Trade Bill

Lord Bilimoria Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 30th January 2019 Lords Chamber

[Lord Lilley]

My Lords, the amendment tabled by the noble Lord, Lord Stevenson of Balmacara, and others of the same gist are remarkable. In my 35 years in Parliament, I do not recall Parliament ever having subjected any trade agreement negotiated by the European Union to the level of scrutiny which it is proposed that future trade agreements negotiated by ourselves should be subjected. This is remarkable evidence that the Opposition are converted to the merits of having an independent trade policy because it will mean that we can influence it and work it to our own advantage. Of course, that would not be the case if we had a customs union-type arrangement similar to Turkey. Turkey does not participate at all in the negotiation of European free trade agreements with others, but is simply a pawn in those agreements. We would be too, if we were in a customs arrangement with Europe but not part of Europe—in other words, if the policy of the noble Lord’s party were to become effective, as I am sure he would agree—and those sorts of assessments would become irrelevant.

More substantively, in the past when I was involved in negotiating the Uruguay round, for example, one thing that disturbed me was the difficulty of becoming accountable to the House—then the House of Commons—for what I was doing. It is quite difficult for Ministers to be accountable for something that they are negotiating, because they can always come back and say, “We got the best possible deal. If it hadn’t been for my brilliant negotiation, it would be even worse”. It is very hard for the House to respond to that. That left me feeling uneasy. If we can find a way to ensure that negotiations are properly reported, assessed and held accountable to the House, that is a good thing. One of the bad consequences of them not being accountable is that officials did not take the job of being accountable to Parliament at all seriously. They felt they were accountable to the international organisations with which they were negotiating. One needs to be worried about that and it is why it is important that we have accountability. If Parliament holds Ministers accountable, officials will be responsive to Ministers and to what the House wants—not to what international organisations and their peers in other organisations want.

That is not a party-political point. When I made that point in the Commons, my Labour opposite number came up and said it was exactly the sort of thing she experienced, not in trade matters but in other matters. Where she was not responsible to the House, officials did not take that responsibility seriously. The noble Lord and his colleagues are on to something important with their approach, which I prefer to the simplicity of the approach of my noble friend Lady Neville-Rolfe. When we have our independent trade policy, it will be important to find ways to hold Ministers to account.

[Lord Bilimoria (CB)]

My Lords, these amendments strike at the heart of the issue, because the Bill contains no provision for greater parliamentary involvement in trade agreements. Parliament’s role in UK treaties is much more limited than the democratic scrutiny given to EU trade agreements. It has no formal role in negotiations, does not have to debate, vote on or approve them. I follow on from what the noble Lord, Lord Lilley, said: for EU trade agreements, the Council gives the European Commission a mandate to negotiate on behalf of member states and authorises the signature and conclusion of agreements. The European Parliament does not take part in the negotiations but is kept fully informed at all stages, questions the Commission and can issue non-binding but politically important resolutions. The European Parliament’s consent is usually required before trade agreements can be concluded. National parliaments also scrutinise EU trade negotiations through their own EU scrutiny processes. In the UK, draft Council decisions on signing, provisionally applying or concluding an agreement are deposited and scrutinised by the EU scrutiny committees in both Houses, and may be debated on the Floor of the House or in committee.

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[Viscount Younger of Leckie]

I had only just started, and I stand by my words, because I was about to go on to say that, none the less, I understand the desire of noble Lords, including the noble Lord, Lord Hannay, to debate these issues today—and that is what we have just done. I also appreciate the desire to understand how the Government intend to fulfil our commitments to transparency on and scrutiny of future FTAs as we exit the EU.

The amendments on future FTAs pursue many aims, which the Government understand. To be helpful to the House, during my remarks I will give as much information as I can on progress and process on FTAs. I will also answer the question raised earlier by the noble Lord, Lord Hannay—but not just yet—and will agree with the remarks made by my noble friend Lady Fairhead.

Amendments 33 and 99, which the noble Lord, Lord Stevenson, spoke to, seek to ensure that Parliament has a significant role in free trade agreements via the creation of a new Joint Committee. Amendments 71 to 74, which the noble Lord, Lord Purvis, spoke to, seek to achieve similar outcomes through imposing obligations on the Government in relation to mandate-setting, transparency and scrutiny before signature. I will address those amendments together.

First, I shall give a little context. Brexit does not change the fundamental constitutional principles that underpin the negotiation of international treaties. The making of treaties, including international trade agreements, is a function of the Executive. At the same time, it has long been held—and this Government continue to hold—that Parliament should have the opportunity to scrutinise treaties effectively. In 2010, the Constitutional Reform and Governance Act confirmed, after a process of consultation, the respective roles of the Government and Parliament in treaty-making. The Government will continue to support and facilitate parliamentary scrutiny of treaties under CRaG.

The noble Lord, Lord Purvis, asked about the Israeli trade agreement. There is agreement in principle on an FTA, but subject to—

[Lord Bilimoria]

My Lords—

[Viscount Younger of Leckie]

If I may be allowed to complete this point, I will then give way to the noble Lord. There is agreement in principle on an FTA, but it is subject to a few remaining technical issues so the final text is not quite ready. When a continuity agreement is finalised, it will be laid with an Explanatory Memorandum and report.

[Lord Bilimoria]

I thank the Minister for giving way. He mentioned that the Government are for scrutiny, so why are these amendments required? The amendments have been tabled because there is a complete lack of parliamentary participation in the Trade Bill. Surely he can understand the uneasiness of this House. The Government tried to railroad the implementation of Article 50 without the permission of Parliament, and the case had to go all the way to the Supreme Court for Parliament to have a say. The Government then tried to withhold a meaningful vote from Parliament, and Parliament had to fight for that. The Government tried to hide their legal advice and Parliament had to fight for its disclosure. Now we have Henry VIII powers being implemented left, right and centre and a Trade Bill acting in a similar way over future trade agreements.

Those agreements are going to be hugely difficult to negotiate. They take a long time to implement, as I know. India has only nine bilateral free trade agreements with other countries, and not one with a western country. This process is going to be hugely difficult, and it looks as if Parliament is going to be cut out of it altogether. We are wrecking the constitution of our country and the balance between the legislature, the Executive and the judiciary. I do not think the Minister can just say, “We are allowing scrutiny”.

[Viscount Younger of Leckie]

If the noble Lord will allow me to continue, he will see that I am not saying that Parliament has been cut out of this altogether; far from it. I said at the beginning of my remarks that I would give as much information as I could, and I hope it will give reassurance to the noble Lord and indeed the whole Committee.

Trade Bill

Lord Bilimoria Excerpts

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Baroness McIntosh of Pickering]

My Lords, as I mentioned earlier, since Committee the Government have published the very helpful Implications for Business and Trade of a No Deal Exit on 29 March 2019. Paragraphs 39 and 40 set out the importance of the services sector, which overall accounts for 80% of the UK’s GDP. The last available figures—from 2016—show that the legal services sector generates £31.5 billion in UK revenue. The UK has signed an agreement with Switzerland, and this is an example of a rolled-over agreement that will potentially bring direct benefits to UK lawyers. The Government say at paragraph 40 of their paper that in a no-deal scenario,

“the EU has said that UK nationals would be treated in the same way as third country nationals with regards to recognition of their professional qualifications. This would mean the loss of the automatic right to provide short term ‘fly in fly out’ services, as the type of work lawyers can do in each individual member state may vary, and the loss of rights of audience in EU courts. UK lawyers and businesses would be responsible for ensuring they can operate in each Member State they want to work in”.

I have a couple of questions for the Minister, my noble friend Lord Bates, whom I am delighted to welcome. What provision has been set out in the rolled over agreement with Switzerland, particularly regarding the insurance and banking sectors, for rights of audience, rights to establish and rights to continue to provide legal services in Switzerland for this purpose? I would be very grateful if my noble friend would take the opportunity to update the House on the provision that the Government are making, in a potential no-deal scenario, to ensure continued rights of audience, continued rights to “fly in, fly out” services, continued rights to establish themselves and continued rights to provide services in the interim between no deal and a future deal being signed. When the regulations went through this House, it was pointed out by my noble and learned friend Lord Keen that EU lawyers would have the right to enjoy those privileges in the UK. It would complete the circle if my noble friend could update the House with an assurance that mutual recognition is being sought with other member states and in the agreement signed with Switzerland.

[Lord Bilimoria (CB)]

I emphasise how important this issue is. From my experience, the UK has arguably the finest legal services in the world. As the founding chair of the UK India Business Council, I am aware that foreign lawyers are not allowed to practise in India. That makes it very difficult for our lawyers to provide advice not just to British companies in India but to Indian companies, and that is a huge loss for India and our British legal services. The ability of our lawyers to practise abroad is crucial. The EU is another area where we have taken mutual recognition for granted. All sorts of situations could arise in a no-deal scenario—situations involving not just advice to companies but disputes. What about consumer rights, for example? British consumers will no longer be able to sue in relation to a European product here in the UK. It will have to be done in the country of origin in the EU and, if our lawyers cannot help out, that will be to the detriment of our consumers. Therefore, this is a very important point that cannot be taken for granted and should be included.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I thank my noble friend Lady McIntosh for presenting this amendment and for giving us the opportunity to put on the record further remarks on where we are with regard to legal services. As she reminded us, legal services contribute around £25 billion to the UK economy, with a trade surplus of around £4 billion. They directly employ well over 300,000 people in the UK, two-thirds of whom are outside London. The UK is a world leader in the provision of legal services, as the noble Lord, Lord Bilimoria, also pointed out, and English law has a reputation for excellence across the world. We are determined to continue to build on this success.

We acknowledge that leaving the single market might have implications for market access and that some UK and EU service suppliers will not enjoy the same rights as they do today. That point was made by my noble friend Lady McIntosh when referring to Implications for Business and Trade of a No Deal Exit on 29 March 2019, published by the Government on 26 February—specifically paragraph 40, which sets out a case study on legal services. In a sense, that underscores that the Government see this as a key priority in the future economic framework negotiations.

That is why, in the political declaration on the future relationship between the EU and the UK, there will be comprehensive arrangements on the trade in services, covering a wide range of sectors, including legal services. The political declaration includes a commitment to conclude arrangements for services and investment that go well beyond WTO commitments and build on recent EU free trade agreements, as well as a commitment to make appropriate arrangements for professional qualifications.

The Government want to secure positive outcomes for the professional business services sector, including legal services. However, as my noble friend will be aware, our future trade relationship with the EU is subject to negotiation with the EU. A trade deal must be negotiated before its terms can be set out in law. I am aware that this is perhaps a probing amendment that seeks to get some points on the record, but clearly the Government’s view is that what my noble friend proposes is not the correct vehicle.

I am aware that in previous debates on this Bill and on some no-deal secondary legislation my noble friend has raised concerns about the impact of a no-deal outcome for lawyers. We do not want a no-deal scenario but, as a responsible Government, we have to prepare for it.

The no-deal SI relating to the practising rights of European lawyers in England and Wales and Northern Ireland, which this House debated in January, and was made on 13 February, provides transitional arrangements for EU-EFTA lawyers. The purpose of this no-deal SI is to clarify the position of EU qualified lawyers who are practising in England, Wales and Northern Ireland immediately before exit day, so that they can be secure in the knowledge of what their position will be in the event that we exit without a withdrawal agreement.

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[Lord Monks (Lab)]

My Lords, the House has carried an amendment such as this before and has done so overwhelmingly. It crops up in the context of this Trade Bill and will do so again whatever the Government do. If they achieve their withdrawal agreement, the direction of travel of what happens next will have to take account of the Norway-plus option. If they fall flat on their face next week, we will see that the options which the country needs to consider urgently are likely to include this one.

It is the only option that combines reconciling the referendum result with single market membership and the customs union arrangement as well. I know that time is tight, but I ask the House to keep this option in mind; the fact that it is being treated briefly tonight does not mean that it will not be very important in the future. I hope people will reflect on the points made by my noble friend in moving this amendment.

[Lord Bilimoria]

My Lords, to follow what the noble Lord, Lord Monks, said, I was one of the noble Lords who led on the amendment—along with the noble Lord, Lord Alli, and others—suggesting that the EEA was the least worst option. That amendment to the withdrawal Bill was passed overwhelmingly. That decision, therefore, has been made by this House; it was overturned by the other place, but it could quite probably—as the noble Lord, Lord Monks, has said—come up again as the least worst option.

[Lord Stevenson of Balmacara]

My Lords, although the key point was made by the noble Lord, Lord Monks, that this might seem a little out of keeping with the rest of today’s discussions, points were made here that will be resonant as we move on with the Bill. I commend them to the House.

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[Lord Lansley]

I thoroughly agree with my noble friend Lord Hailsham in his argument. I will add one thing. The Commonwealth Parliamentary Association just a few weeks ago brought together people from across the Commonwealth to discuss a number of issues. The meeting I attended was a discussion on the ratification of treaties. It was clear that Australia and New Zealand—which of course have a long continuing history of negotiating their own trade agreements—still use the prerogative power as the basis on which the Executive enter into a trade agreement, but they do it in the context of continuing scrutiny, oversight and an approval process following implementation of legislation.

What I read in the White Paper last week went a long way towards replicating that in a very satisfactory way—that is, we would do those things in a similar way to Australia and New Zealand such as the outline approach being presented, reports on rounds and negotiations being reported back to Parliament and of course an approval process. It is perfectly reasonable to wait on the two Houses of Parliament to tell the Government what they think should be the committee processes by which these are considered. Australia, for example, has a joint standing committee on treaties, which looks at the way treaties are ratified. I do not think it is the case that mandates are being taken all over the world; some of the countries that have the greatest constitutional consistency with us do not have a mandate. The noble Lord, Lord Hannay, was right about scrutiny and oversight, but he elided them with the necessity for Parliament to issue a mandate. Under our constitutional processes we should not be issuing a mandate, and the proposed new clause falls on that count.

[Lord Bilimoria]

My Lords, at the heart of this is Parliament taking control. What has been a problem for the past two and two-third years is that the Executive have continually tried to bypass and bully Parliament, whether with Article 50 or the statutory instruments that are going through now. This is really frightening. I am sorry to say to the noble Lords, Lord Lansley and Lord Hannay, and the noble Viscount, Lord Hailsham, but there is a big difference between Australia and New Zealand, and, for example, the United States of America. Not only does that country undertake a meaningful public consultation before negotiating, but it releases all the negotiating text to a large representative panel and subjects the deals to an affirmative vote by Congress, which is also entitled to amend deals unless it waives its right. That is Parliament having a say. That is transparency. The European Union, with its mostly mixed agreements, needs ratification by member states. It is crucial that we accept these amendments, to make sure, in the words of the Brexiteers, that we take back control.

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[Baroness Fairhead]

My Lords, the chosen words of the Government are “outline approach”. On the noble Lord’s point, the ability to have objectives in that outline approach and the ability for both Houses to debate and scrutinise those objectives is the key part of what we are discussing here. I agree with my noble friends Lord Hailsham and Lord Lansley, who talked about the critical issue here, which is consideration and discussion. That is absolutely what this Command Paper proposes—in the initial stage of the outline approach, to particularly scrutinise those objectives.

[Lord Bilimoria]

The noble Lord, Lord Kerr, said very clearly that the power of having Parliament behind the Government enhances our negotiating position with the mandate that that gives. The exact example is: why have we been outgunned by the EU in the negotiations over the past two and two-thirds years? It is because it has had a clear mandate from 27 countries, whereas we have a divided country and a divided Parliament. That does not give a clear mandate whatsoever, which is all the more reason we need the amendment.

[Baroness Fairhead]

My Lords, I do not want to go into the world of semantics, but the preferred term is “outline approach”. The objectives will be the objectives set, which will be scrutinised in the way in which we are proposing in both Houses. I agree totally with the noble Lord, Lord Kerr, that you want the ability to go back and say, “I do not think that will get through my executive board” or whoever because we want a clear set of objectives. This is what we intend to have, and an ability to say, “I do not think that will rub”. I also note that the International Trade Committee in the other place did not call for the power to approve the mandate.

We recognise the legitimate desire of this House to ensure that Parliament is able to shape our approach to negotiations. That is why we are committed to publishing the approach to negotiations. It will include those objectives. We will ensure that Parliament can scrutinise these. My noble friend Lord Tugendhat asked whether it is sufficient. We are trying to ensure enhanced scrutiny, so that is exactly what the Command Paper proposes. As I said, we expect that this would usually be through a general debate in each House.

Trade Bill

Lord Bilimoria Excerpts

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have not participated on this subject before, but I listened to the persuasive explanation by the noble Lord, Lord Fox. I note the phrase “mobility framework”, which sounds incredibly friendly. But I will urge my noble friend to reject this amendment. This is not because I want to build a wall or because I think perceptions of immigration have been wholly erroneous—although he quite rightly drew the House’s attention to that. The noble Baroness, Lady Bull, said that we need to talk about facts. I will share a couple of facts, which will take only a minute. The population of the United Kingdom is going up by 1,200 a day: that is, 400 from natural increase, 600 from immigration from outside the EU and 200 from immigration within the EU. So we are putting a small town or large village on the map of the UK every week. The ONS projections are that the country’s population will go up by 7 million to 9 million between now and 2040. Manchester currently has 2.5 million people living in it—so we will have to find homes for three cities the size of Manchester.

The UK will by that stage have overtaken Germany as the most populous country in Europe and England will have overtaken the Netherlands as the most densely populated. That is against the background of a new industrial revolution that it is believed will cause 7.5 million jobs to be either lost or radically altered. I quite understand the wishes of the noble Lord, Lord Fox, and the other movers of the amendment, but this had to be looked at in the round of our demographic future. It is not about whether you arrived here recently, or about your colour, your race or your creed. It is about what will enable our society to operate cohesively and well as we see that scale of arrivals, and that scale of change to the way we live and work.

[Lord Bilimoria (CB)]

I am sorry to interrupt the noble Lord. How can his argument work when, at the moment, we have unemployment at almost 4% and we need the 3.5 million people from the European Union who are over here now? Given an immigration White Paper that says a minimum salary has to be £30,000, and the remarks of the noble Baroness, Lady Bull, and the noble Earl, Lord Clancarty, how will we manage with a slow-growing economy of just over 1% per year, let alone if it should grow faster? We will have an acute labour shortage.

[Lord Hodgson of Astley Abbotts]

I think the noble Lord is completely wrong. I have explained that it looks as though we will lose 7.5 million jobs because of the fourth industrial revolution; that is the first thing. Secondly, there is drastic underemployment among people aged over 50 who, when they try to get a job, cannot do so. It is seen that they have only a few years left to work and so are not reliable; youth is what people look for. There are plenty of available older people, but jobs will disappear. That is why I could not support this amendment unless we had done a lot more work on what the mobility framework advocated by the noble Lord, Lord Fox, really meant.