Budget Resolutions

Debate between Jonathan Reynolds and Graham Stuart

Wednesday 6th November 2024 Commons Chamber

[Jonathan Reynolds]

That is not what it says. First, on the figures, we cannot make a like-for-like comparison because we know that the information provided by the previous Government in their financial information was erroneous. They did not square their own spending pledges with what was in those documents. The analysis by the OBR shows that long-term improvement in GDP growth is vital, but the right hon. Gentleman will recognise that it cannot model some of the wider parts of the Government’s agenda. It cannot model those changes in the planning system that are so important to the Government. It cannot model the changes involved in having a long-term industrial strategy. It cannot model our changes to trade policy.

I recognise that there is more to do to prove the case of the Government’s overall commitment, but I can tell the right hon. Gentleman that fundamentally fixing the foundations, honesty and stability in the public finances, and a focus on long-term public investment are essential to the long-term growth of the country. Also, one thing that has not had sufficient recognition is that many of the real benefits of greater public investment do not accrue in this Parliament; they accrue beyond it, and it is about time we had some long-term focus again in this country. Not before time, if I may say so.

[Graham Stuart (Beverley and Holderness) (Con)]

The right hon. Gentleman will, I hope, be aware that the long-term economic growth of this country relies not primarily on public investment or indeed public infrastructure, but on a healthy private sector—the wealth creators from whom we can take the funding to deliver into those goods that he talks about and that are part of a balanced and successful society. This Budget does not help them. It does the opposite.

[Jonathan Reynolds]

I am sorry but, again, the right hon. Gentleman is wrong. I agree with part of his assessment, such as that a strong and thriving private sector is crucial to growth, but I find his analysis a little simplistic. Private firms will say that they also need skilled workers, and that they need a decent transport system so they can get to work.

Under the last Government, I would often get up in the morning and check my phone for updates from people using the trans-Pennine line I just mentioned—the one we are upgrading—and it would be full of people saying, “I cannot get to work.” I need the right hon. Gentleman to make a slightly broader analysis.

Despite the previous Government leaving us with a raging skip fire in many areas—we have to raise money, not to deliver our pledges but to deliver their pledges that they did not properly fund—we have had a regard and a heed for the level of competitiveness in the UK economy. For instance, on the rise in employers’ national insurance contributions, over half of all firms with national insurance liabilities will actually pay less or the same, not only because of the changes to the employment allowance but because of how we have removed the threshold so that all firms now qualify.

Despite the frankly terrible inheritance bequeathed to us, we have done our best to meet those needs and to deliver a long-term focus on the future.

--- Later in debate ---

[Jonathan Reynolds]

I always listen to the hon. Gentleman because he is genuine and conscientious in representing his constituency’s interests. I will always listen to what he has to say. We can judge the exact impact of these changes by looking at the value of claims to date. The Conservative party’s analysis has forgotten to aggregate the impact of the changes to those allowances, such as agricultural property relief, alongside the existing nil-rate band and the ability to transfer the allowances between spouses in all cases. The total number of farms across the UK that will be affected by this change is actually only 500 for the 2026-27 financial year. That has been missed, and I remind colleagues that any inheritance tax liability has a 10-year, interest-free payment period. To be frank, there has been some scaremongering from the Opposition, and we have to be clear with people.

We have had to restore economic stability to deliver that investment, and we should not shy away from explaining why this has been so necessary. The previous Government’s scattergun approach to growth left our country starved of investment, economically divided and struggling to maintain a competitive edge in the global economy.

The previous Government’s claim to have delivered the fastest-growing economy in the G7, based on its performance in the first half of this year, is laughably false. I believe that The Sunday Times likened it to someone walking a marathon in six hours but, because they ran the last 100 yards, claiming to be the fastest runner in the world. The truth is that consistency and stability have been sorely lacking. We have had seven growth strategies since 2010 and 11 Business Secretaries in as many years, to say nothing of the UK’s revolving door of Prime Ministers.

[Graham Stuart]

Will the Minister give way?

[Jonathan Reynolds]

I have already given the right hon. Gentleman a go. I will make a little progress, and we will see whether he can do a better one next time.

The result was a protracted period of anaemic growth. Had our economy grown at the average rate of other OECD countries over this period, it would have been £171 billion larger. Imagine the difference that would have made to all of our communities and to today’s Budget debate. British firms, facing such uncertainty, have not seen investing domestically as a sufficiently attractive proposition. They have been reluctant to adopt new technology, to upskill their employees or to plough money into research and development. We have even heard that, in any given year, roughly 40% of UK firms choose not to invest at all. We want to change that for good. We want to give businesses certainty, confidence and stability so that they can make decisions for the long term.

That is why, at the Budget, the Chancellor reaffirmed our new modern industrial strategy. Invest 2035 will be a central pillar of our growth mission. The strategy will allow businesses to plan not just for the next 10 months, but for the next 10 years. It has already won the backing of Make UK, which has told us that businesses will no longer have to

“fear the constant chop and change in policy we have seen over the last decade.”

Instead, they can focus on the long term.

Our industrial strategy will create a strong pro-business environment, making it simpler and cheaper for companies to scale up and invest. It will unleash the potential of our high-productivity services and industries, because our recent economic history has taught us that we have to play to our strengths. Over the last 25 years, high-productivity sectors were responsible for roughly 60% of our economy’s entire productivity growth. Looking at the figures since 1990, over half of the UK economy’s GDP growth has come from just three sectors—information and communications technology, financial and professional services, and advanced manufacturing.

That is why our industrial strategy will channel support to eight key growth-driving sectors, those in which the UK services sector will excel both today and tomorrow—the services and industries that present the greatest opportunity for output and productivity growth over the long term.

Electric Vehicle Battery Production

Debate between Jonathan Reynolds and Graham Stuart

Wednesday 18th January 2023 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the UK’s gigafactory capacity given the announcement of Britishvolt entering into administration.

[The Minister for Energy and Climate (Graham Stuart)]

Britishvolt entering into administration is a regrettable situation, and our thoughts are with the company’s employees and their families at this time. The Government are entirely committed to the future of the automotive industry and promoting EV capability. As part of our efforts to see British companies succeed in the industry, we offered significant support to Britishvolt through the automotive transformation fund on the condition that key milestones, including private sector investment commitments, were met. Unfortunately, the company was unable to meet these conditions and as a result no ATF funds were paid out. Throughout the process, we have always remained hopeful that Britishvolt would find a suitable investor and we are disappointed that this has not been possible. We want to ensure the best outcome for the site, and we will work closely with the local authority and potential investors to achieve this.

The automotive industry is a vital part of the UK economy, and it is integral to delivering on levelling up, net zero and advancing global Britain. We will continue to take steps to champion the UK as the best location in the world for automotive manufacturing as we transition to electric and zero-emission vehicles.

Despite what the party opposite may claim, we are not giving up on the automotive industry: on the contrary, our ambition to scale up the electric vehicle industry on our shores is greater than ever. We are leveraging investment from industry by providing Government support for new plants and upgrades to ensure that the UK automotive industry thrives into the future. Companies continue to show confidence in the UK, announcing major investments across the country including: £1 billion from Nissan and Envision to create an EV manufacturing hub in Sunderland; £100 million from Stellantis for its site in Ellesmere Port; and £380 million from Ford to make Halewood its first EV components site in Europe. And we will continue to work through our automotive transformation fund to build a globally competitive electric vehicle supply chain in the UK, boosting home-grown EV battery production, levelling up and advancing towards a greener future.

[Jonathan Reynolds]

When the Britishvolt site was first announced in 2019, with the promise to deliver the UK’s second ever gigafactory and create 8,000 jobs in Northumberland, it was lauded by the Government as their flagship example of levelling up: the right hon. Member for Spelthorne (Kwasi Kwarteng), then Business Secretary, said that Britishvolt is

“exactly what levelling up looks like”,

and Government Ministers fell all over themselves to take the credit, so now they must also accept accountability for its failure, because, much like their levelling up strategy, all we have been left with is an empty space instead of what was promised.

The collapse of Britishvolt into administration is in no uncertain terms a disaster for the UK car industry, but what is even more worrying is that this is a symptom of a much wider failure. The automotive manufacturing sector currently employs over 182,000 people, and if we are to continue to make cars in this country we must make electric batteries in the UK. The Faraday Institution says we need 10 factories by 2040 to sustain our automotive sector, so even if Britishvolt was going ahead we would still be nowhere near where we need to be. These factories are being built in competitor countries, and that is because they have Governments with the vision and commitment to be the partner that private firms need to turn these factories from plans on paper into a reality. Surely the Government must accept that we need an industrial strategy.

Will the Minister update the House on the Government’s plans to urgently increase UK battery-making capability? Can he tell us when the Government first had concerns about Britishvolt’s ability to deliver the factory, and why did these concerns not come to light when the Department conducted its extensive due diligence investigations into Britishvolt’s plans? What conversations has he had with other companies to secure the site and ensure the factory is built in Blyth? And will he now commit to Labour’s plans to build eight new gigafactories across the UK and expand the roll-out of charging points to support electric vehicle manufacturing?

Wherever we look the Conservatives are failing this country, whether in public services or our iconic industries. Unless this Government wake up to the scale of the transition required, we will not only risk many of the good jobs that so many of our communities rely upon, but we will miss out on one of the greatest economic opportunities this country has ever had.

[Graham Stuart]

The hon. Gentleman is right about one thing: there is a tremendous opportunity. That is why we have the automotive transformation fund. That is why we did thorough due diligence on Britishvolt. It is because we set conditions around milestones that it had to meet that not a penny of that fund was dispensed to Britishvolt. However, I make no apology for supporting companies that are going to be part of that opportunity. The idea from the Labour party is that, if it were in power, it would build these factories. That is not how the economy works. That is why, in 2010, after 13 years of Labour Government, we saw youth unemployment up by more than 40%. That is the truth. We saw communities such as Blyth left behind and ignored. We saw an economic strategy that did not work for our young people and did not contribute to net zero in the way that it should. On the underpinning energy system, a bit more than 7% of our electricity came from renewables when Labour left power. Now it is more than 40%.

The net zero strategy announced £350 million for the automotive transformation fund. That was in addition to the £500 million announced as part of the 10-point plan. That is why we are seeing investment. That is why we have nearly full employment. That is why we have factories and manufacturing going ahead in a way that would never happen under Labour.

Retained EU Law (Revocation and Reform) Bill

Debate between Jonathan Reynolds and Graham Stuart

Tuesday 25th October 2022 Commons Chamber

[Graham Stuart]

We have heard quite enough from Opposition Members, with their exaggerated declarations and scaremongering, and I will answer the points that have been raised.

I am deeply proud of the Conservative tradition of supporting the environment, supporting high standards of food safety and animal welfare, which my hon. Friend the Member for Crawley (Henry Smith) rightly raised, and supporting clean water. As a Minister, I can no longer be a member of the Conservative Environment Network, but as a former member and supporter, I am delighted that it has looked at the Bill and that we are engaging with those members and ensuring that any questions are responded to. The whole of the UK, not just England, is a green and pleasant land, and this Government’s policies for the environment will keep it that way. We will ensure that environmental law works for the UK and improves environmental outcomes. That is why we are committed to reviewing retained EU law, to ensure that the UK regulatory framework is appropriate and tailored to the UK.

The Bill does not change the Environment Act 2021, and we remain committed to delivering our legally binding target to halt nature’s decline by 2030. It was us who put that into law. The hon. Member for North Down (Stephen Farry) suggested that we are some sort of regulatory inferior to the US and the EU. It is this country that brought forward the Climate Change Act 2008. It is this country that brought forward contracts for difference for renewables, for instance. It is this country that has cut its emissions by more than any G7 nation. It is this country, this party and this Government who have delivered that, and I will not allow the hyperbole, the exaggerations, the mistruths and the untruths from Opposition Members to remove that fact.

Similarly, it was claimed by the right hon. Member for Hayes and Harlington (John McDonnell) that the Bill will lead to a bonfire of workers’ rights. That could not be further from the case. We are proud of the UK’s excellent record on labour standards. It was a Conservative Government that raised domestic standards over recent years to make them some of the highest in the world. We have a long-standing track record of ensuring that workers’ rights are protected, which we will continue. It is, frankly, craven of Opposition Members to suggest that this country, this Parliament and this Government cannot be trusted.

[Jonathan Reynolds]

You can’t be trusted!

[Graham Stuart]

I understand why the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) points his finger and tries to attack my party, but we are the party that has delivered those environmental protections. It is this party that has delivered improved workers’ rights. In line with the UK’s track record, we will seek to modernise our regulations, including on workers’ rights, ensuring that unnecessary burdens are minimised and that vital protections continue to be upheld.

I will now turn to devolution. A number of Opposition Members have, predictably, declared that the Bill is some form of Westminster power grab. That is not the case. The six powers in the Bill are conferred on the devolved Governments, so they will be able to exercise powers to amend retained EU law within their existing devolved competence.

Taxation (Cross-border Trade) Bill (Fifth sitting)

Debate between Jonathan Reynolds and Graham Stuart

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you for the opportunity to speak and for chairing the meeting, Ms Buck. I would like to speak briefly around the amendments. One of my earliest questions about the Bill was: what is a public notice and how does one justify that it has been made sufficiently public? The Opposition raised that case clearly. On the definition of public notice and the fact that the person making the public notice has to make that judgment call, particularly in relation to clause 13, which concerns the dumping of goods, foreign subsidies and increases in imports, and given that the UK has not had provision to make regulations and rules, it seems sensible to say that a public notice is not the best way. Parliament should have some say. We have raised concerns previously that, although Brexit is apparently about taking back control, it appears that control is being taken back to the Executive rather than to Parliament as a whole. I will therefore support amendments 137 to 139 if they are pushed to a vote.

[The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)]

It is a great pleasure to serve under your chairmanship again, Ms Buck, and to welcome back the hon. Member for Stalybridge and Hyde. This group of amendments would require trade remedies measures to be imposed and given legal effect by regulations. I appreciate the concerns in relation to the use of public notices, which were raised by both Her Majesty’s Opposition and the Scottish nationalist party representative. I am grateful for the opportunity to set out why this is an entirely appropriate procedure for imposing trade remedies measures.

If you were cynical, Ms Buck, you might think that, because the Opposition have decided to make parliamentary scrutiny the central theme of their critique of the Bill, they are leveraging that into every single argument at every single stage. I am not a cynic, and take the concerns at face value, as the genuine ones that I am sure they are.

The imperative is to act quickly once the Trade Remedies Authority has identified the need to tackle injury to UK industry. I would have hoped that Members on both sides of the Committee would recognise that the imperative is to act quickly when injury to UK producers has been identified, and to move as swiftly as possible to put that right. Measures will be calculated and recommended by a fully expert and independent body, following an extensive investigation that is governed by strict World Trade Organisation rules. Our priority has to be to ensure that those recommended measures are imposed quickly, to provide relief to industries suffering injury.

The additional proposed process would delay our ability to apply measures precisely at a time when UK industry is suffering injury, and when it has been independently established that that is so. It would run counter to the calls we have heard from industry for a swift process. The use of public notices to implement trade remedies measures is consistent with the approach taken in comparable WTO countries such as New Zealand and Australia, and is therefore in line with international good practice.

Therefore I say to the hon. Member for Stalybridge and Hyde that, to suggest that this use of public notice is untoward and could lead to further government by proclamation, even outwith the Bill, is disproportionate. The reality is that this set of amendments, as with so many put forward by the Opposition, would in fact undermine the very principles that they say they are interested in: namely, to protect UK industry to ensure that we have a proportionate and speedy response to unfair dumping or use of subsidy and make sure that injury to British industry is put right. It is a shame that, collectively, the Opposition’s amendments suggest that their priorities are somewhere else.

[Jonathan Reynolds]

The Minister’s case is that this needs to be used for reasons of speed. Can he give us detailed information about how long it takes to prepare a statutory instrument to be brought before the House, given that that does not need parliamentary time in the Chamber—it cannot be that extensive? Exactly how much time will be saved by this proposed new form of parliamentary process?

[Graham Stuart]

The hon. Gentleman has been in the House for some time. I would have thought he would be familiar with the calendar of the parliamentary year, with long periods of recess when Parliament does not sit. Why on earth would Her Majesty’s Opposition, so often accused, doubtlessly unfairly, of being in hock to the producer interest and blind to wider society and the interests of the consumer and the ordinary citizen—though I decry that attitude—because of their links to the trade union movement, wish to put delays in place?

The hon. Gentleman knows full well the delays that can come with secondary legislation. To have that at the end of that extensive, independent and exhaustive expert assessment that has established injury, why on earth would the Labour party, or indeed the Scottish nationalist party, want to get in the way of swift, effective and proper defence of British jobs, British workers and British business?

[Graham Stuart]

I apologise for getting the name of the hon. Lady’s party wrong—it is the Scottish National party. We have put forward a proportionate and swift system, and hope that we would be able to deliver a speedier, more proportionate and balanced response than that of the EU. That is certainly our aim. I note again that amendments tabled by the hon. Lady’s party and Her Majesty’s Opposition suggest that their priority is entirely different.

[Jonathan Reynolds]

I am grateful for the infusion of energy that the amendments have brought to the Committee. The Minister’s bluster revealed a lot. I noticed that he did not actually answer my question. If the Government’s concern is the wish to bring a trade remedy during recess, they have to invent a new constitutional procedure to do that. I am afraid that is a very thin case and the Minister did not provide a reason why the new process is required in the interests of brevity. He was not able to give us any clear information, so we will push the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Graham Stuart]

The legislation makes it clear that the Secretary of State should look at it, and various people who have commented on the structure have said that it is right that, although the main body of work should be conducted by experts, ultimately it should be a politician accountable to Parliament, part of a democratic process, who should make that decision. Were they in any way to disagree, they would have to come to Parliament to make a statement. That is appropriate and proportionate, and why on earth the Opposition parties would want to go to such lengths to try to stop us bringing in effective remedy to protect British producers, I cannot imagine.

[Jonathan Reynolds]

Very briefly, why can the Minister not give us any detail about the methodology by which injury will be calculated, or any of the basic details that the US and the EU have already put in primary legislation? He cannot tell us how that will be because it is not in the Bill. Surely, we need some parliamentary safeguards about what the decisions will be, because the Minister cannot tell us the process that will be followed.

[Graham Stuart]

Our purpose here is to be probed, so even when that probing is redundant or tiresome, one should deal with it in as fair a way as one possibly can. As we know, this is a framework Bill; the secondary legislation, which will have parliamentary scrutiny, will bring in the details as it does in most other jurisdictions. We will follow a balanced, proportionate and effective basis to ensure that we assess that injury in the right way, and we will do so under the aegis of the WTO. Efforts to cut and paste aspects of the WTO system on to the face of our legislation when we are subject to WTO rules anyway are unhelpful and unnecessary.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Schedule 4

Dumping of goods or foreign subsidies causing injury to UK industry

--- Later in debate ---

[Jonathan Reynolds]

I will be, Ms Buck.

The package of amendments offers a relatively straightforward solution to these issues by using a pre-existing, widely accepted set of terms to define injury. As referred to in amendment 29, the agreement on implementation of article VI of the general agreement on tariffs and trade 1994 is a set of World Trade Organisation rules, which already provides a blueprint to many major global economies. That will form a solid basis, which UK industry can use to start planning how it will adapt to the new post-Brexit landscape.

Complying with the requirements in the amendments will help to provide consistency following our exit from the European Union, and align us with existing trading standards in economies we seek to trade with globally. It makes little sense to delegate this decision to secondary legislation when we are already in a position to opt for a widely accepted and road-tested definition that would keep us aligned with potential trading partners. That would also have the major advantage of offering certainty to UK industries today—not years from now—on how the trading landscape will look post-Brexit, and allow them to plan accordingly.

I urge the Ministers to support this amendment. It is a relatively small commitment, which would help to bring consensus and certainty to the British economy.

[Graham Stuart]

These amendments seek to include specific reference to the relevant WTO agreements in the Bill. As I said in our earlier discussion, the Government have carefully considered the right balance between primary and secondary legislation. Where there are very technical provisions in a regime, those are usually set out in secondary legislation because they are very detailed. That is the case here, so we have taken powers to make the necessary regulations.

As a member of the World Trade Organisation, the UK will be required to abide by the WTO agreements. We intend fully to comply with these obligations, and the regulations will therefore reflect the detail of the WTO agreements. However, as I have said, clause 28 does require the Secretary of State, and the TRA, to have regard to international obligations, which should provide any reassurance needed.

It has been suggested that the injury margin is more complicated and harder to define than the dumping margin. We do not believe that that is the case. Both calculations are based on industry data and export data and involve a number of variables where the TRA would be afforded discretion to use its expertise in determining the appropriate approach.

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[Jonathan Reynolds]

These amendments have been grouped because they both refer to making recommendations by the new Trade Remedies Authority, and the evidential basis for those recommendations, available to the relevant Select Committees of the House.

Clearly, how the TRA operates is essential to our future trade policy. We know some things from the Bill about how it will operate—schedule 5 refers to the procedure that will be followed where an increase in imports of goods causes serious injury to UK producers, so there is more detail than we had previously—but the intention is for further detail about the interpretation of what constitutes a significant increase to be set out in secondary legislation. The TRA will also have considerable discretion in many areas of its operation.

Given the stage we are at with the Bill, we are being given a fairly limited set of options in terms of addressing the lack of accountability in key parts of how the framework will operate. These amendments would introduce an additional layer of scrutiny and consultation, which is needed to ensure that the interests of UK industry are properly represented. Select Committees provide vital checks and balances, and given their policy specialisms and ability to call relevant witnesses, they are best placed to scrutinise decisions by the TRA.

These amendments would not only allow us to address the democratic deficit, but provide a platform for engaging with the wide range of inputs needed fully to understand the implications of TRA decisions on different parts of our economy and different segments of UK industry. That might include the Transport Committee, the Treasury Committee, the International Trade Committee and, of course, the Exiting the European Union Committee. The amendments would provide an important democratic backstop to the new process that avoids concentrating too much power in the hands of the Secretary of State or the TRA. In the absence of greater detail in the Bill, I urge members of the Committee to support the amendments to bring some much-needed future accountability to the TRA and to our trade defence policy.

[Graham Stuart]

New paragraphs 12A and 11A, introduced by amendments 39 and 70, would require the recommendations made by the TRA under schedule 4 to be made available to relevant Select Committees of the House of Commons, along with an account for the evidence base of those recommendations. Let me begin by stating that transparency is one of the four design principles set out by the Government for the trade remedies framework. The inherent assumption of a lack of scrutiny implied by the amendments is simply untrue.

To protect the TRA’s status as an independent public body, its recommendations to the Secretary of State should not be subject to political influence before a decision to accept or reject them has even been taken. Those recommendations will be made on the basis of the framework set out in this legislation and underpinned by technical and procedural details to be set out in secondary legislation. Giving the Select Committee a role in that process will undermine the impartiality of the process—an impartiality which is supported by industry. Publishing the recommendation in advance of the decision by the Secretary of State could also further undermine impartiality by increasing lobbying of Ministers by the affected parties, and could also lead to unnecessary disruption of the markets affected.

The Bill provides for public scrutiny of both the TRA and the Secretary of State’s decisions. Whether the Secretary of State accepts or rejects the recommendation, the evidence base for the TRA’s recommendation will be made available to the public, as is required under the terms of the WTO agreements. Furthermore, if the Secretary of State rejects the TRA’s recommendation to apply measures, he or she must lay a statement before Parliament setting out the reasons for that decision. Parliament will then be able to hold the Secretary of State to account if it considers the reasons to be unsound.

[Graham Stuart]

The hon. Lady has been a Member of this House for some time and will know that there is a series of means by which that can be pursued. Making a statement to the House provides the initial spur to start that scrutiny, if that is what the Select Committee or others decide. There are urgent questions, Adjournment debates, Backbench Business Committee debates—I will not list them all, as the hon. Lady is probably rather better on parliamentary process than I am. She will know that there is a huge number and they can all be used. Her Majesty’s Opposition or the SNP and their spokesmen have other means by which to raise the issue.

On that basis, I ask the hon. Gentleman to withdraw the amendment.

[Jonathan Reynolds]

I have two observations to make, the first of which is on impartiality. I would strongly refute that scrutiny by Select Committee would increase the partisanship or the partiality of the transparency of the process. The House’s Select Committees are to me the best example of cross-party working and cross-party accountability in the entire parliamentary process, and we should not shy away from using them when they can improve the process.

Secondly, there was reference to technical and political considerations. The decisions are not just technical. Of course they will draw on technical expertise and criteria, but they are inherently political. We saw that in the steel crisis, where frankly even with very clear technical evidence of dumping, there was a political point of view—not one I share—that the benefits to the UK of dumped steel outweighed the benefits of protecting the UK steel industry. That was not held by all parts of the Government, but certainly by some.

A transparent process that allows decisions to be analysed in that context would certainly add to the process, especially when we consider the lack of detail we have so far. I therefore press the amendment to a vote.

Question put, That the amendment be made.

Taxation (Cross-border Trade) Bill (Sixth sitting)

Debate between Jonathan Reynolds and Graham Stuart

Tuesday 30th January 2018 Public Bill Committees

[Jonathan Reynolds]

It is a pleasure to serve under your chairmanship, Mrs Main. I will speak to amendments 45, 47, 48, 53 and 54, relating to time periods. I draw the Committee’s attention in particular to amendment 45, which prescribes a period within which the Secretary of State must decide whether to accept or reject the TRA recommendations—in this case the recommended period is two weeks—and amendment 47, which corrects the presumption that the specified period will be five years. That relates to the amount of time for which special measures regarding TRA recommendations will be enforced.

The general principle of the amendments we seek today is to provide greater clarity and certainty to UK industry about the terms of engagement with the new TRA. As I believe we have placed on the record, this is a framework Bill—it is a piece of legislation where many key details for the trading regime in future are unidentified. Therefore, we remain somewhat vague about what the modus operandi of the TRA will be. Too much is being left to the whims of that authority and the Secretary of State. We believe it is important to set out guidelines at this stage that give greater clarity to the role and scope of TRA activity.

One way to achieve certainty is to bring an easily-observed, enforceable time limit on the activities both of the TRA and the Secretary of State and their relationship with each other. These amendments have been brought forward in consultation with the Manufacturing Trade Remedies Alliance, which has significant insight into what UK industry needs from future trade defence policy.

Amendments 45 and 54 would mandate the Secretary of State to make a decision on TRA recommendations within two weeks. As the MTRA highlights, although there is provision in the Bill for a deadline to be brought on the TRA through secondary legislation at various points in an investigation, there are none specified for the Secretary of State. In theory, that would allow decisions to be delayed indefinitely. Let us imagine a situation in which the UK is led by such an indecisive Government that members of the Cabinet could not agree with each other on our future trading relationships—that would be a problem. The scenario is hard to envisage, but we should surely safeguard against it.

In today’s globalised economy, markets and events can move much faster than we would ever have anticipated. In a short time, key UK markets could suffer serious injury if appropriate remedial action were not taken quickly. In fairness to Ministers, we have heard that speed of decision-making is something they are looking to achieve. This is surely the rationale behind the Government’s decision to stipulate deadlines on TRA investigations, to prevent time lags occurring which could bring that about. In the Opposition’s view, it seems ineffective to include these requirements but not mirror them for the Secretary of State in accepting the recommendations of TRA investigations. That raises a concern that there could be an option simply to kick the can down the road when a politically difficult decision presents itself. We believe that the MTRA recommendation of a two-week deadline in which the Secretary of State must reach a decision is reasonable and would protect against such abuses.

In a similar vein, the Bill specifies a maximum five-year period but no minimum with regard to the time considered necessary for duties to be imposed, where that forms part of the TRA’s recommendations. It merely states that duties should be imposed for such a period as the TRA considers necessary. However, as the MTRA points out, it is considered normal practice globally for anti-dumping and anti-subsidy measures to last for a minimum of five years, including within key partner markets in the EU and the US. The alliance suggests, therefore, that the default duration of duties should be five years, starting from the date of definitive measures. The Opposition agree.

It is vital to add certainty where we can for UK industry and that we align with our global trading partners to gain consensus and be as consistent as possible on the universally accepted World Trade Organisation principles. I therefore call on the Committee to support the amendments.

[Graham Stuart]

Three groups of amendments need a response. I will start with amendments 45 and 54, which seek to impose a two-week time limit on the Secretary of State’s decision to accept or reject the TRA recommendation. I will then turn to amendment 47, which seeks to create a presumption of five years as the normal, rather than the maximum, duration of definitive measures. Finally, I will address amendments 48 and 53, which seek to ensure that the duration of definitive measures is not affected by the length of any provisional measures that might have been applied against the same imports.

On amendments 45 and 54, on receipt of the TRA recommendation, it is the responsibility of the Secretary of State to respond in a timely manner, while ensuring that the public interest aspect of their role is given due weight. We fully recognise that a swift response is crucial to UK industry, as the hon. Gentleman said, so that the injury being caused by unfair trade practices can be halted. However, in some cases there will inevitably be difficult matters that the Secretary of State will need to reflect on. Although we expect that such matters will be rare, it is important that he has full opportunity thoroughly to consider the issues in making his decision. That might lengthen the process, but it is important to do the job well rather than quickly. To place an arbitrary two–week time limit on the Secretary of State is, therefore, not appropriate. Even though that duration might be sufficient in most cases, the legislation must provide flexibility for cases in which complex considerations must be made in the public interest.

As the hon. Gentleman is aware, once the investigation has been concluded and measures have been proposed by the TRA, the pressure on the Secretary of State quickly to come forward with the adoption of the measures to protect British industry will be great. I perhaps lack the hon. Gentleman’s imagination, but I find it hard to imagine a situation in which the pressure on the Secretary of State to get on with it would not be much greater than a pressure to delay and put it into the long grass, as the hon. Gentleman said. I think we can be confident that any Secretary of State under any Government would wish to make the decision as quickly as reasonably possible.

For those reasons, I do not agree with an arbitrary two-week limit. I understand why the hon. Gentleman has tabled the amendment and I hope it is a probing one. I understand what lies behind it, but I hope I have reassured him.

On amendment 47, it is important to note that the WTO agreements set out that measures may remain in force for up to five years. They do not provide that five years is the default. In fact, they specifically set out that measures should remain in force only for as long as, and to the extent, necessary to counteract the dumping or subsidisation that is causing injury. The TRA analysis may suggest that a period shorter than five years will be sufficient to counteract injury, and in such cases the TRA should set an appropriate duration accordingly.

On request, the TRA will initiate an expiry review before the termination of any measures, provided that UK industry can demonstrate that injury would continue or recur if the measures were to expire. If the review finds that continued application of measures is required to maintain sufficient protection for UK industry, the measures will be continued. I assure the hon. Gentleman that industry is adequately protected without the need for the amendment and I ask him to consider withdrawing it.

Finally, on amendments 48 and 53, I understand the hon. Gentleman’s concerns, but I have to reassure him that that which he fears is not the intention of the provisions. The WTO agreements allow in certain circumstances for trade remedies to be applied from a date prior to the date of the application of definitive measures. The purpose of the provisions is to allow us to reflect that in secondary legislation, not to shorten the duration of definitive measures. We are not seeking to shorten the duration of definitive measures, but are seeking to allow trade remedies to be applied from a date prior to the date of those measures.

The unintended consequence of the Opposition amendments would be to prevent the TRA from collecting duties for a period before the date of the section 13 notice, even though this is permissible under the WTO agreements in limited circumstances. I entirely understand why the hon. Gentleman tabled the amendment and what he was seeking to probe. I hope my explanation has been sufficient to make him see that that which he desires will not be delivered by the amendments.

We believe that this is a necessary provision. We have been clear that we want to incorporate all of the protections permitted under WTO rules into the UK’s trade remedies framework. Removing the ability to do that could be detrimental to the protections available to UK industry. It is on that basis that I ask him to consider withdrawing the amendment.

[Kirsty Blackman (Aberdeen North) (SNP)]

I express the Scottish National party’s support for the Opposition amendments. It is sensible that we are asking the Secretary of State to make a decision within a relatively short time period because, as has been stated, we do not want that to be dragged out for any significant length of time. It is reasonable that, after a significant investigation has taken place—and the TRA’s investigations will be significant—the Minister will quickly review the evidence presented and make a decision in the shortest possible time.

On amendment 47 and the five-year period, I have the Department for International Trade call for evidence on the current EU trade remedy measures. I can see possibly one that is in place for less than five years. In fact, many have been place for over a decade because they have been renewed. It is very unusual in that document, which lists all the trade remedy measures currently in place, for any of them to have a review date of less than five years. It is completely reasonable that the Opposition are asking for the starting period default to be five years, and for the TRA to decide on a lesser period in compelling circumstances. Given the number of these measures that have been extended and how few of them have fallen at the five year period, I suggest that five years is likely to be a reasonably short period for trade remedies to be in place, and that it is sensible for them to extended as a result.

We are talking about the trade remedies body doing substantive investigations and coming up with a huge amount of evidence. Asking it to do so on more than a five-yearly basis would probably be adding to their workload unnecessarily. The Opposition’s suggestion is incredibly sensible in that regard. The presumption should be five years, and the TRA should make decisions for it to be less if it believes that that would be appropriate.

--- Later in debate ---

[Jonathan Reynolds]

Amendments 65 to 69 and amendments 72 and 73 have been grouped together as they all refer to the removal of the preliminary requirement for adjustment plans. It states in the Bill that the Trade Remedies Authority may only make a recommendation if it is satisfied that there is an adjustment plan in place setting out how the UK producers of the relevant goods intend to adjust to the increased importation of goods affecting their industry. In addition, it stipulates that the TRA may only initiate a safeguarding investigation in relation to goods where the application for it is accompanied by a preliminary adjustment plan. As is explained in the Bill’s explanatory notes, this is to ensure that producers have a plan to improve their competitiveness alongside any measures which may be imposed, so that measures are not only a temporary solution.

The amendments tabled by the Opposition would remove the need for such adjustment requirements. The reasons behind this are numerous. It seems counter-intuitive to make it incumbent on industries to draw up their own adjustment plans. Surely if an application is being made to the TRA then this is already a measure of last resort for an industry. It may also provide an easy exit for the TRA to avoid opening an investigation if it is perhaps resource-constrained, by pointing instead to the measures that the producer has drawn up as an alternative to remedies being imposed. Equally, given that time is of the essence—that seems to be a point of agreement between both sides of the House—mandating producers to include adjustment plans before a recommendation can be made risks adding a delay to a process that is already time-sensitive.

Kathleen Walker-Shaw of the GMB, who gave evidence to the Committee on 23 January, said that she was

“extremely alarmed by how weak the remedies were in terms of anti-dumping cases.”

She pointed out specifically that they

“are very data, document and resource-heavy cases to bring forward.”

It therefore makes little sense for us to add to that burden by putting another barrier in place for UK industry to jump over right at the outset by drafting an adjustment plan.

This is not simply the view of the Opposition. Representatives of industry have also argued that these requirements are likely to be problematic. The Manufacturing Trade Remedies Alliance has explained that there is absolutely no requirement in the WTO agreement for an adjustment plan at any of these early stages, either prior to an investigation being opened or when measures are being considered for extension. As the MTRA highlights, the only stipulation from the WTO is that there must be evidence of the industry adjusting if the relief is to be extended beyond four years, and they point out that the EU follows the same approach.

The Manufacturing Trade Remedies Alliance also believes that the requirements as laid out in the Bill are disproportionate, and conflict with the provision allowing safeguarding measures to be entered into in the case of a threat of serious injury. It also highlights the risk that these measures could reduce the Government’s options for tackling aggressive trade protectionism by foreign countries. It notes that the EU has in the past introduced safeguard measures to temporarily protect the steel industry from the side effects of WTO-incompatible tariffs imposed by the US pending resolution of the dispute.

It is surprising that—for a Bill which is so light on detail—this is the one area in which the Government have decided to provide some certainty that flies in the face of expert advice to the contrary. Given the historical context and the anxieties of UK industry, these concerns are understandable. All members of the Committee will be familiar with the implications of what will happen if we do not get this right, as was illustrated catastrophically by the impact of cheap Chinese steel imports.

It is important that the Government give confidence to the UK industry at this stage that they are not anti-protection in principle. This amendment would demonstrate that the Trade Remedies Authority is supportive of this notion, and would streamline the process towards remedies where they are necessary. It would not preclude the development of an adjustment plan on a longer term basis by the industry or producer in question, but would simply prevent a more restrictive process being in place that is out of step with the one being followed by our global partners.

I conclude by returning to Kathleen Walker-Shaw’s testimony of 23 January on those anti-dumping rules. She said,

“I just feel that the provisions in the Bill do not fulfil the promise we were given that British jobs, British industry and the British economy would thrive post-Brexit.”—[Official Report, 23 January 2018; Vol. 635, c. 36, Q43.]

This Committee is now in its third day of investigating ways to try and do this, and can get us closer to that outcome.

[Graham Stuart]

The hon. Gentleman keeps referring to and giving evidence of anti-dumping. These amendments affect adjustment plans that apply to safeguards—so not anti-dumping.

[Jonathan Reynolds]

I said in my introduction that this is about the hoops that have to be jumped through before the Trade Remedies Authority can take action. As I was just coming to my conclusion, I now appeal to the Minister for greater certainty for industry and greater authority so that they can plan for going forward, by adding more clarity at this stage and not introducing things that are not replicated in our closest trading partners.

[Graham Stuart]

The amendment would provide that in safeguard investigations UK complainant producers are not required to provide adjustment plans outlining the steps they intend to take to adjust to increased imports in their market. That would be out of step with our objective to create a balanced and proportionate trade remedies system for the UK. It is noticeable that the only detail given in the hon. Gentleman’s presentation was not do with safeguards, but with anti-dumping. It was not clear from his response whether that was due to confusion or because there simply was not enough information to back up what he was saying about safeguards.

There are many benefits to requiring adjustment plans and the need to promote adjustment is implicit in the WTO agreement. Adjustment plans serve to reinforce the rationale for applying safeguard measures and ensure that measures are used fairly. Unlike anti-dumping and countervailing measures, safeguards relate to perfectly fair trade and apply globally. Therefore it is especially important that those measures balance the interests of producers and downstream consumer industries. Having listened to the speech just given, one would be forgiven for thinking that those issues were not true.

Having a plan for adjustment helps to ensure that measures protect producers from injury, while giving them time to adjust to increased imports. It provides precisely the certainty which, in his peroration, the hon. Gentleman called for. However, though we have put that on the face of the Bill, because of the nature of safeguards —which have got nothing to do with dumping—we have a peroration that asks why we do not provide certainty. It is exactly the certainty that we need to provide. We have spelt it out; we have taken the principle implicit in WTO agreements and put it in the Bill, so that we can improve on existing operations—stick conceptually to the existing rules but do so in a better way, which gives exactly the certainty that the hon. Gentleman talked about wanting to provide.

As so often in our debates in this Committee—which has been a stimulating and fantastic experience so far—amendments tabled by the Opposition have exactly the opposite effect to the ones that they claim. They say they want to do one thing, but when one bothers to read their amendment, look at the Bill and put the two together, one sees that the effect is the exact opposite. It is fascinating to see how, in almost all cases, the Scottish National party supports the Opposition, even when it is clear that the amendments are technically flawed—they do not do what the Opposition think they are doing, let alone achieve the end policy result. Perhaps that is a sad reflection on the state of the Opposition today.

Our intention is not to create additional burdens on business but to ensure a light touch approach which means that industry is able to compete without the need for protection as measures are rolled back. As such, it is undoubtedly in the interests of UK producers to use these plans and to be thinking about adjustment as early as the initiation stage of an investigation. Furthermore, the steps outlined in an adjustment plan provide a useful tool for determining the suitable pace of liberalisation, tailoring measures where appropriate. In drafting our secondary legislation, the Government intend also to build in flexibility to account for scenarios where different levels of detail would be appropriate in the plans.

In terms of whether they would be overly burdensome on business, we will ensure that the process is both flexible and proportionate, in order to serve the needs of business in the most appropriate way possible. It is for those reasons—although I can provide others—that I ask the hon. Gentleman to withdraw the amendment.

[Jonathan Reynolds]

In my experience as an admirer of the Minister, whenever he gets somewhat tetchy it is perhaps to disguise from the House his own shortcomings. I am not satisfied with his response and nor, I believe, is British industry. Therefore I wish to press the amendment to the vote.

Question put, That the amendment be made.

Taxation (Cross-border Trade) Bill (Second sitting)

Debate between Jonathan Reynolds and Graham Stuart

Tuesday 23rd January 2018 Public Bill Committees

[The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)]

Q I was going to follow on in pretty much the same area. Despite that desperate effort to lead you, you were quite clear that there was no fundamental shift, that we need frame- work legislation, that this is an appropriate vehicle for such framework legislation and that, despite the shortcomings as you see it in the scrutiny of delegated legislation within this House, there is nothing untoward about the way that the Bill is set up or uses secondary legislation.

Joel Blackwell: It is important that Members take note of the delegated powers Committee’s concerns on particular issues that it has highlighted. I do think that there is an issue with the use of the made affirmative procedure for cases that do not seem to me to be urgent; that procedure is used for reasons of urgency and should be confined to that. I have never been entirely clear or comfortable with the use of the first instance affirmative procedure. If it has been viewed that a provision should be subject to the affirmative procedure for the first time, it should be subject to the affirmative procedure all the time. The two Henry VIII powers are subject to the negative procedure as well. So there are issues with the Bill.

In terms of saying that the Bill is fine, yes, you have to use framework legislation for issues like this. What concerns the Hansard Society is when framework Bills are laid before Parliament and contain no detail whatsoever on the powers that they wish to confer on Ministers. The lack of an opportunity for the Government to provide draft regulations alongside scrutiny of this Bill, for example, will be a matter of concern, and is something we raised about the Welfare Reform Act 2012. So there are issues with framework Bills.

If there is a huge lack of detail on what the Government intend to do with delegated powers, what usually happens is that you get situations that we would like to avoid where you have clause 7 of the European Union (Withdrawal) Bill that is so wide that there are issues regarding the balance of power between Parliament and the Executive.

[Jonathan Reynolds]

Q Are there any specific areas of the Bill that currently put significant powers in the hands of the Secretary of State but that make you think we should consider the arguments for an enhanced degree of parliamentary oversight?

Joel Blackwell: That is a question I have been posing to myself for the last few days. Honestly, no. We have to be careful, knowing that the procedures for the scrutiny of delegated legislation in the Commons are inadequate, that we do not just fall back on using a strengthened, enhanced or super-affirmative procedure for everything when the affirmative procedure would be appropriate. We need to play the ball rather than the man, to use a football analogy. You have to look at the powers that are brought in front of you and decide there and then whether the scrutiny period is appropriate.

The problem with this Bill, and with other supply Bills, is that the vehicle to highlight inappropriateness in the degree of scrutiny and the appropriateness of delegated powers is the House of Lords Delegated Powers and Regulatory Reform Committee, and there is no counterpart in the House of Commons. The Bill just highlights the lack of that counterpart. But no, looking at the powers, I do not think that the strengthened scrutiny procedure would be useful in this case.

Funding and Schools Reform

Debate between Jonathan Reynolds and Graham Stuart

Wednesday 17th November 2010 Commons Chamber

[Mr Stuart]

The hon. Lady makes a fair point. Many of those initiatives, such as Sure Start, are being supported by this Government. The hon. Member for Nottingham North (Mr Allen) has been an ardent champion of early intervention and has helped Members in all parts of the House to recognise the need to intervene early in order to make sure that children arrive ready for school, and that they have a decent vocabulary so that they can engage with learning. There is merit in what the hon. Lady says, but even the most ardent supporter of the Labour Government would hardly suggest that the improvements that were wished for have genuinely been delivered.

I am pleased to follow my predecessor, the highly distinguished former Chairman of the Select Committee, the hon. Member for Huddersfield (Mr Sheerman), who said that he could not see an ideological base. I hope it is a practical evidence-based approach by the Government. It is clear that they believe that giving greater trust, responsibility and control to front-line professionals is more likely to lead to an improvement in standards than central prescription, however well-meaning. It is as obvious to me as the River Jordan that that is the key insight of this Government.

We must ensure that that process is well thought through, that we support front-line professionals, that capability is developed where it does not currently exist, and that it is put in place in time to match any withdrawal of support from local authorities or others who may previously have delivered it.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The hon. Gentleman is speaking about the Government’s wish to push more resources towards the front line, but in his opening remarks the Secretary of State talked about some of the most intractable areas of poverty and deprivation in the UK. Does the hon. Gentleman believe that directing resources to the front line and reconfiguring budgets alone will solve those problems, or that bigger, bolder schemes such as education maintenance allowances are required to tackle the deep-rooted poverty that causes that deprivation?

[Mr Stuart]

That, too, is a fair intervention. This is not the Government’s sole policy area. They are also considering doubling the size of Teach First over the next three years, and have been in negotiation with Teach First about that. The essence of improving education standards is higher-calibre, better supported, better motivated, better led teachers in the classroom. That is what it is all about. That is the prism through which we should look at every decision that we make—which is why I welcome the Teach First approach.

It is not necessarily contradictory, though I can see that it may look hypocritical, to talk about reducing central prescription on what teachers may have, on the one hand, and on the other, raising the bar to those whom the state supports to go into teacher training so that the people coming in are better qualified.

The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) is right to ask those questions. Tools alone will not deliver. What is needed, and what we have heard from head teachers and from the profession over the years, is that too much prescription, too much teaching to the test, too much narrowing of the curriculum—in other words, too much of what want on under the previous Government—took away the joie de vivre and the empowerment of front-line professionals. If we can bring that back, plus Teach First, put the tools in place, encourage ever better school leadership and school governance, which I hope the Select Committee will examine over time, we can move our education system on to a higher plane, and deliver what Members in all parts of the House want.

Knockabout—trying to suggest that Tories eat babies, or whatever those on the Opposition Front Bench seem to suggest—is not helpful. I believe that everyone in this House, regardless of party, came into politics because they would like to create a more just and fair society. This is not only about social justice. The forces of globalisation, which we cannot stop, and the suggestion in the Leitch report that there will be fewer and fewer jobs for people who do not have skills, make it an absolute economic necessity that we improve the skills of our young people. In response to the hon. Member for Darlington (Mrs Chapman), the truth is that we failed to make the progress that we should have done, and this Government feel that autonomy, plus their other measures, represent a better way to achieve that.

I want to make some brief remarks about Building Schools for the Future. My predecessor, the hon. Member for Huddersfield, who is chatting at the moment, knows full well that there is not the evidence to show that capital investment in schools leads to educational transformation. There is a link, but it is pretty small. Obviously, we all regret the fact that we cannot have brand-new schools where schools are not in an ideal state, but under BSF the allocation of money was out of proportion to the benefit given. Under this Government, more money will be spent on capital in schools in this Parliament than in the first two Parliaments of the Labour Government. Let us keep this in perspective. We need to recognise that nobody wants children to be in a school that is not in a good condition, but equally there is no evidence to show that the building itself, however inspiring the children may initially say it is when it opens, leads to the educational transformation that is at the real heart of improving outcomes, particularly for the poorest.

I should like to touch on the education maintenance allowance, which many other Members have mentioned. In the case of the EMA, unlike BSF, there is material evidence to show that it has helped young people from certain backgrounds to stay in education. I hope that Ministers will take that evidence very seriously and ensure that whatever they put in place does not artificially stifle that opportunity for people.

On the move from the current position to autonomy, we need to consider issues such as school sports trusts. I hope that Ministers, while generally believing in giving autonomy to schools and passing it down, will be careful to ensure that transitional arrangements, and sometimes funding, are in place so that things of value are not unnecessarily lost before they grow again from the grass roots.

Most of all, what we must have for this country is aspiration—aspiration to raise standards overall, and aspiration in believing that we can do so much better. So far, the shadow Secretary of State has been far more of an expert on health than on education, but I hope that he can start to express that Blairite aspiration of looking upwards, improving and challenging all the time, rather than simply defending the status quo, which is indefensible as it stands.