Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Alton of Liverpool Excerpts

Committee stage
Thursday 7th December 2023 Grand Committee

[Lord Kerr of Kinlochard (CB)]

I will say a brief word on Amendment 8A. Contrary to the habit of a lifetime, I played by the rules and did speak at Second Reading. I made clear that I warmly welcome our accession to the CPTPP and that I have no difficulty with the main points in this Bill.

On Amendment 8A, I am sympathetic, but I think that one needs to think quite hard about the timing. Within 12 months of the passing of this Act, the Government would be required to submit reports on two important areas of performance: how the—very welcome—rules of origin provisions are working out, and how respect for geographical indications is being honoured.

I do not know when our accession will take effect—none of us does—because it will depend on who is last to ratify our accession. It is conceivable that it might take all of 12 months or more than 12 months before this happens. To say that the report will be required within 12 months of our passing the Act is slightly odd. If the report is going to be useful, it needs to take account of what has actually gone on—the experience—with regard to how the rules of origin are being respected and how self-certification of rules of origin is working out.

Although I support the principle of the report—because these are both extremely important provisions within the CPTPP, and a report to see how they are working out seems a good idea—I really do not think that it is a good idea to ask the Government to do so within 12 months of the passing of the Act.

[Lord Alton of Liverpool (CB)]

My Lords, unlike my noble friend Lord Kerr of Kinlochard, I am afraid that I was not present for the Second Reading debate—I was with the noble Viscount, Lord Trenchard, who spoke earlier on, as the other half of the reception committee that welcomed the President of the Republic of Korea. I hope that we played our small part in deepening the friendship and relationship between this country and the wonderful, vibrant democracy of the Republic of Korea, with which I hope we will deepen our trade relations as the years go by.

I also have an amendment for consideration later, which will probably be reached on our second day in Committee. It also has within it a reporting mechanism. I agree with my noble friend that 12 months may not be the right time, but the noble Lord, Lord Davies of Brixton, and my friend, the noble Lord, Lord Purvis of Tweed, are right to have both articulated the need for Parliament to have reports laid before it. That is the principle, but how one does that, the mechanisms that we use and the timeframes we place on it are surely open to discussion. The Government should not quail at the idea of there being time for Parliament to look back at what has happened to something such as the CPTPP. I must say that I also welcome the CPTPP; I strongly believe that the Government have done the right thing in promoting this opportunity for the United Kingdom. I have no issues whatever with that; my issues would come later about some of the partners we might have in the future. We will discuss that later on.

This idea that Parliament should discuss the nature of trade is not new. With the help of the House of Lords Library, I was looking at the debates that took place in 1857 when the great champion of free trade, Richard Cobden, denounced the opium trade in a three-day debate in which two relatively young MPs—William Ewart Gladstone and Benjamin Disraeli—joined forces across the political divide to support him, just as Cobden had stood with William Wilberforce in denouncing the trade in human beings. He was against the slave trade. There were red lines not to be crossed.

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[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that comment; I am happy to have a discussion with him and other noble Lords about this. We would resist this significantly. It would cause confusion to have parallel principles around how the Secretary of State should act in relation to this FTA and in other areas, in terms of how we manage our own economy and how we check our supply chains. The noble Lord, Lord McNicol, was right to raise the concept of supply chains; I have conversations with many noble Lords in many instances about the principles around how we protect our products in this country from supply chains that we find are either not aligned with our values—as well raised by the noble Lord, Lord Alton—or lack competitive advantage. I have great sympathy in particular with the agriculture sector, with which I have engaged significantly and which says that it is not about free trade but that we are obliged to conform to standards that are significantly higher than in other countries. It is classified as unfair, and we are very sensitive to that.

[Lord Alton of Liverpool (CB)]

I am grateful to the Minister for referring explicitly to the supply chain issue. It should form the basis of further discussion, perhaps outside the Committee and before we get to Report. If we look at the requirements under the 2015 modern slavery legislation—pioneered by the Minister’s right honourable friend Theresa May during her time in the Home Office—we see that it places duties on us to look at the way in which products have been manufactured. It is not just about the precautionary principle; this is asking us, every time we take decisions about things that we are going to purchase in this country, what the supply chain was. It is not just about free trade; it is about fair trade. How can manufacturing industry in the United Kingdom possibly compete if people are using slave labour in places in Xinjiang?

I take the Minister back, if I may, to the amendments that I moved during the passage of the Trade Act 2021 and the Health and Care Act 2022 and, indeed—as the noble Lord, Lord Lansley, and others will recall—the Procurement Act 2023. They all looked at our duties and obligations under the 2015 legislation. By very significant margins, cross-party amendments were added to all those pieces of legislation. I simply ask the Minister: how will we comply with the 2015 Act? Would he agree to have discussions outside the Committee before we go further on that point?

[Lord Johnson of Lainston (Con)]

I absolutely make myself available to have discussions outside this Committee on all points. I refer the noble Lord, Lord Alton, to my original statement that collaboration around this is very high.

I will try to make a philosophical point which I think is very important: this is a free trade agreement. It is concerned principally with tariffs, smooth movement of trade and other principles. It is very important to separate that from the important standards that we hold ourselves to in this country. It is right that we have a number of very important pieces of legislation that drive standards in supply chains. Any of us who have been involved in business know that we have to ascertain our supply chains. In other areas, particularly in relation to the environment, I believe that supply chains are covered very well by our legal processes in terms of child slavery and other abhorrent activities. That is well understood and the supply chain obligations are very clearly understood. In the environment, it is still more nuanced. It will always be a complex area, because other geographies clearly have different environmental advantages and disadvantages compared with us. We are still working on that, but it is for a separate track of legislation. I do not think that it is right to confuse the principles of the legislation around free trade agreements with legislation around our own supply chain obligations.

When given the decision, should one be in a free trade area, able to bring to bear one’s own values to make necessary changes, or not be, because you do not believe that the participant parties are aligned with your values? I would prefer always to pick the former.

Although I would not necessarily suggest that there was a significant gulf between us, Australia and New Zealand when we negotiated the Australia and New Zealand FTAs, there is absolutely no doubt in my mind that the engagement with the UK on environmental and animal welfare issues resulted in significant changes in the Australian and New Zealand domestic animal welfare and environment policies. I have no specific evidence of that, but I know full well that there were strong levels of conversation around that and, at the same time, Australia and New Zealand made significant changes in our direction in both areas. Either that was a great coincidence or it was partially supported by the fact that we were collaborating with them more effectively. This is what the CPTPP will allow us to do.

I refer back to the TAC report, which made clear our own standards for pesticides, which were raised by the noble Lord, Lord McNicol. That does not change: nothing changes in our standards the day after CPTPP comes into force—that is for our own sovereignty to control.

I ask that this amendment is withdrawn, but clearly I am here to discuss in detail how we can reassure noble Lords that the principles around the need to report on the effectiveness and concomitant effects of the FTA are properly established, as well as other key points around derogation and key values issues, which should be properly controlled and contained.

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[Lord Purvis of Tweed (LD)]

I am fully aware that China is not a member—I do not think there is any doubt about that—but surely the noble Viscount is aware that the growth levels of the Vietnam economy have been entirely, or at least very largely, dependent on the growth of the Chinese economy. Given that New Zealand has had a free trade agreement with China for more than 20 years, the growth of the Chinese economy has been a major, if not the predominant, factor in the growth of the Asia-Pacific economy, which—it is regularly cited—is the fastest-growing economy and one we need to be part of. It is the fastest growing because it has been dependent on the growth of the Chinese economy—but that is an overall debate.

On the CPTPP members, the noble Lord, Lord Lansley, is absolutely right: with some of them, such as Australia, we are still awaiting the police of the GIs—the European Union, for us—to make an agreement with it. We are still in that situation. My noble friend Lord Foster raised that where businesses have an opportunity to choose between two systems, for some businesses that is a burden because of the complexities associated with that and therefore clarity on advice about the preferential way of utilising this is important. The Minister responded very fairly.

I agree with the thrust of what the noble Lord, Lord Davies, said. I know that he will be in the Chamber for the Rwanda Statement, but in response to the point made by the noble Lord, Lord Kerr, with regard to my drafting, there are even greater powers than the Minister or others in this Committee. They are the clerks in the Public Bill Office who tell us what is or is not in scope of the Bill, so my drafting was in order to satisfy the greatest authority, the Public Bill Office, in order to put down an amendment so we could discuss it. However, I am very happy to explore further options. This issue, connected with those raised by the noble Lord, Lord Alton, that we will discuss in future, is significant.

[Lord Alton of Liverpool (CB)]

I am very grateful to the noble Lord, Lord Purvis. Given what the Minister said a few moments ago about Malaysia, I draw his attention to a report in today’s Daily Telegraph about Shimano, which I think is the biggest bicycle parts company in the world, which operates out of Japan. It is selling through a supplier in Malaysia products that have been made by slave labour in Nepal. That is a good illustration of the kind of problems that we will run into. Although that is not necessarily part of the treaty, it is part of our obligations under British law to ensure that such things do not enter our supply chain.

[Lord Purvis of Tweed (LD)]

I am grateful to my friend the noble Lord, Lord Alton, because he and I often think alike in many of these areas. He slightly pre-empted me because I was specifically mentioning Malaysia to close and to stress why it is important. With the greatest of respect to the Minister, I think it is valid to know on the record what the interest in Malaysia is since we will be debating it going forward. In 2021, in the Chamber I raised the fact that the UK had a £316 million contract with a Malaysian firm, Supermax, to supply PPE gloves through NHS Supply Chain. That company’s exports to the United States were impounded by the United States because of contraventions of ILO standards and slave labour concerns. This has still not been resolved. I raised that, and I was grateful to the Minister’s predecessor, the noble Lord, Lord Grimstone, who initiated a review within the department. As I understand it, this is still being litigated. I do not expect the Minister to have an answer today, but I would be grateful if he would write to me because this is pertinent to the next stage in Committee with regard to multi-million-pound contracts through supply chains. I know that NHS Supply Chain is a distinct part of the NHS. With regard to this Malaysian firm, the United States activated powers which we did not. Now, with regard to procurement, as the noble Lord, Lord Lansley, indicated, supply chains and the standards that we seek, there are genuine, valid concerns. I remind the Committee that the contract was worth £316 million. The United States had the equivalent impounded.

I know that we will come back to some of these general issues. I am grateful to noble Lords who have taken part and grateful to the Minister, who as always is open and accessible to discuss these aspects. I beg leave to withdraw the amendment.

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We have previously debated primary legislation that gives the Government powers in future when they have free trade agreements to incorporate the provisions of those into domestic legislation by statutory instrument. That must be the right way forward. We are still building this practice up since our acquisition of trade policy responsibilities, but it must be a better way of proceeding. If we do not do that, we will end up with these bits and pieces of legislation in primary legislation, imagining that we are debating the overall rationale of the treaty when, in fact, we are not. We will be amending legislation in detail when it could all be done by regulation and we, as a Parliament, could accept or not accept that regulation.

[Lord Alton of Liverpool (CB)]

Can the noble Lord clarify that he would always want that done under the affirmative procedure so that there could be a debate in the House on secondary legislation? I agree with him on the principle that we do not want bits and pieces of primary legislation, but there needs to be some ability to discuss secondary legislation, where appropriate.

[Lord Lansley (Con)]

Some of them are under negative procedures. It is a judgment, not least in this House as our Delegated Powers Committee will advise us on what judgments to make. I would not endorse a blanket affirmative procedure; it must be based on the relative significance of the decisions to be made. Just because something is laid under the negative procedure does not mean that it cannot be prayed against or objected to, but that must rest with the committee.

There is nothing in the current legislation requiring any consultation with the representatives of rights holders in this country before the definition of a qualifying country is extended. I think it would be right for that to be the case; I suspect the representatives of rights holders would welcome it. In giving the Government this wider power, this is a good moment to add this carefully constructed consultation requirement before they bring an order forward. I beg to move.