Trade Bill (First sitting)

Kemi Badenoch Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[The Chair]

Can I say, before I go on to the next person, that I have at least six people who still want to ask a question and we have a maximum of 23 minutes, so can people bear that mind?

[Mrs Kemi Badenoch (Saffron Walden) (Con)]

Q I would like to bring Mr Howarth into the conversation. Going back to the purpose of the Bill and the need for the continuity agreements with those countries that are covered by EU deals, how practical is it, in your opinion, to transfer those agreements into bilateral trade deals?

Christopher Howarth: It is important, getting back to the Trade Bill, that it only gives a power for existing trade agreements. These trade agreements are already in force and companies already rely upon them. When we talk about impact assessments, the biggest impact assessment is that these agreements are already in force or have already gone through a scrutiny process and may come into force, such as CETA. Obviously, in leaving the European Union, we are moving to a different scrutiny system. Before, they could be decided by the Commission, the European Parliament by qualified majority voting or, in the cases of mixed agreements, you would have to get unanimity, occasionally from devolved Administrations as well. We are moving to a new system, but these agreements are already in force.

The relationship with the European Union (Withdrawal) Bill is that we are keeping retained legislation and we are keeping the EU standards, so if there are any amendments to these agreements, they have to be in line with the regulations—the food safety and environmental standards—that are being retained in UK law. The scope for actually changing things is quite narrow. These have been through a scrutiny process. They are in force. This Bill is necessary, in my opinion, so that the people who rely on these agreements can be sure that they will be transferred over in time.

[Mrs Badenoch]

Q And the practicalities?

Christopher Howarth: Trade agreements do traditionally take a very long time. In this case, they are already in force and we already have texts. Small amendments may need to be made around quotas—in some of the agreements we need to agree with the European Union and the counterparty how to split the quotas up—but the texts by and large have been agreed. In the future we may wish to come back to them to improve them or to fit them more to UK interests, but these agreements do exist. Trade agreements traditionally take a long time. I refer you to Parkinson’s law: that trade agreements tend to expand to the amount of time available to negotiate them. If you give trade negotiators 10 years to negotiate an agreement, it will probably take 10 years. In this case we have a fixed deadline, and I assume both sides will want to fit the negotiations and the necessary functions to that.

[Barry Gardiner]

Q You made an important point. Clearly we need to ensure that the trade we have with many of these existing partner countries continues. That is an essential focus, which I think is uncontroversial around this room, but when you are talking about the amendments that might be made—as these treaties cease to be simply EU treaties that we are part of and become bilateral relationships with these countries, new treaties and distinct legal entities, as the addendums to the Bill have made clear—do you agree that it would be a fine opportunity for many of these countries to say that they want greater access to our markets in return for having this new agreement with us, or that they might take the opportunity to protect their market a little bit more? Might one of the reasons why the Bill puts in place a Henry VIII power be precisely because it envisages a scenario where such amendments might be made and where we might have to accommodate them, and the Minister then adopts that power in order to do so?

Christopher Howarth: I think it is true to say that the agreements the European Union made were fitted around European Union interests and that if the UK were starting from scratch, we may have had other interests. The EU interests would protect French farmers and the French audio-visual industry. You would get a price on the other side, say with Canadian agriculture. If the UK was doing it, we might do it differently. That is probably a discussion that would take longer and we would come back to later, and these agreements would probably stay exactly as they are. On the scrutiny side, we had a sort of mirror of this debate in the European Union (Withdrawal) Bill negotiation and discussions in Parliament. There may be some—

--- Later in debate ---

[Barry Gardiner]

Q Mr Ashton-Bell, can I pick up on something you said because I noticed that you were nodding when Mr Burke was saying that. You said you struggled to understand how we could get the best deal without engaging every part of society in the debate. You also posed the question of who makes the fundamental decision. Do you therefore agree with Mr Burke that it would be helpful to have, in the nine places available on the TRA, statutory representatives perhaps of small business, the trade unions and producers? At the moment, the Bill has it as a blank sheet for those nine spaces, and nobody is really quite clear who might be appointed. Perhaps you could all comment on that, starting with Mr Ashton-Bell.

James Ashton-Bell: My organisation does not have a defined position on that blank sheet of paper you have just described, but to follow your rationale, and consistent with what I have said so far, bigger organisations do not have a monopoly on understanding how trade impacts the economy. In anything where you are making choices about trade and how it will impact the wider economy, you should have a wide and balanced group of people advising Government, or an independent authority, about how to make those choices. That means, indeed, that small business are very much equal to big business, and workers also, because workers are just as impacted as the businesses themselves.

Chris Southworth: I just want to clarify my point. It is exactly the same: the representation is a critical point. An independent body, yes, but there must be representation within that independent body to represent all the important voices, which includes all those here, but I would also include NGOs and civil society, who have equal interest in the implications of trade. They must be at the table and that has to be in everyone’s interest, including business—big, small and medium.

Martin McTague: Barry, it will not come as a massive surprise to you that, yes, I do agree that small business should be a serious voice on this. It is nice to know that James supports me. That is a welcome change. [Interruption.] It is something that we have clearly got unanimity on.

[Mrs Badenoch]

Q Speaking about the representation on the Trade Remedies Authority, there have been suggestions that Parliament should have a greater role on this board. What impact would that and other stakeholders have on the impartiality, accountability and timeliness of decisions? Could the panel tell us what they feel about having various nominations to non-executive membership? What impact would that also have on the independence and impartiality of the Trade Remedies Authority?

Chris Southworth: Ultimately, it is about having a rounded decision made by an independent body. That political oversight is critical—James is completely right. Ultimately, it is going to come down to a political decision whether a decision is made one way or the other. If you operate in an organisation like the World Trade Organisation, then all these voices come into play. It is incredibly important that the decisions prior to any engagement in a global environment are made in a good way that is inclusive. The role of Parliament is critical in that too.

[Mrs Badenoch]

Q You don’t think that that would slow things down?

Chris Southworth: Trade is slow, it is technical, and it is difficult. It involves implications for people’s lives and for businesses of all shapes and sizes in every region. There isn’t a component of public or professional life that is not impacted by trade. It is important that everyone has their say, so that when the negotiations begin, the negotiators and all the stakeholders are confident on what those positions are. It is equally important that, during the negotiation when important points come up that are difficult and tricky, which they always are at that stage, there is also an opportunity to come back and say, “What do you think? Do you agree with this, because we are going to have to make a compromise?” That could mean an implication for Welsh farmers, businesses in the midlands, or local communities in Sheffield. It could mean all of those things.

[Mrs Badenoch]

Q I am asking because I have had messages, particularly from farmers in my constituency, about remedies being very slow to be enacted. That is a real issue, so I would be looking for a very efficient remedies authority. I hear what you are saying, but I can also see a situation where the conversation goes on and on and no remedy comes forth. Justice delayed is justice denied.

Chris Southworth: Again, you need to come down with a political decision at some stage on whether or not it is right in terms of timing. The key point is: has there been proper consultation beforehand and has every stakeholder had the chance to voice their views in a proper structured format, not throughout the consultations, but in a proper structured way? That is the important point. Ultimately, there is always a sensibility around trade remedies, particularly if you are talking about things such as steel dumping. That has huge implications for a lot of people, particularly in geographies that tend to be vulnerable, so there is a difficult decision to be made. It is important that everyone has a chance to have their say about what that decision should be.

[Mrs Badenoch]

Q Does anyone else want to come in on the make-up of the board, impartiality, timeliness, and so on?

Tony Burke: I think we would agree with everything that was said about the make-up of the board. It has to be wide-ranging and it has to have expertise. On the point you raised: when we put our evidence in from the Manufacturing Trade Remedies Alliance—industry and the unions—we wanted a system that worked. Don’t forget, we have not done this for a long, long time. We needed to make sure that we got it right. There were some folks’ voices saying, “Let’s have a fast-track. Look at America, it takes a long, long time”. We said, “No, if you do fast-track, you could get it wrong”. You need to have a system that works, step by step, but is widely consulted on, as has been said.

We may have problems in a particular industry, where we have to bring expertise in and we need to have people in that discussion at the remedies authority who know exactly what they are talking about and are able to demonstrate it. They can be very complex. When we look at the US system, it takes a very long time and moves very slowly. We do not want to rush it, but we need something that works and is as wide as possible. As I said earlier, I do not think impartiality comes into it, providing there was oversight from Parliament.

[Faisal Rashid]

Q I understand there were 60,000 responses to the consultation. The trade White Paper was published the day after the consultation closed. I apologise if I am wrong, but I think you said earlier that you were quite comfortable with the process. Do you think it is practical and do you think the consultation feedback from the stakeholders has been taken into account?

Martin McTague: We believe it has been taken into account at this early stage, but a lot more consultation needs to take place. We have a position and we are developing that position on exactly how this will affect smaller businesses. At this stage, it is not a developed position.