(9 months ago)
Commons ChamberMy hon. Friend is making an excellent, excellent speech. [Interruption.] Well, he knows it anyway, but there is nothing wrong with praising. Is it not also a sign of how the Government, time and again, let down our creative industries? If it were steel or farming, Conservative Members would be in the ear of Ministers through their trade partnership committees, but creative industries are locked out of many of them and ignored. That is why Labour has put forward a plan to put creative industries at the heart of our economic development.
My hon. Friend is generous in his description of my speech—I am grateful to him—and absolutely right about the importance of Labour’s plan for the creative sector.
Reform of the UK’s copyright framework should not be taken lightly, and it should only follow proper and well-considered consultation. Otherwise, we risk endangering our gold standard of protection for our vital creative sector. I gently suggest to the House that the reforms allowed for under clause 5 should not have been shoehorned into this Bill, and certainly not without a thorough consultation having taken place first. In that regard we are sympathetic to the merits of new clause 12, tabled by the hon. Member for Chesham and Amersham. We will continue to scrutinise developments in this area, and we hope that Ministers will reach a final decision, after the consultation, that will not have the adverse impact that is feared by some outside the House.
As I have said, I share the concerns expressed by my hon. Friend the Member for Brighton, Kemptown in new clauses 2 and 3, and I therefore hope he will join us with enthusiasm in the Lobby later today. Similarly, I share the desire of my right hon. Friend the Member for Hayes and Harlington for much greater adherence to the conventions of the International Labour Organisation. We raised this issue in Committee, and as I said earlier, I share his frustration—and that of other Members—that Ministers have not allowed the House a substantive debate under the CRaG process.
(2 years ago)
Commons ChamberMy 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.
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.
(2 years, 2 months ago)
Public Bill CommitteesThank you, Mr Twigg, for the opportunity to resume my speech in this debate that was opened by the hon. Member for Airdrie and Shotts. I will speak in particular to amendments 5, 7, 20 and 22.
It is a particular joy that you are chairing the afternoon sitting, Mr Twigg, because you will know, having been both a Minister and a shadow Minister, just how much the odds are stacked against a shadow Minister in a Bill Committee, with 1,000-plus civil servants backing up the Minister versus just one researcher and, fortunately, some very high-quality Labour colleagues. The odds are very uneven.
When this morning’s sitting ended, I had begun some preliminary remarks on the case for amendment 5. I was about to highlight some of the issues around the differences between the New Zealand free trade agreement procurement chapter and the Australia FTA procurement chapter. I suspect that businesses will need some help to navigate those differences, so consultation with interested businesses across the UK would seem sensible.
It is tempting to think that the differences are so marginal that they can be ignored and that any flaws in the procurement chapters can be swept away by the upcoming procurement Bill or our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As the Minister briefly alluded to, with the CPTPP not yet on the statute book and with plenty of issues to be addressed before it gets there—if it does—we have to get the trade deal procurement chapters and their implementation right, as they will, without question, affect the legal landscape in which businesses bid for contracts here in the UK and in which British businesses bid for contracts in Australia and New Zealand.
Not only are there subtle and important differences between the New Zealand and Australia deal procurement chapters, but they are not the only such chapters that we have signed up to since our departure from the European Union; of course, we have the procurement chapter in the deal that the previous Prime Minister negotiated with the European Union. Again, there are subtle but none the less significant differences between the EU procurement chapter and the Australia and New Zealand chapters. It would seem an obvious and sensible thing for Ministers to embrace some help to navigate those differences, and amendment 5 would help them to do that.
Where do the differences lie? It is important to remember that the Government procurement agreement is the foundation text for procurement negotiations. The procurement chapter in the EU deal—the first we signed—keeps the GPA text and builds upwards from it. I hope to come to the evidence of the procurement expert Professor Sanchez-Graells in a little bit. He argues that the text of the procurement chapter in the Australia deal not only replicates but, crucially, modifies the text of the GPA. That creates a GPA-minus agreement and risks all sorts of complications and legal problems when bidding for contracts, both here in the UK for Australian and New Zealand businesses, and in Australia and New Zealand for British businesses.
Another reason that we should perhaps consult firms is that, as I understand it from the evidence that Professor Sanchez-Graells gave us, a UK firm could be barred from all remedies—the interim relief remedy, judicial review, as well as full redress, compensation—if they felt they were being unfairly treated in an Australian Government tender process, on public interest grounds. In a similar process in Australia, a French firm could be barred from interim relief but not from a redress claim. So the French firm could potentially secure compensation if it was treated unfairly if the contract was moved forward on public interest grounds, but the British firm could not. Apparently, that is because the UK firm’s rights are considered under the UK-Australia FTA, while the French firm’s rights would be governed by France’s membership of the Government procurement agreement.
Is not this another worrying sign that the trade deals and the Bill often sell British businesses short? British businesses are being deprived of rights that they currently have. I am sure my hon. Friend will confirm that, if we pass the Bill without amendment, it will mean that British businesses have less access and security in the Australian and New Zealand markets than they currently do under the GPA rules that extend to everyone already.
That is certainly my understanding of the evidence that Professor Sanchez-Graells gave this Committee, the Select Committee on International Trade in this place, and the International Agreements Committee in the other place.
Let me spell out for the Committee where the problem lies. As I understand it, the Government procurement agreement allows countries to bar access to some but not all remedies, on public interest grounds, for companies that are unhappy with Government procurement decisions, but, crucially, it does not allow a ban on remedies involving compensation. That is the difference with the Australia FTA procurement chapter, which does allow a ban on remedies involving compensation.
Potentially, the firms of other GPA countries will have more comfort and ability to risk tendering for big Australian Government contracts, because they will know that they have some access to remedies if things go wrong in the procurement process and they want to try to get compensation. As my hon. Friend the Member for Brighton, Kemptown rightly says, it takes some skill to negotiate a worse position for British businesses in terms of access to remedies than the situation we have now. That is probably not the biggest mistake that the now Prime Minister has made in her time in office, but it feels like a significant issue, and I look forward to the Minister addressing it.
Government procurement matters enormously. We have touched a little on some of the reasons for that. It helps if Government procurement is done well. One of the reasons why amendment 5 is necessary is to ensure that we do not make the current set-up for Government procurement in the UK worse but, instead, enhance it. Done well, Government procurement can help to build supply chain resilience. We saw the significance of that during the covid lockdowns, when our dependence on China became ever clearer and the need to re-onshore some of our supply chains became a topic for discussion by business and, I suspect, in Whitehall.
We are all too familiar with the horror stories about some of the dodgy personal protective equipment that was procured. We understand the context in which some of those decisions were made, but it is striking that Transparency International, with which I worked when I was a development Minister trying to tackle corruption in developing countries, felt the need to investigate the Government procurement market for PPE. It identified some 73 contracts, worth 20% of all the contracts, that it said raised one or more red flags for possible corruption. That suggests there is work to be done to improve the quality of Government procurement. The National Audit Office also highlighted concerns, where the Government admitted that they were not getting full value for money on PPE.
We also know that good conditions for Government procurement can create more choice and more scope for innovation, and can achieve better value for money. One thinks about the digital procurement expertise that we need, and the potential for artificial intelligence to help revolutionise public services. We need to make sure that the framework under which Government procurement contracts are being offered works well, and that this new injection of uncertainty—but also, potentially, enhanced opportunities for other firms to come into the Government procurement market—does not destabilise the UK procurement market but improves things. A bit of consultation might help in that regard.
I touched on some issues around levelling up, which, to my surprise, prompted murmurs of disagreement from Government Members. I understood from their chuntering that they think everything is rosy with Government procurement outside London and the south-east. However, some figures I have seen from the House of Commons Library suggest that at the moment, there is a clear bias in the Government procurement market towards businesses operating in London and the south-east. The last thing we would want is for the procurement chapters of the Australia and New Zealand trade agreements to exacerbate the difficulties for businesses, not only in London and the south-east but in the west midlands, the north-west, the north-east or the east of England, that are trying to get into the Government procurement market.
House of Commons Library data demonstrates that of the 445 most lucrative contracts awarded by central Government in 2019, 202 went to companies in London or the south-east. That does not suggest that Ministers are using Government procurement to level up. We know they are not doing much else on levelling up, so one would hope that they would take the opportunity to consult more, as our amendment 5 would require them to, in order to ensure that the Government procurement market is not being made worse for businesses outside London and the south-east that want to get involved. It might be an opportunity to look at reforms and think about how businesses outside London and the south-east can be encouraged to do so.
Nevertheless, it seems a reasonable question to pose. A bit of better consultation might allow us to think about how we encourage more British businesses to secure Government contracts. The Minister rightly said that there is a good argument for extending the contracts covered by this legislation—he was thinking of contracts of unknown value and length—on the grounds that it would encourage more competition and better value for money, but we need to ensure that that does not put off good British businesses, particularly small and medium-sized ones in the local area, from getting contracts. I am yet to hear any convincing story from this Minister or, indeed, Business Ministers or Cabinet Office Ministers about what they are doing in that space to shift things forward.
Let me come to some of the specific concerns that Professor Sanchez-Graells raised, which are the most troubling of the many issues raised in the evidence sessions last Wednesday. It is worth highlighting Professor Sanchez-Graells’s experience. He is a professor of economic law at the University of Bristol Law School and co-director of the Centre for Global Law and Innovation. He has done a lot of research on economic law, particularly competition law and procurement, and his research concentrates on the way the public sector interacts with the market and how it organises the delivery of public services, especially healthcare. He is a significant witness. He was clearly taken seriously by the International Trade Committee and by the International Agreements Committee in the House of Lords.
Professor Sanchez-Graells argued that there are a series of problems with the way in which the procurement chapter has been written that, in effect, create the GPA-minus problem, which could have a chilling impact on the appetite of British businesses to bid in Australia and New Zealand, unless Ministers can rectify those problems and provide comprehensive reassurance that Professor Sanchez-Graells may not have considered the whole picture. He has been explicit in saying that he wants the procurement chapters of both the New Zealand and Australia deals renegotiated and only then put into law, so it is important that we hear the Minister’s reaction to those concerns.
I had thought that the biggest problems with the Bill were the huge giveaway to Australian farmers, the lack of protection for British agricultural goods, the lack of progress on geographical indications and the shocking levels of scrutiny, but Professor Sanchez-Graells appears to suggest that there are serious issues with procurement and whether the procurement chapters present the huge opportunity that Ministers have been keen to big up. He says that the legal uncertainties in the chapter that the Bill would write into law ensure that the rules clash with the World Trade Organisation’s rules on procurement, and we would then risk breaching international law, be it the GPA or the two trade deals.
We know that Ministers have a record of not being bothered about breaking international law—one thinks of the Northern Ireland protocol or other aspects of the trade agreement with Europe—but if Britain’s reputation for international lawbreaking gathers ground, that could have a chilling effect on our ability to negotiate other trade agreements and implications for the confidence of the markets, which is particularly worrying.
The GPA is the baseline for opening up access to procurement contracts. I commend Ministers for the objective of creating a GPA-plus regime, and the Australia deal secures some more substantive obligations that point in the direction of such a regime, such as the electronic publication of contracts by authorities, the inclusion of a clause on environmental, social and labour considerations and a clause on SME access to procurement opportunities, the expansion of economic coverage through the inclusion of concession and build-operate-transfer contracts, and so on. However, it also deviates in ways that alter or reduce substantive obligations, so we have the creation of a GPA-minus regime instead.
The scope for legal uncertainty risks having a chilling effect in terms of British businesses wanting to bid for Australian and New Zealand contracts, and vice versa. Amendment 5 makes it clear that consultation is key, and amendment 22 would give us the chance to understand fully the impact of these GPA-minus changes. Both would be helpful additions to the legislation and would allow us to address some of the concerns.
The concerns Professor Sanchez-Graells expressed in evidence to the Select Committee were very technical and challenged members of the Committee—they certainly challenged me when I read back over them to fully understand their scope. To bring them to life at our witness session last week, I asked him to give some examples of where his concerns might have played out. One example I asked him to think about was a British construction business bidding for a contract to help build the Melbourne airport link, which the Australian authorities are tendering. He said:
“Let us imagine that an innovative British company that wants to sell low emissions rolling stock for that metro link in Melbourne airport goes and tenders in Australia. It is excluded for any number of reasons and it wants to challenge the decision. It could also be barred from access to remedies in Australia, which means that the UK tenderer has lost its time and probably made a loss on the project.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 42, Q52.]
That business could lose its access to remedies if the Australian courts embraced the decision of the contracting authority on public interest grounds—that the contract could not be delayed and the compensation not offered, because it was so important that the Melbourne airport link got built on time.
If the UK tenderer had spent substantial amounts to get that contract and then could not get any compensation for all that money, that would create a big disincentive for anyone from the UK thinking of trying to tender for future projects in Australia. It is important that the Minister and the Department for International Trade explain what steps they will take to prevent that risk from coming to fruition.
Is there not also a danger that an international company could choose which of its subsidiaries a bid should come from? Rather than choosing the British company and channelling the money through it, it might consider that the protection offered would be marginally better should the bid come from the French or German company. The multinational company will choose to channel its bids through their other subsidiary companies outside the UK, which could deprive UK taxpayers of money and British workers of the contract, when the British company has done some of the necessary paperwork and processing. There does not need to be a material change; there only needs to be a theoretical risk that that could happen.
Unfortunately, that is absolutely right, as Professor Sanchez-Graells argued. That is a real risk. There are potentially chilling impacts on British authorities that want to issue contracts, should New Zealand companies, and particularly Australian companies, bid.
On the possible GPA-minus provisions, a broader issue is relevant to the argument for amendments 5 and 22. Is the GPA being undermined? The GPA-minus provisions are not just an issue for the UK-Australia FTA, but are likely to be an issue under the CPTPP. Given how difficult it was to negotiate the GPA and how long it can take to secure improvements, enhancements and modernisation, one has to ask whether Ministers have given up a little on that multilateral process. Have they decided that it is so important to get individual procurement chapters agreed under trade deals with potential allies that we will give up on the process of modernising the GPA? Surely it needs to be a living document, because it dates quickly; the current version was negotiated more than 10 years ago and is already out of date on digital procurement and sustainability. The more GPA-minus provisions there are in trade agreements negotiated around the world, the more difficult it will be for the World Trade Organisation to negotiate an enhanced, modernised GPA. It would be good to hear what plans the Minister and the new Secretary of State have to prevent the UK-Australia chapter, with its GPA-minus provisions, from stopping any effort to modernise the GPA. One hopes that Britain would seek to lead that process at the WTO.
The second major concern of Professor Sanchez-Graells is why we are putting the two procurement chapters into law if we plan to accede to the CPTPP? It has its own procurement chapters, and both Australia and New Zealand are members of it. Those chapters are very similar to the Australia and New Zealand FTA chapters, so there is similar scope for uncertainty. We have been led to believe by the current Prime Minister and the previous Secretary of State for International Trade—presumably the present Secretary of State will tell us something similar—that CPTPP remains the top trade priority for Ministers. Professor Sanchez-Graells is concerned about the Government’s rush to get two procurement chapters on to the statute book when there is scope for future uncertainty. I am not sure what I think about that particular argument, but I would be interested to hear what the Minister has to say.
(2 years, 2 months ago)
Public Bill CommitteesTo be fair to the Minister, he sort of touched on the issue in very loose terms. Perhaps my hon. Friend may be reassured that amendment 5, which we are inching towards, would require much more consultation down the line. Perhaps that is a way to try to improve things for SMEs across the UK.
Is not the big problem—my hon. Friend rightly pointed this out earlier, but the Minister did not really reflect on it—that we are giving away negotiating elements for future deals? Opening this up to all GPA countries means that no GPA country will need to put it on the table. We have opened up our markets for them, and they have not opened up their markets—fantastic. We have cut off the nose to spite the face of all our small and medium-sized businesses, but other countries have not acted similarly. If we do this repeatedly with all areas of trade, in the end we will have unilaterally opened up all our borders but received no benefits for our small businesses. That is the basis of the Conservative negotiating strategy, and it is a disaster, is it not?
I appreciate that Conservative Members will be focusing on other mistakes that the Prime Minister has made, but my hon. Friend is absolutely right. One wonders whether, in the rush to get a deal with Australia, Ministers essentially decided just to give up their negotiating leverage on these issues and hoped to push it through quietly without too much attention. None the less, we have aired these issues. We will reflect on what the Minister says, and we may well come back to this matter on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I totally agree. The US is a much better example than us of scrutiny and engagement. It engages its elected representatives early on. We see a Democrat Government there—one of our sister parties—putting trade unions and small businesses front and centre in their ongoing prosperity, rather than trying to run roughshod and have corrupt practices, which the previous party of Government in the US was all in favour of.
There is a better way of doing this. The amendments are not the ideal. I am, desperately unfortunately, missing my Select Committee inquiry this morning on international trade agreements and how we how we process them. I am sure I will read the transcript of the evidence hearing with fascination this evening. The Public Administration and Constitutional Affairs Committee’s inquiry makes it clear that the current ways that we produce trade deals and scrutinise their implementation—what these amendments are about—are inadequate. They are inadequate because they were created in an age when most of it was farmed off to the European Union and we had strong scrutiny processes of secondary legislation that came via the European Union—Committees that looked at that and debates in Parliament.
All that was swept aside—I will not get into the rights and wrongs of leaving the European Union. We have then just relied on a CRaG process and no other proper form of ongoing scrutiny process, which we would have accepted under the European Union, or which every other country has now developed, because trade deals are dynamic.
Gone are the days when trade deals were fixed in one piece of writing; they are ongoing, living, breathing documents. That is quite right, because trade deals really are multilateral deals on numerous issues: on not just direct trade but intellectual property and procurement, as we are discussing today. They affect the domestic implementation of issues, affecting how councils and public bodies are able to go about their day-to-day business, and the ability to consult.
I apologise to my hon. Friend for missing his opening remarks. However, as he was reflecting on the weaknesses of the CRaG process, does he not think that perhaps part of the reason why Government Members genuflected towards the CRaG process so much, despite all its weaknesses, is that it was initiated by a Labour Secretary of State, Arthur Ponsonby, albeit 100 years ago? Perhaps that is what gives them some comfort. However, I absolutely agree with my hon. Friend that it is time to uprate and modernise it.
I do not think that even the most foresighted Labour politician would expect the rules that they designed 100 years ago to still be in operation today. Even if I managed to get one amendment through in my career here, I would not expect it to last 100 years.
The CRaG process, I am afraid, is not fit for purpose in the modern world. Although I do not want to prejudge what my other Committee will say, I suspect that is the conclusion that all sides are coming to—that it needs to be updated. These amendments allow a sticking plaster so that secondary legislation and regulations that are made must go through that process. That is what we heard businesses wanted.
The amendments would also ensure that all regions and nations of our country are properly consulted. The other part of my constitutional affairs hat is that we visit the devolved Administrations every year and speak to them about how they feel their relationships with the Union are going. I can tell Conservative Members that they think it is going very badly. That is not just the SNP in Scotland but Labour in Wales and the Democratic Unionist party in Northern Ireland. They think that the way this Government consult and work with them is arrogant and dismissive. That is what every single one of them said, and what Conservative colleagues in the devolved Administrations said to us too.
I think that is the case here.
These amendments, particularly amendments 2, 20 and 22, which relate to the devolved Administrations, provide a failsafe for the devolved Administrations and English regions to know that they will be consulted. They provide a failsafe for the businesses, including small businesses, that we heard in evidence to know that they will be consulted beforehand. Of course, with all consultation, the Government can still go away and say, “We have listened to you. We have heard you. We have put forward our suggestions. You don’t agree with them, but we are still going to push forward, because we think that is necessary.” That is democracy; of course that has to be allowed, but what we cannot have is people being bumped into things at the last moment or presented with things as faits accomplis, and that is the situation at the moment.
I rose to support the amendments. I think that they are vital; more importantly, they are vital in preserving our Union. I know that some colleagues have a different view, and it is people’s own right whether they want to leave or not—it is not my choice—but I would like to see the Union preserved. I think that those on the Government Benches would like to see the Union preserved as well. I am afraid that if we do not start treating the devolved regions and nations of this great country with more respect and more humility, people will be out the door and it probably will be understandable.
I rise to support amendments 5, 7, 20 and 22, which were tabled in my name and which my hon. Friend the Member for Llanelli spoke to. In so doing, I want to indicate, as I hope my interventions on the hon. Member for Airdrie and Shotts indicated, my strong sympathy with her two amendments as well. I hope that amendments 5 and 22, in that they are more wide-reaching because they cover Northern Ireland, Wales and the English regions as well as Scotland, might be sufficient to encourage her support for them.
Amendment 5, as we have indicated, seeks to lock in the opportunity for more consultation with the whole UK about particular regulations that might emerge around the procurement chapters. As I said in my opening remarks, the Australia free trade agreement is more than 2,500 pages long, and it is quite easy for the bits on procurement to be largely missed. The opportunity to lock in a bit of consultation at this point—before implementing regs have to be made—would help to ensure that there is specific focus on the procurement chapters in both deals.
(2 years, 2 months ago)
Public Bill CommitteesQ
Lucy Monks: Basically there needs to be more done to help businesses—especially small businesses—export. There is so much potential with the kind of businesses we have in this country and the kind of markets that might be able to open up to us. We are entering into a new world. We have had conversations with the Department for International Trade over the export support service, which is meant to cover the EU and basically help businesses find their way through the new relationship. Has that worked as well as it could have done? Has it been as targeted as it could have been in the level of support? Not really, but the Department has promised and is in the process of introducing a new system that is supposed to address some of the concerns we have levelled, such as providing detailed information in a way that is accessible to small businesses, rather than just pointing to bits of the Government website, which is what was happening before.
We need to keep working in the direction we are talking about and trying to improve the availability of those kinds of services, while also looking at, for example, new ways of working with the FSB or DIT to encourage more people to understand and to export. We would be happy if that were to continue. There are so many different things that will have to happen to encourage businesses, and especially small businesses, to think about exporting if they are not doing it already, or to export into new markets if they are unfamiliar with exporting to Australia and New Zealand, because the cost and the risk can potentially be so high. We all need to work together to ensure that that can take place.