Trade (Australia and New Zealand) Bill

Lloyd Russell-Moyle Excerpts

Report stage
Monday 12th December 2022 Commons Chamber

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

My hon. Friend is making a very good point—a point that the Secretary of State for International Trade unfortunately did not seem to be fully up on when we questioned her last week. She has now promised to investigate this area. Is it not a good example of how, not necessarily the legal risk, but the uncertainty will lead multinational companies to divert their trade through regimes that are certain? Britain will therefore lose out as long as there is uncertainty, even if that is not a reality.

[Gareth Thomas]

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

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

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It is a matter of great regret that the devolved Administrations with responsibility for agriculture, wherever they are in the UK, have had no direct role in the negotiation of these deals, and that absolutely has to change when we are negotiating future trade deals to replace those left behind.

[Lloyd Russell-Moyle]

Is it not the case that in most countries that have federal, confederal or other such arrangements with devolved nations, those nations are involved and embedded in the negotiating teams? Does that not show the arrogance, in relation to co-operative relations across the Union, of this Conservative party, which seems determined to fulfil the hon. Member’s party’s wish, which is to annoy people in Scotland so much that they want independence?

[Richard Thomson]

That is certainly an interesting take, and entirely understandable, but I would far rather be making the arguments for Scottish independence on their merit, rather than on how much we and all the devolved Administrations are being vexed by a high-handed UK Government who are over-mighty and overreaching in this respect.

We have already been forced against our will in Scotland to trade outside of the EU and to be tied to a UK Government who seem hellbent on agreeing trade agreements at almost fire-sale prices just so they can pretend that Brexit is working. That is a thoroughly invidious position to be in, but it is the position we find ourselves in, for the moment at least, and we are determined to do all we can to try to mitigate the damage on this before we go back to the issue of principle that the hon. Member has raised. Make no mistake: the impact of these agreements will be felt throughout Scotland, and to that end it is vital that not just the Scottish Government but all devolved Administrations can have a full role, with their input being listened to, respected and acted on in future negotiations.

The Bill did not have to be like this. It was entirely possible to take a longer period of time to reach a more considered view. For those absolutely hellbent on leaving the European Union, there were better ways of doing it than the unmitigated car crash that has followed from the way successive iterations of Conservative Governments have gone about it. They seem to have spent more time negotiating among themselves than negotiating with those who matter. There are better ways of doing this, and there are better outcomes that can yet be agreed. I strongly urge the UK Government to repent, go back and try to achieve something better. It is within their grasp if they have the will to do so.

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[Lloyd Russell-Moyle]

We are here to talk about a very small part of a much wider trade Bill. To some extent, we are only talking about it because the Procurement Bill has not been brought to this House from the other place. If it had, we might not even be talking about some of this Bill’s clauses at all. Is that not a disgrace? Almost no other country has such poor scrutiny of its trade arrangements.

Of course, Britain did not have such poor scrutiny of its trade arrangements before we left the European Union. In this place, we were able to use the negative resolution procedure at several stages, including the pre-stage. The European Parliament had the right to vote down the deal at the pre-negotiating stage, as well as the final deal, and our Government could do so through the Council.

Now the Government, in all their ineptitude, are the ones who decide. They forced the CRaG process through, which in itself was unnecessary because ratification cannot be fully implemented until all the legislation has been laid down. There was no need for the CRaG process to happen last year without any substantive debate or vote in this place, because the trade deal cannot be fully brought into force until this Bill has passed.

The Government’s whole about-arse process on trade —we have heard all the criticisms made by the former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Camborne and Redruth (George Eustice)—shows that they have no real plan and no real idea about how to negotiate. When I ask my Australian colleagues what they may have compromised on and what we may have gained, they say, “It’s a pretty good deal for us—we wrote it.”

Through the amendments on procurement, there are several things we can do to ameliorate the mess that the Government have made of this deal. First, we can ensure that Parliament has scrutiny over how the details will be implemented. If the deal goes through, as we heard in the speech of my hon. Friend the Member for Harrow West (Gareth Thomas) and in my intervention on him, it might weaken the protections on procurement.

Ensuring that the statutory instruments laid before the House are not written as poorly as the Bill and the trade deal, so there is no wiggle room on procurement, should be our first step. The way to ensure that is by holding Ministers’ feet to the fire. In the Bill Committee, the Minister seemed a bit unsure about how the affirmative procedure and the negative procedure work. It is clear that if statutory instruments are made via the negative procedure, there will almost never be a debate in this House. They will go through without debate, because Members of this House will not be able to pray against them in time; sometimes we have seen Governments deliberately laying statutory instruments when the House is not sitting and cannot pray against them. That is the reality.

The only way to ensure debate and discussion, either on the Floor of the House or in Committee, is to ensure that the affirmative procedure is applied. That must be the bottom line. It is not hard, and it will not delay the process, because the Australians themselves need to go through an affirmative procedure when they implement measures. This is asking for nothing more than our counterparts are getting; to offer anything less would be to devalue and degrade Britain. We know that the Conservative Party is doing quite a lot of that at the moment, but come on; let us, at least on this one, show that Britain counts. Britain should be able to get something as good as what is available to Australia and other countries around the world. Underselling Britain is disgraceful, and we need to reverse that.

Secondly, we need clarity on the legal clauses. It needs to be made clear that they will not undermine the current protections around the world. As I said in my intervention, it is not a question of whether, in a court of law, we might reach a point at which British companies would be successful; that is irrelevant. The question is, would it be necessary to go to a court of law to determine whether British companies would be able to obtain compensation, or would everyone be so clear about the fact that a French company would be able to obtain compensation that a French competitor would be given a marginal competitive advantage? That is the question that arises from the poor wording in the Bill.

If a marginal advantage is given—even a theoretical advantage that in practice does not come about—multinational companies that can channel their trade either through their British company or through their French company for large procurement deals will do it through the French company, and then where will the tax be paid? Where will the revenue return? It will return to France, and Britain will lose out again. It is therefore vital for this clause to be included.

I am also deeply disappointed—and I wish the Government would accept some of the amendments that deal with this—about the fact that for Australia, the procurement requirements do not count at state level because Australia is a federal system. All its procurement, in respect of education, roads and building, universities and community facilities—I could go on—is at state level, so this trade deal does not bind the Australians. Because of the way this Government have negotiated the deal, they want to tie the hands of our devolved authorities and local government in a way in which Australian hands are not tied; again, selling Britain short. What we could see is the proper integration of our devolved authorities and local government, particularly big strategic local government—for instance, London-wide government and Metro Mayors. We could include them in the negotiations, or, even better, ensure that future negotiations do not allow an asymmetrical position in which we are included and others are not.

This is a poor deal, as we know from the other side. This is a poor Bill, which accepts everything from one side and protects Britain not one jot. The Opposition new clauses and amendments go some way towards ameliorating that. Ministers should accept them, thus ensuring that we can truly champion British businesses that are trying to trade around the world. That is what I genuinely believe we all want.

[Jim Shannon (Strangford) (DUP)]

I was not expecting to be called at this point, Mr Deputy Speaker. I was just removing a mint from my mouth.

[Lloyd Russell-Moyle]

Did you think I was going to go on for longer?

[Jim Shannon]

Yes, I would expect the hon. Gentleman to do that—but what a pleasure it is to follow the hon. Gentleman, who brings knowledge to these debates and, probably, to every debate. Let me also to say how pleased I am to be able to throw some of my thoughts and those of my party into this debate.

As a proud Brexiteer—that is no secret—I am pleased to see the opportunities that can and will come from Brexit, and we in Northern Ireland hope that we too will benefit from them. We await the Government’s endorsement of the Northern Ireland Protocol Bill, which will give us the same opportunities as everyone else, but that is for a future debate rather than this one.

The potential of the Australian and New Zealand trade agreements is exciting for me and many others. The agricultural and fishing sectors are vital for my constituency, so my request to the Minister will be to provide the support to enable our agricultural sector to be protected. We in Northern Ireland are fortunate, in that we export food and drink products worth some £5.4 billion, and we export some 65% of that produce to the EU and across the world. We are already the epitome of what the Government are trying to achieve through this deal, and we are doing that right across the whole world. Lakeland Dairies is a good example. It is already moving to sell its produce in the far east, the middle east, Africa, south America and the USA, so it is very much to the fore. We also have Mash Direct, a buoyant company that is seeking markets overseas, and Willowbrook Foods and Rich Sauces, which likewise have farmers who feed into them. So we have a strong agri-sector in my constituency. The Minister knows that already; I am not telling him anything he does not know. He is always very astute and does his research so he will know what I am referring to, but I seek that wee bit of reassurance that my agri-sector in Strangford will be in a position to have those protections, and that we can be part of that export push that the Government clearly want to bring about.

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[Geraint Davies]

My comment would be that Britain should be taking a lead, as it claims to, on mitigating climate change. The way to do that is to take best practice, from Singapore or anywhere else, and hardwire that into current and future agreements. That has not been done, because our economic, climate and other interests have been thrown to one side in order to just tick a box and say that we have got a trade agreement.

[Lloyd Russell-Moyle]

My hon. Friend mentioned carbon border adjustments. Is it not the truth that both Europe and America are now leading on these discussions, because they understand that trade deals without proper carbon and border adjustments are just ways of exporting jobs out of countries—degrading those countries, their workers and the environment in one fell swoop?

[Geraint Davies]

I am certainly a big supporter of what the EU is doing on carbon border adjustments, for instance ensuring that we have a level playing field for steel made in south Wales, which emits half the carbon of Chinese steel, and that there is an incentive to invest in green production domestically. The EU has taken a lead and we need to catch up. The United States is subsidising green industry and, as my hon. Friend will know, there is a tension between the two different strategies when it comes to ensuring a sustainable and greener future for all.

Turning to procurement, clearly it is not exactly a new idea that big multinational corporations will use unelected, private, often secretly held tribunals to try to fine democratically elected Governments who want to pass laws to protect the environment and public health. We saw that in investor-state dispute settlements. Most obviously, at the moment, we have got the Energy Charter treaty, which binds countries for 20 years to being sued if they try to pass laws to help the environment.

People will know that Germany, France, Poland, Spain and others are trying to withdraw from that treaty, although we have not heard much for the United Kingdom—because of its fossil fuel interests, I assume. My question is: why, when we know those companies will be quick on the draw in taking us to court and suing us, do we allow them a way in on procurement, so that when they do not get the business with the NHS, they can suddenly sue us? That concern is covered in new clause 1, which I very much support.

Finally, it is obvious that, out of the carnage of the botched Brexit deal, while obviously we want deals with Australia and New Zealand, the haste with which we have approached these deals has left us in a situation where they get all the benefits and we face a prospective loss. That is absolutely disgraceful maladministration from the Government, and I support the amendments to try to mitigate some of the harm done by their hopeless negotiation.