All 4 Lord Bassam of Brighton contributions to the Electronic Trade Documents Act 2023

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Mon 7th Nov 2022
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Second reading committee
Monday 7th November 2022

(1 year, 3 months ago)

Grand Committee
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Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, like all other Members of this Committee I welcome the Minister back to this modest piece of legislation, although it has a truly massive import, as all previous speakers have said today. I have drawn one or two points from their comments.

The noble Viscount, Lord Waverley, made the point that this was a major innovation in legislation and an important part of a jigsaw that needs to fall into place if we are to ensure that our place in the trading world is maintained. The noble Viscount asked four important questions; I shall listen for the answers to them with great interest. As he said, this is part of an exciting journey and one which we obviously need to follow closely. I was deeply impressed by his contribution and that of the noble Lord, Lord Lansley, who accurately described it as an important framework Bill—that is what it is, at seven pages long. With his enormous experience in international trade, I am sure that he will focus laser-like attention on it when we get to Committee. The major issue that he identified was interoperability, which is key to what we are trying to achieve here. Overcoming obstacles around that will be extremely important.

I was grateful to the noble Lord, Lord Holmes, for his comments because he brought the debate into the real world when he said that the Bill could achieve something like 5% savings in transaction costs. In itself, that does not sound like an enormous amount, but when you think about the value of international trade it is vast. Another important point that he made was about the environmental benefits that this legislation could bring. I think we are all very conscious of those now, but he also talked about the importance of accountability and transparency and we, too, on our Benches, very much share that.

The noble Earl, Lord Lindsay, made the important point that SMEs will be the big beneficiaries from this. That is without doubt or question, because clearly it is of enormous advantage to an SME when its transaction costs are reduced and ability to trade speedily is very much underlined. The noble Lord, Lord Fox, talked about the Bill being technical, and it is, but the big problem it has to solve is that of possession. We should all focus on that.

The Labour Benches fully support the introduction of the Bill. We see it as a long overdue reform, which allows for the legal recognition of certain types of documents used in trade and trade finance in electronic form. This will finally mean that parties can use the law that currently applies to paper trade documents when transacting with electronic trade documents.

As we know, the Law Commission does invaluable work in advising on the reform of long outdated legislation. Despite the size and sophistication of the international trade market, many of its processes, and underlying legislation, are based on practices and frameworks developed by the nation’s merchants hundreds of years ago. It is the Bill’s intention that electronic trade documents, when capable of possession, should be treated in law in a manner equivalent to their paper counterparts—a simple notion but one that is obviously complex to implement.

The Bill represents for us a most welcome opportunity to further modernise trade transactions. In theory, it should speed up transactions and bring business into the modern world, where electronic interactivity is commonplace. The Law Commission report said that

“there is an existing set of complex private international law rules that determine which courts have jurisdiction over a dispute, and which country’s laws should be applied to resolve it … these rules are complex and fact specific”.

It then said that electronic trade documents may give rise to

“novel issues … that require further consideration”.

For instance, it continued, there are “inherent difficulties” in ascertaining “the geographical location” of digital assets, including electronic trade documents. Similarly

“questions may arise as to how an electronic trade document issued in England and Wales would be treated by a country that does not recognise the validity of electronic trade documents”.

The Law Commission also recommended that private international law aspects of electronic trade documents should be dealt with in a separate commission project that deals with digital assets more broadly as part of its 14th programme of law reform. I think it was supposed to be completed in mid-2022. Can the Minister advise on what steps will be taken in the meantime to mitigate issues that may arise affecting the operation of trade transactions? Can the Minister undertake to report back to Parliament on the operation of the provisions within a year of the date on which the Act is implemented?

We on our Benches believe it is important that parliamentarians are kept advised of progress in this field. I have nothing much more to add, except that we thank the Law Commission for its critical work on the Bill which we see as largely uncontroversial and of great value in ensuring that the world of trade and commerce operates smoothly and efficiently as possible and that UK businesses are not disadvantaged in any way. This Bill eases those processes and transactions that we need for us to continue to be competitive in a highly competitive world of trade.

Electronic Trade Documents Bill [HL] Debate

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Electronic Trade Documents Bill [HL]

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Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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I see. The only part of the Bill that we received contrary evidence on was mates’ receipts. If that is the only matter that there was an argument on, we have done pretty well on the Bill so far. I thank our chair for his expertise, which helped us enormously as we went through the Bill; we kicked the tires fairly firmly. I congratulate our Minister, who switched hats seamlessly during the Recess and is now the spokesperson in this area; his versatility clearly knows no bounds. I thank him for his letter, which cites case law that makes the status of mates’ receipts very clear. We also owe the noble Lord, Lord Lansley, quite a bit for unpacking, with his trade expertise, the issues in Clause 1 today and throughout the passage of the Bill.

I am personally quite satisfied, although I have some trepidation. Professor Sir Roy Goode is no mean authority, but we must conclude that the Minister is correct in quoting case law, and I think our chair is very satisfied with how Clause 1, and the documents cited in Clause 1(2), are set out. So I agree with the noble Lord, Lord Lansley, but it is useful that we have explicitly said that we are satisfied in that respect.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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I feel provoked to speak. I shall not detain the committee long. I entirely echo what the noble Lord, Lord Clement-Jones, said. The letters from all parties have been extremely helpful, and the noble Lord, Lord Lansley, has played a blinder in trying to draw out the detail, which has helped all of us. This is obviously a very necessary Bill, and I am sure that, in the fullness of time, it will ensure that we as a nation are well placed in the world of electronic trade and electronic trade documentation. I do not have any particular misgivings about the Bill, but I shall of course listen very carefully to what is said in the other clause stand part debates.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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I will not detain the committee long on this clause, not least because I will speak in detail on Clause 2 in a moment. I echo my noble friend Lord Lansley’s thanks to all the members of the committee, with whom it has been a pleasure to work, particularly under the chairmanship of the noble and learned Lord, Lord Thomas of Cwmgiedd, who has helpfully steered our discussions. I express my gratitude to our clerks and all who gave evidence.

I am glad that my noble friend was satisfied by the letter that I sent on 17 February. I am glad to have this opportunity to put that on record. It will of course be published alongside the other Bill documents, so that the explanation contained in it can be seen. It goes without saying that the Government believe that Clause 1, and all the clauses, should stand part.

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Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I will be brief. As all noble Lords described, this approach was overwhelmingly supported by our witnesses to the committee. All of them emphasised that MLETR is a model law, not a prescription for law. Possession of digital documents is absolutely the essence of the Law Commission’s approach to the Bill, and it has been entirely justified. The noble Lord, Lord Lansley, talked about something being capable of possession, which essentially makes this clause a gateway, like Clause 2, leading it to common law to establish possession. This approach was entirely supported by everything that we heard during our inquiry. We fully support that Law Commission approach.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, clearly, the issue of possession and exclusive control was the nearest we came to controversy in our sessions on the Bill. But the convocation of professors arraigned before us was unanimous in the view that this is the way to approach the issue. The seminars on this which the noble and learned Lord, Lord Thomas, gave us added to our conviction that this was the right way. No doubt, it will establish the benchmark for other jurisdictions to follow.

I have one question. My eye alighted on the word “indorse” in Clause 3(1). Normally, this would be “endorse”. As I understand it—my English is not the best in the world—the difference is pretty marginal, but one relates specifically to financial terminology. I wanted to understand this better, because it is an unusual word that is not often used. Apart from that, I have nothing to add.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, I am sure that the Bill team behind me, to whom I add my thanks, will provide the legal thesaurus to answer the noble Lord’s question.

It is helpful to have a debate on Clause 3, as it is at the heart of the Bill. It provides that electronic trade documents are capable of possession and are, in all other ways, capable of having the same effect as paper trade documents. As my noble friend Lord Lansley said on the previous clause, this is an opportunity for us to show our working and reflect our helpful discussions in the committee with those who have kindly given evidence.

At several points during our deliberations, questions have arisen regarding the Bill’s approach to possession and exclusive control, particularly in comparison with the approach taken by the model law and Singapore. The Bill’s approach provides that a document that satisfies certain criteria, including being capable of exclusive control, qualifies as an electronic trade document, and that an electronic trade document can be possessed. The Singapore legislation and the model law provide that, if an electronic trade document can be exclusively controlled by a person, and if that person can be identified as the person in control, the document can satisfy a possession requirement. The main distinction between the two approaches is that the Singaporean and MLETR approach conceptualises exclusive control as a functional equivalent to possession, whereas the Bill provides expressly and directly that a document that can be exclusively controlled can be possessed.

The approach taken in the Bill was consciously chosen as the best solution for UK law for several reasons. Allowing the possession of electronic trade documents unambiguously removes the legal blocker currently preventing their recognition. It ensures that paper and electronic trade documents are subject to the same legal rules and laws, including that possessory concepts, such as pledge and conversion, apply to electronic trade documents in the same way they do to paper trade documents. This approach avoids the need fundamentally to rethink existing concepts of possession in respect of intangible assets, and it achieves equivalence with paper documents in a straightforward manner that is easy to understand for British businesses and global trade.

It is crucial for market certainty that electronic trade documents are able to plug directly into the existing legal framework applicable to paper trade documents. This identical treatment, irrespective of whether a document is in paper or electronic form, is particularly important, given the provisions in the Bill allowing for a change of medium, which are necessary to give parties flexibility as the industry seeks to effect the transition to electronic trade documents that we want to see.

Applying the concept of possession directly also preserves the role of intention in relation to electronic trade documents as it applies to paper. Intention is an important element of possession in UK law, and, as we heard in the oral evidence we received, it is possible to conceive of a situation in which a party has exclusive control of an electronic trade document but not the intention necessary for possession. Intention is relevant to determining who has possession of a paper trade document, and it should be equally relevant to the same documents in electronic form.

Possession is a common law concept with a significant and hugely valuable pedigree. The Bill in general, and Clause 3 in particular, is carefully worded to take advantage of this without risking the integrity of a well-established and foundational common law concept. Taking a different approach would require a fundamental reworking of the Bill.

Furthermore, the Bill deliberately does not define what it means to have possession of an electronic trade document. The Bill is concerned with features that an electronic trade document must exhibit in order to be possessable, and it includes a notion of control for this purpose only, rather than identifying who is in possession of it as a matter of fact or law, or both. Leaving the latter inquiry to the courts and common law is the preferable course of action. The common law has proven itself highly flexible and adaptable in this regard: existing common law has developed a range of tools to assist in determining what is, and who has, possession of a tangible asset at any particular time. This could include the related concept of constructive possession, which was raised in our evidence sessions as an important concept.

Although the common law of possession may need to be adapted in order to accommodate electronic trade documents, this is achievable without an explicit account of its relationship with control. This is largely because control is one of the two elements of possession as a matter of fact of common law.

Anyone with the ability to exercise control over an electronic trade document, such as anyone with knowledge of the private key or other security credentials, could thereby claim to have control and in turn a claim to possession. Where multiple people have competing claims to possession, existing rules on relativity of title will apply to determine the superior interest in any given situation.

The noble Lord asked about indorsement. It means an annotation in writing on the back of a paper trade document instructing that the obligation recorded therein be performed to the order of the person named in the indorsement or simply to order, which is called a blank indorsement. This instruction must be signed, and is usually completed by delivery. If the indorsement is a blank indorsement, the possessor of the document, whoever they may be, may indorse it in their turn. If the indorsement is to a named person, any subsequent indorsement must be by that person. It is an essential part of the transfer of many trade documents and any rights that attach to them. There is a business practice of indorsing paper documents on their reverse, which reflects that “indorsement” comes from the Latin “dorsus”, meaning back. The term is also used in the Bills of Exchange Act. I am glad that we have continued our learning process in this session.

Finally, on the subject of functional equivalence, it is worth noting that although Singapore is a common-law jurisdiction, it has diverged from the UK in the context of electronic communications and electronic commerce, where it has adopted other UNCITRAL model laws and the UK has not. The language of the MLETR might therefore be more compatible with Singapore’s existing law than it is with the UK’s. Its implementation without adaptation may raise fewer difficulties of interpretation there than it would in this jurisdiction. As the noble and learned Lord, Lord Thomas, said, different countries may take different approaches, but to all intents and purposes we are striving for the same ends.

As English law is the foundation of international trade, this Bill will put us ahead and in the lead not only of the G7 countries but of almost every other country in the world. The UK is setting the approach which all other jurisdictions will seek to follow, not just on the digitalisation of trade documents but on the future digitalisation of all trade, towards which this Bill is an important but merely foundational step.

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Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, I add my thanks to the committee clerks, the noble and learned Lord, Lord Thomas, the Minister and other colleagues who have aided the performance of the committee’s duties. They have done a first-rate job and made the subject matter much more accessible to those of us who are simply lay people trying to comprehend it.

I will build on the point made by the noble Lord, Lord Holmes. We have all expressed the view that this piece of legislation provides a platform for us to build on as a nation in leading the world in the development of electronic trade documents. This is a question for the Minister, because we need to understand what sort of strategy the Government will put in place to ensure that we reap the benefit of that. If we are there with Singapore and just one or two others, that suggests that the scope for using this legislation is currently rather narrow, yet we understand and regularly hear from Ministers that we are in negotiation with other nation states on trade deals; we have had Australia and New Zealand pretty recently, and there is sometimes discussion about a trade deal with the US.

It seems to me that this activity should be linked to the development of electronic trading. Perhaps we should have a strategy document brought before us at some point; we would certainly benefit from a debate on the whole topic, because there is no point in having good legislation if the world is still indulging in a paper trail. The noble Lord, Lord Clement-Jones, referred to 25 million paper documents, and the Explanatory Notes set out and describe just how vast this assault on the world of paper is. There will be a massive paper saving if we can get this right, which would have a big environmental benefit for the future. Can the Minister give us a couple of ideas about the Government’s thinking on this and maybe at some later stage bring forward the opportunity for us to debate the issue more widely?

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I thank everyone who has helped the committee in its work. It has been an education. I have learned a great deal about electronic trade documents; I suspect it will not be of great assistance in my future career, but there is some value in the context of all our discussions about the internet. Learning about the Special Public Bill Committee process has been of particular value, and I take on board the comments of the noble and learned Lord, Lord Thomas, about how the approach could be improved. My thanks to everyone.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, Clause 7 sets out the territorial extent of the Bill, so this is an opportunity for me to say a little about that, as I touched on in my letter of 17 February.

As we heard during the evidence sessions, timing and resourcing meant that, unfortunately, it was not possible for the Scottish Law Commission to work collaboratively on this project, but the Government have taken every opportunity to ensure that the Bill works across our devolved legislatures. On Scotland specifically, the Government have undertaken significant legal work, including by engaging independent legal counsel, to analyse and ensure the compatibility of the Bill with both English and Scots law, including that related to the Moveable Transactions (Scotland) Bill currently before the Scottish Parliament.

Following one of our evidence sessions, I corresponded with Professor Andrew Steven, who queried whether Clause 3(4) was necessary. In his response, he acknowledged our thinking behind its necessity and agreed with our approach. I will ensure that the Explanatory Notes that support the Bill are updated to provide further information on this matter. The Government are working closely with the Scottish Government to secure legislative consent from the Scottish Parliament. To be clear, this may require minor amendments to the delegated powers in the Bill to ensure that areas of reserved and devolved competence are satisfactorily covered.

The remaining parts of Clause 7 make provision about the coming into force of the Bill and it having prospective effect only. It also sets out the Short Title of the Bill. It will come into force two months after the day on which it is passed. Clause 7(3) ensures that an electronic trade document issued before the Bill comes into force cannot be possessed, indorsed or converted into a paper trade document. It also ensures that it is not possible to effect a change of form or medium under the Bill from paper to electronic if the paper trade document was issued before the Bill came into force.

Following the Bill being passed, many of the precise steps taken to implement and fully harness the benefits of the Bill will be for business and industry to determine. That is consistent with the approach taken throughout the Bill; it does not mandate the use of electronic trade documents but is a facilitative Bill. However, as we heard in our evidence sessions and as the noble and learned Lord, Lord Thomas, said again today, there are favourable winds and great enthusiasm from UK businesses for this important change. Businesses stand ready and eager to support the delivery of the Bill, which will benefit businesses of all shapes and sizes.

However, there is certainly a role for government to play here, not just my department but across His Majesty’s Government. For example, a memorandum of understanding has been agreed as part of the Singapore digital economy agreement, through which the Government are working in partnership with the International Chamber of Commerce on a pilot project intended to improve the interoperability between the UK and Singapore’s electronic trade documents framework. I mentioned in our evidence sessions the role that we played through our presidency of the G7 to encourage other jurisdictions to follow in this important area. We will continue to work alongside international bodies such as the ICC to assist that and support businesses to benefit from this UK legislation. We will work across government to ensure that this change is communicated.

The noble Lord, Lord Clement-Jones, asked about the Digitisation Taskforce chaired by Sir Douglas Flint. That was launched by the Chancellor in July 2022 to drive forward the modernisation of the UK’s shareholding framework. In particular, Sir Douglas has been asked to identify immediate and longer-term means of improving the current intermediated system of ownership, eliminate the use of paper share certificates for traded companies, mandate the use of additional options to cheques for cash remittance and consider whether the arrangements for digitisation can be extended to newly formed private companies and as an optional route for existing UK private companies. His Majesty’s Treasury leads on that work, so it may be better for Treasury Ministers to provide further information in the debates which noble Lords rightly say may prove useful.

In closing, I echo the thanks given to the Law Commission, particularly Professor Sarah Green, to George Webber and Louise Andrews, who have supported the committee’s work admirably, and to all those who gave evidence. I acknowledge the point made by the noble and learned Lord, Lord Thomas, about the difficulties imposed by the timetable of the Special Public Bill Committee process; we are all the more grateful that they sent us that evidence, which informed our discussions. I am also grateful to the members of the Bill team from across a number of departments who have supported our work.

I underline the point that all members of the committee have made and which has underpinned our discussions from the outset: that this small Bill has enormous potential to place the UK at the forefront of international trade as a thought leader for others to follow, and that it can bring significant benefits to British businesses, making it easier to sell internationally as well as cheaper, faster and more secure. It has been a privilege to work on it with the rest of your Lordships’ committee, and I hope that it will become law very swiftly.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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I caught what the noble Lord said about the Treasury. Am I correct in understanding him to say that the Treasury will be in the lead in developing a post-Bill implementation strategy, rather than the noble Lord’s own department? I can understand why, strategically across Whitehall, it might not be DCMS, but will it be the Treasury rather than the departments that are responsible for business and for trade?

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Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I add my thanks to those of the noble and learned Lord, Lord Thomas of Cwmgiedd. I certainly learned a great deal about the Law Commission process for scrutinising Bills, and a lot of that was due to the fact that the noble and learned Lord, Lord Thomas, was an expert and wise chair of our Committee. Great thanks are due to him and to the Minister. It is rather unusual to have a Minister sitting in on the Committee, but he was very welcome nevertheless, along with the noble Lord, Lord Harlech. I also thank the other members of the Committee who kicked the tyres very effectively on the Bill. Of course, I particularly thank Professor Sarah Green and the Law Commission.

The whole purpose of the Bill is to make digital trade a reality. We sometimes think that our job is done when a Bill goes through and we can think about something else, but it is important that progress is made on the single trade window which will result from this Bill. Can the Minister tell us when the first phase of the single trade window might happen? Will it happen in November 2023? After all, it is a very important part of what we should expect. It is quite complex. It is described as a multi-department programme, which probably sends quivers down the spines in Whitehall. It would be very good to hear that the Bill is going to come into effect very quickly and will lead in the very short term to greater digital trade, but it is a very good Bill and we have scrutinised it pretty effectively.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, it falls to me to add my general congratulations to the Minister, to the noble and learned Lord, Lord Thomas, for his work on this, to the Bill team and the advisers who were behind them and, in particular, as the noble Lord, Lord Clement-Jones, said, to Professor Sarah Green, who led the way in the evidence and cleared a great pathway for us. The Law Commission should be congratulated on constructing this legislation to which none of us wanted to effect an amendment, and we succeeded in that through many hours of deliberation and consideration, so that is something to be proud of in itself.

I want to add to a point the noble Lord, Lord Clement- Jones, usefully began. Many Bills meander their way through Parliament and disappear, sinking without a trace. I suspect this Bill might do that as well, but it does not deserve to. This is a really important piece of legislation which we should not just be proud of but make something of. Some estimates suggest we can save something like 50% in costs by moving to forms of electronic trade. That is not to be sniffed at in an intensely competitive international trading world. This piece of legislation, which puts us in the lead on electronic trade, is something we should celebrate.

I raised in Committee with the Minister that we should ensure we have a strategy which means that this Bill gets the opportunity to do what it says it is about: facilitating electronic trading. I asked the Minister about this when we were in Committee. He said:

“Following the Bill being passed, many of the precise steps taken to implement and fully harness the benefits of the Bill will be for business and industry to determine.”


That is fine, but we need a clear pathway and strategy from the Government for us to be able as a trading nation to reap the benefits of this legislation. I would like to hear from the Minister—it is something I am sure the House will want to come back to at some point—what that strategy might look like. He later said that there is

“a role for government to play”,—[Official Report, Electronic Trade Documents Bill [HL] Special Public Bill Committee, 20/2/23; col. 17.]

which is the case. However, we and Singapore are the only two trading nations with the benefit of this legislation in prospect.

I congratulate the Government on bringing this forward. It is a fine piece of legislation. It may not be controversial, but it is potentially of great value. I hope this Government can aspire to give this piece of legislation the value it deserves.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am very grateful to the noble Lords, who have given the rest of your Lordships’ House a brief snapshot of the good scrutiny the Bill received through the Special Public Bill Committee. It may be unamended, but it is certainly not unscrutinised. I am very grateful to all the other members of the Committee for the work that they did and, as the noble and learned Lord, Lord Thomas, rightly said, to all the academic experts, those from the legal profession and, crucially, from the industries which stand to benefit the most and came to give evidence before the Committee. All of that was much appreciated.

The noble Lord, Lord Clement-Jones, asked about the single trade window. It falls to colleagues at His Majesty’s Revenue and Customs. If I may, I will direct the question to them and furnish him with an answer on the single trade window. Both noble Lords are right that there is work to be done across government. Colleagues at the Department for Business and Trade and at the Department for Science, Innovation and Technology will take the Bill forward in another place.

As noble Lords have heard me say before, through our presidency of the G7 recently and our role jointly chairing the Commonwealth digital connectivity cluster, we are in international fora encouraging other jurisdictions to follow our lead in this area to align with the model law and avail themselves of these opportunities. They are significant for industry in terms of the simplification and speeding up of trade, the environmental impact and resilience when it comes to unforeseen things such as the pandemic, which brought into relief the importance of this Bill.

This Bill is facilitative, but it will put the UK ahead not only of the G7 countries but almost the whole world. I am very proud that we are setting the approach which other jurisdictions will seek to follow. With gratitude to noble Lords who have scrutinised the Bill in your Lordships’ House, I beg to move that the Bill do now pass.

Electronic Trade Documents Bill [HL]

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Viscount Camrose Portrait The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
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My Lords, the Government’s intention has always been that this Bill should apply UK-wide. In the process of delivering this ambition, we were able to confirm that legislative consent was not required from Northern Ireland or Wales. However, in the case of Scotland, private property law, as affected by this Bill, is a devolved matter and therefore legislative consent is necessary. As a result of amendments made to the Bill in the other place, we have received legislative consent from the Scottish Parliament.

The Bill has been amended to the effect that it now confers the delegated power in Clause 5(2)(b) additionally on Scottish Ministers both to exercise the power alone within areas of devolved competence and to act jointly with the Secretary of State. By including the option for Scottish Ministers to act alone and also to act jointly with the Secretary of State, the delegated powers can be exercised in a flexible manner that best suits the prevailing need for secondary legislation. Moreover, it avoids any future uncertainty as to whether matters are within the devolved competence of Scottish Ministers, particularly if they cut across devolved and reserved matters. The requirement in Clause 5(4) for the Secretary of State to consult Scottish Ministers before exercising the power in Clause 5(2)(b) will be disapplied in circumstances where the Secretary of State and Scottish Ministers act jointly to make regulations.

As noted earlier, while the Bill is unlikely to need future amendment, we believe that such changes are best delivered through concurrent delegated powers, which will allow both the Secretary of State and Scottish Ministers to make those changes. The amendments will therefore enable Scottish Ministers to make such regulations in a case in which all the provision made by the regulations is within Scottish devolved competence, and to act jointly with, or be consulted by, the Secretary of State in other cases.

The delegated powers previously afforded to the Secretary of State by the Bill are not substantively affected by this amendment. In view of this, Amendment 6 provides for regulations under Clause 5 to be subject to the affirmative resolution procedure at Westminster and in the Scottish Parliament.

In addition to these two substantive amendments, we have also had to include four consequential amendments to update and correct cross-references within the Bill. I hope noble Lords will acknowledge the requirement for the amendment to Clause 5 to change the delegated power and the consequential amendments that allow this new clause to be inserted into the Bill.

I reiterate the thanks that my noble friend Lord Parkinson of Whitley Bay gave at Third Reading to all those involved in the passage of this transformational Bill. I beg to move.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, I have studied the amendments closely and I can see the beneficial net effect of them. I guess that Amendment 4 is probably the most crucial to the package, and I think the noble Viscount was right to introduce them together in the way he did. I do not have much to say other than that, except to congratulate the Government on having the foresight to bring this legislation forward, and to thank the noble Lord, Lord Parkinson, for the work he did both in the Special Public Bill Committee and on the Floor of the House in considering the legislation.

I have a question for the noble Viscount, which I asked the last time we considered the Bill. This is a very important and significant piece of legislation that will go a long way to making the passage of international trade much easier, considering the impact that it could have. It will make it much easier to trade across international boundaries, and the volume of trade is such that removing the constraint on the use of electronic communication is extremely important. It is estimated that it could save as much as 15% of current transaction costs. That would be a considerable net benefit to the UK economy.

The one thing that worried and troubled me during our consideration was that there did not seem to be an implementation plan. When I quizzed the noble Lord, Lord Parkinson, on this, I was less than convinced by his response; I hope he was more convinced than I was. I do not see a plan yet. There is a role for one of the government departments involved in this to take a lead. It is really important that it does so in a way that works well with business, and consults business and all other interests to ensure that we get the maximum from this legislation; otherwise, I suspect it will lie unused.

We are one of only two jurisdictions that have made advances and progress on this. I know that others are looking at our work in the field and, if we can make a success of it, others will undoubtedly follow—but it needs leadership at the top to make this useful piece of legislation workable in future and to enhance our credentials as an international trading country.