wherever, they would not be doing their job. What is more, they will be dragging their heels, because they will know that the clock is ticking and that we need to get something sorted out. They have everything on their side. The Minister is so naive. All the negotiations over the past 40 years have been done by EU negotiators. We do not have the negotiating capacity. He is smiling glibly and pretending that it will be all right on the night, but it will not. People will remember what he has said today and how naive he was.

This Bill is simply not fit for purpose. It takes two to tango, and the Bill presumes, as the Minister does, that the EU will tango and not trip us up in the process.

The other facet of the Bill is secrecy and hiding what will happen. My hon. Friend the Member for Brent North (Barry Gardiner) said that the US-UK deal will be hidden for four years, and there are all sorts of fears about our having to import substandard food products from the US, including chlorinated chicken, which the Secretary of State looks forward to eating—his name is Fox—and hormone-impregnated meat. In the US, medicines are introduced into meat and asbestos is for sale. All those standards may end up coming through the back door under the cloak of darkness in these secret deals.

I know that the Bill is not about the US-UK relationship at the moment, but the Minister and the Secretary of State have mentioned CETA, which already enables certain changes to occur. There is a real risk that we will take on some of these problems. Indeed, there is a real risk that we will lose out on opportunities that the EU is creating, particularly in the trade relationship with Japan. That trade relationship will involve 600 million people and comprise 30% of the world’s GDP. The Europeans have built in environmental conditions, particularly through the Paris agreement, and other rights and protections that we enjoy in the EU, and the real problem is that downstream, due to both changing the existing bilateral relationships and as part of future trade relationships, the protections and rights we enjoy through our trade relationships in the EU will be bargained away. Whether it is human rights, environmental rights or consumer rights, those things are now inadvertently on the table, and that table is under the cloak of darkness, as there will not be public scrutiny.

There should be a guarantee of scrutiny, and we should ensure that the rights and protections we enjoy in the EU are sustained in future trade relationships. In my view, we should stay in at least a customs union, and ideally the customs union and the single market.

--- Later in debate ---

[The Minister for Trade Policy (Greg Hands)]

As you know, Mr Speaker, it has become almost a tradition in this place to pronounce, when winding up a debate, that it has been interesting, thoughtful, helpful, vigorous or useful. This debate has been all those and more. Above all, it has been illuminating. It has illuminated the chaos of the stance of Her Majesty’s official Opposition, as did last night’s debate on the Taxation (Cross-border Trade) Bill. It has revealed the deep divisions within Labour on anything to do with trade, customs and markets. It seems that whenever a Division is called on those matters—bear in mind, Mr Speaker, that it is of course the Opposition who call the Divisions—Labour descends into its own chaos.

When we considered the Queen’s Speech, 49 Labour Members backed an amendment tabled by the hon. Member for Streatham (Chuka Umunna) in favour of staying in the single market and the customs union. That was contrary to the manifesto on which they had fought only days earlier. On CETA, the EU’s free trade agreement with Canada, only 68 Labour Members followed the official line from the hon. Member for Brent North (Barry Gardiner) and voted against it, whereas 86 voted with the Government and their free-trade instincts in favour of the agreement. As one of them put it, “If you can’t have a trade agreement with Justin Trudeau’s Canada, who can you have a trade agreement with?”

When we considered the Ways and Means motions for the Taxation (Cross-border Trade) Bill just before Christmas, 28 Labour Members rebelled by backing an amendment in favour of staying in the customs union. Last night, 219 Labour Members voted against the Second Reading of that same Bill, which means that they are opposed to the UK’s having, post Brexit, any scheme of trade preferences for developing countries.

[Geraint Davies]

On a point of order, Mr Speaker. This speech is not about the Trade Bill; it is about the Opposition. The Minister had 10 minutes in which to talk about the Trade Bill.

--- Later in debate ---

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. I know that the Minister now intends to attend to the Bill. That was by way of being his preliminary observation. He will now, I know, immediately segue into the matters that are of concern to the House today.

[Greg Hands]

Tonight, Mr Speaker, it seems that Labour Members will go even further and vote against the creation of the Trade Remedies Authority in the first place. They will vote against the ability of UK companies, including SMEs, to bid on government procurement contracts elsewhere in the world and against UK exporters continuing to benefit from the provisions of more than 40 EU trade agreements. All that bears witness to the staggering confusion that exists among official Opposition Members.

Before I respond to the individual points that have been made in the debate, I want to be very clear, because there is still a great deal of confusion on the Opposition Benches, about what is not in the Bill. It does not include a power to implement future free trade agreements negotiated with new countries. It is very much about providing continuity and stability by enabling the UK to implement the effects of the trading arrangements that already exist between the European Union and other countries at the point when the UK leaves the EU.

We heard excellent speeches from my hon. Friends the Members for Hertford and Stortford (Mr Prisk) and for Fylde (Mark Menzies)—two of our excellent trade envoys—and from my hon. Friends the Members for Milton Keynes South (Iain Stewart), for Hornchurch and Upminster (Julia Lopez), for Walsall North (Eddie Hughes), for Saffron Walden (Mrs Badenoch), for Chelmsford (Vicky Ford) and for Clacton (Giles Watling). Let me draw out four particular strands from those speeches. First, all the Members were very strong in pointing out what was in the Bill and what was not, particularly my hon. Friends the Members for Milton Keynes South, for Hornchurch and Upminster and for Clacton. We also heard some home truths about Brexit, particularly from my hon. Friend for Walsall North. My hon. Friend the Member for Hertford and Stortford agreed with calls for the UK to be a strong advocate of free trade and a supporter of the rules-based international system, which was very much what my right hon. Friend the Secretary of State and I did last month in Buenos Aires. We also heard some very important points about the definition of fair trade from my hon. Friend the Member for Newton Abbot (Anne Marie Morris).

Let me deal briefly with some of the points raised by Opposition Front Benchers. First, there was an allegation of an exchange of letters with the US trade representative, suggesting that the Department for International Trade had given some kind of assurance of secrecy. The opposite is true: the letters to which the hon. Member for Brent North (Barry Gardiner) referred do nothing more than set out a proposal for the proper handling of confidential information and are not an attempt to avoid scrutiny. In fact, the letters reaffirm our commitment to a transparent and inclusive process with specific reference to Parliament.

The hon. Gentleman also talked, as did the hon. Member for Glasgow East (David Linden), about the trade White Paper with reference to when the Bill was published. The White Paper was just one way of getting the shape of our future UK trade policy correct. Since then, we have also issued a call for evidence on specific EU trade remedies, which is still open. My door is open, and the Secretary of State and I have meetings coming up with the ceramics and steel industries and other important industry groups.

The hon. Member for Brent North asserted that transitioning deals would not be subject to any parliamentary scrutiny, as did many of his colleagues. We have every intention of ratifying all the EU free trade agreements currently in force before we leave the EU, including the EU-Canada CETA agreement, the South Korea agreement that was mentioned by the hon. Member for Edinburgh South (Ian Murray) and others, and the economic partnership with the South African Development Community. Those have already been subject to parliamentary scrutiny here, and there is of course a process for them to have further scrutiny as well.

The hon. Member for Brent North also raised the question whether Parliament can vote on the terms of UK membership of the GPA. The Bill creates the power to have stand-alone UK membership of the GPA, but the approval for ratifying the UK independent membership will be sought separately from Parliament.

The hon. Member for Livingston (Hannah Bardell) made various points in a thoughtful contribution. She said the Bill does not define what a free trade agreement is, but it does define that in clause 2(7) as

“an agreement that is or was notifiable under”

particular provisions

“of GATT, or…GATS.”

The hon. Member for Edinburgh South made some points about Scotch whisky. There have already been two meetings of the trade working group with South Korea and there is absolutely no evidence that the South Koreans want to do anything at all against Scotch whisky. It would be against their interests and ours to do so. I, the Secretary of State and the whole International Trade team work tirelessly to promote Scotch whisky. I did that personally in Peru when lobbying about particular metal rules, and it has happened during discussions about rules in Taiwan.

[Hannah Bardell]

Will the Minister give way?

[Greg Hands]

I am sorry, but I do not have time.

The hon. Member for City of Durham (Dr Blackman-Woods) raised interesting points that have been under-scrutinised both yesterday and today with regard to Britain’s trading relationship with developing countries. That is incredibly important and a strong priority of this Department, but I must point out to her that the official Opposition voted last night against powers to transition existing schemes of trade preferences and for the UK to have trade preferences for the developing world. That was not consistent with what she said today.

In conclusion, trade is a key driver for growth and prosperity, and an important part of both the UK and the world economy. The UK’s trade with the world is equivalent to over half the UK’s GDP. A recent IMF project to which my right hon. Friend the Secretary of State referred concluded that about 90% of world growth is likely to come from outside the EU. International trade is linked to many jobs and contributes to a growing economy by stimulating greater business efficiency and higher productivity and sharing knowledge and innovation across the globe.

The Bill is a responsible first step. It is about continuity and stability. It is designed to provide continuity by ensuring that we have in place the right tools to ensure a smooth transition as the UK exits the European Union. That is in all our interests, so I urge colleagues to vote against the amendment. I commend the Bill to the House.

Question put, That the amendment be made.