Trade Bill

Lord Adonis Excerpts

2nd reading (Hansard): House of Lords
Tuesday 11th September 2018 Lords Chamber

[Lord Adonis (Lab)]

My Lords, the noble Baroness, Lady McIntosh, has just spoken powerfully about the benefits of expert sectoral attachés at our embassies, and I am sure that the Minister will be taking her suggestions seriously.

I make no apology for returning to the critical issue of Northern Ireland, following on from my speech on the Taxation (Cross-border Trade) Bill last week. Ireland is the Achilles heel of Brexit, because it cannot be squared with the prosperity and flourishing of Ireland, because of the impediments it will impose on trade within Ireland and between Ireland and Great Britain. The crucial thing to understand about this, as I now appreciate only too well from successive visits to Belfast and Dublin in recent months, is that as an island off an island, Ireland’s trade is overwhelmingly centred on, or routed through, Great Britain. Some 14% of Ireland’s trade is directly with Great Britain, while 85% of Ireland’s EU freight trade is routed through British ports.

The issue we and Ireland face, therefore, has two critical dimensions. The first is the extent of the trade between us and the damage we will inflict on Ireland if we unilaterally erect barriers to that trade. The second is the impact on the fragile peace and stability of Northern Ireland, which, even 20 years after the Good Friday agreement, is in a state of crisis, with no Assembly or Executive for 600 days and the constant threat of re-entering a spiral of civil disturbance or worse. These two issues are interrelated, since nothing contributes to peace more than prosperity, and nothing undermines prosperity more than civil unrest, uncertainty and an absence of democratic institutions able to deliver for the people.

Since I spoke last week the position has worsened, because of the incredibly inflammatory remarks by Boris Johnson, Mrs May’s Foreign Secretary until two months ago, about her Brexit policy being a “suicide vest”. Leaving aside the nauseating attention-seeking tone of that metaphor, it is important to understand that Mr Johnson was referring to the backstop provision for Northern Ireland. As an irresponsible hard Brexiter, Mr Johnson has long been opposed to the backstop by which EU law and the EU’s trade regime will continue in Northern Ireland if there is any question of a hard Brexit requiring border infrastructure after the implementation period in 2020.

Mr Johnson’s reason is simple: the backstop imperils Brexit itself. This is in fact true. The problem is that anything else imperils the Good Friday agreement and threatens to provoke paramilitary activity in Northern Ireland—which is precisely why the Prime Minister agreed to the backstop last December, as a key element of any withdrawal agreement between the United Kingdom and the European Union this autumn.

I know that the Minister will totally dissociate herself from the “suicide vest” remark—but will she say what the Government’s current position on the backstop is, given that the Prime Minister herself said in Belfast, shortly after Mr Johnson’s destabilising resignation, that she no longer favoured a backstop that had force in European law or was not time-limited?

I have two other vital questions for the Minister about the Government’s post-Brexit trade and customs policy on Ireland. First, can she say how Section 10 of the European Union (Withdrawal) Act relates to the Irish backstop? My specific point is that if there is no deal, there is no backstop—so, by definition, on 29 March 2019 there will be a hard border and customs tariff arrangements between Ireland and Northern Ireland. I do not see how this, or any weakening of the backstop, is compatible with Section 10 of the European Union (Withdrawal) Act, which noble Lords will recall—because we inserted it into the Act—provides that a Minister of the Crown must act,

“in a way that is compatible with the terms of the Northern Ireland Act 1998”.

The same provision—Section 10 of the European Union (Withdrawal) Act—also specifically prohibits the Government from agreeing to,

“create or facilitate border arrangements between Northern Ireland and the Republic of Ireland after exit day which feature physical infrastructure, including border posts, or checks and controls, that did not exist before exit day and are not in accordance with an agreement between the United Kingdom and the EU”.

I ask the Minister, therefore, whether Section 10 prohibits no deal, or a weakening of the previously agreed backstop in relation to Northern Ireland?

As a further consequence of the crisis in the Conservative Party this summer, following the Chequers declaration on Brexit policy in July, the Government have gone significantly further than Section 10 is respect of provisions relating to Ireland. We now also have Section 55 of the Taxation (Cross-border Trade) Act that we enacted only last week, which was inserted as an amendment in the House of Commons by Mr Jacob Rees-Mogg. Section 55 of the latest Act states:

“It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain”.


This gives rise to an obvious and huge question that I will now also put to the Minister. If under Section 10 of the European Union (Withdrawal) Act a no-deal Brexit or any Brexit without a backstop is illegal in respect of Northern Ireland, and given that Section 55 of the Taxation (Cross-border) Trade Act states that it is not legally permissible to have different customs arrangements between Northern Ireland and Great Britain, does it not logically and necessarily follow that a no-deal Brexit, or any hard Brexit that is inconsistent with the Northern Ireland backstop and the Good Friday agreement, is illegal not only in Northern Ireland but across the whole of the United Kingdom?

I would be grateful if the Minister would respond to these two questions, either verbally at the end of the debate or in writing as soon as possible. Given the gravity of the issues at stake, it may be that she will want to give me a full response in writing. I should also say that I am taking other eminent legal advice on these vital questions. In conclusion, it looks to me as if the Irish Achilles heel of Brexit might be about to go gangrenous—and the force of the Brexit laws already enacted by Parliament might well be the cause.

--- Later in debate ---

[Baroness Fairhead]

I can confirm that we are still aiming to have them in the case of a no deal so that they can be signed. That is our clear aim, but the timing is tight. I can write to the noble Lord; I was actually going to do so, in detail, before Committee. I can say that conversations are ongoing. The noble Lord referred to statements from South Africa, some of which said that they supported it even in the case of no deal, which I think that statement was about.

The issue of our approach to future free trade agreements was raised by a number of noble Lords, including the noble Lord, Lord Monks, the noble Baronesses, Lady Henig and Lady Jones of Moulsecoomb, and my noble friends Lady McIntosh of Pickering and Lady Hooper. I understand the desire to discuss such issues—they are important—but it is worth reminding ourselves that we propose a very different approach for those future agreements. We want to consult and involve a wide range of stakeholders and others before we decide how best to proceed. Once we have left, we will establish appropriate mechanisms to scrutinise future free trade agreements. As mentioned by the noble Lord, Lord Purvis of Tweed, the Secretary of State has already announced that the Government will bring forward bespoke primary legislation, if required, for each future trade agreement. He also committed to keeping Parliament updated in negotiations through the provision of statements and updates to the ITSC. This is in addition to our commitment to engage more widely. The aim is to be transparent and inclusive. Our 14-week consultation is ongoing, as many noble Lords discussed, and will feed into the government process. We aim to ensure that both Houses have adequate time and ability to scrutinise. The Government will set out in due course how we will proceed.

I want to address specifically a question asked by the noble Lord, Lord Monks, about trade union involvement. As the Secretary of State announced on 18 July, the consultations launched by the Government on future trade agreements provide one of a number of means by which trade unions can have their say on the government approach.

I touched on parliamentary scrutiny in my opening remarks. I want to cover the issue of how we may use the reporting exemption in Clause 4, as raised by the noble Baroness, Lady Falkner of Margravine. We do not plan actively to use the exemption. However, it is right that the Government prepare for a range of scenarios to ensure that we can deliver continuity. In exceptional circumstances, the Government must reserve the right to ratify agreements before they lay a report on the changes. This reflects a similar position in the Constitutional Reform and Governance Act that has never been used.

The noble Lords, Lord Grantchester, Lord Fox, Lord Monks and Lord Whitty, and the noble Baronesses, Lady Jones of Moulsecoomb and Lady Henig, raised the issue of standards. It is clear that future trade policy must work for UK consumers and businesses. High standards are what our domestic and global customers demand and that is what we should provide. I am pleased to have this opportunity to provide reassurance that the Government are committed to upholding the high standards that this country is rightly proud of. Not only that, we want to champion standards as a world leader. The noble Lord also mentioned that free trade automatically leads to a lowering of standards. I invite noble Lords to look at the EU trade agreement with Canada, CETA, which makes it clear that the lowering of standards is not an option.

I turn now to the European Medicines Agency. Life sciences are a critical part of our nation’s strength. The noble Lord, Lord Kakkar, raised a particular issue on which I have a detailed response. We made clear that we want to provide noble Lords with the strongest possible reassurance on our commitment to implement the CTR. If it comes into force during the implementation period, as is currently expected, it will apply to the UK. If not, we will take certain steps. I will write to the noble Lord with more detail on that and I will place a copy in the Library.

The noble Lords, Lord Kerr, Lord Grantchester and Lord Wigley, and my noble friend Lord Elton raised the issue of the devolved nations. The UK Government want all parts of the UK to support the Bill. We have been clear from the Bill’s introduction that on the elements of this legislation, namely relating to Clauses 1 and 2, we want to engage the legislative consent process. We are working with the devolved Administrations and have made significant strides through amendments tabled in the other place. I reiterate the Government’s commitment to continue to engage with the devolved Administrations, and I remain confident that we will reach a position which the devolved Administrations can support.

On our independent trade policy and the independent Trade Remedies Authority, I am grateful to the noble Baroness, Lady Falkner of Margravine, and my noble friends Lady McIntosh of Pickering and Lord Elton, who expressed recognition of the vital importance of putting in place an effective and independent Trade Remedies Authority. I listened with interest to the view of the noble Lord, Lord Hannay of Chiswick, on the prospects for the UK’s independent trade policy. I do not share his views and I think we need to have this TRA to be able to support our independent trade authority.

The noble Lords, Lord Monks and Lord Whitty, questioned why we could not have individuals with particular expertise on the board. My noble friend Lady Neville-Rolfe stated the opposite. We believe that it is vital that board appointees are not beholden—or perceived to be beholden—to the groups whose interests they represent, otherwise it could undermine their independence. We are committed to staffing the TRA board with the appropriate range of background and experience. On the sort of experience and specification, we have consulted the Scottish and Welsh Governments on the job description and the person specification for the Trade Remedies Authority chair, ahead of launching the recruitment campaign. Appointments will be made on merit alone.

I welcome the interest expressed by the noble Baroness, Lady Falkner of Margravine, in ensuring that the TRA is set up and staffed appropriately. We have restricted it to a maximum of nine members to ensure that the senior membership can be resourced flexibly in response to business needs. It is broadly consistent with an arm’s-length body of that size.

My noble friend Lord Tugendhat raised the issue of WTO membership and the recent policy towards that body. The President has said that he wants to see the WTO modernised. At the G20 we have started this discussion, and the recent EU-US discussions included an agreement to co-operate on WTO reforms.

Finally, the noble Lords, Lord Hain and Lord Adonis, as well as my noble friend Lady McIntosh of Pickering raised the Northern Ireland border. This is crucial: the Prime Minister has been clear that we need to respect the Belfast agreement—there will be no hard border—and the constitutional integrity of Northern Ireland. She has rejected the backstop proposed by the EU—these are ongoing negotiations.

[Lord Adonis]

My Lords—

[Baroness Fairhead]

I am just coming to the noble Lord’s question. The noble Lord asked some very specific questions and I will write to him and take up his kind offer.